The most striking feature of the U.S. economy over the last three decades has been the upward redistribution of income. The top 1.0 percent of households has managed to pocket the vast majority of gains over this period. That is a sharp contrast with the three decades immediately following World War II when the benefits of much more rapid growth were broadly shared.
This pattern of growth might lead people to question the policies that have led to this upward redistribution (e.g. trade policy, labor policy, monetary policy and anti-trust policy). In order to prevent such questioning and to further the process of upward redistribution, many wealthy people have sought to focus public attention on programs that benefit the middle class and/or the poor.
Peter Peterson, the Wall Street investment banker, has been most visible in this effort, committing over $1 billion of his fortune for this purpose. Recently he enlisted a group of CEOs in his organization, Fix the Debt, which quite explicitly hopes to divert concerns over income inequality into concerns over generational inequality. It argues that programs like Social Security and Medicare, whose direct beneficiaries are disproportionately elderly, are taking resources from the young.
It is easy to show the absurdity of this position. The amount of money that the young stand to lose from the upward redistribution of income is an order of magnitude larger than whatever hit to their after-tax income they might face due to the continuing drop in the ratio of workers to retirees. Also, older people generally have families. This means that when we cut the Social Security or Medicare benefits of middle- and lower-income beneficiaries, we are often creating a gap that will be filled from the income of their children.
Nonetheless, when you have a billion dollars to throw around, you will have plenty of people willing to argue absurd positions. Therefore, it is not surprising to see the Fix the Debt crew and various other Peterson derivative organizations pushing the line about generational conflict, but what is NPR's excuse?
This is an excerpt of Has NPR Joined Peter Peterson's Crusade Against Social Security and Medicare? which originally appeared on the Center for Economic and Policy and Research's (CEPR's) Beat the Press blog. Read the rest.