If you can’t fix stupid, America might be screwed.
You’ve made me break out my political science knowledge twice in a week. I resent this, as I was hoping to never again have to wring my hands into bony pretzels over our collective future penury, or (shudder) slum through Social Security revenue projections. My failing is that I am a highly emotional and somewhat argumentative human, however, so I cannot let your article go by without sharing both my vitriol and debating some of the proposals you made. Just remember that you started it.
Let’s start with areas of agreement. I think that focusing end-of-life health care expenditures on ensuring quality of life rather than extension of life is both the right thing to do morally and financially. It was one of the major points brought up in the otherwise interminable health care reform debate, and it is definitely worth fulfilling that goal. We also agree on making living wills mandatory and making assisted suicide legal, though the latter option is something I would not exercise under any circumstance. I do not think that my own objections, based largely in the logic that I’ve had to work damn hard to keep myself clear of suicidal tendencies in the first place, should extend to anyone else.
This, however, is the limit of our détente, Tom. I think that the example given of the city counselor offers a false equivalency. You invite the enraged and doomed reader to share outrage at the city counselor’s outsized compensation and grotesquely large pension that none of us could ever hope to enjoy. This is an exceptional pension deal, and most professionals under the age of 55 or so cannot hope to engineer retirement compensation anywhere approaching this.
Given that employers have long stopped offering such generous terms and the strains on most household budgets at this time, it is quite easy and understandable for someone to pat themselves on the back, say “I got mine,” and feel as if they have profited without harming anyone. The city counselor surely feels the same way, though we agree that giving a public official defined benefits in 2011 rankles and is simply unacceptable.
Indeed, Pareto improvements do not exist in the world of retirement benefits, and so it bears mentioning that public sector pensions require separate examination. My grandparents’ generation (they are all in their late 70s) was the first to broadly share a reasonable expectation that they would work themselves to the point of sublimation, only to retire at 60 or 65 before the first coronary and enjoy a decade or two retired, with healthy benefits. It was a sweet deal, and their bosses were all too happy to sign off because they weren’t the ones who would have to pay for it way, way down the line.
When the bill came due and employers sought to renegotiate more favorable terms, private sector firms were able to do so far more easily than the public sector, as they did not have to negotiate the potent combination of public sentiment and deeply entrenched unions hellbent on performing their sole duty: ensuring the best interests of their workers. Some unions, like the air traffic controller’s union, fared less well than others. By and large, however, the defined benefits model meant that the costs were set in stone and that there was nothing that could be done. The costs were the costs, and until the Baby Boomer generation fully replaced their parents in the workforce on more favorable terms to employers, there would—indeed, could—be no movement.
You are right about defined benefit plans being a colossal and unsustainable strain upon the national budget. Each year, however, there are fewer and fewer of these plans in existence, and it is highly unlikely that most people under the age of 45 will ever see anything remotely approaching such a guarantee over future income. The liabilities from these plans won’t disappear without ‘creative accounting,’ though, and there is little to do except find revenue to meet the costs.
The fetid nature of the current political climate dictates that this simply will not happen, so I can empathize with your call to outlaw such plans going forward. I’m not sure what that would do since the model is moving away from that anyway, but perhaps if we’re to get drastic, then maybe that’s where to begin. Doing it to current retirees, though, would essentially constitute dicking people out of what is mostly hard-earned income by shutting down underwater pension plans. That can’t happen, and won’t, because it is just that: a dick move.
Social Security and pension reform has to happen, in part because there is such a strong aversion to raising the revenues (read: taxes) necessary to fund them. In and of themselves, they are not the problem, though. When one looks at the numbers and sees that the math doesn’t add up (and how), the obvious thing to do is to think of it as an economic problem. It is not an economic problem. Unemployment is an economic problem. Energy costs and global warming are economic problems exacerbated by politics. “Living too long,” to use your phrase, is a political problem.
There is neither political will nor the climate of compromise freed from ideological constraints and corporate lobbying necessary to bring about such a solution without genuine crisis. The numbers have been bad for as long as I have lived, and they will continue as such as I approach 30. Reconciling pension liabilities and revenues may fall just short of rocket science, but it is possible. Fixing the political system that allowed this to happen in the first place is the more daunting task, and I am pessimistic that it can happen in any sort of civilized fashion.
We are living longer, Tom, and I don’t see any particular problem with that. While none of my grandparents expected to get anywhere close to 80, there were indicators and numbers going back decades showing that life expectancy was on the rise. No one seemed willing, able, or even awake enough to care, and so now we have the situation at hand. We now know better, and broadly agree that raising the retirement age (something I support, incidentally) or playing with the accounting are insufficient half-measures that will yield nothing more than a temporary palliative. Yet here we are, ready to let our chance wither and die without even bothering to see if there’s something to be done, out of a potent combination of ideology and spite. That’s stupid, but it is what it is.
The real reason why I disagree with your post, then, is not because of your umbrage or even the proposals you made. I fundamentally think you are wrong about what the root of our problem is. Living too long is not the problem. Plain old stupidity is the problem, and as the aphorism goes, “you can’t fix stupid.”
Smoke ‘em if you got ‘em.