Spinning the next generation

Excellent article today on the AARP's momentous decision to throw their weight behind Bush's Medicare bill. Novelli's reasoning about why the organization was compelled to support the bill, in spite of many members' strong disapproval, was that the younger members the AARP has been courting in the last several years, i.e., those not actually receiving Medicare yet, were receptive to the bill.

This episode offers some insight into what is sure to be a growing debate in the ongoing fight over social entitlements. Privatization of the US' major entitlements has thus far been a fringe threat...in no small part due to the fact that seniors have consistently organized their reliable constituency to speak with a single voice. That unassailable fact of American politics has nurtured a durable bipartisan coalition to maintain and protect the entitlement programs. Serious contention has been relegated to program details, rather than core overhauls.

But as the current generation of beneficiaries fades, who is to say the massive baby boomer cohort will support entitlements with the same commitment? This group, after all, matured as employer backed pensions and health care were disappearing and direct investment in the stock market was a real option. The notion of introducing competition and private accounts may not seem the sacrilege it does to the boomers parents. Or at least, that will be the story.

The truth, of course, is that the 'investment class' is a myth, that ordinary citizens have no better idea how to play the stock market than any of the paid professionals who have been losing their shirts for the last three years, and that the effect of entitlement programs on poverty rates among the elderly continues to be dramatic and impossible to deny. These facts show no signs of going away anytime soon, and, in fact, with the way private health insurance and pensions are going, entitlement programs may be the only thing low and moderate income baby boomers have left at the end of the day.


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