A Generation of Sociopaths by Bruce Cannon Gibney

Author:Bruce Cannon Gibney
Language: eng
Format: epub, mobi
Tags: Political Science / Commentary & Opinion, History / United States / General, Political Science / Public Policy / General
Publisher: Hachette Books
Published: 2017-07-02T16:00:00+00:00

Antisocial Security

All OAB programs struggle for the simple reason that they never received enough funding in the first place. FDR may have hoped Social Security would be self-sustaining and perhaps eventually redundant, but this has not happened, and not enough money has been allocated to cope with that reality.18 Therefore, the essential task is to convince younger people to continue supporting their elders while presenting a subsidy as the earned return of enforced savings. Accordingly, all OABs have been subject to sustained campaigns of deceit and misinformation, from all political corners—the Right, which claims government programs are bankrupt (not true, yet); the Left, which claims programs are equitable (not in generational terms); and various interest groups espousing all manner of self-interested fixes like privatization. The unifying theme, however, has been to keep the system going at minimal present cost until the Boomers die.

Although precise calculations are complex, any numerate person can understand how these plans work generally, and who the winners and losers are in the shell game. All pension-like plans depend on a few key inputs—the longevity and number of participants, inflation in cost of benefits, interest rates and the rate of return on investments, and the number of payers. The variable the actuaries cannot (and in some cases, are forbidden to) forecast are political changes. In our model, which assumes sociopathy, we simply twirl the political dial to mendacity, a setting that produces outputs coincident with the Boomers’ interests and that are supported by the evidence.

Turning to the inputs, the good news is that people are living longer. While a lot of life-expectancy gains have been driven by lower infant mortality, people who make it to sixty-five can expect to live another 19.2 years, up from about 16.8 years in 1982.19 The problem is not that the actuaries didn’t predict these improvements, it’s that citizens didn’t adjust their savings or retirement expectations. Despite living longer, people now retire slightly earlier. The average retirement age for men has fallen by one year from 1970–71 through 2011, and combined with increased longevity, the period of retirement has extended by a third, from 13.6 to 18 years.*,20 Bluntly, that’s too long.

To maintain living standards, the median household would want about $800,000 in private, nonhousing assets on retirement.21 Median households have something like 10 percent or less of that amount, and even though older households have higher net worths, they too face a large gap that even the rosiest assumptions about pensions, welfare transfers, and stock market returns cannot close. Most studies conclude that about half of households are materially underprepared for retirement, and surveys show that only 17–25 percent of workers are very confident in their retirement planning versus 35 percent who aren’t confident (the rest either being “somewhat” confident or not knowing or refusing to answer).22

Moreover, any major illness could exhaust private savings, and even for the reasonably healthy, old age will also be exceedingly expensive, driven by the generally rapid rise in health-care prices. Since the period 1982–1984, health-care costs have more than quadrupled in gross terms and have been rising faster than inflation overall.

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