Robbing the Old to Give to the Young (and the Rich)

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Advocates for the preservation of so-called old-age entitlements have been warning for some time that Social Security and Medicare may be offered up as a sacrifice to offset the cost of the bailout and stimulus.  This would suit conservatives, who for years have been looking for ways to undermine the popular programs. Leading that charge are the the “granny bashers” hunkered around the Peter G. Peterson Foundation. With an endowment of $1 billion, the Foundation pursues an agenda that consists mainly of bitching and moaning that greedy geezers are taking money away from poor young things with their unconscionable demands for basic health care and income support. With increasing support from the media, the punditry, and some members of Congress, they warn that aging boomers will soon bankrupt the country and destroy the lives of future generations.

It’s particularly absurd that this argument emanates from the likes of Peterson, himself now an octagenarian, who was Nixon’s Secretary of Commerce and and more recently chair of the Council on Foreign Relations. Peterson, who is worth $2.8 billion, was also head of the now-defunct Lehman Brothers, and is probably best known as senior chairman of Blackstone Group, a finance company currently enjoying harsh criticism from the Chinese for having lost that country $80 billion in lousy business. While attacking the programs that support poor elderly people, Peterson seems to have no objection to government bailouts for his old comrades on Wall Street. Bill Greider recently wrote a comprehensive piece in The Nation on the machinations of Peterson and his anti-entitlement cohort. 

This week, Dean Baker, co-director of the Center for Economic and Policy Research,  a Washington think tank, points out the essential flaws in the granny bashers’ prognostications of doom. In fact, he argues, they have it backwards:

The recent collapse of the housing bubble and the resulting stock market plunge have reduced the wealth of older workers and retirees by close to $15 trillion. This is a transfer to the young, since they will be able to buy the housing stock and the corporate capital stock for a far lower price than they would have expected to pay just two years ago.

Remarkably, the granny basher crew has somehow failed to notice this enormous transfer of wealth from the old to the young. They just continue their crusade to cut Social Security and Medicare as though nothing has happened.

It should be evident that the granny bashers don’t care at all about generational equity. They care about dismantling Social Security and Medicare, the country’s most important social programs. It is important that the public recognize the granny bashers’ real agenda so that they can give them the respect they deserve.

This post also appears on James Ridgeway’s blog, Unsilent Generation.

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