All this intergenerational resentment is not so much unjustified as misdirected. The younger generations have ample reason to be upset with the boomers — for getting bigger retirement benefits and leaving behind lots of debt, which threatens future prosperity.
But for some reason, these issues do not elicit the same anger. There is no widely popular youth movement to cut spending or entitlements the way there are ones to freeze rent, build more housing, eliminate student debt or offer free child-care.
In fact, President Donald Trump is hailed in some quarters for his political savvy in abandoning entitlement reform. The president has even expanded retirement benefits, as many Democrats have called for; the budget law he signed last year cuts taxes on Social Security payments and gives seniors an extra deduction, both of which make the debt worse. And yet there were hardly any objections from either party.
See also: iWow subsidiary bags $1 mil prize funding from DBS Foundation’s inaugural eldercare innovation award
It is remarkable: As benefits to seniors are increased at its expense, a generation that feels it deserves more is mostly silent. Part of the explanation is that this is not new; the value of old-age entitlements has increased over time relative to the taxes they pay for them.
It is not just in the US. In France and the UK, the income of seniors is also growing at a faster pace than it does for workers. In France, pensioners actually have higher incomes than working-age adults. Yet younger French citizens, who have many economic challenges and their own resentments, do not march in the streets in support of the government when it tries to cut retirement benefits.
Another possible explanation is that young people do not resent old-age benefits because they realise that they too (if they’re fortunate) will be old one day. It is notable that the payroll taxes that fund entitlements in the US are featured prominently on every pay stub. That makes it seem like a benefit they are paying for, and deserve, even if each generation gets more than it puts in.
See also: Even with a brief life expectancy dip, 16% of the global population will be 65+ by 2050
There is also a cultural taboo against cutting benefits for the elderly, who are seen as more vulnerable. For years, they had the highest poverty rates, though now they have the lowest. Even when there is a debt crisis, pensions are rarely cut.
Finally, there could be an ideological reason that young people are so reluctant to support entitlement cuts for the old. Young people today, especially among the more activist set, tend to skew left. Resentment of a boomer for owning a house they’d like to live in — a house he paid little for — is, in a sense, resentment of capitalism itself. Supporting cuts in Social Security, on the other hand, or even a reduction in increases, is to favour shrinking the welfare state.
The idea seems to be that the market economy produces a finite amount of resources that are unfairly allocated, while the welfare state can be expanded as needed. In fact, the opposite is true. The government’s spending ability is far more limited than the market’s production capacity. The US cannot keep expanding benefits for each generation, especially as the population ages and interest rates increase. Much as the younger generations might want to, ignoring this problem will not make it go away. — Bloomberg Opinion
