According to Cato, a male at age 65 will receive, on average, $238,000 in federal transfers during the rest of his life, while paying $167,000 in taxes -- a net $71,000 gain. A 25-year-old male will pay $524,000 in taxes during his lifetime and get only $202,000 in transfer payments -- losing a net $322,000.
This disparity will only get worse as Washington ladles out more benefits for the elderly and the growth in the number of seniors outpaces the growth in the number of young workers. Higher taxes for the intragenerational transfers will discourage work and productivity. Resources will be taken from young people who would save it -- contributing to investment and other felicitous economic phenomena -- and given to the elderly to spend freely.
We considered it a damning statement of irresponsibility that young women once thought it acceptable to bear children out of wedlock and make the rest of society pay the bill. So why isn't it considered uncouth for seniors to force young families, struggling to pay the bills, to fund their often cushy retirements? The moral odium directed at the Welfare State, which resulted in welfare reform in 1996, should find a new target in the Geriatric State.
President Lyndon Johnson said in 1965, upon the creation of Medicare, "No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents." Families staggering under a tax burden that will only get bigger can only respond 40 years later, "Yeah, right."