The inexorable upward march of public spending, debt, and unfunded future obligations has been the largely invisible disaster of America’s give-away government over the past 50 years. With every passing second the amounts grow larger still, and as of this writing we are staring at financial liabilities that cannot possibly be met no matter how high taxes are raised—the math is cruel and irrefutable.
Choices will have to be made, which will require a recalibration of our rosy and unrealistic view of the role of government.
It is no surprise that most Americans cannot imagine a limit to what “generous” politicians can provide. The electoral equation that has defined many decades past can be summed up rather simply: Voters like stuff + elections are won by promising stuff + no one ever asks if we can actually afford the stuff that is promised = fiscal irresponsibility and stupidity. This is how you spend a nation into an abysmal long-term financial hole—but win elections.
Given that expenses for Social Security, Medicare, and Medicaid are today by far the largest expenses of the federal government—and a similar dynamic is consuming state and local tax revenues as well—it might be worth recognizing that the biggest fiscal challenge facing America is that we are an increasingly old and poor nation. All the other spending that consumes our government budgets is going to be subservient to this basic reality as the Baby Boomers become the Silver Tsunami that overwhelms us.
So how can we expect this to play out in the years ahead?
The private marketplace will react to the specific needs of a growing population of seniors with alacrity—as it already has. Healthcare, housing, and services targeted to the needs of seniors are a growth industry helping those wealthier folks fortunate enough to be able to pay. Less affluent seniors will rely on carefully targeted public services, discounts, and tax breaks to ease their daily financial burdens, but they will also use the wisdom and skills acquired during their lifetimes to find a reasonable path to financial sustainability as they grow older, which could include keeping one foot in the workplace for as long as their health permits.
However, the poor will be, as has been the case in every society both past and present, a public charge that is dealt with in a manner that ranges from grudgingly agreeable to scandalously neglectful.
People who hit a bump in the road during their working years and may need temporary financial assistance tend to be a category of the poor that are given significantly more respect from society because they are presumed to be responsible, independent, and diligent, so the public funds expended to provide their support are typically more easily forthcoming.
However, those who remain public charges for the long-term for reasons that range from the vaguely understandable to the deeply dysfunctional are often further brutalized by government agencies and bureaucrats that treat them with ill-concealed contempt that only makes their lives more difficult. Some of this negativity is perhaps justified by the maladaptive behaviors that can accompany chronic poverty: drug and alcohol abuse, violence, willful destructiveness, and pitiable irresponsibility.
These outward manifestations of ruined and chaotic lives tend to diminish public sympathy and further isolate these unfortunate individuals. Taxpayer-funded efforts to use educational opportunities and job training to help the more functional poor transition to self-sufficiency many times are sabotaged by their own messy lives and the pathologies of friends and family who may—either wittingly or unwittingly—create impediments that are impossible for even the most conscientious student to overcome.
We will, unsurprisingly, witness a harsh, irreconcilable dynamic. These two populations will each place more demands on the public purse in the decades ahead, but the financial needs of a growing population of seniors inevitably will be given priority over those of the poor. When government budgets inevitably tighten as the working age population shrinks, the organized political power of older Americans will slowly skew the allocation of available resources in their direction. Presidents, kings, potentates, and Caesars have typically claimed to protect the old; they have been, in contrast, more likely to ignore the needs of the desperately poor. This is a sad reality across nations and societies that goes back through the millennia.
Given that a fast growing, politically powerful, and increasingly expensive cohort of seniors is going to be claiming to an ever larger share of federal, state, and local spending, we can expect that the poorest Americans will see their safety net further shredded in the years ahead. In addition, political blocs whose agendas do not dovetail with the needs of seniors will find their funding further squeezed. Any plans for massive government spending going forward—particularly in a difficult post-Covid-19 fiscal environment—are going crash into a “gray wall” that will be harder to surmount with each passing year.
Goodbye, Green New Deal. Adios, free college. Bonjour, high speed railroads. The basic reality is that government is now more and more going to be in charge of the care and feeding of the very old—with a much smaller portion of resources being directed to the needs of the poor. Moreover, political support for a broad range of progressive policy proposals is going to travel a very rough road unless they can be effectively sold to a fairly monolithic and self-interested population of American seniors.
One of the reasons that the 1960’s were so groovy and liberal was that it was a brief moment in time when America and much of the world was extraordinarily packed with young adults whose minds were filled with the big dreams of those starting their lives. The next 20-30 years are likely to feature a stark governmental retrenchment and refocus that will look to meet the needs of a rapidly graying nation during a period when a closer alignment of revenue and spending will also be necessary due to the constraints imposed by the free-spending half century now behind us.
It is not at all unlikely that generational tensions will come to predominate as the financial priorities of the young and old diverge in a variety of ways we can now only imagine. The hippies are going to need lots of hip replacements, so children, adolescents, and young adults during the decades ahead will have to learn to build their lives with far less government assistance in a world of quiet sunsets—rather than brash dawns.
Demography, at least as it pertains to government spending, will determine the destinies of American politics and politicians for the foreseeable future. This will become plainly obvious in very short order as we start to sort out the stack of unpaid bills now piled high and needing our immediate, undivided attention.