Our zombie economy and the death of Social Security

Money Closeup

The United States is currently drowning under the weight of 9.3% unemployment. Millions who could work are out of work, and there are many more underemployed – stuck in jobs they are overqualified for – and earning far less than they should. With people unemployed or earning less, demand for goods and services is naturally low, which causes businesses to cut costs by laying off workers and reducing wages.

Right now the United States is trapped in the cycle I described above. The government could step in and decide to borrow more money and employ those capable and out of work citizens. Those employed citizens would then turn around and spend their newfound money on goods and services and, as demand rose, so would the fortunes of the labor force.

Unfortunately, our government is in thrall to deficit hawks that think our current level of government borrowing is unsustainable. Of course, those hawks are right about one thing: We can’t keep borrowing at the same pace we are now. Not forever anyways. But, by the same token, we can’t cut off government aid to our economy without making the downward cycle more vicious. With a weak economy, the debt situation will be even worse because the government won’t be getting nearly as much back in tax revenue. The way forward is clear, more stimulus now and then belt tightening once the economy is back on track.

Alas, our leaders aren’t ignoring the calls of the deficit hawks. Instead, they’re getting ready, with the help of our dear Democrats, to make the last few years of our miserable lives even worse by raising the age we’d be eligible for Social Security from 65 to anywhere between 68 and 70. Life expectancy is increasing, so the argument goes, so why shouldn’t the age for Social Security eligibility? What they won’t tell you is the poor souls who need Social Security haven’t seen their life expectancy grow much at all, and that those same folks are more likely to be stuck in more physically demanding jobs.

Of course, these mostly-rich deficit hawks that want to cut our Social Security will be just fine no matter what happens. The government has pledged to keep their capital gains taxes low even in the face of all that scary debt. The ones who aren’t rich don’t have to worry either. Their own Social Security won’t be cut; they just want to cut it for young people.

Worst of all, their hawkishness doesn’t extend to any other logical avenue for cuts besides areas of government spending that decrease the burden on the poor.  The health reforms that would do the most to curtail Medicare spending will remain off the table. Climate change legislation that would curb global warming and help the budget is a non-starter. And of course, our blindingly expensive occupations in Iraq and Afghanistan will continue indefinitely.

Flickr photo by kevindooley

6 Comments

  1. Clint

    Who needs that fancy social security and “health care” anyway? Damn government is always on my back. They’re infringing on my right to live out a nasty, brutish and short existence as a rugged individual. Stupid social contract.

  2. Ian

    Unfortunately SS isn’t even enough to pay your property taxes if you own your home when you retire. Certainly it helps, but its a pitiful amount of money. More money for the elderly, I say!

  3. The people who argue we had young workers to old, 60 years ago, don’t take into account the productivity of today’s workers to then. No need to change SS.

  4. I recall recently some study on the structural nature of the deficit (the name escapes me at the moment) that said, in a nutshell, “the gov’t gets enough money to pay for SS & Medicare, and that’s it. Everything else is pure debt”.

    Isn’t it funny how any serious analysis points at the expense of global military domination as the key problem, yet “defense” (HAH!) is NEVER taken up as a serious target for deep cuts?

  5. Chris

    b-psycho,
    Yep. We spend the kind of money on our military that would make sense if we were facing the Soviet Union in a protracted conventional war. The reality is that we’re fighting a rag-tag group of dudes with AK-47s that are hiding in caves and setting off improvised bombs.

  6. Ian

    Chris,

    We should definitely cut military spending, but you know that we aren’t spending it to fight only terrorists. Even before 9/11 our military budget was enormous. Its all about staying the top in the world and feeding the MIC.