On Sunday, Fr. Ruskamp informed the congregation that on January 1, 2011, the first Baby Boomer hit 65, the traditional retirement age. This means that in this country, we’ll be seeing roughly 10,000 people retiring every day for the next 19 years. They’re already calling it the “Boomer Bust” and the “Silver Tsunami,” and the economics aren’t pretty.
Take Social Security, for example. This website, relying on data from the Social Security Administration itself (this report, for example) paints an ominous picture of rising taxes:
| Year | Social Security Tax Rate |
| 1950 | 3% |
| 1960 | 6% |
| 1970 | 8.4% |
| 1980 | 10.2% |
| 1990 | 12.4% |
| 2000 | 12.4% |
| 2008 | 12.4% |
And a Boomer Generation retiring much more quickly than new workers are entering the workforce:
This is bad news both for America’s retirees and her workers. For retirees, it’s bad because they’re reliant on fewer and fewer workers. In 1945, for each beneficiary there were over forty workers paying into the system. Obviously, there was more than enough money to go around – even at a 3% tax rate, Social Security drew a surplus. Today, both because of massive expansions in Social Security and shifting demographics, for each beneficiary there are roughly three workers paying in, not forty. The tax rate has more than quadrupled, and yet it struggles to keep up. For every 100 workers in 1940, there were two beneficiaries. In 1960, there were twenty. Today, there are thirty, and at the rate we’re going, by the time the Boomer Bust had ended in 2030, there will be forty-five beneficiaries for every hundred workers, and the numbers only get worse from there.
The economics we’re facing leave a few unsavory solutions: increase taxes on workers, decrease benefits to recipients, or decrease the number of people able to receive. Likely, some combination of these will be implemented. In particular, the retirement age is expected to continue to rise, and younger workers in particular can expect to put off retiring at least for a couple years past 65.
It didn’t have to be this way. As Fr. Ruskamp noted, the reason that Social Security was so easy to bear in the past is that there were so many young people. With a young and active workforce, enough money is generated through their productivity to more than cover the needs of America’s elderly population. There’s no reason that this trend couldn’t have continued – the Boomers could have spawned an even larger Boom. But they didn’t. Fueled by fears of overpopulation (an economic and scientific theory thoroughly discredited) as well as selfishness, our country embraced contraception and abortion as solutions to the “problem” of children. The result was a birth rate which has declined precipitously from 25% and more in the early 50s to barely 14% in 2005. And of course, fewer children yesterday means fewer workers today, and fewer sources of income for Social Security and other welfare programs. Parents can’t rely on their kids to support them in their old age, because they aborted those kids in the womb.
In other words, the sins of abortion and contraception have very real economic and social impacts as well as spiritual ones. Fr. Ruskamp tied all of this together, from the legalization of abortion in the early 70s to the Boomer Bust we’re approaching today, using God’s own words from Psalm 95:10-11,
“For forty years I was angry with that generation;
I said, ‘They are a people whose hearts go astray,
and they have not known my ways.’
So I declared on oath in my anger,
‘They shall never enter my rest.’”
Many Americans today, he noted, will put off retiring (which literally means “resting”) because of our collective sinfulness in turning away from God towards the false idols of “free love” and abortion on demand.
I wonder if immigration reform will be linked at some point to this debate. I would like to see the impact of providing some sort of legal status (not arguing for any in particular, there’s a wide spectrum) to undocumented workers so they can contribute directly to social security. They already are a large group and is growing fast. Perhaps their contributions could ease the burden and all others and show that social issues -as you very well described with abortion- have a real and direct economic impact.
Absolutely. There’s basically no question that immigrants provide a young and generally-healthy population capable of paying into Social Security. Julian Simon’s The Economic Consequences of Immigration into the United States, 2nd ed (1999) dealt with this question at length, and concluded it was a huge boon. On the other hand, the Center on Budget and Policy Priorities opposes bringing immigration into the Social Security debate, but concedes that immigrants improve Social Security’s financial status at least modestly (http://www.cbpp.org/cms/index.cfm?fa=view&id=1272).
The New York Times reports that illegal immigrants contribute $6 billion to $7 billion to Social Security, as well as about $1.5 billion in Medicare taxes. (http://www.nytimes.com/2005/04/05/business/05immigration.html?ex=1270353600&en=78c87ac4641dc383&ei=5090). And since they’re here illegally, they generally can’t collect Medicare or Social Security, of course.
This proves to be a really double-edged sword. It seems as once like an economic incentive to (a) encourage more illegal immigration, and (b) not permit those here illegally to ever acquire citizenship or other legal status. After all, if you keep illegal immigrants here illegally, you get the billions in Social Security tax revenue they generate annually without having to ever provide the workers a dime when they reach old age.
Obviously, I’m not advocating that as a just or Catholic solution, but I’m not so naive as to think that it hasn’t crossed the minds of folks much more powerful than myself that this is so.