Contributing Since the 1960s
The oldest Baby Boomers have been working for companies and organizations since the mid-1960s (or over 60% of the Social Security program's existence!), thus they’ve been contributing to Social Security for over 40 years. They’ve been contributing to Medicare since program inception. The youngest Boomers have been contributing to both programs for around 25 years.
Payroll deductions for both these programs increased dramatically following the 1983 Greenspan Commission, ostensibly with the promise that these accelerated payroll deductions would offset the demographic impact of retiring Boomers early in the 21st century.
Promises have been made; and promises have also been broken. Many Boomers started their careers when most companies provided retirement plans with a guaranteed annuity upon retirement. Many worked for years under the umbrella of these promised benefits, and then in the late 1980s, the manufacturing sector of the U.S headed overseas. Offshoring of U.S. jobs led to domestic downsizing.
The generation of greatest vulnerability to the downsizing of America was the dominant workforce segment at that time: Boomers, of course. White collar jobs have followed blue collar jobs overseas, and this has cut a swathe through the burgeoning tech economy of the mid-1990s through the present. Loss of retirement benefits has followed job loss.
Too many people look at the large size of the Baby Boomer Generation as indicative of unfair advantages, from economic leadership to cultural dominance. They resent Boomers’ sense of entitlement and the halcyon days of their youth when all seemed well with America’s post World War II economic expansion.
What critics miss is the realities of being part of a large generation preceded and followed by smaller generations. Advantages accrue for the large generation, in the aggregate, but individuals within the generation face severe liabilities of intergenerational competition for college admission, career opportunities, affordable housing, and access to leadership positions within companies.
Many others criticize Boomers for their spending habits, best elucidated by David Brooks in his book, Bobos in Paradise. Boomers are seen as frivolous spenders, unleashed and rash, unwilling to delay gratification. On the contrary, society has often asked Boomers to spend money. Sometimes patriotism has been connected with consumerism, as was the message foisted by President George W. Bush following the terrorist attacks of September 11, 2001. Thus our nation’s best citizens don’t horde money through savings but rather circulate money in the economy, buying goods and services with every paycheck.
Another argument of the critics is the unfairness of leaving the youngest generations with the debts of retiree entitlement programs. As mentioned, critics' indignation never fully allows a complete discussion about the economic offsets of the Millennial Generation, with 80 million members and growing due to legal and illegal immigration.
However, that argument aside, Millennials have been indulged from birth through childnood in many ways impossible or inconceivable during the Boomers’ youth. The youngest members of society were once celebrated by “Baby on Board” placards hanging in minivans traveling in urgent pursuit of kids’ soccer games.
The infrastructure, or hardware and software known as “America Today,” with all its assets and liabilities, is nevertheless a tremendous gift from older generations to the youngest. The U.S. has unrivaled worldwide leadership in digital technology innovation, in advanced education, in entrepreneurship, in medical technology, in entertainment and in a “can-do” spirit. This composite of economic value is the baseline upon which any agreements or disagreements about generational equity must begin. Millennials are not beginning their adult lives and careers inside an impoverished nation with few freedoms but rather in the most successful and enviable nation on the planet — yes, even in today's recessionary environment. What they do with these resources is largely up to them, and any potential liabilities incurred by society’s aging adults must factor against many assets being given to younger generations.
One liability often overlooked by entitlement critics is the cost to taxpayers of privatization. Once we begin requiring workers to reduce current entitlement payments by 2%, to be reallocated for private retirement accounts, impending insolvency of Social Security comes nearer, faster. The government would still need to keep its entitlement promises to current retirees, thus shortfalls through reduced entitlement payroll reductions will need to be compensated for by increased income or retail taxes. In the short term, the additional costs to taxpayers have been estimated to be in the neighborhood of $1 trillion dollars. In the long term, full execution of privatization could cost taxpayers $8 to $9 trillion.
