Friday, July 29, 2011

Robert Samuelson Has It Right

Robert Samuelson's article in this morning's New York Times is right on target. Samuelson zeroes in on our fiscal problem and lays it at the feet of our subsidies for the elderly. Yes, subsidies. The idea that social security and medicare represent a safety net does not accord with the facts, as Samuelson notes. The elderly are by no means as poor as the White House would have you believe. Transferring money from working Americans to retired Americans is often a "reverse Robin Hood" exercise. Folks with less income and few assets are often subsidizing the upper incomes. As Samuelson notes more than 25 percent of the over 65 population have assets that exceed $ 250,000, which is a lost more than the asset base of the folks subsidizing them.

It is time we disabused ourselves of the notion that social security and medicare are helping poor people. Poor people die earlier than rich people. Folks that live into their 80s and 90s are disproportionately well off compared to the general population. We should stop transferring money from young married couples with children to their parents whose asset base is often far more than the future will provide for that married couple. This is robbing Peter to pay Paul's, often wealthy, grandmother. We should stop doing this.

Helping the truly needy is worthy and we should do that. Transferring money from working folks to folks that often have plenty of assets of their own is unfair and destructive.