Entitlement Reform is Easier than You Think

Bad news on the entitlement front:  Social Security and Medicare will be gone earlier than anticipated.

Remember how I posted that Social Security would not be able to pay out full benefits after 2037?  Well, that has been changed to 2036.  And Medicare?  That's not going to be able to pay out full benefits after 2024! (See: http://money.cnn.com/2011/05/13/news/economy/social_security_medicare_trustees_report/index.htm?hpt=T2#disqus_thread).

It's a good thing that report came out today as I was planning on discussing this subject anyway.  See, I was having a discussion with my cousin the other day about whether or not Baby Boomers and the elderly deserve their Medicare and Social Security benefits.  She thinks that because they worked hard their whole lives and paid into those government programs they are entitled to every penny.

I, on the other hand, disagreed strongly (as you can probably tell given my numerous previous posts on entitlement spending).  The problem I have with current and near-future retirees collecting full benefits is the fact that we young people will also pay into the systems our whole lives, but we will (at best) get about 75% of our legally allowed benefits when we retire.  That is truly unfair and I have no intention of living in a country with older generations who think it's totally fine to rob young people like this; it's too disgusting, irresponsible and uncivilized for America.

Adding to my fury is the fact that our country's poor fiscal, political, and social health can be attributed to the fact that Boomers and their predecessors haven't been paying attention over the decades.  This entitlement problem has been building for 30 years (at least) and no one paid attention until now.  The older adults make excuses like "oh government does whatever it wants" and "it doesn't affect me" and such.  These are unbelievably lazy and self-absolving excuses: they are pretty much the opposite of what American adults should be doing in terms of taking responsibility for their failures.

Old people like to accuse us teenagers and young adults of shirking personal responsibility.  Well, older people, I have news for you: you have been totally irresponsible in your duties as American citizens.  You have failed your country because you did not do what citizens in a democratic republic must do in order for their country to maintain economic and political excellence: you failed to keep your officials' spending and lobbyists' bribes in check.  If you don't like this opinion, too bad: it's truth.

Now that my rant is out of the way, it is time to come up with a solution to our entitlement problem.  And, yes, it will involve cutting some benefits for current and soon-to-be retirees: I am sorry to say it, but, you have partially caused this problem and you will be part of the solution.  There is no reason why we young people should only get 70% of the amount we paid in to entitlements while those who failed us get 100%; that is too unjust and I will not stand for it.

Here is a simple plan that would solve Social Security's problems quickly (you should note that it affects both the taxpayer and the Social Security recipient minimally): first, we can reduce the cost of living adjustment by 1%, and, then, we can extend the Social Security tax to all wages above the current cap of $106,800 (this last trick should take care of the funding by itself, but, I would reduce the total tax rate by 2% and expand the levels of income that are subject to the tax).  (See: http://www.msnbc.msn.com/id/37195779/ns/business-personal_finance/t/can-tiny-changes-save-social-security/).

Medicare is the tricky one.  The NYT said old people should die sooner because 28% of Medicare costs occur during the last year of life (see: http://www.nytimes.com/2005/02/27/business/yourmoney/27view.html).  I doubt anyone likes the idea of dying sooner (I know I don't) so here are some other plans: raising the minimum age of entry into the program, eliminating services, and making wealthy people pay more.  Also, we could use a voucher plan that would have senior citizens buy insurance plans that suited them best (see: http://www.cato.org/pub_display.php?pub_id=3726).

If you don't like those solutions, feel free to propose some other ones.  But, know this: we don't have time for partisan crap.  We need practical ideas ASAP.

So, young people.  Pressure your grandparents and parents into supporting these relatively modest reforms: your futures are on the line (it's not your fault) and your family members need to know it.