Conservative Logic

An economic guide to politics, designed for post-Baby Boomers

Generational Warfare

 

The statement that started this blog is a little dated now that the election is over. But it is proving to be remarkably prescient. Looking at the Washington bailout culture through the filter of generational warfare, the old are sticking it to the young today more than at any other time in our country’s history. So I leave my original post for your consideration…

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The defining political struggle of our time is generational.

This election year, we’ve heard quite a bit about the return of class warfare to US politics. The media has erroneously conflated the presumptive nomination by the Democrats of the most liberal Presidential candidate since George McGovern with a renewed tension between rich and poor in America. And yet the evidence seems to reflect just the opposite. Voting patterns in the Democratic primaries seem to be fragmenting by race (blacks for Obama, Hispanics for Clinton), age (youth for Obama), education (more educated for Obama) and other affiliations (unions for Clinton). The evidence we have so far would seem to indicate a more class-polarized election if Clinton is nominated than if Obama is nominated.

The premise of this weblog is that it is age, not class, race, or any other division, that constitutes the most significant and relevant cleavage of political interests in this country. Why? For the simple reason that this countries younger generations – basically, everyone below the age of about 40 – are being systematically looted and defrauded by this country’s older generations, with the federal government as their instrument. America is engaged in generational warfare on a massive scale – and the youth of America for the most part don’t even realize that they are being victimized.

  • The massive deficit spending of the US government, along with rapidly rising national debt, effectively represents a transfer of wealth from younger generations (who will foot the bill of the interest, and, eventually, the principal) to older generations.
  • Social Security represents another massive transfer of wealth from youth to age. It’s unlikely that my generation will ever see a dollar from Social Security; yet every year we pay in to the program in order to fund payments to older generations who weren’t responsible enough to save for their retirements during their own prime earning years.
  • Healthcare is heading for a massive crisis and the Baby Boomers retire and the US government assumes the burden of their healthcare through Medicare.
  • The government continues to create and expand other entitlements for the elderly – to be paid for by younger Americans.

Older generations – particularly the Boomer generation – have achieved effective and political control of this country by virtue of their current demographic advantages. As a result, neither political party is good for the youth of America.

That being said, one party clearly represents a superior choice for younger voters from an economic policy perspective. By virtue of its small government philosophy, conservative economic principles, and federalist roots, the Republican party offers a superior option to younger voters. This may seem counterintuitive to many voters who believe that the Republicans are the party of the status quo (and by extension, older generations). This blog will show that the Republican party offers a clearly superior choice to younger Americans. Although traditional Republican economic values have been abused by the Bush administration, McCain shows hopeful signs of a return to the type of fiscal discipline that offers maximum advantage to younger generations.

The mystery, of course, is why younger generations historically tend to vote against their personal financial interests by voting Democrat. This blog will address that issue as well, in its turn. In the meantime, consider the major Democratic economic policy initiatives, particularly those articulated by Obama (and essentially reflected by Clinton):

With Obama:

  1. We pay to fund healthcare for the elderly, with little benefit to ourselves. Nationalization of healthcare sounds great in principle to younger voters – free healthcare from the government! But keep in mind that even if you can make socialized medicine work efficiently (a big if), someone still has to pay for it. Reality is, younger people are healthier. Their medical costs are lower. Under a national healthcare plan, we younger generations take the brunt of the cost of healthcare for the Boomers and older generations, many of whom have lived unhealthy lives and made unhealthy choices.
  2. We take on the burden of funding these same peoples’ retirement. Obama’s social security initiatives only marginally impact the date of imminent Social Security bankruptcy (pushing it back by a few years); but they do make it profoundly more difficult for younger Americans to accumulate savings – which they will need to fund their own retirements when the time comes.
  3. We pay for a plan to bail the older generations (especially Boomers) out in the housing market. Not only do we pay for the plan, but the plan itself keeps housing prices articificially high. Which means it costs us more to buy our own homes when the time comes.
  4. We pay with new economy jobs (the jobs the younger generation will take in high tech and services) when we increase trade barriers in order to keep old economy manufacturing jobs.
  5. We strengthen the unions which creates an inflexible labor market where age (and lack of performance) is rewarded over youth and vigor.
  6. We pay with higher taxes. Let’s think about the case of a recent college grad, starting a new job in New York City making $50k a year. Let’s say 50% now goes to taxes (federal, state, city, sales), leaving $25k of disposable income. Repealing the Bush tax cuts will knock another ~$1k off the that. So tat’s an instand hit of 4% more in taxes thanks to Obama. And try living on $24k a year in New York. That $1k hurts.
  7. Consequentially lower economic growth follows from the tax increases — which can have a massive compound effect over the course of our relatively longer lives. The pie will be smaller for us in our retirement; the pie will be smaller for our children.
  8. All these programs cost money, ballooning the deficit and driving up interest rates — further slowing economic recovery and creating even more indebtedness for my generation to eventually have to come to grips with.

In a way, despite his message of youth and hope, Obama is selling younger generations down the river with policies that amount to a gigantic bailout plan for irresponsible Boomers. Election of Barack Obama would result in a redistribution of wealth (and future wealth) from young to old on a massive and unprecedented scale.

I’ve created this weblog for a variety of reasons:

  • To describe the unprecedented scope of the problem and the profound implications our current course has for the prosperity of American youth;
  • To document the demographic basis of the problem;
  • To reveal the various manifestations of the problem – existing and proposed government programs and entitlements; political worst offenders, etc.;
  • Finally, to recommend a political course of action to those Americans of my generation and following generations – the victims of American gerontocracy.

My views are based on basic principles of fairness and individual responsibility:

  • Take care of your own Every generation should at a minimum be responsible for providing for itself. Intra-generational wealth transfers via traditional social welfare programs are not under consideration here.
  • Care about the future. Responsible generations also care about the future. They care about the success of their children and their children’s children. Just as individuals often choose to leave a financial legacy to their children or grandchildren, older generations should have an interest in endowing the future with some kind of positive endowment, rather than debt.
  • Fair is fair. I am not anti-elderly. All I ask for is a restoration of political and economic fairness and balance. At an individual level, I believe that most older Americans would be appalled if they understood the economic ramifications of their voting patterns on younger generations. The problem is a collective one. As individual, self interested votes are translated into public policy, inter-generational fairness is sacrificed.
  • The Constitution should not be abused. The US Government was not designed by the Founders to be an agent of inter-generational wealth transfer. Since in the 225 years since the founding, the scope and size of government have naturally evolved – and part of this evolution has been the development of institutions and powers that enable the process of inter-generational piracy. The abuse of the powers of the federal government in this way would have dismayed the country’s Founders.

Over the next few months, I’ll be following ongoing election excitement through the filter of generational warfare. If you run across items that you think are relevant, send them to me – I’ll post them and comment. The intention here is to draw attention to American gerontocracy in the hope that voters of younger generations can find a consistent self-interested voice powerful enough to resist the self-interests of America’s older political masters.

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One Response to “Generational Warfare”

  1. Richard said

    Interesting premises for a blog, one I have often thought about myself. I often notice young families, both parents working, exhausted and struggling while their elders take trips to Florida in February and play the state Lotto with their social security money. For every senior completely reliant on their welfare checks (let’s call the payments what they are) there is a senior who uses the payments as fun money. It’s a perverse system and on that will only get worse.

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