Here it comes, the end of the New Deal as we know it!

posted by Curt Bentley, on October 15, 2007 07:58 pm

Interesting story from Fox News -- the first of the Baby Boom generation filed for social security. I must admit to being a little taken aback . . . I had always thought my dad was part of the baby boom generation (even though I consciously knew he was not, since he was born in '42), and he has been retired for four years now. The fisrt of the baby boomers will turn 61 sometime this year. The youngest of the generation (born in '69, I believe) will be 38. So, for the next 23 years, they'll be beginning to retire. The floodgates are about to open.

While just about everyone agrees that social security is "broken," no one apparently can agree on how to fix it. The real question is what that means for people like me, part of the next generation. I really don't know, and to be honest with you, haven't thought about it much. I don't think I've contributed much to social security (given that I've been in school all my adult life). The only time I think about it is when it's in the news or when I get the informational letter every year around tax time.

It seems to me the most prudent course of action for individuals like me is to assume that social security will not be there. For people in their thirties, that's a viable option. We have enough time that, if we take retirement seriously, we'll be able to get along without social security . . . at least, that's what I think. I'm not planning to rely on it at all. The people who are really in a bind are the people at the tail end of the baby boom generation. Their in their early forties to early fifties. They may have planned on social security to finance a substantial portion of their retired life. It seems to me that we only really have to try and fix social security for those individuals . . . the rest of us can probably get along without it. Of course, such a decision flies in the face of the very principle that social security is "legitimated" on: that when you're young you pay in and when you're old you draw out. This makes it very easy for people opposing what seems like the commonsense solution--all they have to do is use this contradiction to get people really riled up politically. So long as they can do that, it will take a real emergency before the people will be united enough over the social security problem to prevent politicians from using social security as a divisive issue to generate political capital.

So what do I think this all means? I'm really not sure, but I suspect it means that we won't see social security reform until the system is pretty much bankrupt . . . likely right about the time that the middle of the baby generation retires (maybe ten years from now). Then we'll see just how reliant people are on social security. If they're not all that reliant, then the system might just go relatively quietly into the good night. If not, it should be an entertaining political battle. But, I'm planning on the death of social security within the next 25 years. If it lives, I'll get something of a bonus. But if not, I plan to take care of myself, by myself.

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