Last week, Peter H. Wehner -- Karl Rove's deputy inside the White House -- shared with us, in a leaked memo, his view that "no one on this planet can tell you why a 25-year-old person today is entitled to a 40 percent increase in Social Security benefits (in real terms) compared to what a person retiring today receives." This was part of his explanation of why the forthcoming Bush plan should solve the phony Social Security "crisis" by freezing the growth in benefits -- thus offering the retirees of the future a 40 percent cut in promised benefits.
One's suspicions that the Bush economic policy is being crafted in the Gamma Quadrant are only bolstered by talk of this sort, since, on the planet where I live, Earth, plenty of people can tell you why this should be so. As a member of the About to Be Screwed Generation at the tender age of 23, however, a special obligation rests on me to explain why we shouldn't pay for the fiscal profligacy of the Bush era by slashing my Social Security benefits. The underlying issue here is what's known in the business as shifting the program from its current "wage index" system to a "price index" system. Right now, a retiree's initial benefit level is linked to, among other things, the growth in average wages rather than the growth in the Consumer Price Index.
The most basic reason why I'm entitled to wage-indexed benefits is, simply: That's what the law says. Since wages normally grow faster than prices, this means benefits get more generous in real terms over time. Just as 2004's wages are more generous than the wages paid in 1974, so, too are the benefits paid in 2004 more generous than those of 1974. And every month, my tax dollars are paying for those more generous benefits. This is OK for two reasons. First, since 2004's wages are more generous than 1974's, I can afford to pay more tax in absolute terms than could the young journalists of 1974. Second, the program I'm paying for right now is supposed to endure over time. A portion of my 2004 wages goes to pay 2004-level benefits on the assumption that, when I start collecting benefits in the still-richer 2048, I'll get 2048-style benefits -- not 2004-style ones. As the "moral values" crowd could no doubt tell you, it isn't fair to break promises, especially when we've been doing things (like collecting payroll taxes) on the assumption that the promise will be fulfilled.
One can get a more fundamental answer to Wehner's question by simply asking why I, a 23-year-old in 2004, should enjoy a better life than did my parents' generation, and their parents' generation, when they were my age. I'm typing this column on an Apple PowerBook G4. This machine is not only considerably more powerful than anything my father owned when he was 23, it's more powerful than the best computer that existed in the entire world back in the mid-1970s. I have an iPod, a DVD player, cable, and a cell phone. All this is made possible by the enormous technological progress that my generation is able to enjoy -- even though, so far, we've contributed almost nothing to American prosperity.
In addition to technological progress, there's the simple accumulation of capital goods. The Metro station across the street from my house that I use almost every day to get around town didn't exist when my father was my age. Neither did the street I live on. The entire Washington, DC, Metro system hadn't yet been built when my grandparents were my age. Back then, average people not only didn't have cable, they didn't have televisions at all. It was massively more expensive to ship food around the world, making it impossible to acquire the fresh, out-of-season produce we take for granted today. Air travel was a rarity back then, as was air conditioning.
The point is simple: Life gets better over time because the economy grows in real, per capita terms. In some sense, there's no way to justify the arbitrary good luck that people enjoy in virtue of being born later in the saga of historical progress. In another sense, we take this for granted. Since each generation, in the course of improving its own standard of living, inevitably leaves its children better off, there's no serious injustice here. Social Security benefits grow in real terms over time so that senior citizens have the opportunity to share in the increased prosperity that was made possible by their hard work in earlier years. Today, thanks to wage-indexing, the living members of the much-heralded Greatest Generation enjoy a standard of living befitting the early 21st century. If we'd implemented a price index from the beginning, they'd currently be stuck at the much lower standard of living enjoyed in their youth -- a time when many Americans lacked telephones and electricity.
What was considered a normal life back then would be abject poverty today. President George W. Bush is proposing that my generation be condemned to a similar fate. No one knows what life will be like decades from now; but, unless something goes badly wrong, it will be much better than life today. It will be better, in part, because of the contributions people my age will make to America's growing store of public and private capital and technical knowledge. Social Security will allow us to participate in the prosperity that we will have helped to create. Bush wants to deny us that opportunity, and it isn't right.
And it's important to note that things will only get worse and worse over time under Bush's proposal. Already, my little cousin Rebecca has a bunch of cool stuff I didn't have when I was her age. When she retires, the average standard of living will be that much higher than whatever it is when I retire. But her benefits would be no more generous than mine, which would be no more generous than our grandparents'. Extended over the infinite time horizon the Bushies love so dearly when hyping the alleged crisis, the results become even more absurd. Imagine we'd pegged Social Security benefits not to the standard of living of the 1940s but to the prevalent level of wages at America's founding in the late 18th century. Senior citizens wouldn't be able to afford plumbing, rudimentary medical care, refrigerators, motorized transportation, pasteurized milk, modern insulation, or any number of other things we take for granted.
To let today's seniors live lives that, while normal by the standards of 1804, would constitute appalling poverty in today's terms would be an outrage. But this is what the Bush plan would do to the retirees of 2204, and things would only get worse in 2304, 2404, and so forth. Rather quickly, in the scheme of things, Social Security will only be paying a trivial fraction of average wages (today, it's 40 percent; under Bush's plan, I'll get 20 percent -- dropping rapidly in future years), becoming essentially non-existent. We'd be back to the days before Social Security, when senior citizens were an enormous burden on their younger relatives and when seniors without children capable of supporting them were left as paupers. And this, of course, is the point. Conservatives don't like Social Security, and they never have. The preferred the days in which seniors were the most impoverished group in the United States over the contemporary situation in which they have the lowest poverty rate. But they don't dare come out and say so by just eliminating the program outright. Instead, Bush wants to kill it slowly -- leaving things more or less intact for himself, Dick Cheney, John Snow, Alan Greenspan, and the rest of the gang, while leaving my generation, our children, and our children's children holding the bag.
Matthew Yglesias is a Prospect staff writer.
