The Debt-Paying Generation: A short primer

by Ryan Streeter on December 7, 2013. Follow Ryan on Twitter.

I had this Cowan and Kessler op-ed from the WSJ the other day open in my browser, and I thought it was worth pulling out these factoids before shutting it down:

[S]ince 2010 Social Security payouts to seniors have exceeded payroll taxes collected from workers. This imbalance widens inexorably until it devours the entire Social Security Trust Fund in 2031…At that point, benefits would have to be slashed by about 23%…

In 2030, a typical couple reaching the eligibility age of 65 will have paid $180,000 in lifetime Medicare taxes but will get back $664,000 in benefits…

In the 1960s, the federal government spent $3 on [public investments like infrastructure, public schools and college financial aid] investments for every $1 on entitlements. Today, the ratio is flipped. In 10 years, we will spend $5 on the three major entitlement programs (Social Security, Medicare and Medicaid) for every $1 on public investments.

We’ve heard all this before, but it never hurts to keep reminding ourselves of what past policy choices mean for the future of today’s younger workers. The interest on the debt required to keep fueling this will also grow sharply in the coming decades. The lack of urgency on these issues is astounding to me.

  • MB

    Good simple math