No money has been saved. No investments have been made. No cash has been stashed away in bank vaults. Today’s payroll tax payments are being spent to pay medical bills for today’s retirees. And if any surplus materializes, it’s spent on other government programs. As a result, when today’s workers reach the eligibility age of 65, they will be able to get benefits only if future taxpayers pay (higher) taxes to support them.
Just as Bernie Madoff was able to offer early investors above-market returns, early retirees got a bonanza from Social Security and Medicare. That’s the way chain-letter finance works. But in the long run, there’s no free lunch. That’s why things look so dismal for young people entering the labor market today. (John Goodman posting at his Health Policy Blog)
To which Rob Long over at Ricochet responds:
And yet: no protests in the streets. No marches. No student sit-ins. No youth agitation at all, really, except for a couple of College Republicans in blue blazers. What? Are they stupid? After all of that college tuition? Are young people in their 20's just dumb?
At a certain point, as the Bernie Madoff saga unfolded, a lot of us wondered if there wasn't some blame to be shared with the folks who believed his nonsense, who credulously cashed the checks in good years and bad, who never asked how he managed such stellar and consistent returns.
As a man in his 40's who is currently participating in the great swindle, I've got to say to the kids in their 20's: thanks for making it so easy.
