I regularly read the Blogs at Health Care Policy and Marketplace Review. I know... I should get a life :>)
One in particular caught my attention. It discussed the phenomenon that is Barack Obama, and the recently energized involvement of youthful voters. Against this backdrop, the author peered into a crystal ball and opined about some of the implications. In turn, I began thinking about the issues this could raise:
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It was recently reported that the cost per senior citizen for Social Security, Medicare and Medicaid in 2007 set a record at $27,289 each. That equates to about $10,673 per non-senior household. While the number of senior citizens has remained stable at about 12% of the total U.S. population, the costs have risen by 24% more than the cost of living since 2000. I suspect most of that increase is due to the cost of health care services since social security payments increase at about the rate of the cost of living increase and a year or so in arrears.
Most of us have been aware that, despite politicians' protestations to the contrary, there is no 'lock box' where previous contributions have been squirreled away for future use. The money that has gone into this 'Trust Fund' has been removed by Congress and spent on current needs for years and years. As the result, with longer lives after retirement, there are fewer workers who are being required to support each of the retirees. This is truly a 'pay as you go' system today.
This situation is now being exacerbated by the beginning of the influx of the 'boomers' who are now beginning to reach 62 years of age and thus qualifying for social security benefits. I read in another journal that the average savings of the boomers retiring at this point is some $40,000. If that is the case, there is a real rude awakening due for all of us in the not too distant future, no matter how well we might or might not be situated in our own right.
Senior voters have always pretty much controlled the debate on entitlements for their age group through organizations such as the AARP, the senior voting block and various other groups. This is about to change, however, as Obama brings more and more younger voters onto the political scene. That will likely continue if he is elected, and certainly many of those people will stay involved even if he is defeated.
The long and short is this: there is a much delayed debate due in the very near future about how to change senior entitlement programs so that the remaining 'worker bees' are not driven into bankruptcy in their attempt to make their living and to pay federal, state and local taxes.
As more seniors draw against the promises made to them over their lifetimes, the pressures on the taxpayers will increase unless some changes are made, and made quickly. This idea that the debate can be delayed for another decade is simply not a correct assumption. And, the children of the baby boomers who may be moved to take a stand that they want changes made would nearly assure the debate being joined.
35% of all federal spending is for seniors' entitlements, and that was just 32% in 2004. Something has to give, but what will it be? And whom in the current political arena is brave enough to face up to the challenge? We often hear about the 'third rail' of politics...and that third rail is exactly what we're talking about here.
Changes will be necessary and almost everyone will ultimately feel the impact of those changes.
The time for political demagoguery, if there ever was a time for that, has ended.
