A Generational Divide?

[Geee]

American Thinker:

In Running on Empty, Peter G. Peterson excoriates the "we-first" attitude of retiring baby boomers. Having read Peterson's take on boomer retirement, one is left with the impression that boomers are selfishly intent on bankrupting future generations and driving America into permanent decline to boot. Happily, Peterson concludes, there is a solution: higher taxes and reduced benefits. This is what Peterson calls "real leadership."

Breaking promises and raising taxes may seem like "leadership" to some, but in fact it is just another effort to excuse and facilitate irresponsible spending by future administrations. The common refrain of every liberal commentator on Social Security, and even of those like Peterson who claim to be non-partisan, is that there is simply not enough revenue to meet future retirement obligations (which Laurence Kotlikoff and Scott Burns in The Coming Generational Storm estimate now stand at $51 trillion). There is just not enough accumulated in the Trust Fund to fund the retirement of 77 million boomers. But if government had run the Trust Fund in a responsible manner, there would have been.

The core of the problem is the investment performance of the Social Security Trust Fund. As the Office of Management and Budget stressed in its FY2000 report, the "special" bond obligations held by the Social Security Trust Fund "do not consist of real economic assets." They are not marketable bonds, nor do they pay market rates. They represent nothing more than political promises to fund future retirees based on future revenues. In that sense, no matter what the reported rate of return of Trust Fund "bonds," and the recent rate of return has been abominable, the Trust Fund has earned nothing whatsoever in actual interest. Even the Fund's principle rests on nothing more than the words of politicians like Al Gore, with his fantasy of a Trust Fund "lock box."