The 12-member Super Committee is down to its final two weeks to produce a plan to cut at least $1.2 trillion from the federal budget. According to recent reports, both Democratic and Republican proposals have contained sizable cuts from Social Security, Medicare, and Medicaid – all programs that benefit the large majority of Americans in the 99% – while offering little in the way of new revenues.
The forces of the 1% are hard at work to convince us that these cuts are necessary to the fiscal health of the country, and that anything short of these rollbacks will result in economic doom and crippling levels of debt in the coming decades. Their latest attempt to distract from the real issue at hand – the enormous transfer of wealth to the top 1% that has taken place in the last forty years – is to convince us that wealthy seniors are the ones taking from today’s younger generations.
This ‘generational warfare’ angle has unfortunately gained traction in the media recently, and the timing could not be worse. As the Super Committee is deciding whether to cut social programs, these studies imply that since seniors already have much more wealth than the young, it is inappropriate – even irresponsible – not to cut Social Security and Medicare benefits.
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It is not difficult to spot the errors in these articles. For one, they cite that the median household net wealth of a senior household was $170,494 in 2009, up 42% since 1984. This figure includes the value of all property, assets, and savings. But according to the National Association of Realtors, the median sales price of new homes at that time was $172,100. It is not at all surprising that the elderly have more assets than the young: they have worked (and saved) much longer, and most have accumulated property and homes. But beyond the value of their homes and property, the average senior actually has very little accumulated wealth. That is the scandalous news here, not that seniors have more wealth than young workers. (What’s more, every age group except the young has experienced net wealth gains in the past forty years – not just seniors.)
Of course, it is true that young Americans are also in bad shape – the median net worth of households headed by someone under 35 is only $3,662. There are many causes for this – for example, high unemployment rates for young people(currently around 18%) on account of the recession, which drops earnings and savings levels. But strikingly, cutting Social Security would not help this group at all (especially since they too will rely on it in coming decades). Instead, we need policies targeted to help this age group – better college loan repayment programs, for instance – and most of all, jobs.
As the Super Committee enters crunch time, we would be wise to remember the sage wisdom of FDR, who offered this analysis in 1936:
The very employers and politicians and publishers who talk most loudly of class antagonism and the destruction of the American system now undermine that system by this attempt to coerce the votes of the wage earners of this country. It is the 1936 version of the old threat to close down the factory or the office if a particular candidate does not win. It is an old strategy of tyrants to delude their victims into fighting their battles for them.
Don’t be distracted by false claims of generational warfare – the real struggle is against the forces of the 1% who are trying to squeeze the rest of the country even tighter. We need to remind the Super Committee that in the end, they are accountable to the 99%, who overwhelmingly want no cuts to Social Security, Medicare, and Medicaid.