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BK Blog Post
Posted by Jared Bernstein.
From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team.
This is why we all need to read Dean Baker’s Beat the Press column.
This alarm bell–“the old are ripping off the young!”–goes off all too frequently. The answer is not, as such histrionics imply, to do less for the elderly, most of whom depend on Social Security and Medicare (Dean also makes the point that you don’t do the young a favor when you fail to adequately support their aging parents).
Remember, the income of the typical elderly beneficiary is <$30K. For about two-thirds of the elderly, Social Security is their major income source; for 36 percent, old-age benefits account for at least 90 percent of their income and these shares are even larger for minorities and for women. Without Social Security income, and 42 percent of the elderly would be poor as opposed to 10 percent with the benefits.
The answer, as Dean suggests, if we really care about today’s young, is to worry less about the public debt and a lot more about the economy and society in which they’re growing up. Climate, poverty, unemployment, inequality, neighborhoods that are job deserts at best and killing fields at worst, lagging infrastructure (public schools!) and capital stock.
That doesn’t mean public debt isn’t important, although low interest rates have rendered it more manageable than expected in recent years. But as Dean and I argue in Chapter 4 here, the most reliable way to reduce the debt is to run the economy at full employment.
While it sounds cogent, this “blame the aged” trope is nothing more than a DC key-dangle (“look over here at the shiny object!”). Bookmark his rebuttal and revert to it immediately the next time someone dangles those keys.