Dean Baker goes after Pew this morning. His problem is with a Pew report that determined how much wealth different age groups had. This has been widely reported and Baker has complained about it before. The problem is not the numbers, which Baker agrees with. The problem is the implication that our seniors are stinking rich at the expense of the young.
The Pew report says that the median wealth of people over 65 is $170,000. This includes all of their wealth: house, car, furniture, savings, stocks, whatever. As Baker points out, this is a little less than the value of the average home in the United States: $180,000. So if these people sold everything they owned, they could reduce their mortgage to $10,000. In that case they would have nothing else, other than their Social Security checks. This doesn’t sound like the definition of wealthy.
There is a ridiculous contrast to this. When discussing raising taxes on the wealthy, we are told that making $250,000 per year is not wealthy. In fact, if we look at the Fiscal Cliff deal, apparently even $400,000 per year is middle class. How is it that reports manage the cognitive dissonance that says that a quarter million a year is middle class while a low mortgage and $1200 per month is wealthy? I think I know: reporters aren’t retired. Most of the people we hear from are in Washington in high profile (and well paid) positions. They know people would make these kinds of salaries and so it doesn’t seem unusual. Most of them do not rub elbows with the 40% of retired Americans who live solely off Social Security. Anyway, as a lump non-taxed sum, $170,000 sounds pretty good; I don’t think it occurs to them that it is all the wealth these people have.
The problem with making a big deal about seniors’ wealth is that it is used as a reason to cut their benefits, as though that will help the young. What the young need is a good economy so they can get good jobs. But cutting government programs for seniors will just hurt the economy and make it harder on young people. The deficit scolds are forever talking about all the debt we will leave to future generations. But the future generations are here now and what they most need is a job.
Yesterday, I was invited by Fix the Debt to write a letter about my fears about the debt. I used the opportunity to tell them that my biggest fear was that groups like them would destroy the economy. I also pointed out that they don’t care about the coming generations. They care about the rich now. The deficit scolds are all about keeping inflation low and the dollar high. These are the policies that the rich want. They what their piles of money to keep their value, and these two things do that. The rest of us want reasonably high inflation so that our debts will go down in value. We also want a weak dollar so that other countries buy things from us and thus we have jobs.
Pew’s report about the “affluent old” is part of this push to destroy the social safety net. It even notes that the total wealth of the young has decreased while the elderly’s has increased. So again: this is pushing things that the rich want in the name of the young. The whole campaign is bad enough. The fact that they use the young as the reason for their concern is disingenuous and repugnant.