Friday, October 31, 2003

The Generational War takes shape

Rich Lowry on NRO - "Operation Please Granny":

According to Cato, a male at age 65 will receive, on average, $238,000 in federal transfers during the rest of his life, while paying $167,000 in taxes — a net $71,000 gain. A 25-year-old male will pay $524,000 in taxes during his lifetime and get only $202,000 in transfer payments — losing a net $322,000.

This disparity will only get worse as Washington ladles out more benefits for the elderly and the growth in the number of seniors outpaces the growth in the number of young workers. Higher taxes for the intragenerational transfers will discourage work and productivity. Resources will be taken from young people who would save it — contributing to investment and other felicitous economic phenomena — and given to the elderly to spend freely.

Medicare and Social Security are on pace to be 80% of ALL government spending in 2040. Clearly, this cannot go on.

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