Washington, DC, May 25, 2004 --  

As Washington enjoys its first days of summer, two separate invasions are unleashing swarms of strangers onto the city's streets. The first wave has already brought millions of intruders with beady-red eyes, shiny blue-black torsos and thickly veined, two-inch wings. They are the 17-year periodic cicadas. The second invasion, which begins this weekend, will bring tens of thousands of gray-haired visitors wearing fraying military uniforms and hats emblazoned with insignias of military units from 60 years ago. They are the veterans of World War II -- in town for the dedication of America's new war memorial.

Although the two groups have a great deal in common when it comes to swarming activity, they could not be more different when it comes to their relationship to succeeding generations. The periodic cicadas have just emerged from 17-years of life underground. They are now spending their final days in a desperate quest for a mate with whom to produce offspring. As soon the females lay their eggs, the cicadas will perish, leaving the world to their children.

The octogenarian humans, by contrast, typically experienced childbearing 50 years in the past -- an activity that took place relatively early in their lives. Unlike the cicadas, humans continue to live alongside their offspring, where they compete for the same resources. This competition for resources has become particularly ugly in America in recent years. Older generations of humans now aggressively seize the resources of younger generations, while paying no heed to their protests.

The latest device for such resource transfer starts working next Monday, when new Medicare prescription drug cards go into effect. The cards are the first phase of a program now projected to cost $534 billion over the next 10 years.¹ The money for this new benefit to the elderly will come, of course, from taxes and debt passed to younger generations.

The magnitude of the irresponsibility associated with this new program only becomes clear when put in context with existing entitlement programs for the elderly. Last year, the American government redistributed $470 billion in Social Security benefits to retired and disabled Americans from their taxpaying countrymen.² Octogenarians have long since received everything they paid into Social Security with interest, yet they still keep taking more. This is not because they are lucky enough to live longer -- it is true even counting their cohorts who died decades ago. The lifetime benefits paid to people born 85 years ago is over 3 times greater than what could be expected if their contributions had been invested in bonds.³

This unsustainability of this inter-generational income transfer reflects itself most obviously in the rickety state of the Social Security and Medicare programs, both of which are projected to face insolvency in coming decades.⁴ The Social Security system, while healthier than Medicare, is so broken that its board of trustees estimates Americans would have to pay $3.7 trillion right now to keep it solvent for the next 75 years.⁵ In this light, adding an expensive new prescription drug entitlement onto Medicare is beyond irresponsible -- it is immoral.

While it is undoubtedly true that only a tiny minority of elderly Americans have personally lobbied for these programs, almost all elderly Americans have been willing to take the benefits. Of the 35 million members of AARP -- America's largest lobbying organization and a supporter of Medicare's prescription drug expansion -- about 45,000 resigned in protest early this year.⁶ The sight of elderly Americans burning their AARP cards over Medicare expansion may seem like a righteous uprising, but the reality is quite different. The organizers of the boycott movement were not angry about passing the cost of the drug benefit to younger Americans. They were angry that the benefit relied partially on funding from private insurance companies, instead of relying entirely on the government. The boycott organizers, in essence, want even more money from younger Americans. This is a moral outrage.

The greedy behavior of older Americans with respect to the young is simply abysmal. Although the comparison to the behavior of the cicadas is intriguing, it is hardly a model for human evolution -- nobody in their right mind would want people to give up the opportunity to live alongside their parents and grandparents. But there must be a middle ground between the extremes. As Americans live longer lives, it is reasonable to expect that they do so with either their own resources, or with the willful support of their children and grandchildren. Like the cicadas, elderly Americans have already had the chance to spread their wings and lay their eggs. Let them not feed off of younger Americans who are simply trying to do the same.

Related Web Columns:

Mugged By Grandma, July 8, 2003

Avenging an Evil Plan
The Hastened Death of Social Security, January 26, 1999

Prune Juice in Florida
Your Tax Dollars at Work, January 28, 1998

Seeing the Whites of Their Lies
The Social Security Budget Beachhead, October 7, 1997

Notes:

1. The Cato Institute, Repeal Medicare Drug Entitlement, May 23, 2004

2. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2005-2014 Appendix F, January 26, 2004

3. General Accounting Office, Social Security Rates of Return (HEHS-999-110), 1999.
This paper quotes one of the few studies to examine age-based Social Security benefits, released 10 years ago. It found that today's 85-year-olds are receiving a 7 percent inflation-adjusted rate of return from their Social Security payments. This return is far in excess of the typical inflation-adjusted rate of return for bonds (1.5 percent). The net result of this 7 percent vs. 1.5 percent rate of return is that people who are 85 today get approximately 3.5 times as much money back relative to contributions as they would have received if they had invested their money in bonds.

4. Social Security Administration, Status of the Social Security and Medicare Programs, March 2004.

5. Ibid.

6. Chicago Sun Times, 45,000 Quit AARP Over Its Support of Medicare Bill, January 18, 2004