Its a double whammy:
Lower taxes = this allowed the boomers to build more wealth.
Also, they did not pay in enough to find their public pension (SS) benefits later on.
Quite the financial scam really on the younger generations.
This part is absolutely true, even for upper middle class folks. This is why there’s a problem.
It is too late for the US.
The Canadian system was set up initially like the US system but thank goodness we had a Finance Minister with the guts to put it on a sustainable basis in the 1990’s by dramatically hiking the contribution rates and setting up an independent investment manager to oversee the investments. That manager has produced investment returns among the best in the world for any public pension fund and contributions will not need to increase for the next 75 years.
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Damn, it’s all my (and my Boomer friends’) fault for something passed in the 1930’s, 20 years before we were born!!
Someone should have thought of that before creating the boomers (no, we did not create ourselves).
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That only means that the amount of benefits they receive relative to the tax they paid is slightly closer to equilibrium than it would have been.
It’s still absolutely unsustainable. Baby boomers are still, In aggregate, taking more out of Social Security & Medicare than they put in.
I remember the stories on the news in Canada in the 90s about the country being broke due to massive deficits.
I was only a teenager so I didn’t pay much attention to the news, but it does seem to me that Canada made the right calls when it really mattered.
The thing is that even after the boomers were created nothing was done! It is not like they suddenly arrived from another planet!
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Apparently no one did the exercise.
In a static population, you would get about 65% workers.
That’s seems ok. Until you look at where they work. Does it surprise you to learn that 1% are in agriculture, 20% in industry, and 75% are in services. Most of the posters here are in that last category.
Back when I was young and frisky, a colleague and I were at the local watering hole. Struck up a conversation with some young ladies who asked what we did for a living. My friend paused for a bit, and said “I think we make garbage. Every day we show up with about 300 others, and every evening we go home. The only thing that gets picked up at the loading dock is garbage. So I guess we make garbage.”
WHat a hoot.
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And I say that not to hate on baby boomers. Taxes increased AND benefits decreased back in the day. But no more.
True, and none were of voting age (maybe in some states) when the Boom period stopped, in 1963.
So, something COULD have been done.
But, no, let’s pass the Medicare Act instead!
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And this was why, politically, Canada was able to do it. We had to be staring into the abyss before people would accept the financial discipline that was needed.
They didn’t set up the scam. They weren’t even born. It’s not their fault.
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Don’t blame T_P. He read that quote online, which was written by someone in the 1600’s.
Correct. The system was designed for a vastly different society and workforce. Go look at employment by sector in 1930. I’m too lazy. And be done it before. But let’s at least apply some analytics before declaring what the problem is.
Thats not relevant here.
What matters is that they are profiting (in a very material way) at the expense of the younger generations, which is then having a negative impact on fertility and productivity.
So the only way forward, given that hell will freeze over before you can trim SS benefits, is clawing back some of that extra largesse via taxes on the retired.
Thats what we ended up recommending as a fix in the UK.
I agree that Americans have made some bad political decisions. I don’t agree that they were all made by boomers.
Your first article was written in 2015. It says
by census counts, there are as many boomer voters today as there are 25- to-44-year-olds and senior citizens combined.
Note “voters”. This is the census count of people: Age and Sex Composition in the United States: 2015
20-29: 44 million
30-49: 82 million
50-69: 78 million
70-99: 30 million
The boomers made up almost all the 50-69 group in 2015.
I follow US politics. I have no recollection of the much larger group of people who are younger and older than the boomers supporting any more reasonable public policies.
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What would employment by sector tell me that’s pertinent to this discussion?
The system was set up to only work with people having children at a rate substantially above replacement and ALSO mostly not living very long in retirement.
Longer life expectancy coupled with a birth rate close to replacement is what caused the problem.
The framers of Social Security did not foresee these outcomes and thus they did not design a system robust enough to handle it.
The framers of Medicare didn’t either and they gave less excuses given that Medicare passed during the baby bust. Admittedly the beginning of the baby bust, but still…
Can you quantify that? How much more?
And, do retirees believe this?
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You have the same problem in the US as we have in the UK.
What matters is not the aggregate totals of the boomers, but how they are geographically dispersed.
Perfect example is Florida.
Large amount of seniors. Lots of EC votes for election.
Same problem in the UK. They are concentrated in rural areas, and given the electoral structure (FPTP) they have outsized voting power.
So naturally, they vote to keep the status quo with more benefits flowing in their direction.