FacebookTwitterGoogle+RedditEmail

Are American Parents Really Stealing From Their Kids?

by DEAN BAKER

A common refrain in debates over Social Security and Medicare is that these programs are putting seniors ahead of children. The implication is that there is a fixed pool of tax revenue. If more of this revenue goes to seniors to pay for their benefits, there is less to cover the cost of child nutrition and health care, daycare, education and other programs that benefit the young. To put in crudely, in this view, a dollar spent on the elderly is a dollar taken away from spending on children.

There is an alternative perspective. The amount of money that the government collects in tax revenue may not be fixed. Understood this way, people’s willingness to pay taxes may depend on their perception of the usefulness of the services provided. This could mean, for example, that if the public believes that the government services being provided to both seniors and children are valuable and should be expanded, they would be willing to pay higher taxes to support those services.

If we look at the situation historically in the United States, we have vastly increased the share of GDP going to government programs for both seniors and the young over the last 60 years. In 1950, Social Security payments were less than 1 percent of GDP and Medicare and Medicaid did not even exist. By comparison, we are now spendingalmost 5 percent of GDP on Social Security, and more than 5 percent of GDP on Medicare and Medicaid.

This growth in federal spending for programs that primarily benefit seniors has been accompanied by a huge expansion in programs intended to primarily benefit the young, such as Head Start; the Women, Infant and Children Nutrition Program; and the State Children’s Health Insurance Program. In addition, state and local funding for education and other programs that benefit the young has also hugely increased relative to the size of the economy over the last six decades. People have been willing to pay more in taxes to finance programs that benefit both the elderly and the young.

There is a similar story if we look across countries. If the tradeoff view were correct, we should find that countries that are more generous in their support of seniors are stingier when it comes to public support for their children and vice versa. However, the opposite appears to be the case. If we control for the relative income of different countries, it turns out that a dollar of additional spending per kid is associated with 67 cents of additional spending for each senior. (This relationship is statistically significant at the 5 percent confidence level.)

In short, the data suggest that more spending on seniors is associated with more spending on kids. Presumably this indicates that countries where people rely on the government to ensure that their seniors have a decent standard of living are also inclined to provide the government with resources necessary to ensure that their children’s needs are also met.

This evidence suggests that cuts to programs for seniors may be unlikely to end up benefitting our kids. Rather such cuts may be associated with reduced spending on kids as well. If the public does not trust the government to provide good care for seniors, it may also not trust the government to provide good care for children.

In that case, there would be no tradeoff between spending on seniors and spending on kids. If we care about both our seniors and our kids, and trust the government programs designed to provide support at both ends of life, then both sets of programs are likely to be adequately funded. In the opposite case, neither set of programs is likely to be adequately funded. The world where just one set of programs, either those supporting seniors or those supporting kids, receives adequate funding seems largely the invention of politicians.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This essay originally ran in the The Business Desk (PBS NewsHour).

 

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

More articles by:

CounterPunch Magazine

minimag-edit

Weekend Edition
August 26, 2016
Friday - Sunday
Paul Buhle
In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment
Andrew Levine
How Donald Trump Can Still be a Hero: Force the Guardians of the Duopoly to Open Up the Debates
Rob Urie
Crisis and Opportunity
Louisa Willcox
The Unbearable Killing of Yellowstone’s Grizzlies: 2015 Shatters Records for Bear Deaths
Charles Pierson
Wedding Crashers Who Kill
Richard Moser
What is the Inside/Outside Strategy?
Dirk Bezemer – Michael Hudson
Finance is Not the Economy
Jeffrey St. Clair
Roaming Charges: Bernie’s Used Cars
Margaret Kimberley
Hillary and Colin: the War Criminal Charade
Patrick Cockburn
Turkey’s Foray into Syria: a Gamble in a Very Dangerous Game
Ishmael Reed
Birther Tries to Flim Flam Blacks  
Brian Terrell
What Makes a Hate Group?
Howard Lisnoff
Trouble in Political Paradise
Terry Tempest Williams
Will Our National Parks Survive the Next 100 Years?
Ben Debney
The Swimsuit that Overthrew the State
Ashley Smith
Anti-imperialism and the Syrian Revolution
Andrew Stewart
Did Gore Throw the 2000 Election?
Vincent Navarro
Is the Nation State and Its Welfare State Dead? a Critique of Varoufakis
John Wight
Syria’s Kurds and the Wages of Treachery
Lawrence Davidson
The New Anti-Semitism: the Case of Joy Karega
Mateo Pimentel
The Affordable Care Act: A Litmus Test for American Capitalism?
Roger Annis
In Northern Syria, Turkey Opens New Front in its War Against the Kurds
David Swanson
ABC Shifts Blame from US Wars to Doctors Without Borders
Norman Pollack
American Exceptionalism: A Pernicious Doctrine
Ralph Nader
Readers Think, Thinkers Read
Julia Morris
The Mythologies of the Nauruan Refugee Nation
George Wuerthner
Caving to Ranchers: the Misguided Decision to Kill the Profanity Wolf Pack
Ann Garrison
Unworthy Victims: Houthis and Hutus
Julian Vigo
Britain’s Slavery Legacy
John Stanton
Brzezinski Vision for a Power Sharing World Stymied by Ignorant Americans Leaders, Citizens
Philip Doe
Colorado: 300 Days of Sunshine Annually, Yet There’s No Sunny Side of the Street
Joseph White
Homage to EP Thompson
Dan Bacher
The Big Corporate Money Behind Jerry Brown
Kollibri terre Sonnenblume
DNC Playing Dirty Tricks on WikiLeaks
Ron Jacobs
Education for Liberation
Jim Smith
Socialism Revived: In Spite of Bernie, Donald and Hillary
David Macaray
Organized Labor’s Inferiority Complex
David Cortright
Alternatives to Military Intervention in Syria
Binoy Kampmark
The Terrors of Free Speech: Australia’s Racial Discrimination Act
Cesar Chelala
Guantánamo’s Quagmire
Nyla Ali Khan
Hoping Against Hope in Kashmir
William Hughes
From Sam Spade to the Red Scare: Dashiell Hammett’s War Against Rightwing Creeps
Raouf Halaby
Dear Barack Obama, Please Keep it at 3 for 3
Charles R. Larson
Review: Paulina Chiziane’s “The First Wife: a Tale of Polygamy”
David Yearsley
The Widow Bach: Anna Magdalena Rediscovered
FacebookTwitterGoogle+RedditEmail