Dean Baker today has pretty much taken this apart, but I shall throw in a few more cents. In yesterday's Parade magazine, generally a completely politically bland outlet to accompany comic strips in Sunday papers around the country, Vice President of the Pew Foundation, a supposedly terribly respectable place, Paul Taylor, unleashed a massively misleading hysterical screed about how the baby boomers are going to bust the millennials with all their awful Social Security and Medicare benefits, with him apparently having a book on this, so I must cynically think that Taylor is just lying to push his apparently worthless book. However, we have really had enough of these misrepresentations. Taylor's main misrepresentation is to claim that by the time all the boomers are on SS and Medicare, these programs will be broke, gobbling up half the budget. Fundamentally this assumes that the rate of increase in medical care costs that we have seen in the past will continue, which does not look at all likely now. Dean points out that SS finances are not in such a bad place given all the tax and benefit changes made in the past such as by the 1983 Greenspan Commission.
Let me note a simple fact that if Taylor knows it, he gives no evidence of doing so and that Dean did not mention, although he noted a number of other relevant issues. As with so many other screeds of this sort, Taylor makes a big fuss over how by 2030 or so the ratio of workers to SS and Medicare recipients will have fallen to about 2 to 1 in contrast to today's 3 to 1. This is supposed to make people just fall on the floor in a total freakout, with millennials rising up to demand that boomers head for the gas chambers ASAP, as I see regularly suggested on such anonymous econoblog sites as the abominable EJMR. So, this simple fact is that right now one finds in Germany roughly this ratio, 2 to 1, with pensions if anything higher than they are in the US. Is Germany failing to make its payments or suffering from a massive budget crisis? Obviously not. Indeed, the fact that all these hysterians routinely ignore is that of the higher income nations, the US is one of the best positioned demographically for dealing with this issue down the road. Does Japan have a big problem? Yes. Does the US? If it can get its medical care cost increases under control, no.
I want to add that I am increasingly frustrated at how widespread this false story of likely future failure of these programs for millennials has spread. Anecdotal, but I just heard on a local radio station where several hosts were talking a younger one simply asserting that Social Security and Medicare "will not be there for me." I constantly hear this from students, almost always asserted with an astounding degree of certainty and self-righteous pomposity. Needless to say, this makes them susceptible to the games by politiicians who want to cut these programs back. The irony is that if this happens, it will not happen much to the baby boomers, but will be set up to land much more on these very millennials. They will be sold accepting definite future benefit cuts because, gosh, if they do not accept them, they might have to accept them. The incoherence of thought and lack of knowledge about what is going on here I find really frustrating.