At the risk of not posting anything, I'll just say that one reader is a little confused. I thought you've pointed out before the inequalities of stock ownership. Maybe stock + house = total wealth to a lot of people, but maybe that shouldn't be 35-55 yo's? RE houses, maybe 35-55 yo's shouldn't be speculating in Riverside and Miami Dade?

Intergenerational entitlement's are a little tricky, and I guess I don't run into too many old people, so I'm not exactly forced to redesign my views often.

I guess I have two simple questions, since I must sound like Samuelson at this point: 1) What is the expected (planned, autobudgeted, restricted) payout of Medicare relative to the amount paid in, in a moving but fair time-period. 2) Is this a metric I should be concerned about.

Any pointers to books, review articles would be helpful. I enjoyed your review of pharma models.

Did Samuelson mention that without Social Security and Medicare the young will have to care for their parents and grandparents or suffer the embaressment of having them beg in the streets?

Frankly,

I think the young will be stupid enough to fall for the old reliable weapon of class warfare:

DIVIDE AND CONQUER

It seems to work every time it's used, besides aren't the young enthralled with a guy who wants to gloss over the rape of working people that has taken place in the last thirty years?

I can't wait to watch Obama "save" SSI, after all his economic advisors want benefits cuts with more of SSI linked to stock returns...ouch!

Yep, stocks are a much better investment than government bonds...aren't they?

Reagan had his useful idiots, Obama will have his.

"Did Samuelson mention that without Social Security and Medicare the young will have to care for their parents and grandparents or suffer the embaressment of having them beg in the streets?"

Comments like this make me think that many Americans can't read. Samuelson is not advocating and end to social security. He advocates trimming the growth of benefits and raising the retirement age. I don't think the street would be fill with 66 year olds in this case.

I am a young person (22) and I do resent the burden that these programs will place on me. The idea of social insurance as FDR envisioned it was actually a form of insurance, meaning a way to hedge for unlikely but expensive events. In FDR's day, being elderly was both. Today, it is typical for people to both live and be able to work into their 70s. I think that, given hard choices have to be made, it is fair to ask people up to 68 or 69 to work before they receive their payout, provided they are not handicapped. I feel much less cruel asking this than the baby boomers should when they ask me for so much of my income.

Not sure if the so called "ill-informed" economists are all really that bad or simply wanted to push their agenda, which happened to be a huge disaster.

I agreed with the 22-yr bright young man that people born on or after 1986 should work until 72 and then receive validation from their doctors proving they could NOT work then start drawing SS.

Thanks Lewis,

Right on cue.

In this case you are a useful tool.

'nuff said Dean? Every kid has a future so bright they'll be wearing sunglasses.

DIVIDE AND CONQUER bat's a 1.000 in class warfare

Lewis: I hate to be ageist but you have no idea what 45 is like much less 65 or 72. Explaining it to you would be like talking to a five-year old about puberty. I'm not being sarcastic or cruel. You simply must age to know what it's like - and arbitrarily throwing around a retirement age of 72 because people are living longer now and so should be worked until they are nearly dead is just crazy - and, frankly, cruel.

Lewis wrote, Today, it is typical for people to both live and be able to work into their 70s. I think that, given hard choices have to be made, it is fair to ask people up to 68 or 69 to work before they receive their payout, provided they are not handicapped.

Except that if you view it as insurance, the "boomers" aren't getting a great deal, either.

The problem isn't the boomers. It's the implicit debt: the people who did get a lot more out of the system than they put in are already dead.

"Today, it is typical for people to both live and be able to work into their 70s. "

True, but will employers hire them? Look at the track record of big companies offering buyouts to older employees - not in their 70s, but 40s, 50s - to lower expenses, including by hiring younger workers who are healthier at less pay.

Dean Baker, another brave smack against the powers that be. Social Security despite it's regressivity is the most efficient project of the US Govt. Sadly it mostly takes from the workers and takes little from the investor class who live off mostly capital gains (which many want to eliminate taxes for even lowering the upper 1 percenter s taxes to like 5 percent of income where most of us are taxed in the 30 percent plus range. Ask Warren Buffett about that.)

Some 21 y.o. blaming Boomers for everything and believeing the snakeoil salesmen like Samualson has got to read this Corporations are doing their best to fire 50 y.o.s to hire stupid and cheap 22 y.o.s in their place...so increasing the social security age isn't going to help some old joe forced to be working at Walmart or w/o a job at all.

'course the oft tatooed, self-indugent young like Lewis know everything except how to work. Or have a job daddy gave them?

Some commenters do not understand the distortions built into Samuelson's views (and those of the WaPo). Samuelson contends that young workers will have pay more in taxes or accept more government debt as boomers retire, and claims that this will require increasing SS retirement age, etc.

Young workers will absolutely have to pay more or accept more debt, but this is not the fault of the Social Security system. Boomers have paid into the system to account for their population bulge - this is the Trust Fund, and they deserve to get this money back. Had their SS taxes not gone into the Trust Fund, this money would have been distributed to pre-boomer retirees, who would have had a windfall. Or else the boomers' SS taxes would have been reduced, which would have been a windfall for them. Samuelson's claims would be justified if there had been no Trust Fund.

The burden that young workers will have is that of paying for tax cuts for the rich, wars and other things which have no relation to the SS system except that the Trust Fund has been used as a cover for these expenditures, by counting the money going into it as general income.

As for future expense projections, as Deans says this is mostly a matter of the rise of health care costs, not the entitlement programs themselves. Though now an extended period of recession will probably affect all projections of government income.

Lewis

the problem with your view is that you don't know enough about Social Security.

you are not paying for anyone else's retirement. you are paying in advance for your own.

and if Pay As You Go confuses you, it is because you don't understand how money works. Every dollar you put into a bank account or a Stock purchase goes right out the back door to pay for someone else's expenses. All you get is a promise... or less than a promise in the case of stocks... to get paid back.

That's pretty much how Social Security works except the "promise" depends only on the continued existence of the United States... and some degree of intelligence not immediately obvious among the voters... and not on the soundness of the bank, the rate of inflation, or the willingness of the future "young" to pay the prices, or work at the wages, that make dividends and higher stock prices possible.

but it's okay, when you are young and don't know anything you don't have to be able to think. just rub two sound bites together and you achieve instant wisdom.

Lewis

"insurance" does not require that the insured event be unlikely. only that you pay for its "expected" cost through premiums.

another aspect is that the insured event be sufficiently painful that the cost of mitigating it is justified.

this leads to two ways of looking at Social Security:

if the insured event is getting old, and living a normal or longer than normal time in retirement, it makes sense to "insure" for that event by paying for it in advance. has a fairly highly probable event, the premiums will be a large fraction of the cost of the event... so that on average you will pay most of the costs of retirement by the time you retire.

OR you could look at the insured event as "arriving at old age without enough money to buy food or live indoors". this is a somewhat less probable event than simply arriving at old age... but by no means rare... then you can look at your payroll tax as a premium to insure against a quite catastrophic and expensive event. one which would justify paying a premium that was even higher than the eventual payout. because, if you think about it.. the difference between having 80 dollars when i will need it to buy food and having nothing and starving to death, would fully justify paying, say, 100 dollars now to guarantee that 80 dollars later.

so far, Social Security actually pays you more than you pay in (accounting for inflation), but if we ever reach a time where because of longer life expectancies or slower economic growth it does not... it could still turn out to be a good investment. probably even more necessary than today.

Just to counter Lewis:

I'm 26 and I support Social Security. Indeed, I would say one of the major problems with Social Security is that the pension provided is far too low to assure a decent living in retirement.

However, I think there is something in social insurance policy that has been neglected, whose neglect fuels the generational divide issue - Unemployment Insurance. On the level of that which is visible or tangible day-to-day, people my age can't really relate to Old-Age Insurance as something that belongs to us in a real way. Disability Insurance, likewise, is not something that people think about belonging to them - in no small part because people don't want to think they'll be diabled at some point.

But what could be real to us, what risks we face quite often, is a real Unemployment Insurance system. A system where benefits arrive automatically, without an arduous application process that has resulted in only a third of the eligible unemployed actually receiving benefits, where low-wage workers, temporary workers, and part-time workers can actually receive support given their increased vulnerability to job loss, and a system in which benefits are decent enough to survive for short-term periods of unemployment.

Unemployment is real for young Americans, and it's a major source of economic insecurity for our cohort. Restoring UI would restore a crucial part of the social contract - restoring the idea that we all pay in because we all get protection.

Oh, you guys are a hoot. Nice straw man.

Samuelson rightly acknowledges the hardly controversial concept of trade-offs and advocates means testing and a higher retirement age, and you guys say "Hey, he wants to throw seniors into the streets with no money or healthcare! How dare he!

Get a grip, folks.

If you have any interest in leaving La La Land and approaching the issue rationally (something I'm not counting on), here's a rational framework http://swordscrossed.org/node/2192 But pleeeeeease, if you're going to comment there, THINK first, and please no empty rhetorical rants.