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Nearly Everybody Wants to Cut Federal Spending?
From a very recent Rasmussen poll:
Eighty-three percent (83%) of Americans say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.
Considering the public pillorying that occurs every time a politician dares to suggest cuts, I find that percentage to be absolutely astonishing.
Are we really this schizophrenic?
58 Responses to “Nearly Everybody Wants to Cut Federal Spending?”
Kind of, but not really. It boils down to a variation of NIMBY.
I bet more than 83% of people, if polled, would agree we need public landfills so we have a place to send our collective garbage. But propose putting one near them…well, you get the idea.
But there is another aspect beyond NIMBY. I think all too often the spending cuts, by the time they make into some form of a bill, have the obvious fingerprints of multiple special interest groups and lobbyists all over them, in the form of special exemptions, etc.
That triggers an understandable reaction against the perceived, or more often real, unfair distribution of the effects, and THAT leads to general discontent.
People are willing to sacrifice when needed and asked, but it has to be fair and equitable for them to accept it.
Agree with Schaden. People love the idea of less spending as long as it's less spending on someone else. “Don't tax you, don't tax me, tax that man behind the tree”.
In one word: yes.
In more words, they want less federal spending, but they still want:
1. their Social Security check deposited nice and tidy into their bank accounts every month
2. the high quality, nearly free medical care of Medicare, while denying it to younger, healthier people
3. to fight endless wars, that magically are cost free
4. safe, modern roads and bridges
5. cheap, convenient energy
There's much more, but you get the idea. People want what they want, and they want someone else to pay for it. Eventually, we're going to have to have a come to Jesus meeting in which there is a realization that we are ALL going to have to start paying the bills.
At least as a going forward matter based on the President's budget, the 83% are correct. Spending sits well outside its historical ranges while taxes are at the high end of their historical range. Thus, the size of the deficit is driven more by spending than the willingness of taxpayers to pay more in taxes.
Not sure this is NIMBY so much as is it a belief (again I think a fairly reasonable one) that in the $3.8 trillion budget, there's probably some waste. Remember, most voters who work have been involved in an expense cut exercise at some point in their existence. They've never seen the government go through this type of exercise so they believe there's waste to be removed.
They probably don't understand the magnitude of reduction that is needed, probably in part because politicians and pundits love to talk about waste as the solution to our problems.
That said, the overall perspective seems pretty reasonable to me.
steveinch, you said, “Spending sits well outside its historical ranges while taxes are at the high end of their historical range.”
I agree with the first half. But upon what do you base the latter half of that statement?
Editing to add: I totally agree here: “They probably don't understand the magnitude of reduction that is needed,”
Probably from someplace like this, which shows total tax as a pct of GDP heading towards record levels in like 20 – 50+ years. I personally put no value in ANY rev/tax projection that goes more than 10 years, and for d most only 5 years.
The 800 lb gorilla that is never discussed is defense sending. The next five countries don't spend what we do and the constant drum beat for national security without fiscal analysis makes our deficit continue to grow. The defense budget ironically suffers from the same problem as social security, soldier retirement pay, medical services, and educational allotments skyrocket as we maintain a standing army of volunteers.
I believe I read that the US has 1600 bases worldwide. Has there ever been a serious discussion about the number and size of these bases strategically? If we are going to continue to be the policeman of the world, couldn't we at least reduce costs by closing or shrinking redundant police stations? A smaller footprint in Germany, Japan, and Korea would certainly reduce our costs. If it comes down to supporting Grandma or supporting the economy of Okinawa, I believe the question is moot.
6. Wars. A decade without a war is like day without sunshine… ( 40's – WWII, 50's Korea, 60's Vietnam, 70's Vietnam, 80's No Sunshine, 90's Iraq, 00 's Iraq & Afghanistan ).
Besides which money spent on war isn't real money anyway…
Grandma better learn to like cat-food… The cheap kind… The very cheap kind…
Lots of good points being expressed here, some of which I agree with. I have to say, it's always easier to point at the government and take them to task than it is to look at ourselves and our own contributions to the problem as well as some of the potential sacrifices we need to consider if we are serious about getting the debt under control. I agree with HemmD about defense spending, Schaden about the NIMBY effect, but disagree with steveinch's statement that taxes are at the high end of their historical range, which is flatly untrue. If we are serious about reducing the deficit and not passing it on to following generations, then we will need to use all the tools at our disposal, including serious and realistic cuts, but also returning to the higher tax levels that existed in the 40's, 50's, 60's and 70's. If the argument ignores that part of the equation, then it isn't a genuine argument.
Since the only portion of the budget that could be cut, that doesn't directly affect people, is the military, and that's not going to happen.
It seems the general public doesn't understand where the money is going. Everything they want cut, foreign aid, etc. is less than 2 0% of the budget. The military and other secuity programs along with Social Security, Medicare, and Medicaid account for more than 80% of the budget. They will have to decide which of these programs should be cut if the deficit is to be lowered.
If these programs are not curtailed, they will overwhelm even the discretionary spending by 2020 when all the baby boomers are fully covered.
Politicians are reluctant to cut spending because not many have the guts to go to their districts and say, “Hey I reduced the amount of federal aid to our district”, while the person who runs against them would be more than happy to point this out in one form or another.
“It seems the general public doesn't understand where the money is going. Everything they want cut, foreign aid, etc. is less than 2 0% of the budget. The military and other secuity programs along with Social Security, Medicare, and Medicaid account for more than 80% of the budget.”
I agree that the public doesn't understand where the money is going. In fact, Rasmussen has something about that, too.
(link)
However, your estimates of how much of the budget is non-discretionary is about the highest I've ever seen. Discretionary spending is, as I understand it, more like 40%, not 20.
That doesn't directly affect people? are you so sure about that?
Polimom,
In the President's budget submission and the CBO current policy baseline projection, receipts are projected above 20 percent of GDP in 2020. That is at the high end of the historical (post WWII range) of 17 to 20 percent.
Today, it's crazy low (14 to 15 percent) but that's more the recession than the tax code anything else.
BTW, in both projections, spending is between 23 and 24 percent of GDP in 2020.
I take 2020 as a baseline since we must be out of the recession by then but in 2015, according to CBO current policy baseline spending will be 22.3% of GDP (the lowest number in the 10-year forecast) and receipts would be 19.7% of GDP. The only time receipts exceeded 20 percent was during Clinton II and a reasonable chunk of that number was capital gains taxes (which are not really income driven but more bubble driven).
To be fair, the CBO assumes the tax cuts expire and the President assumes the tax cuts for the rich expire and there are a bunch of new taxes. I haven't seen a current law (as opposed to current policy baseline and you can't use OMBs because they played with the numbers). My guess is it would be 2 to 3 percent of GDP lower but still in the historical range.
The President's budget has slightly higher levels of receipts and meaningfully higher (about 100 to 150 basis points depending on the year) levels of spending.
CBO baseline is here http://www.cbo.gov/ftpdocs/108xx/doc10871/front…
President's budget is on the OMB website
Leonidas
“That doesn't directly affect people? are you so sure about that? Aside from about 1.5 million people serving in the military, there are their families and thats just directly, although all those working in support industries that rely on military spending and their families aren't really so indirectly affected in many cases either.”
As I said in my post, we spend billions supporting economies of most countries. Do Germany and Japan really require our help with their local economy as we maintain a presence in their country to “protect” them?
How many new Air craft carriers do we need a year? What combat plane currently is anywhere close to ours? What air war are we going to fight? Seems to me we constantly spend more money on defense because we are afraid. If the US is committed to war-like intercessions, maybe we need to face up to war-like casualties. Defense spending is predicated upon the idea that no Americans should die in conflict, and that illusion keeps the jingo spirit alive and well.
JSpencer, please see my post above. Taxes are projected to be at the high end of their historical range within 5 years in both the most recent CBO analysis and the President's budget (for different reasons but to the same effect).
Your post about the time period before the 80s confuses marginal tax rates with total tax receipts. As this analysis from the CBO shows http://www.cbo.gov/ftpdocs/108xx/doc10871/histo…
Even in the 1970s, government revenues did not exceed 20 percent of GDP. In fact this happened only 1 time since 1970, in 2000.
I've seen the data going back to WWII but I've forgotten the google search I used to get it. When I find it, I will post it.
steveinch
measuring taxes as a percentage of gdp during the worst recession since 1930 is mis-leading. If the economy recovers and gdp skyrockets, I believe the percentage will drop due to basic math.
steveinch, thanks for clarifying. Yes, I was pretty sure that's what you were talking about. But as you point out, these are projections based upon (either) expiring cuts or new taxes. “Historical highs” as a percent of the GDP are *not* occurring now. On the contrary, in fact.
I agree but my point is, even were taxes to return to the high end of the range, the budget deficit is unsustainable because of higher than ever spending. If you assume they don't and they stay in the 17 percent range, we are well and truly doomed sooner rather than later
steveinch -
So, record level taxes are record low taxes, except if you project at least 10 years out.
Right….
HemmD
Sorry, but that's not correct according to both the CBO and the OMB
Taxes actually drop during recessions as a percent of GDP because the impact on wages and cap gains is greater than the total decline in economic output.
Receipts in 2009 were 14.7% of GDP versus 17.something in 2008.
GDP is a highly inflated number, while inflation is a deflated number. That's why taxes are always compared to GDP and not inflation. If you compare taxes to the rate of inflation, you'd see quite a bit different story.
Basically, the only way the budget is going to be balanced is if everything is on the table, including higher taxes and reduced benefits.
Schaden,
Taxes are record low now because of the recession, but that doesn't change that the driver of future deficits is spending. I'm personally unconcerned about the fy09, fy10, and (maybe) fy11 deficits. However, the long term picture is concerning and the driver of this is spending. If you assume receipts do not recover, the problem only gets worse and even current policy baseline would put receipts in the historical range.
You actually only need to project to 2015 (hardly 10 years) to have taxes in the upper half of the historical range. My opinion is the projections are pretty solid if the policy assumptions are right but they may well not be. My own opinion is they are about half right. The upper income tax cuts will be allowed to expire but the President will neither push to allow them all to expire nor get the various tax increases he proposes in his budget.
Still and all, you can't balance the budget running expenditures in the 23 to 24 percent range.
Not sure what I'm missing, but if the percentage is calculated as tax / gdp, and the amount of taxes is lessened more than the gdp is lessened, that would mean that the percentage is less than previous.
Conversely, the gdp number( the denominator) must reduce further than the tax (the numerator) for the percentage derived to be higher
“People love the idea of less spending as long as it's less spending on someone else.”
It's analogous to how so many people routinely assume federal goodies will be paid for.
HemmD,
Take a look at the CBO or OMB projections and you'll see that receipts expand rapidly with recovery. The numerator and the denominator are not independent of each other. In fact receipts move more radically than GDP thus, receipts tend to slump in a down economy and grow faster than GDP in a strong economy. If that's what you're saying, I apologize for misunderstanding. It appeared to me you were saying the opposite, namely that taxes as a percent of GDP would decline as the economy grows.
“the only way the budget is going to be balanced is if everything is on the table, including higher taxes and reduced benefits”
That implies entitlement reform, which is paramount. Social Security and Medicare are already huge; just look at successive Budgets of the United States and see for yourselves. Sooner or later these programs alone will start a perennial contest — reminescent perhaps of pre-1980s “industrial relations” between Labor and Management, with Government as observer and often as facilitator (this time, it, the federal government, will be involved directly). What we'll be subjected to is the ceaseless attempt to secure “equilibrium” between taxpayers and beneficiaries, as politicians face protests by both groups, as tax increases and spending controls or reductions become essential. (As these programs begin running deficits, more money will be required from elsewhere to continue paying benefits in full. It is at this time that the programs and reforming them will no longer be possible to evade, as has been the case with politicians and so many other people all these years so far.)
Polimom,
A useful graph can be found here. It shows Federal Tax Receipts as a percentage of GDP from 1965 to present, with projections out to 2082. Thanks to the recession/depression, current tax receipts as a percentage of GDP are at an epic low, with no significant changes to the tax code compared to the last few years. The scare stories about how taxes are “going to their highest levels ever” require one to assume 1) all of the assumptions the various future projections are based on are correct, and 2) there will be no changes to tax policies after this year–for decades. Yeah, right . . . .
The true discussion should not be around what percentage of GDP the Federal government takes in in taxes, but instead what percentage of GDP does the Federal government spend. THAT is the true burden on the economy, not corporate and personal income taxes.
What we'll be subjected to is the ceaseless attempt to secure “equilibrium” between taxpayers and beneficiaries, as politicians face protests by both groups, as tax increases and spending controls or reductions become essential.”
*******
Ah but taxpayers are ALL beneficiaries. See this is the myth of capitalists view on socialism. The perfect example. Everyone will become sick, infirm or old and with dwindling money, with the rarest of rare exceptions. When that happens, they will want socialism. Until then it's “I got mine Jack, keep your hands off of my stack”. What it amounts to is hoarding and selfishness.
According to economists we are in a hole that needs spending in order to get out of. So we should spend and not fear it since the pendulum will swing back the other way when we are coming out of the Great Bush/Cheney Depression. Everyone will forget how malignant capitalism forced us into mandatory socialism and the blame for “nearly destroying our country” will predictably fall on the shoulders of the democrats and capitalistic hoarders will rest easy knowing their “stack” is fine.
Master,
Good chart but it's old. The FY11 budget is much higher on receipts than FY10
Non-military discretionary spending is about 12%. Interest is about 5% and the TARP about 4%. If you include the military as discretionary (?!?) (at 23%) you get closer to 40%. I'm going by the wicki budget chart.
http://en.wikipedia.org/wiki/United_States_fede…
More pertinent information is available at http://www.concordcoalition.org/
The true discussion should not be around what percentage of GDP the Federal government takes in in taxes, but instead what percentage of GDP does the Federal government spend.
I agree with you. And here's an historical chart (and data) that looks at precisely that equation (spending as a % of GDP). LINK.
The first thing I notice is that (with the exception of the Great Depression spike) spending as a % of GDP has been steadily increasing all along. Through bad times… and through good times. Slow, steady expansion.
Sil,
It's not a question of whether everyone will become sick, infirm or old, it's a question of who pays for that and why we insist on a massive (greater than $1 trillion) transfer of income from people without wealth to people who have it.
As an example, the median net worth in 2000 (last census) was $50,000. The median net worth of people age 65 and over is over 100k and the top 20 percent of people over 65(by income) had a median net worth of in excess of $500,000. Why should the bulk of taxpayers who have net worth below $100k give money to people who have a net worth of more than 5 times as much.
I have no issue with giving money to people who have need but why transfer from the have-nots to the haves?
Polimon,
Agree and that's exactly the problem. Unless we can change that curve, we are doomed to a financial crisis (either inflationary or default)
Except notably during the Clinton administration.
Unfortunately, the end of that administration is where Robert Rubin laid the initial seeds of the banking crisis (no, not blaming that alone, just saying that was a key starting point).
Yes, it would, of course affect a large portion of the population since it is such a large portion of the budget, but I meant not as directly as cutting SS or Medicare. The fact that cutting either the military personnel or the federal employees would only make the recession so much worse is what makes cutting them at this time so unthinkable. However, much could be cut in the materiel and contractors area.
OK, then cut social security to anyone with an income high enough to preclude needing it. Cut all corporate welfare completely. Zero tax breaks for high income brackets. With companies netting billions quarterly, a hundred million isn't going to kill them. So there aren't as many trips abroad and cocaine parties and private jets and high-end prostitutes. Oh well, we all have to make sacrafices.
That's a point that escapes many. That we ALL have to make sacrafices, including the uberwealthy. You know, not just the newly homeless mom living in her car with her two kids, thanks to losing her job because of deregulation and recklessness on Wallstreet trickling down in the form of laying off her and hundreds of her coworkers when their inventory couldn't move anymore due to a frozen economy. We ALL have to make sacrafices..
No corporate welfare, no more social security for people who can afford to not be getting it. See if that doesn't help things out a little.
I actually think there are several ways one could tinker with both SS and Medicare, without the often-described horrors of poor / old people starving / freezing to death in the streets.
Some degree of means testing, for instance, on SS, would yield real $. And I'll give you an example: a parent dies, and his/her young child receives that parent's projected SS $ until the child reaches 18. Doesn't matter whether that child lives in an impoverished family or an affluent one. If the child is young when the parent died, that racks up to some really big $ — and even more on point, funding for such extended benefits was never put into the SS equation.
Re: Medicare. I often see people challenging others in this type of conversation with what they think is a profound “gotcha”. Like this: “So if you're in favor of entitlement cuts, then I guess you aren't taking / won't take Medicare, right?”
But Medicare isn't actually optional. Once you're eligible for it, there is no other medical plan available at all. The government entity has totally negated any other choice. But there are many MANY 'elderly' people who could — and would — buy on an open market if the choice was available.
Spending cuts — particularly in entitlements — are always presented as an either or, all or nothing choice. But that's really not at all the case.
Polimom
It may not need to be stated, but changes to SS must be planned for and implemented ten years from now. Any changes made for people in the home stretch to retirement must know well enough in advance to make reasonable changes.
In other discussions about cutting SS benefits, I have said that I'd be willing to change the 65 retirement age to say 68. I'm 59 now, so three extra years would be worth giving up to me if it would help resolve the problem. People who are 50 today could have their retirement age moved to 70 without any great hardship. If 25 year olds were given 75 year retirement goals that would have minimal effect upon their current lives.
The point, obvious as it may be, is that reducing benefits across the board for those receiving funds now or those who are about to receive funds cannot be done piecemeal. I felt this needed to be stated explicitly because the mounting national debt is discussed as if changes must be done today.
The same kind of planning must occur with military retirement. You can't change what a 20 year vet has been promised., but you certainly can change what a new recruit can expect.
“Ah but taxpayers are ALL beneficiaries. See this is the myth of capitalists view on socialism.”
Incorrect, Sil. Social Security and Medicare are principally retirement-related social-spending programs. “Beneficiaries” and “retirees” have always been synonymous here. This introduces something else you probably have neglected as well, the change from now to the future of the “dependency ratio” between taxpayers (or workers) and retirees (the beneficiaries). This is changing in our future due to societal aging. (It is going to be even worse in Europe than here.)
The interests of the retired beneficiaries and the working taxpayers will largely be in opposition.
The politicians will face demands and complaints from both groups in the future, as the “pain” and the opposition to it has to be shared among both groups. Balancing that pain in some way is what is meant by “equilibrium.” (In practice it will be like hovering in a helicopter, or balancing atop a large ball on water — naturally unstable, ever-changing.)
There are supplimental plans to Medicare already in place so your post is misleading. The market can support both streamlined medicare and “cadillac” auxillary plans. Why this hasn't sunk in as a way for the insurance industry to stay afloat is beyond me.
40 million people need insurance. As our economy rebounds by taking the burden of their premiums off taxpayers via ER and off the backs of small-business owners via mandated coverage for employees, more and more of those 40 million will be able to afford supplimental plans in the private industry.
We aren't going to wet-nurse this industry any longer. The system is broken and must be fixed.
“I actually think there are several ways one could tinker with both SS and Medicare, without the often-described horrors of poor / old people starving / freezing to death in the streets.”
Plenty of reforms have long been listed, and posted by me on this site as well as discussed elsewhere.
The three first overdue reforms to examine are:
* Raise the retirement age to a normal age for modern times, age 70 or higher.
* Index the retirement age and perhaps benefit payments to increases in life span.
* Reduce or end early retirement.
It's assumed that benefits themselves won't be reduced. This certainly is possible. Either there could be exclusions based on means testing, as you and so many people have identified, or to retain universality (I'm thinking ahead and thinking of the programs' defenders), these programs could be changed to lower benefits to those currently making more, eventually if possible so that all receive minimum payments (Social Security) or a minimum benefit package (Medicare). This retains universality while lowering costs.
It's assumed that we'd have to do more than what the Trustees have long noted is needed to make the programs solvent now. (This is repeated in every year's Trustees' Reports and Report Summary.) The Trustees list the tax increases that would be needed to regain solvency with these programs for the short term. (More would, and will, be needed to make them solvent for the longer term or indefinitely.)
Note that simply making all funding for them “mandatory” in no way guarantees solvency (though it would score early, good points among the gullible in this country if the politicians were to do this).
In the extreme case (something I'm already foreseeing as a possibility eventually), we could move from Medicare for All to VA for All (the VA model, more extreme than Medicare for everybody) if it's eventually felt necessary to put costs under additional control. (I don't believe it will be sought for improvement of quality of care or a true desire to end private health care completely.)
For those are more well-read, you'll note
“these programs could be changed to lower benefits to those currently making more, eventually if possible so that all receive minimum payments (Social Security)”
illustrates that Social Security can be viewed as the retirement-age partial-univeral (and incremental example) equivalent of a guaranteed minimum income for everybody (a leftist dream for decades).
OK, back to the ordinary stuff…
As I've said many time before, the budget challenge is hard but not at all unsolvable. 5 specific and easy to understand changes would solve the problem.
1. Allow the Bush and Obama tax cuts to expire for everyone.
2. End industrial tax preferences, meaning preferences that favor one industry over another
3. Stop all government payments to any individual (or small business) with income or wealth in the top 25% of society
4. Reduce military spending by 5 to 10 percent
5. Freeze all other spending until balance is reached
Those 5 things would eliminate the deficit within 5 years and would allow discretionary spending to grow at a moderate rate after balance is achieved without upsetting the balance.
Nobody will like the whole list but it's a simple list, easy to explain and effective.
Parenthetically, I think means testing is a far better solution than raising the retirement age. Means testing focuses any reductions on people who actually have less need of assistance as opposed to raising the age which hits all people just because of their age.
Of course, a truly radical approach would be to eliminate SS and Medicare entirely and push Medicare beneficiaries into Medicaid and SS beneficiaries into AFDC. As a practical matter, there's no reason to have two programs doing the same thing except that this way we can retain the fiction that SS is somehow different than welfare.
“Medicare isn't actually optional. Once you're eligible for it, there is no other medical plan available at all. The government entity has totally negated any other choice. But there are many MANY 'elderly' people who could — and would — buy on an open market if the choice was available.”
In fact, not only are employers shifting qualifying retirees to Medicare (there's no need for employer retiree benefits of any kind, after all), but it's also presumed by the insurers once someone qualifies for Medicare.
Medicare is far from perfect — for one thing, why is there such a thing as “Medigap” insurance? — and is known along with Medicaid for being refused or limited (i.e,. access is rationed) by providers. If you qualify for and are headed for Medicare, one of your first tasks facing you (unlike many others) will be finding someone who takes Medicare.
“OK, then cut social security to anyone with an income high enough to preclude needing it.”
The benefit formula will probably be revised in later years to make the distribution effectively more regressive. (The minimal, “flat” amount for everyone, the ultimate example I've given, is just hypothetical, so don't worry.) Changes (such as were sought during the Bush years and fought without reason along with everything else proposed, by the Dems) to the formula to retard future growth of the benefits (indexing to inflation rather than wages, etc.) are also likely.
This is independent of what's overdue and will no doubt be done sometime, raising or eliminating the income limit or “cap” as it's known for FICA payroll taxes. (It's arbitrary and illogical to have or retain the cap, anyway.) Note that whether or not benefits are adjusted (increased) for those who have their taxes raised as a result, raising or eliminating the FICA cap only delays the start of Social Security deficits for a few years. By itself it never has been capable of making Social Security solvent (saving it).
For those who still don't understand:
[Social Security Administration]
“Two proposals for eliminating the benefit and contribution base are analyzed in this
memorandum. The first, Proposal 1, eliminates the contribution and benefit base for the purpose
of (1) determining earnings subject to payroll taxes and (2) crediting earnings for computing
benefits. Proposal 2 eliminates the contribution and benefit base only for the purpose of
determining earnings subject to payroll taxes.”
[#1, end the cap, raise benefits for high-income earners. #2, end the cap, only; no benefit changes]
http://www.centristpolicynetwork.org/legislative_updat...
This week's Newsweek has a couple of good articles on the very subject we are discussing here.
For myself, as a fairly young person, the current ways in which we fund both Social Security and Medicare feel akin to generation theft. What we are essentially doing is transferring wealth from the young and working, to the old (and not so old) and retired.
And before we get into the tired trope about how much one has paid into the system: it is almost certainly much less than one will receive out of the system.
Here's the thing: SS and Medicare were never meant to sustain people for DECADES of retirement. When SS was enacted, people lived on average, about 2 to 3 years more before passing. Now, they may live for 30 or even 40 years.
Folks, it is not unusual for people to live to be 100 or more these days. The medical profession even has a name for it: there's the OLD and then there's the OLD, OLD. You are old until about the age of 85. After 85, you are considered in the class of the old, old. Between 65 and 75, one could call that class, the young old.
How can a society sustain the ever increasing life expectancy and the ever increasing needs of the very old at current levels? The answer, is that we simply cannot–not without squeezing the young, productive people in a society in which they are already at a severe disadvantage.
“The medical profession even has a name for it: there's the OLD and then there's the OLD, OLD. You are old until about the age of 85. After 85, you are considered in the class of the old, old. Between 65 and 75, one could call that class, the young old.”
The medical profession typically uses age 70 as an older-age criterion for things like organ donations and transplants.
Onset of disability in the modern nations is usually in the seventies.
Somewhere in the seventies is the modern retirement age due to disability related to old age. It is also the modern retirement age used to maintain something approaching normal for dependency ratios (between retirees and workers), or maintaining an earlier typical period of retirement in years.
“What we are essentially doing is transferring wealth from the young and working, to the old (and not so old) and retired.”
That is indeed what is happening, and it is unsustainable in its current arrangement.