May 8, 2013
33 MILLION NEW RETIREES WILL BUST U.S. BUDGET
ANALYSIS & OPINION BY RUSS STEWART
In America, the worst is yet to come. According to U.S. census projections, the number of age 65-plus retirees will balloon from 40 million in 2010 to 73 million in 2030 -- an increase of 33 million, or 82.5 percent.
That means that of the current $3.7 trillion federal budget, the allocation for Social Security, Medicare and Medicaid will double to $2 trillion annually. The federal deficit is close to $17 trillion, and the annual interest on that debt is $900 billion; January's "deficit reduction compromise" will reduce it by an estimated $2 trillion by 2020. Defense spending is $950 billion. Discretionary spending, including the federal government's payroll and pensions, plus infrastructure and "pork," is another $1 trillion.
The question is: Who pays for it?
The obvious answer: The 11 million illegal aliens who will be given a "pathway to citizenship" and will start paying social security and FICA taxes, plus fines, fees and back taxes as part of their 13-year naturalization process.
Make no mistake: "immigration reform" is not about compassion, it's a hard-headed economic decision to get more people on the payroll to subsidize those who are not on the payroll, which means Mitt Romney's infamous "47 percent." By 2020 it will be closer to 55 percent, and by 2030 it will be 60 percent.
Among Washington Republicans, paranoia is rampant that legalizing "illegals" will create a permanent Democratic majority. After all, 73 percent of Hispanic voters backed Barack Obama in 2012, which, augmented by 93 percent of the black vote, enabled Obama to win by 4 million votes. Among Democrats, smugness is epidemic. They figure that they've got a perpetual lock on three-quarters of those 11 million new citizens and that the presidency is theirs forever. Both are wrong.
The great fallacy among contemporary political prognosticators and strategists is that they presume that today's reality is tomorrow's certainty. That's just plain stupid. Politics is never static; it's in constant flux. There is no permanency. "Generational hegemony" is fleeting. Throughout American history, no political party has maintained their dominance for more than a generation, which means 20 to 30 years.
The Democrats' spin is that their "coalition," bolstered by racial, demographic, ideological, secular, geographic and economic trends, has evolved into a permanent majority. Social issue-obsessed white liberals, well educated upscale suburbanites, trial attorneys, Asians, Jewish voters, pro-abortion-rights feminists, secular urbanites, public sector union members, gays, blacks, Hispanics, government-dependent "47 percenters," immigrants, single women, trendy Generation X voters -- that's the "Obama Nation," and it's growing. It's hard to envision Hillary Clinton losing if she runs in 2016.
The Republicans' coalition, according to the political intelligentsia, is withering. It's too white, getting too old, too religious-oriented, too intolerant of cultural change, and too obsessed with gun rights and fading issues such as abortion and gay marriage. They are absolutely right -- for now. A party which demands purity is a loser, while a party which seeks inclusiveness is winner. That is the historical ebb and flow of American politics.
In America there have always been, usually simultaneously, geographic, cultural, religious, ideological, ethnic and racial divisions. That's the underpinning of political parties, and those alliances shift constantly. Within the next decade the Democratic coalition will crumble, social issues will evaporate, and the salient issue will be the payers versus the payees -- or, to be less tactful, the "leisure class" versus the "productive class." Or, even less tactful, those who expect or are entitled to a government handout versus those who have the government's hand in their wallet.
By 2020 the "Obama Nation" will be kaput. Generational issues will predominate, and there will be plenty of anger and discontent among the payers. One party will emerge as the oldsters' entitlement protector, and the other will surface as the champion of the producers, meaning younger workers and Hispanics. Retired baby boomers will be implacable 47 percenters. The Democrats' coalition will be shattered.
Every U.S. presidential contest has been a referendum on the status quo and about who controls, dictates and benefits from the role of government. The outsiders want to oust the insiders and arrogate the booty to themselves, and every generation, they do. Here's a perspective:
1776-1800: George Washington may have been the "father of the country," but he ruled by personality, not philosophy. At this stage of American democracy, fierce geographic and ideological battles erupted between the New England Hamiltonians and the Virginia Jeffersonians. The Federalists sought a strong national government, Navy and a federal currency, and the Jeffersonians believed in state's rights. Commercial traders, seeking high tariffs, were antagonistic to slave-holding, tobacco-farming Southern planters, who wanted low tariffs.
1800-1824: Thomas Jefferson won the critical 1800 election, defeating Federalist John Adams of Massachusetts, and Jefferson's agrarian Virginians (Madison and Monroe) held the presidency until 1824. Castigated as Anglophiles and monarchists, the Federalists disappeared. The issue of state's rights was triumphant.
1824-1856: Jefferson's Louisiana Purchase opened the West, and a don't-tread-on-me mentality prevailed. Westerners allied with Southerners to create a new majority. The Whig Party, the Federalists' descendant, advocated federally funded internal improvements such as roadways and canals and a standing military. As always, the division was between a stronger or weaker federal government. Tennessean Andrew Jackson, the hero of the Battle of New Orleans, wanted it weaker, and with Western and Southern support, he beat John Quincy Adams of Massachusetts, the Virginians' successor, in 1828. As president, Jackson dissolved the United States Bank (devolving currency to the states), slashed tariffs, annexed Florida, tolerated slavery and founded the Democratic Party as the less-government party, a coalition of farmers, slave holders, and German and Irish immigrants in the eastern cities. The Whigs, based primarily in New England and supported by the commercial classes, held the presidency for just 8 of those 32 years. Southerners, desperate to protect their "peculiar institution," sought to expand slavery to the territories, including Texas. The Whigs disappeared after losing in 1852.
1856-1896: Abolition, a social issue far more powerful than contemporary "equal rights" or gay rights, roiled the country from roughly 1830 onward. Originally the province of self-righteous New England clergymen who wanted to abolish slavery everywhere, the agitation split the Democrats into North and South factions, with the latter threatening nullification and secession. The Republican Party was founded, but it was not abolitionist; it simply opposed spreading slavery into the west. Republican Abraham Lincoln won the presidency in 1860 with just 39.8 percent of the vote, and the South promptly seceded. The resulting Civil War was carefully couched by Lincoln as a battle to "preserve the Union," not an effort to "free the slaves."
With the South's secession, the Republicans became the North's majority party, and after Appomattox and Lincoln's assassination, they were unassailable. The so-called "bloody shirt" infused every subsequent election, with the Democrats portrayed as pro-South "Copperheads" and traitors and the Republicans as America's saviors. The Grand Army of the Republic was the Republicans' backbone. Every election refought the Civil War, and the Republicans always won, keeping the presidency until 1884. During this time, the Republicans became the pro-business party, favoring high tariffs, low wages and no government regulation.
1896-1932: Stand-pat conservatism was the norm from McKinley to Hoover, with a Teddy Roosevelt (1901-1908) aberration. The Democrats' base was in the urban East's cities, with teeming Irish Catholic populations, the Solid South, unions, and the Midwest and Plains states farmers. The Republicans had the industrial East and the Protestant small-town Midwest, which constituted a majority.
1932-1960: Unfettered capitalism is tolerable to a degree. After the 1929 stock market collapse and the ensuing Depression, the Republicans' laissez faire economic policies were no longer tolerable. Democrat Franklin Roosevelt promised a "safety net," and he expanded the existing Democratic coalition to include blacks, who had been loyal to the "Party of Lincoln" but who didn't vote in the South; when they moved North, they became Democrats. Social Security was created, and the "welfare state" was born. The Democrats kept the presidency until 1952.
1960-1980: The premise of racial civil rights is equality of opportunity, not equality of result. By the advent of Lyndon Johnson's "Great Society" and "War on Poverty," the Democrats had become the redistributive party, guaranteeing "poor people" income and housing, while the Republicans, led by Barry Goldwater, were the low-tax party. The Vietnam fiasco crippled the Democrats' anti-communist image, and Richard Nixon's failings crippled the Republicans' resurgence. With the 1972 McGovern takeover, the Democrats became the culturally liberal, "soft on communism" party.
1980-2008: Entitlements versus opportunity? Jimmy Carter's incompetence paved the way to a blowout Ronald Reagan victory in 1980. Reagan cut taxes and ballooned the deficit but spurred an economic recovery. His huge defense spending brought down the "evil" Soviet Union. Reaganism persevered even during Bill Clinton's reign -- until George W. Bush.
2008-Present: Entitlements win. Barack Obama is not going to cut federal spending. There will be no grand bargain. "Obamacare" will be implemented in 2014. For the next 20 years, the political discourse will be about who gets from the government and who gives to the government.
Obama's coalition will be rent asunder.