Generational warfare is not pretty and neither is the expectation of entitlements

In the United States, Medicare benefits compar...
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Many people downplay the Presidents rhetoric of targeting this group or that, the wealthy, the insurance industry, the bankers, Republicans, etc.  His strategy seems to be one of targeting scapegoats and then appealing to the resulting populist sentiment.  This coupled with a constant barrage of entitlement mentality has its (negative) impact.  Consider the following, which is a comment, posted on this blog. 

I think it’s a shame before God what you are doing to those of us who have worked and given of ourselves to help make this country what it is today only to be made to feel that it was all for naught.  You say there was no cost of living increase so those of us who worked as civil servants are put on hold for three years as far as an increase in our pensions are concerned; however, those of us who are still breathing and able to ambulate pay the high prices at the gas pump, we haven’t stopped eating, so the groceries we buy are just as expensive as those you buy, you’ve increased our Medicare premiums, why, so that others can be covered, we have medications, for problems we are not necessarily responsible for but aging has created some of these problems, we have property taxes, State taxes, Federal taxes, you name it, we have it except the wherewithal to pay for it.  President Bush almost succeeded in ridding the country of the middle class, I guess you will eventually rid the country of us old folks because there is no way in the world we can continue like this.  It’s a shame before God a nation that claims to be for its people but the ones who are making out are those rich Republicans.

 An interesting perspective on civil servants is it not.  This writer has no clue that the vast majority of Americans have no pension, let alone a cost of living adjustment potential.  I find it especially interesting that the writer does not make a connection between taxes and paying for civil servants and their generous benefits, especially at the state level. Clearly, the lack of a pension increase is caused by those darn Republicans and Medicare premiums are going up for no good reason.  This writer is frustrated, uninformed and clearly affected by what he or she hears and reads, but apparently looks no further than rhetoric.  It is scary stuff in my view and I suspect there are many more Americans with this point of view.

Give me a break, I have to get to the bank

Us old folks had a lifetime to prepare for the inevitable, living on a fixed income, medical expenses, ongoing higher property and other taxes plus all the rest that goes with life.  Why is it suddenly a shock that living for twenty years or more on a reduced, fixed income is not going to be easy?

Frankly, I am more worried about younger Americans who will have the ever-growing burden of paying for the promises made to and the unrealistic expectations of seniors in America.  The current Administration has delighted in pushing class warfare; the real problem facing America is generational warfare.  Unequal wealth distribution can be corrected from the ground up by improving the education, and training of younger Americans and preparing them for the new dynamics of the workplace.  However, the burden created by entitlements focused primarily on the oldest generation at the expense of all other Americans is a disaster waiting to happen.  In addition, part of the fix is likely to be a scaling back of the promises to younger Americans thereby placing them in a box trying to fund their own future while still paying for the promises yet to be fulfilled.

Thanks a lot to all the politicians who fail to see beyond the next November.  AARP rules!

2 comments

  1. I’ve said it once and I will say it again, the only thing more regressive than FICA taxes and FICA-Med taxes are the benefits they finance…. Complaints about changes in Medicare and Social Security based on a class warfare argument are a joke …

    The benefit does not vary based on income. You only need to pay minimal taxes for 10 years to gain access to the same benefit financed by a high income individual over forty years.

    Not sure why you posted the Urban Institute chart, but certainly understand why they cut the chart off at the income level they do. No one wants to admit just how much of Medicare Part A is paid by higher income individuals.

    Then, when you consider the fact that most of Part B and Part D are financed by general revenues… well, since only 55% or so of Americans pay income taxes …. well, how regressive is Medicare supposed to be (become)?

    Consider (2008 data, source Kaiser Family Foundation)on the sources of revenue for the various parts of Medicare:

    Part
    A B D Total
    Payroll Tax 85% 0% 0% 41%
    Income Taxes 0% 73% 79% 39%
    Premiums 1% 25% 9% 12%
    State Paid 0% 0% 12% 1%
    Tax on Benefits 6% 0% 0% 3%
    Interest/Other 8% 2% 0% 5%
    Total 100% 100% 100% 100%

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    1. Tried to get the spacing right in the chart from the prior post….

      Medicare Part
      A B D Total
      Payroll Tax 85% 0% 0% 41%
      Income Tax 0% 73% 79% 39%
      Premiums 1% 25% 9% 12%
      State Paid 0% 0% 12% 1%
      Tax on Benefits 6% 0% 0% 3%
      Interest/other 8% 2% 0% 5%
      Total 100% 100% 100% 100%

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