Two articles appeared recently in the Daily Local News in West Chester (PA). The first is about the “wealth gap,” and the second discusses reducing Social Security increases. In the “Wealth Gap” article (Hope Yen, A.P., “Wealth gap between young, old widens,” Daily Local News, Monday, November 7, 2011, B1), I especially “liked” some of the descriptions and conclusions. Of course, the reason for this “study” is because of the special congressional committee to reduce spending by 1.2 trillion dollars.
- The “wealth gap” is 20% now, double the gap in 2005. So what?! This is the first generation that had IRA’s and 401ks their entire working life.
We were continuously warned to save for retirement, so if you saved, you have created a “Wealth Gap.” Shame on you!
- “37% of younger households have a net worth of zero.” So what?! When I was 35, I had (I thought) a huge mortgage, two kids, two cars to pay for, and two college educations to pay for. By the measure used here, I had zero assets. That’s the way life works. You’re poor when you’re young and you save so you don’t have to be poor when you’re old.
- The conclusion is “It makes us wonder whether the extraordinary amount of resources we spend on retirees….should, at least, be partially reallocated to those who are hurting worse.” How’s that for logic? Let’s redistribute the wealth to the young. Oh yeah! We created IRAs to allow the elderly to have a safe retirement. Those old farts should give it back!
- It states “the median net worth of households headed by someone over 65 is $170,494.”
If I’m 65 and only have $170,000, I’m doomed to be poor, sooner rather than later. We are constantly told that life expectancy is going up. $170,000 is not going to last 25 years.
Keep in mind this is the median. That means 50% have less than $170,000. That amounts to $6,800 per year if you live 25 years. WOW! Live it up, you wealthy old man!
Who cares if it’s 42 percent more than it was in 1984??? It isn’t enough anyway. It means 50% of those over 65 are heading for trouble.
- “The elderly have a comprehensive safety net that most adults lack.”
I assume this means Social Security and Medicare. Of course, all discussions about Social Security tell us that living on Social Security is not sufficient. If Medicare survives, which is doubtful, the health safety net shields us from the big health care bills, but Social Security still isn’t enough to live on, and (see the second article) it will be reduced anyway.
- The “best” description in the article is the “wealth inequity.” How did saving money—that you earn—become an inequity for someone else?
The second article (A.P., “New formula would reduce Social Security Increases,” Daily Local News, Tuesday, November 8, 2011) describes a new formula to reduce social security increases. The article makes it clear that not only is this new formula designed to decrease Social Security, it is also a “stealth” tax increase.
Note that the last paragraph mentions that the Obama administration proposed the new formula, although, to be fair, it’s been floated by Democrats before this administration.
It is interesting that in the discussions on reducing the federal deficit all parties agree that spending must be cut. However, the Democrats’ idea of “cutting spending” mandates a tax increase before they will support it. So, by that logic, the way to reduce spending is to give Congress more money to spend. I have a headache.
Oh, well. I’ll get off my high horse now. The appearance of these two articles, in two days, just got me started. Having the money we all saved described as a problem provoked me. I acknowledge that I, and most of my friends, will survive the cuts in Social Security, but it strikes me as ironic that the way we’ll survive is by using the savings which created a “Wealth Inequity.”