By Judd Gregg - 08/01/11 10:00 AM EDT
There is one number that is not talked about but which is the root cause of much of this debt-default angst.
Between now and 2017, the number of Americans who have reached their retirement age will essentially double, from 35 million to approximately 70 million.
It is hard to overstate the fiscally devastating effect that this ongoing explosion of the number of older people will have.
It means the cost of Medicare — an already fiscally, and to a large degree substantively, dysfunctional program —will at least double. Social Security and soon thereafter Medicaid, as the primary provider of long-term care, will see their costs exponentially increase as well.
In addition, a less noted but significant effect will be that the largest and most productive generation in American history will basically become nonproductive. Instead of having this huge generation working and generating wealth for the nation, it will be using up the wealth of the nation as it demands the benefits of the social safety net it supposedly paid for with years of FICA taxes.
This simple, undeniable and overwhelming fact stares at us, but the president and his party in Congress deny it.
“Medicare must not be touched, Social Security is sacrosanct and all will be fine with the debt if we just raise taxes on the wealthy and cut defense” is their mantra.
But, as the numbers do not work and under this scenario the deficit and debt still grow uncontrollably, what is the purpose of this misdirection?
The president and his party have decided we should choose the path of least political resistance. On this path all is well as long as the present does not look at the future. Massive debt can be created if whoever is going to pay for it is not in the room at the time of its obligation, being a generation away.
In addition, according to the worldview of the president and his colleagues in Congress, there are numerous examples of social welfare states that continue to function for the popular good and benefit the elected elite. In their mind, there is no reason America should not replicate this approach.
All it takes is a higher tax burden to meet the demands of the larger government. In Europe, where governments take up an average 35 percent to 40 percent of their economies, these costs are paid for with robust income tax rates layered with large value-added taxes.
America thus has lots of room to grow the central government and lots of room to raise taxes, or at least this is the view of the governing class. The doubling of the number of retirees and its implications for economic growth and the overall burden of government is therefore not a concern to the left.
In fact, it is welcome. It creates a larger constituency to support this goal of massing the government. Power is the purpose of the game. And power comes from political constituencies who vote to put people in power.
The president and his cohorts believe the compelling result of this doubling of the number of retirees is not that their demands for benefits will bankrupt the country but that their demands will empower the left to realize its purpose of a vastly larger federal government.
A permanent, huge, new supportive base brings with it the power to distribute social justice as they define it. There is no altruism here, only a crass desire to concentrate power at the expense of the younger generations whose standard of living will inevitably drop as they are forced to carry this massive expansion in the cost of government.
The president and his fellow travelers find themselves with an unexpected windfall for their purposes. So many new retirees, so much potential political power, are gifts. The left has stumbled into a candy store of delicious opportunities that can, they believe, empower their goal of a greater social welfare state with them in charge permanently.
So what if it causes cavities for the kids?
“They don’t vote. Heck, some of them are not even born yet.”
Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and also as ranking member of the Senate Appropriations Foreign Operations subcommittee.