Living on Borrowed Time (Part 2 of 3)

PREFACE:
This topic is going to be offensive to some people. It presents life from a Darwinist view and portrays life as an investment and the living as resources, as opposed to the laughing and loving souls that we can be. This post will remove the romantic, the religious, and the superstitious notions about life and add in the bio-economy of politics, economics, and sociology.

BODY:
Job turnover, retirement planning, geriatric medicine, political policy, economic policy, advertising, driving laws, handicap-awareness, and a whole slew of other things greatly depend on how long people will live and what their condition will be in their later years. The larger the population living into seniority, particularly advanced seniority, the greater a societal shift is required to accommodate the population shift.

Take a look at all the stories about the Baby Boomer generation (those born at or soon after the end of World War II – 1946-1955). This generation has proven to be one of the most domestically-influential generations this country has ever seen. They played both parts in the Civil Rights movement, Women’s Rights movement, Gay Rights movement and were the majority of the leadership and fighting force through the Cold War. They watched the first lunar landing, they fought the Vietnam War (leading in and protesting against), and they revolutionized so many activities, industries, and sciences that life in this country will never again be like it was. They made life both simpler and more complex, but they made it change. They are about to make it change again.

This generation of Americans represents the largest and most prolific generation of seniors that this country has ever seen. As a result there are a lot of accommodations that are coming to fruition that haven’t existed previous. Retirement communities, assisted living, new geriatric medications, geriatric physicians and surgical/medical procedures for geriatric conditions are becoming full-fledged industries but not quick enough to match the need. Senior-specific tourism, senior-emphasized shopping venues and senior-influenced products come to fruition, but not quick enough to match the need. Adults find themselves looking after their young children and their aging parents for long periods of time. Retirement pensions don’t last as long as the person’s life. People are outliving their siblings, spouses, and their children. These people are very much alone in their later years, with no one left to take care of them…well, not really.

Historically, older people have been taken care of by their descendents, their friends and their community. Unfortunately, societal changes (many of which became the standard after the Baby Boomer generation) have made it so that people live apart from the bulk of their family far more often than they used to. In addition to the separation of family, people tend to move to different towns, cities, states and countries far more often than we used to, both as a country and as a human race. Lastly, the longer one lives the less likely they will have a full compliment, or even a reduced compliment of people that have known them a long while. So at the same time that a person’s life requires more relevant and familiar attention from others, there are fewer relevant and familiar people available.

This is where a combination of political changes and societal changes has turned a big impact into a huge one. First, let’s look at the political changes. In 1935, President Franklin D. Roosevelt signed into law the Social Security Act as a part of his “New Deal” program. This program was intended to be a social insurance tax program that would provide retirement benefits to working Americans. Along with the creation of Social Security, that act also created welfare. In Title 3 (Unemployment Compensation) and Title 4 (Aid to Families with Dependent Children - AFDC), the Social Security Act laid the foundation for the American welfare system. Though Social Security was considered a remarkable new step in social insurance, the provisions at that time were such that most women and minorities were excluded from unemployment insurance and old age pensions.

There were a couple of key pieces to how this legislation operates.
1. The payroll taxes were automatic and static (due to the newly created FICA), while the payouts were not.
2. Unemployment and AFDC taxes would never be refunded if not used.
3. The surplus was put into a trust that is made available to congress for other purposes.
4. The retirement age was set to 65.

In 1935, the average life expectancy of white males was 61 years. The writing of the age requirement was such that it bet against recipients living to or much past the age of 65. Given the folks (mostly white men) that would be taxed and never use the unemployment provisions in life and/or die before reaching the qualifying retirement age it would keep the coffers full. Provisions to include working women and minorities came through amendments in the 1950s.

Though Social Security was amended a number of times over the years to follow the most substantial change came when President Lyndon B. Johnson wrote the Social Security Act of 1965. This amendment was part of President Johnson’s “Great Society.”*

*Notice this evolves every time some president has a catch phrase change program…keep an eye out for the next one

In this new act Medicare and Medicaid were first introduced. Medicaid was created as a social health insurance plan for the exceptionally poor. Medicare was created as a social health insurance plan for the elderly (which was determined by the same qualifying age as Social Security – 65). It is worth noting that the average life expectancy in 1965 had risen to 70.2 years (male LE was 66.8 years). The life expectancy for men (then the majority money-earners in the workforce) still was close enough to 65 that it was figured a safe gamble from a financial perspective.
It was the assumptions of the past that made for the predicaments of the present.

What these bills never accounted for were the social changes, the ebbs and flows of American life from the late 1960s to now:
• There were downturns to the economy,
• Minorities joined the establishment workplace in substantial numbers,
• Women joined the establishment workplace in substantial numbers,
• The costs and after effects of the Vietnam War,
• Sustained periods where the US was not fully engaged in war (Afghanistan conflict ended 1989 to Afghanistan invasion begins in 2001…how’s that for irony)
• The substantial increases to available healthcare.

As societal changes pressed on the provisions of the Social Security, Unemployment, Medicaid, and Medicare the social insurances went into default. Every president since Jimmy Carter has faced the challenge of keeping the Social Security coffers full. Even in the periods of surplus that followed, we’ve never fully met that challenge.

So now the country faces the challenge of meeting the disbursement demands of the largest retiring generation since the inception of Social Security. They are healthier than any generation before, can expect to live longer than any generation before, made (and paid to Social Security) more money than any generation before, and will require larger payouts (per person and as a group) than any generation before. To make matters even more strained, we are in the throes of a financial recession the likes of which we haven’t seen since the Great Depression, we are substantially in debt as a country, and healthcare costs skyrocket at a pace few can keep up with.

So the retirees and government have only themselves to blame, right? Well not really.

So the new challenges and opportunities of a larger senior-class will be addressed before they become a problem, right? Well not really.

There will be a happy ending to this situation, right? Well that depends, on what we do from here on.