What The Ryan Budget Gets Right

The "Ryan budget" is out, and the predictable firestorm has ensued. Extolled by some and derided by others, the GOP's fiscal framework gets one thing right: the aging of the American population is a severe threat to both Medicare and Social Security, and, absent reform, both programs will cease to serve the problems they were designed to solve.

It is not a question of politics. It's simple mathematics.

As the Ryan budget claims state, both parties have long danced around the hard, pesky truths brought by population aging. The arithmetic upon which Medicare and Social Security operate has changed. We're living longer. The ratio of old-to-young has tilted. The taxes on American workers will soar if both programs are aligned to new demographic realities.

Our science and our medicine has brought about nothing short of a "miracle of longevity." But our age-related entitlement programs are stuck in centuries past. And the Ryan budget -- love it or hate it -- at least recognizes that we can't afford anachronistic financial plans. If we try to, we do exactly what we must not: deplete the programs and leave those most in need without a safety net.

The age at which Medicare and Social Security kick in - our mid-60s - and their actual construction both date back to the 19th century, with some minor updating in the first part of the 20th. It was Otto von Bismarck's proposal for Germany in the 1880s that the state provide for those who were "disabled from work by age and disability." The idea came from private pension systems of the preeminent businesses like the railroad.

This was a time before penicillin, not to mention the countless number of truly historic medical breakthroughs of the past century and a half. Now, the lucky recipients of such developments, we must align our socio-economic public policies to today's demographics.

A less politicized and more honest political discourse would "update" what we, and the world, expect of those in their 60s, 70s, and 80s.

This will have a huge impact on how future generations live. As Dr. Sarah Harper of the Oxford Institute on Ageing pointed out a year ago in her London Oxford Lecture, "a young girl who was born in the mid-nineties is likely to see three centuries." Or at least it ought to have some impact, as it ought to have consequences for how we shift our public policy thinking.

As soon as 2020, there will be more than a billion people over 60, and by mid-century the 60-plus demographic will outnumber those under 14. This is a demographic structure that was unimaginable a half-century ago, and the United States and the rest of the world cannot afford the presumed dependence and disability model for a 65-year-old. It may have been reasonable in 1880 or the 1960s when Medicare was created, but, as the Ryan budget argues, it is not in the 21st century.

For those over 65 in 1880, Bismarck asked: How can we help them? The answer was with social support programs, which would also be good for society, since those "old 65ers" were in their last years and needed and deserved the help. The question to ask today is: How can we enable this massively growing demographic segment of society to remain economically active and socially engaged?

Doing so is good for both the individual and society as a whole. It is in everyone's interest to invest in healthy, active, and productive aging, and it is great for long-term debt issues. But we're only going to get there if we can leave politicking aside and collaborate on a sensible spending plan for the ballooning over-65 population. For admirers and haters of the Ryan budget, we can all at least agree that we want to preserve Medicare and Social Security. And in this pursuit, we must begin by recognizing the extent to which demographics have changed the equation.

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