Home > income inequality, income redistribution, Plutonomy, Social Security > The one percent turns class war into generational war

The one percent turns class war into generational war

from Dean Baker

Major news outlets like the Washington Post and National Public Radio constantly bombard us with news pieces on the budget deficit. Invariably these stories focus on the cost of “entitlements,” which most of us know as Medicare, Medicaid and Social Security. The story pounded home in these pieces – often explicitly – is that these programs, that primarily benefit the elderly, are creating the basis for a generational war between the young and the old.

The media focus both contributes to and follows the Washington policy debate. At the moment, we have the congressional “supercommittee” scheming to produce a deficit-reduction plan that will almost certainly involve large cuts to all three programs. There is a commonly repeated view in Washington policy circles, based on no evidence whatsoever, that there will be a disaster if the supercommittee comes up empty handed. This means that members of the committee are feeling great pressure from the 1 percent to produce a package with big cuts to Medicare, Medicaid and Social Security.

It is truly impressive how the Washington elite have managed to make these modest protections for the country’s working population (the 99 percent) into the greatest problem facing the country. The obsession with cutting these programs is occurring at a time when we have more than 25 million people unemployed, underemployed or who have given up looking for work altogether. One might think that Congress would convene a supercommittee to get people back to work rather than figuring out a way to undermine programs that people need, but it’s the 1 percent that pay for elections, not the 25 million workers suffering from their greed and incompetence.

Since almost no one can be immune to the hysteria that the media have created around the cost of these programs, it is worth putting it in some context. Starting with Social Security, the latest projections from the Congressional Budget Office show that the program can pay all benefits through the year 2038 with no changes whatsoever.

Even if we never did anything, the program would be able to pay more than 80 percent of scheduled benefits well into the next century. Since the value of benefits is projected to rise through time, 80 percent of the projected benefit in 2040 is considerably higher than the average benefit received by retirees today. Therefore the often-repeated comment that there will be nothing there for our children or grandchildren is a telltale sign of ignorance or dishonesty.

The cost of making the program fully solvent for its 75-year planning horizon is projected at 0.58 percent of GDP. By comparison, the increase in annual spending on the military as a result of the wars in Iraq and Afghanistan is 1.7 percent of GDP, almost three times as much. The upward redistribution from the rest of us to the 1 percent over the last three decades was 6 percent of GDP or more than 10 times as much as this shortfall. But it is only shortfall in Social Security that the media want us to see as a crisis.

The health care programs, Medicare and Medicaid, pose more of a problem, but this is because the U.S. health care system is dysfunctional. We pay more than twice as much per person as do people in other wealthy countries with little, if anything, to show in the form of better outcomes. (We rank near the bottom of wealthy countries in life expectancy.) 

If we had the same per person health care costs as people in Germany, Canada or any other wealthy country, we would be looking at long term budget surpluses, not deficits. But controlling costs involves reducing the income and profits of the 1 percent. It means reducing payments to insurers, drug companies, medical equipment manufacturers and highly paid medical specialists.

Rather than control costs, the folks in Washington would rather make people pay even more for health care. This is why we see proposals like raising the age for Medicare eligibility to 67 or turning the program into a voucher system. Both plans are likely to protect the income of health care industry, while making it even more difficult for current or retired workers to cover their health care costs.

The public should realize that “generational warfare” is an agenda that was deliberately designed by the 1 percent to distract the rest of us from the class war that they have been successfully waging over the last three decades. Rather than have a public debate on the policies that have redistributed so much income upward, the 1 percent want to pit children against their parents and grandparents, forcing them to fight over crumbs.  

In this context, the only victory that the supercommittee can hand to the 99 percent is a blank sheet of paper. People will have enough things to worry about this Thanksgiving without adding a congressional plan to slash their Social Security and Medicare.

See article on original website

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  1. Bruce E. Woych
    November 7, 2011 at 10:20 pm

    @ Dean Baker: I am a bit surprised that you are arguing the nuts and bolts of this issue from a policy rationale rather than from its core foundation. Having followed your work with great interest I would have expected you to use this material to back up the real story, rather than to lead it. If you had started with an opener (instead of concluding) like this:

    “The public should realize that “generational warfare” is an agenda that was deliberately designed by the 1 percent to distract the rest of us from the class war that they have been successfully waging over the last three decades. Rather than have a public debate on the policies that have redistributed so much income upward, the 1 percent want to pit children against their parents and grandparents, forcing them to fight over crumbs.”

    We may have been able to actually use this format to demonstrate that the republican agenda (apparently with Obama as their Frontman) is, in fact, putting an operational action into place that is successfully achieving policy sabotage and political sleight of hand. We may have been able to point out that what the variety of ultra-right think tanks tried to exploit for decades unsuccessfully, was now being incrementally but progressively implemented under crisis fear, anxiety and legitimation tactics that appear to be justified.
    We may have been able to expose the fact that their claims have no basis in reality (the data you presented for example). We may have been able to point out that the Peter G. Peter Foundation has been pushing this distorted and perverse rape of the geriatric population through stealing so-called “entitlements” from their social security. We may have been able to demonstrate that this is the mode of operation of the biggest scavenger corporation in the world which Peterson established to take advantage of inside knowledge of Washington contacts he developed in Public Office. In fact even the language of “austerity” and entitlements” are fallacious fictions constructed to mislead rational perspectives with “loaded” language and deceptive terminology.

    But since you decided to actually print the political stupidity of their logic by giving factual data, we have missed the opportunity to venture into the actual truth behind the micro-macro political antics of deceit.

    Oh well…better luck next time!

    • Alice
      November 8, 2011 at 9:35 am

      There is the inrtergenerational war, the left right war, the educated versus the uneducated war, the muslim versus the christian war, the dictator versus democracy war, the big government versus the small government war, the deficit hawks versus the stimulus spending war,…

      in fact any tiddly little war will do to distract everyone from the real war that needs to be fought

      Thats the class war.

      The rich are doing just too well and the middle and poor are being forced down too far.

      The real war is entirely over this obscene inequality now and the solutions are simple but while ever we have governments and political appointees (thats all they are) prostrating themselves before big businesses and the wealthy from whom they hope to earn a living, or a political appointment or a post retirement position…nothing will change. Our politicians sing the same song as the wealthy. Our mainstream newspapers sing the same song. The mainstream economics curriculum sings the same song.

      Who do we vote for? It doesnt really matter. We cannot get the change we need. System in disarray.

  2. Bruce E. Woych
    November 7, 2011 at 11:16 pm

    “Abramoff: So what we did was we crafted language that was so obscure, so confusing, so uninformative, but so precise to change the U.S. code.”

    http://www.cbsnews.com/8301-18560_162-57319075/jack-abramoff-the-lobbyists-playbook/?pageNum=3&tag=contentMain;contentBody

    Great example: language loading…

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