Tom Matlack looks for a reasonable solution to America’s old age problem.
I had dinner with a good friend the other night. His most recent girlfriend is one of the country’s most expert setters of “back” fires.
“There are very few people who can do what she does,” my friend explained. “And she’s like 5’1” too.”
Her talent is to set the fires behind a major wild fire to clear flammable material and thereby control the spreading wildfire. It’s a treacherous vocation because her small fires, it not set properly, can just add to the destruction of the main wild fire. “She just disappears for days at a time,” he said, “and then one morning she just shows up at my front door completely exhausted.”
I found this discussion of the superwoman firefighter fascinating, but that wasn’t my friend’s real point. As the stock market plummeted another 500 points, the topic of discussion was the economic calamity hitting our country—not global warming causing more and more out-of-control fires. The woman setting backfires was just one more example of my friend’s problem. He’s a techno-creative type who had done well in an unconventional career path that led to a nice, but not extravagant, place in the hippie community of Topanga Canyon, steady income, and a retirement nest egg saved carefully over decades of work.
“You know what happens when she’s put in her federal years of service?” he said. “You, Tom Matlack, of Brookline, Massachusetts are going to have to pay her a big fat federal pension.” He paused for dramatic effect. “For life. Me? I just have to keep working my ass off to get what we all are going to be paying her once she hangs it up.”
My buddy went on to recount how a mutual friend of ours had served as a Los Angeles city counselor, making $175,000 a year for his four-year term. Upon leaving office, he then received a $150,000 pension.
“You guessed it. For life,” he said. “I mean. I’m thinking about running for city counsel right now. There’s a vacant seat.”
This conversation got me thinking about what is really causing the latest financial crisis. Whether it’s the state of California, the car industry, or the United States government, one of the biggest factors is over-promising to take care of an aging population.
According to the National Center for Policy Analysis, the unfunded liability associated with Social Security and Medicare is over $100 trillion.
State budgets, major corporations, and unions are all suffering under the same weight, trying to live up to uncapped liabilities associated with more people living longer.
Life expectancy in the United States has increased from roughly 50 to 80 over the last hundred years. A number of companies (notably Sirtris Pharmaceutical, which focuses on the Resveratrol found in red wine) are promising to extend life even further.
Meanwhile, as Atul Gawande explains in “Letting Go,” Americans are obsessed with not-dying. We expend huge sums on the very last months of life. Gawande’s research points out that hospice care—making death more comfortable, rather than fighting the inevitable—is vastly cheaper, more humane, and ironically leads the dying to live longer.
My buddy’s mantra: It’s all about the pensions. And the more I think about it, the more I think he is right.
It’s also about wealth disparity, racial inequity, and educational opportunity. But in terms of the near-term financial crisis in federal and state government, it really is about the aging of our population and how to live up to the promise we have made to pay for health care and the general well-being of people we once would’ve expected to be dead already.
I am going to steal a bit from Ernest Hemmingway, throw in a little Atul Gawande, and get radical on you, poor reader.
I’m 46. I’ve had a good run so far and sure hope I have a few decades left in me. I’m in good medical health. (Mental health is debatable but not life threatening). So, unless I get hit by a car or struck down by a rare disease, I’ll probably make it to 80. (Remember: 80 is the overall average age, but once you have made it to 46, you have slipped by a bunch of bad shit that could have killed you, so your actual life expectancy at 46 is higher since you take out all the people who died young and brought down the overall average.) And I don’t plan on retiring until they pull the plug.
Like most people my age, there have been those times when I seriously could have died if things had gone just slightly differently. I’m still here and grateful to be able to hug my family. But I am not afraid to die. What I care most about is the quality of my life. My paternal grandmother lived to be 99. She didn’t want to, but her body kind of just held the pieces together. She started talking about wanting to die more than a decade before she did. I admire her courage in the face of that adversity but don’t want it for myself.
My proposal: a reconciliation of our financial responsibility to each other and a much more frank conversation around the length and quality of life in our country. Yes “pensions” and Social Security may be the problem, but as long as there is absolutely no ability to even raise these issues, we are all going down in flames.
“If these people want to keep their pensions they have to take up smoking—a lot,” my friend suggested. But really, this whole idea of retirement at 55 or 65 is pretty absurd. So we are supposed to spend 25 years, from 55 to 80, bankrupting our kids, while we play checkers?
We are living a long time and, unlike prior generations, have the capacity to work for a lot longer. Not only do we have the capacity to work, but also I think we need to work to keep ourselves active and engaged, contributing to the greater welfare of our country.
Let’s stop tinkering at the margin, adjusting the Social Security rate of inflation by half a point, and tweaking the retirement age by a year. If we are ever going to get anywhere, we have to face into the reality that people live a long time. We mistakenly promised to help support able bodied people do nothing, when they could be doing something productive.
So here’s how we solve our financial crisis in one fell swoop:
- Going forward, make illegal any defined benefit plan with an age trigger. Instead, make the support of “retirement” based purely on physical and mental ability. Support those who are incapacitated. Not those who are old but vital.
- Convert existing participants in defined benefit programs into lump-sum-defined benefit programs based on current financial assets. This way, a pension plan that has $200 million of liabilities and $100 million of assets doesn’t bankrupt the company to make up the difference. Give participants 50 cents on the dollar now, and shut the thing down. That goes for Social Security, too. And for any crazy city councilmen (or congressmen or Presidents, for that matter) hoping to get a big stipend for doing nothing forever. Give ’em all a lump sum and send them packing.
- Focus our health care expenditures not on extending life but on increasing the quality of life particularly for those near the end.
- Make having a living will mandatory so that extraordinary measures don’t have to be taken for those who don’t want them.
- For sick puppies like me, who have a low pain threshold and would prefer the old Hemmingway approach when the time comes, allow doctor-assisted suicide with the proper counseling and safe guards.
And, yes, if there are any pensions left after all of the above, ship the remaining participants crates of Marlboros and grain alcohol on a regular basis.
Enjoy life pensioners. And stop living so damn long.