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Boomer Entitlement?
Young Americans, and especially young men, are feeling economically disenchanted. As the national debt soars and interest rates remain high, the prospect of providing for a family (let alone buying a home) seems impossibly far off. Russ Greene explains part of the problem: “Total Boomer Luxury Communism,” or a host of policies at all levels of government that generously provide for senior citizens while leaving the youth to pick up the tab. Greene talks about how we got here, what’s needed to give Millennials and Gen Z a chance, and why there’s reason to be optimistic.
Related Links
“What Is Total Boomer Luxury Communism?” by Russ Greene (The American Mind)
“Debt Politics” with Mitch Daniels (Law & Liberty Podcast)
“What Social Security Should Do—and What It Shouldn’t” by Sita Slavov (Law & Liberty)
“Slashing Tax Rates and Cutting Loopholes” by Adam N. Michel (Cato Institute)
Transcript
James Patterson (00:06):
Welcome to the Law & Liberty Podcast. I’m your host, James Patterson. Law & Liberty is an online magazine featuring serious commentary on law, policy, books, and culture, informed by a commitment to a society of free and responsible people living under the rule of law. Law & Liberty and this podcast are published by Liberty Fund.
Hello and welcome to the Law & Liberty Podcast. My name is James Patterson. I’m contributing editor to Law & Liberty, as well as associate professor of Public Affairs at the Institute for American Civics at the University of Tennessee. With us today as a guest is Russ Greene. He is the executive director of the Prime Mover Institute and the author of “What Is Total Boomer Luxury Communism?” I guess Russ, we should start with the answer to your question, so go ahead and hit us with it. Welcome to the Law & Liberty Podcast.
Russ Greene (01:16):
Yes, thank you, James. I’m glad to be here. “Total boomer luxury communism” refers to a suite of government policies at the local, state, and federal level that has the effect of transferring wealth at a massive multi-trillion dollar scale each year from younger people to older people. And I can break down each word in that phrase. It has a particular meaning. The luxury part though is probably the one that’s most important because Boomer, that’s pretty obvious. We’re mainly talking about senior citizens. That’s Baby Boomers right now for the most part. The luxury part though, really denotes how these programs are not just about keeping seniors out of poverty. They’re often justified that way, but if you actually look at how they work, they far exceed that level. So Social Security benefits reach past $60,000 a year per individual. So for a couple maxing them out. You could be looking at up to $125,000 a year.
(02:28):
That’s pretty significant. And then Medicare Advantage programs, at least as of last year, some of them were covering greens fees at golf courses, golf balls, tennis lessons, horseback riding lessons, ski trips, et cetera. Again, all funded by the taxpayer. So total boomer luxury communism is just a way to sort of label this massive wealth transfer scheme from younger people to older people, which also, as I mentioned, has local and state policy elements, which really is mainly about how a lot of taxation schemes are designed to lower the tax burden on older people and concentrate more of it on younger people.
James Patterson (03:15):
How did we get here? Originally, the idea was to provide retirement and medical benefits to seniors when they may not even have the resources to stay in the homes they already own. How do you move from the Social Security of the New Deal to paying one’s golf course fees?
Russ Greene (03:37):
Yeah, many different things happened at once. Obviously America changed a lot during that time period in about 90 years. One is life expectancy. So even though life expectancy actually declined for several consecutive years over the past decade, it’s still much higher now. I think it’s around 80, right? I mean, when Social Security was passed into law, it was around 64. The other thing is just demographics. So the dependency ratio, so the ratio of people working and therefore contributing payroll taxes to fund these programs relative to the beneficiaries, it’s just plummeted, right? So in 1950 it was about 16 workers for every beneficiary, every one beneficiary, 16.5 to one. Now it’s below three to one. It’s heading towards 2.3 to one by 2035. So in other words, we have way fewer workers to support every retiree. And the other significant change is these benefits, due to actions, first actions by Congress and then due to inaction by Congress, have just become much more generous over time.
(04:54):
Initially, for example, Social Security benefits had to be adjusted directly by Congress in the 1970s through a series of laws. They basically put them on autopilot. As a result, Social Security benefits, especially for high income people have rapidly risen since then. So the median benefit that she’ll get in 2025 is about 30 to 35% more than it would’ve been in the year 2000, for example. And then on the Medicare side, in the healthcare side, there’s a series of changes. One of them is there’s just an epidemic of overpayments in the Medicare Advantage Program, which these are the privately administered programs, so that’s Medicare part C, and that is what enables all these excesses like Medicare Advantage covering meals and transportation and country clubs and such. And then also Medicaid also has been so means testing for Medicaid programs such as the long-term care, it often overlooks the major assets that seniors do have, such as overlooking up to nearly 1.1 million in home equity. So you can be impoverished as a senior and be a millionaire in the government’s eyes.
James Patterson (06:18):
So when I lived in South Florida, I had this experience of getting a haircut at a joint barber salon sort of thing, and the woman across business was getting her hair done and was talking about taking her Social Security check to the casino and gambling it away. And I told the story—somewhat scandalized—to my parents, and one of my parents said, well, it’s her money, right? She paid into Social Security when she worked. Is that true? Is that how Social Security works? You pay in and then you receive benefits that match what you paid in?
Russ Greene (06:58):
No. Was this a setup question? So a lot of times when I propose reforming Social Security, someone will say, you just want to turn it into a welfare program. And the response to that is, “It already is a welfare program.” Social Security beneficiaries in the bottom four quintiles get back from Social Security benefits far more than they contributed through payroll taxes into the program over their lifetimes. It’s true that for the top quintile, they generally get matching benefits in part because they paid in so much more. So there is a progressive benefit formula already. It’s 90%, 32%, and then 15%. So essentially what that means is you get 90% back of the first chunk of your average income over your lifetime, but then past that threshold—I think it’s about $2,000, I forget where exactly it is—you only get 32% back and then past another threshold, you only get 15% back. So there already is a progressive formula for this, but in Medicare, it’s even worse. People are getting back in terms of Medicare benefits many times what they ever contributed in the form of payroll taxes.
James Patterson (08:22):
So does this have a distortion effect on the American budget in terms of mandatory versus discretionary spending? I, of course, had to teach this class to my students, and I mentioned that I was interviewing you and brought you up in class, so hopefully if they’re listening, they’ll get to hear you tell me how right I was. I’m guessing that these expenditures, they eat up most of the budget.
Russ Greene (08:45):
Yeah. So-called mandatory programs, or I prefer the term autopilot, because they’re not mandatory. Congress if it chose to could change them at any time.
James Patterson (08:57):
Mandatory for them for reasons we might talk about …
Russ Greene (09:00):
Right. I think the preferred framing, like the technical language, is direct versus indirect expenditures. I prefer colloquially to call it autopilot spending. So that’s basically the major entitlement programs, Social Security, Medicare, Medicaid, plus interest payments on the debt because that’s not really optional, that is kind of mandatory. You got to pay that. You add all that together, the entitlement programs and the interest payments, that’s 74% of the federal budget.
James Patterson (09:29):
Not good.
Russ Greene (09:30):
So if you look at recent CBO projections, that’s just going up, up, up, up and up. For example, Medicare is going to double over the next 10 years. Just think about that. Social Security, according to the latest CBO projections, it’s looking like 74% increase during that time. Social Security already costs us about 1.6 trillion a year. It’s the largest single category of expenditures. And there’s also sort of a more political or constitutional issue with this, which is that pretty simple. What is Congress’s job? Why does it have authority? It has the power of the purse, right? It’s supposed to review and approve spending and revenue, right? It doesn’t do that mainly because of these autopilot entitlement spending programs. So if once something becomes an autopilot program, Congress doesn’t review and approve it every year the way it does, for example, for defense spending, that has to be negotiated and approved by Congress every single year.
(10:38):
And that’s a good thing. If we are going to spend a trillion dollars on something like we do on defense, there should be a robust debate and discussion about it in Congress. That does not happen for these entitlement programs. And I think that that’s really distorted our politics at the national level, but also there’s a downstream consequence of it, which is the lack of political debate in DC means that the general public has no idea what’s going on with these programs. There are a few politicians who are brave enough to talk about it like Representative David Schweikert, but no one really knows some very salient facts about these programs. One is very few Americans, according to polling from Cato, are able to identify how high Social Security benefits can go. They don’t realize that they can exceed for single individual $60,000 a year. And another thing is there’s almost no discussion, or at least at the popular level about the fact that the trust funds for these programs, the Medicare Hospital Insurance Trust Fund and the Social Security Trust Fund, they’re running out in six to seven years. So people don’t know that. And as a result, there’s no real public awareness of the need to reform these programs.
James Patterson (12:03):
The populist insurgency we’ve seen both on the left and the right often would complain about the uniparty, right? The uniparty about, say, interventions abroad or open borders when it comes to immigration, but these were their targets. But in the process of targeting these ideas, they formed their own uniparty, and it appears to be on these benefits that the Republicans used to have a lot more people that talked about this. And the outcome was Paul Ryan running as vice president under Mitt Romney, the depiction of him hurling an old woman off of a cliff from a wheelchair in a campaign ad. And the lesson that a lot of Republicans learn from that is accept total boomer luxury communism and even campaign to preserve it. So isn’t this partly a response to the pressures that the elderly put on elected officials given they vote in their interests, and the last time the Republicans tried to run against this, they got their clocks clean?
Russ Greene (13:13):
Yes, all that. I mean, Matt Yglesias has a fairly provocative take on Donald Trump, which I think has some truth to it, which is that he’s the great moderator. He forced the Republican party establishment to move closer to the median voter. The issues where it was furthest away from them, one of them would be normal social conservative issues like abortion, for example. Obviously, yes, he appointed the Supreme Court justices that overturn Roe to his credit, in my opinion. But also if you look since then on IVF or on funding of Planned Parenthood or on FDA approval of abortion drugs, the Republican or on gay marriage for that matter, the Republican party is really moderated on traditional social conservative issues under Donald Trump. For better or for worse, it’s gained politically due to that, but it’s also had to make some sacrifices on issues that were very important to traditional social conservatives.
(14:17):
A similar change happened on federal spending and on entitlement programs where the party has really moved to the center unfortunately on spending and on Social Security and Medicare, where you’re right, Romney and Ryan really wanted to do something about these programs. I think they were going about it kind of in the wrong way, both rhetorically and practically, but nonetheless, it was something that they were talking about and planning to act on and George W. Bush before them, but now that’s almost completely gone, but not for long because these trust funds are running out. I will say to Donald Trump’s credit, and I’m really excited about this, it does look like they’re going to do something about Medicare Advantage, which is the program that I identified in my piece in December, just these egregious examples of horseback riding lessons and tennis and golf, all due to over a trillion dollars in Medicare Advantage overpayments by taxpayers.
(15:17):
Over 10 years, the CMS has put out a proposal to really tackle this issue, and as a result in January, I was very happy to see that stocks of major insurance companies, such as UnitedHealth Group, plummeted on the news. So that was very encouraging because a lot of people will say what you said, that they’ll be doomers about this because we’ll say you can’t do anything. Seniors are too powerful. And I’m not sure that’s true for a number of reasons. One is that things are happening right now. That was a politically bold move by the Trump administration to do, but they were willing to do it. I’m not sure exactly what the calculus was there, but it was the right decision. And the other thing is that this is really about cost and benefits. It’s absolutely true that there’s a political cost to doing anything about an entitlement program that will cut the amount of money that taxpayers are sending out every month.
(16:13):
On the other hand, the costs of inaction are high as well. So the cost of inaction are a higher risk of inflation. The national debt goes up, higher risk of a debt crisis, higher interest payments, and ultimately, most likely pretty significant tax hikes, which are both politically unpopular and economically harmful. So at some point, my prediction is that basically the cost of inaction are going to significantly outweigh the cost of action on these programs. The other thing I’d say, and this is one of the things that I’m most excited about with this total boomer luxury communism stuff, is that the younger generation of MAGA people actually cares about these issues, at least when I’ve been able to speak to them about this. In part because I’m not explaining it using the normal libertarian talking points. I’m speaking to it in terms of like, this is bad for workers, it’s bad for families, it’s unjust, it harms the common good using that language, all of which is true by the way, and not purely economic or financial or quantitative language that speaks to them. And it also sort of addresses the issues they care about most, which is why is living a dignified life in America, why is starting a family as a younger person in America, why is that so difficult? Apparently more difficult now than it would’ve been 20, 30, or 40 years ago? Total boomer luxury communism might not be the only reason, but it’s certainly a very significant reason for lot of the problems that the new right sees in America, and in my opinion correctly.
James Patterson (17:54):
One of the sort of memes or slogans used by younger people on the new right is “this is what they took from you.” And normally it’ll have an image of a kind of fifties style family with a two car garage and all that, and in a way that’s kind of melodramatic, but what are the distortionary, if that’s the word or distortionate, it effects on the economy that harms young people with total boomer luxury communism? What is it that it does to them?
Russ Greene (18:29):
Yeah, first and foremost, it displaces the family and weakens ties between people. So very often conservatives talk about how this happens with welfare programs like Thomas Sowell and others have talked about how you’re basically breaking up nuclear families because the woman now can depend on the government instead of on her husband, which has negative impacts both for the family itself and for their children. A similar thing happens across generations with total boomer luxury communism where parents, instead of maintaining tighter bonds, both in terms of where they live, but even emotionally with their children, they’re encouraged more to depend on the government and their old age, and they live under this delusion of independence where they think, “oh, I’m not dependent. I live off of Social Security and I paid into that. Therefore I am an atomic individual.”
(19:36):
And it’s really, we always talk about welfare harming the morality of younger people like in their twenties, thirties, and forties. In a very similar way, total boomer luxury communism has harmed the morals of the baby boomer generation because they’ve grown up under its assumptions, they’ve become dependent on the government for their lifestyle, and they’re committing grave injustices to younger generations, but they’re not able to see it because their judgment is clouded by self-interest. So that’s very harmful. So there’s a familial and moral dimension to this that it can’t be emphasized enough. Economically, though, there’s very concrete harms that are undeniable. I mentioned earlier that Romney-Ryan somewhat misunderstood this issue. Chris Pope has written about this in City Journal for the Manhattan Institute. He gets into better detail, more detail than I can hear, but one of the biggest ways that Romney and Ryan misunderstood what’s going on with the federal government is they really focused on income taxes, which it’s true are basically almost entirely born by higher-income people.
(20:43):
What they missed is payroll taxes as opposed to income taxes are a disproportionate burden on working and middle class people, and they’re funding benefits for a generation that is on average much wealthier than they are. So this is actually a very populist-friendly issue because when you think about payroll taxes, funding benefits for retired millionaires, that’s profoundly, socially unjust. There is no philosophical or moral justification for that. That also means that we are making life more unaffordable for younger people in a very concrete way because they have to pay, it’s several steps here, they have to pay the taxes that fund these programs, but those taxes don’t fully fund these programs, so the government has to borrow. That borrowing then leads to inflation, so the cost of the grocery store at the gas pump or higher, it also leads eventually to higher interest rates. So it’s harder to get a car loan, it’s harder to buy a house.
(21:44):
It eventually slows economic growth because when the debt to GDP ratio surpasses 80%, that’s a drag on economic growth. We’re way above that already. We’re going to be about double the economy if we stay on our current trajectory by 2050. And then also they’re going to be paying for this their entire lives in the sense of they’re the ones who are going to have to pay, or we are really, are the ones who are going to have to pay interest on this debt forever. So these programs that seniors are benefiting from now are going to be paid for by us our entire lives, and because they’re financially unsustainable, it’s not like, oh, just be patient, right? You’ll get it one day. It’s like, no, these programs can’t go on in their current form. So boomers are benefiting from things that we know cannot continue while at the same time making younger generations pay for all of the burden.
James Patterson (22:44):
So younger people are poorer than they should be, and when they’re old, they will not get Social Security or Medicare as it exists today under any circumstances.
Russ Greene (22:55):
I don’t want to be an absolutist about this because look, if some of the more optimistic AI scenarios happen, who knows what can happen, but I think the most likely situation, if you look at the Congressional Budget Office projections and any of the credible projections from think tanks on the right or left around DC, I mean there’s just no way that these programs can continue in their current format. So what does that mean? There’s going to have to be most likely, this is not what I want, but just projecting empirically, most likely there’s going to be some combination of benefit cuts and tax hikes. I would like to see more benefit cuts relative to tax hikes, and I would also like to see benefit cuts concentrated on higher income and higher net worth people. That would be my preference, but functionally what that means, less benefits in the future, higher taxes is the ratio of benefits to taxes paid that boomers enjoyed, cannot keep going. There’s going to have to be higher taxes and lower benefits, and that fundamentally means oftentimes people will say, if you adjust these programs, you’re breaking the social contract. Social contract was broken a long time ago when they decided to put these programs on an unsustainable fiscal footing.
James Patterson (24:22):
The politics of this sounds really hard and I can’t imagine what they’ll look like. I mean, you’ve mentioned a few leaders on these issues. Do you think that they might be able to forge a path that doesn’t lead to almost a generational civil war, meaning younger voters will attack older voters and older voters will attack younger voters? How do you solve this?
Russ Greene (24:54):
I do think there actually does need to be more generational conflict. And I say that because Gen X, Millennials, and Gen Z, our current strategy has been unilateral disarmament. The booomers are organized, they know what their interests are, and they’re fighting to defend them at our expense. Who’s representing us? So you project that forward. What does that look like? That looks like if it continues to be true that seniors are mobilized and no one else is to defend their interests, then in 2032 and 2033, when these Social Security and Medicare trust funds run out, who’s going to foot the bill? The burden is going to be entirely placed on younger generations, unless that is, there is a broader political awakening among younger generations, and really at this point, gen X will be so close to retirement that might be hopeless. So really it’s going to have to be Gen Z and Millennials. There’s going to have to be some sort of political awakening among them, and they’re going to have to have some equivalent of an AARP or something. It’s going to have to be organized and funded to advocate for their interests in the new settlement that’s going to have to occur at least by the early 2030s.
James Patterson (26:22):
Last year, we had Governor Mitch Daniels on the Law & Liberty Podcast, and we talked about this use of debt to finance peacetime, social programs and how this is historically the craziest thing, right? Historically, debt financed wars and people got very worried about this because it meant that there would be this hangover from a war you might possibly lose, and now we’re largely at peace. I mean, even when we’re at war, it doesn’t feel like it if you lived through the occupations of Afghanistan and Iraq. So why did we resort to this degree of debt for peacetime social welfare benefits?
Russ Greene (27:10):
Yeah, due to two illusions. One is the illusion that debt was free. It was a ZIRP phenomenon, right? The zero interest rate phenomenon.
James Patterson (27:18):
Oh, yeah. Say a little bit more about ZIRP. That’s really important I think.
Russ Greene (27:22):
Yeah, I mean just that’s actually, I was just looking at some economics research indicating that’s actually part of total boomer luxury communism, but from 1983 to 1984 over the next 40 or so years, interest rates were historically low for the most part, and that led a lot of politicians, it should be said on the right and the left (the Republicans weren’t much better than this on this than the Democrats) to basically decide that deficits and debt didn’t matter because they weren’t paying an immediate price for it. They sort of assumed also that inflation was not going to be a serious problem, and that was sort of part of the illusion. The other illusion was that, it was the illusion of inaction or the illusion of passivity, like, oh, we’re not actually choosing to do this because Congress isn’t debating it. It’s just sort of set on autopilot.
(28:17):
So it didn’t register as a decision that we were even making, I don’t think. And also there’s a third illusion, which is that if you ask the average American right or left, what’s driving the debt? Why do we have such high deficit spending? Nobody can identify the right target, right? They’ll pick something like foreign aid or defense spending or tax cuts or something else that they want to blame, something convenient to scapegoat, but almost no one is going to accurately identify, oh, no, it’s Social Security and Medicare. That’s the primary reason, and I want to be clear too, we can have discussions about foreign aid and a lot of the USAID stuff was really appalling to me, and I’m glad it’s under scrutiny. A lot of military spending doesn’t seem to be getting what we’re paying for, so let’s have a discussion about that. But let’s be clear, what’s driving the deficit spending and debt problem is Social Security, Medicare and Medicaid, and that’s largely been overlooked due to the end of ZIRP. Interest rates are first inflation happened. Then March, 2022 was the first rate hike by the Federal Reserve. Even if the Federal Reserve tries to lower rates now as soon as inflation comes back, they’re going to have to raise ’em again. So the era of really zero interest rates, but also zero inflation that is over in addition due to the trust funds about to be depleted. The era of just ignoring Medicare and Social Security is coming to an end as well.
James Patterson (29:53):
When I was teaching the class the other day, I talked about there’s this kind of defying of gravity or the laws of physics that you feel when you’re falling and it all comes to an end when you hit the ground. What’s a parachute we could pull open? What does that look like? You mentioned earlier some of the things that you wanted a sort of tax hike and rate decreases. What would the tax policy be?
Russ Greene (30:23):
To be clear, I was not saying I advocate for tax hikes. I was saying that I think the most likely way this is going to resolve if you just project current trends forward is there will be tax hikes. Cato put out a really good piece on all of the ways that you could actually cut tax loopholes because the tax code has become incredibly complicated, and there’s all sorts of special tax breaks that you can only get under certain conditions. Even if you’re a strict libertarian, you should object to that because that is a form of central planning. It is a form of tax expenditure. It’s really more akin to a subsidy than a tax cut. One of the things that total boomer luxury communism has sort of been activated against recently was in the One Big Beautiful Bill Act under the headline of the working family’s tax cut.
(31:16):
There was a large increase in the standardized deduction for senior citizens and only for senior citizens. I think it was an increase of about $6,000. So things like that, let’s just get rid of ’em. I would say the same for most if not all forms of tax credits for green energy, for example, which have been partially repealed, thankfully, by President Trump and the One Big Beautiful Bill Act, but should be totally repealed. Yeah, the Cato article I found it is it’s by Adam Michelle. It’s called “Slashing Tax Rates and Cutting Loopholes.” They found hundreds of billions of dollars in savings each year just from closing these tax loopholes. That’s at the federal level. I would do a similar thing at the local and state level where most states have either an explicit or implicit as in California lower tax rate, especially on property taxes for senior citizens. I think every case that’s unjustifiable, senior citizens should pay the same tax rates as everyone else. If that means they have to sell their homes, oh, well.
James Patterson (32:29):
That’s kind of what they should do. Why do they live in a five bedroom home?
Russ Greene (32:34):
Right, exactly. On the housing discussion, we don’t talk enough about how housing is inefficiently distributed. So it’s not just about the sheer quantity of housing, but there’s specific locations and types of homes that should be inhabited by working families, and they are in instead inhabited by non-working retirees, empty nesters. And that’s economically inefficient, and it happens because of total boomer luxury communism. So because these people are getting so many thousands of dollars a month from the government and because they pay lower tax rates than everyone else, they’re incentivized to stay in homes that are closer to major metropolitan areas, more expensive, and have more bedrooms, three, four, five bedrooms, than they really need. They disproportionately own the larger homes in America. Senior citizens do. It should not be like that. Right? That is crazy.
James Patterson (33:30):
Well, at the same time, the average age of a first mortgage is in the forties now, which is crazy.
Russ Greene (33:39):
Yes. Connor O’Brien, who’s an economist I respect, has somewhat question that statistic, but even if it’s wrong, it’s more like 35 than 40. Yeah, I mean, there’s no question that senior citizens of the highest ownership rates, they have the highest rate of paid off homes and they get their home equity exempted from means testing frequently. So they’re favored in all sorts of ways. So mostly what we’ve been talking about is revenue side. On the spending side, you just have to cut benefits for however we make this happen, and there’s a variety of proposals of how to do it. Andrew Biggs at AEI has proposed something, Mark Warshawsky, I think is his name, also at AEI, put out a competing proposal, but we have to give less money away to retired millionaires, period. So you could do that. What Biggs says is let’s just flatten Social Security benefits.
(34:41):
So in 2032, when there have to be, by law, when there has to be, by law, 24% cut to Social Security, instead of making lower income people bear the same amount of burden as higher income people, let’s just concentrate most of that pain on the top quintile. Currently right now, you can get Social Security benefits in the United States that are three to four times what you would get in other comparable nations like Australia, New Zealand, Canada, or the UK, right? Again, over $60,000. Other countries, you’re looking at $20,000 at the most, right? So we need to flatten max benefits for higher income people and Warshawsky’s proposed doing that through means testing as opposed through just based on what your lifetime income was. That has some advantages, also some disadvantages. But however we get there, what we need to do is cut government spending on the wealthiest retirees.
James Patterson (35:43):
It is incredible how many times I’m seeing people on social media. The Senate, for example, actually sort of touted this savings for seniors on housing that was in the One Big Beautiful Bill, and I knew that there was something happening because I saw that first of all, they experienced it for people who aren’t on social media, good for you, you shouldn’t be. But second of all, they got what’s called ratio, which means that the number of replies exceeded the number of likes. And if you went to the replies to this announcement on Twitter, you were constantly being referred to. It was about how, what are you doing giving these rich people money? And it has ballooned, this term. It’s really taken on as a brand, and it’s coming into the faces of the communications teams that these politicians are using to sort of tell people how they’re helping seniors. So maybe this isn’t a winning message anymore.
Russ Greene (36:43):
Yeah, no, I want to destroy these people. I want to be very clear. There needs to be a higher political price if you’re going to give a special tax break or any sort of special new benefit or even continue an existing one to senior citizens. And I don’t just mean that for Republicans. We did the same thing to Gretchen Whitmer. I don’t know if you saw that.
James Patterson (37:03):
Oh, yes. 355,000 seniors saving households average. This was a tax relief, right, on property taxes. Yeah, I’m seeing that right now.
Russ Greene (37:13):
Yeah, yeah, exactly. So governor of Michigan, Democrat, and I’m pretty sure I got this going. I think I was the first major account to quote tweet her, and I forget exactly what I said, but it was something about total boomer luxury communism and she got totally ratioed, right? And it was pretty, these are significant numbers. I think it was over a million views. Rightly or wrongly, comms teams and policy teams are going to respond to stuff like that. That doesn’t feel good, right? It’s hard to say at what point it becomes an electoral problem for them, but it’s already a comms problem for them. You also had Dan Patrick in Texas, he was proposing an additional special property tax break for I think it was people, I think there was one for 65 and up another for 55 and up. He’s lieutenant governor in Texas. He got ratioed as well for the same reason. And what’s interesting about it too is the people who are pushing back against this stuff, they run the gamut. They’re not just libertarians. They’re not just on the right. You’ve got NatCon, New Right people. You’ve more free market oriented people, but you’ve also got progressives and pretty far left people all coming together saying, this is unjustifiable because it really doesn’t, if you’re a younger person, it really doesn’t matter what your political priors are. You should be upset about people selling you out. It doesn’t matter what your ideology is. There’s no ideology that justifies our current system.
James Patterson (38:56):
And that’s the thing about social media is that even if it’s a kind of subset of a lot of things, it’s where more young people are than older people and things don’t stay in containment on Twitter, they escape to people who are less online, and then they’ll become more cognizant of these sorts of issues. So it seems to me that you’ve really started pushing something that’s gained its own momentum. And I have to say that I’m pretty excited about it as a person who has really had to come to grips with what I was dealing with myself, I think we’re roughly the same age, and I didn’t understand why things were so difficult, and it was financially for so many people I knew, and for me, and I think this is a kind of political awakening that people need, but I’m just concerned that this is going to become a source for overcorrection and genuinely needy seniors might get harmed in the process. Is that something that bothers you?
Russ Greene (39:54):
Well, as I was saying earlier, I don’t want to see that outcome, but I actually think without this mobilization, it would’ve been more likely because if you have the money’s running out in these programs, default setting is going to be just cut across the board everyone, which means that’s going to harm the most, the lower quintiles of socioeconomic status. What I’m advocating for is to protect poor seniors as much as possible. Ideally, we could even raise benefits for them while focusing most of the cuts in tax equalization on the higher quintile. That’s what I want to see, that I’ve been very clear about that and all my messaging around this. The other thing I would say is I wouldn’t have been successful if I had been trying to persuade younger people to get mad. I’m not the reason they’re mad at older people. They just didn’t know why.
(41:01):
And I actually think it’s healthier politically to not just have vague anger, but to have specific anger that leads to action, that leads to deliberation, that leads to policy change as opposed to people just young men mostly sitting in their basements being mad about America, but not knowing exactly what went wrong. So maybe it was the Jews, maybe it was the capitalists, I don’t know. So people have a sense something’s gone wrong, and I think too often people like you and me who are more on the side of pro-American founding on net, pro Constitutionally limited government, our response to this youthful anger was basically line goes up, like per capita, GDP has gone up. What the hell are you complaining about? More appreciative of the fact that you have a smartphone in your pocket and TVs are a lot cheaper than they used to be. There’re some truths to that argument, and people should listen to the economists who are trying to correct them or at least take them seriously. On the other hand, man does not live by bread alone, A, and then, B, is, there are significant economic grievances that younger people do have, and I think total boomer luxury communism is part of explaining to them what’s gone wrong and what to do about it.
James Patterson (42:31):
Yeah, TVs and phones getting cheaper, but mortgages and college debt being a very significant amount of monthly paycheck for people like our age and younger, that’s going to put a pretty significant damper on the enthusiasm. One other thing is, like, if you ever say to students that are now in college, well, you’ve got this supercomputer in your pocket, they’re going to not necessarily be happy about that. Right? There’s something that I think is really interesting, is that that pitch really weak now because of how much these younger students have an ambivalent relationship to social media, and they see phones as a source for surveillance as much as for communication.
Russ Greene (43:15):
Yeah, absolutely. And now there’s concerns about AI. I’m pretty pro-AI. Obviously, people have some concerns around protecting children and pornography and all that, and that’s all legitimate. But on net, I’m pretty pro-AI, I think it’s very important that we find ways to make labor more productive, especially given our demographic challenges. In other words, if we’re going to have fewer and fewer workers for each retiree, our workers had better be really empowered by technology if we want to make that economically work, but that also means there’s going to be a lot of technologically driven disruption in the lives of people who are in their twenties right now or in their teens, and that’s going to be difficult. There are probably some things that government can do to make it a little easier for them to deal with, but on the other hand, for them to have to go through what we all know is going to happen over the next painful transition period we know is going to happen over the next five or 10 years will be even more difficult and more gut-wrenching if it happens. While we also maintain a commitment insulating the people 65 and older who are most responsible for these problems from any consequences, that just compounds the injustice and it’s going to compound the anger.
James Patterson (44:44):
Again, the article is “What Is Total Boomer Luxury Communism”? I believe at the beginning, I forgot to mention that. This is at the American Mind website put up by Claremont, so everyone please go read it. I imagine that we might get some pushback from older listeners, but that’s part of the fun of all of this. Russ Greene, thank you so much for joining us here at the Law & Liberty Podcast.
Russ Greene:
Thanks for having me on.
James Patterson:
Thanks for listening to this episode of Law & Liberty Podcast. Be sure to subscribe on Apple, Spotify, or wherever you get your podcasts, and visit us online at www.lawliberty.org.
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Young Americans, and especially young men, are feeling economically disenchanted. As the national debt soars and interest rates remain high, the prospect of providing for a family (let alone buying a home) seems impossibly far off. Russ Greene explains part of the problem: “Total Boomer Luxury Communism,” or a host of policies at all levels of government that generously provide for senior citizens while leaving the youth to pick up the tab. Greene talks about how we got here, what’s needed to give Millennials and Gen Z a chance, and why there’s reason to be optimistic.
Related Links
“What Is Total Boomer Luxury Communism?” by Russ Greene (The American Mind)
“Debt Politics” with Mitch Daniels (Law & Liberty Podcast)
“What Social Security Should Do—and What It Shouldn’t” by Sita Slavov (Law & Liberty)
“Slashing Tax Rates and Cutting Loopholes” by Adam N. Michel (Cato Institute)
Transcript
James Patterson (00:06):
Welcome to the Law & Liberty Podcast. I’m your host, James Patterson. Law & Liberty is an online magazine featuring serious commentary on law, policy, books, and culture, informed by a commitment to a society of free and responsible people living under the rule of law. Law & Liberty and this podcast are published by Liberty Fund.
Hello and welcome to the Law & Liberty Podcast. My name is James Patterson. I’m contributing editor to Law & Liberty, as well as associate professor of Public Affairs at the Institute for American Civics at the University of Tennessee. With us today as a guest is Russ Greene. He is the executive director of the Prime Mover Institute and the author of “What Is Total Boomer Luxury Communism?” I guess Russ, we should start with the answer to your question, so go ahead and hit us with it. Welcome to the Law & Liberty Podcast.
Russ Greene (01:16):
Yes, thank you, James. I’m glad to be here. “Total boomer luxury communism” refers to a suite of government policies at the local, state, and federal level that has the effect of transferring wealth at a massive multi-trillion dollar scale each year from younger people to older people. And I can break down each word in that phrase. It has a particular meaning. The luxury part though is probably the one that’s most important because Boomer, that’s pretty obvious. We’re mainly talking about senior citizens. That’s Baby Boomers right now for the most part. The luxury part though, really denotes how these programs are not just about keeping seniors out of poverty. They’re often justified that way, but if you actually look at how they work, they far exceed that level. So Social Security benefits reach past $60,000 a year per individual. So for a couple maxing them out. You could be looking at up to $125,000 a year.
(02:28):
That’s pretty significant. And then Medicare Advantage programs, at least as of last year, some of them were covering greens fees at golf courses, golf balls, tennis lessons, horseback riding lessons, ski trips, et cetera. Again, all funded by the taxpayer. So total boomer luxury communism is just a way to sort of label this massive wealth transfer scheme from younger people to older people, which also, as I mentioned, has local and state policy elements, which really is mainly about how a lot of taxation schemes are designed to lower the tax burden on older people and concentrate more of it on younger people.
James Patterson (03:15):
How did we get here? Originally, the idea was to provide retirement and medical benefits to seniors when they may not even have the resources to stay in the homes they already own. How do you move from the Social Security of the New Deal to paying one’s golf course fees?
Russ Greene (03:37):
Yeah, many different things happened at once. Obviously America changed a lot during that time period in about 90 years. One is life expectancy. So even though life expectancy actually declined for several consecutive years over the past decade, it’s still much higher now. I think it’s around 80, right? I mean, when Social Security was passed into law, it was around 64. The other thing is just demographics. So the dependency ratio, so the ratio of people working and therefore contributing payroll taxes to fund these programs relative to the beneficiaries, it’s just plummeted, right? So in 1950 it was about 16 workers for every beneficiary, every one beneficiary, 16.5 to one. Now it’s below three to one. It’s heading towards 2.3 to one by 2035. So in other words, we have way fewer workers to support every retiree. And the other significant change is these benefits, due to actions, first actions by Congress and then due to inaction by Congress, have just become much more generous over time.
(04:54):
Initially, for example, Social Security benefits had to be adjusted directly by Congress in the 1970s through a series of laws. They basically put them on autopilot. As a result, Social Security benefits, especially for high income people have rapidly risen since then. So the median benefit that she’ll get in 2025 is about 30 to 35% more than it would’ve been in the year 2000, for example. And then on the Medicare side, in the healthcare side, there’s a series of changes. One of them is there’s just an epidemic of overpayments in the Medicare Advantage Program, which these are the privately administered programs, so that’s Medicare part C, and that is what enables all these excesses like Medicare Advantage covering meals and transportation and country clubs and such. And then also Medicaid also has been so means testing for Medicaid programs such as the long-term care, it often overlooks the major assets that seniors do have, such as overlooking up to nearly 1.1 million in home equity. So you can be impoverished as a senior and be a millionaire in the government’s eyes.
James Patterson (06:18):
So when I lived in South Florida, I had this experience of getting a haircut at a joint barber salon sort of thing, and the woman across business was getting her hair done and was talking about taking her Social Security check to the casino and gambling it away. And I told the story—somewhat scandalized—to my parents, and one of my parents said, well, it’s her money, right? She paid into Social Security when she worked. Is that true? Is that how Social Security works? You pay in and then you receive benefits that match what you paid in?
Russ Greene (06:58):
No. Was this a setup question? So a lot of times when I propose reforming Social Security, someone will say, you just want to turn it into a welfare program. And the response to that is, “It already is a welfare program.” Social Security beneficiaries in the bottom four quintiles get back from Social Security benefits far more than they contributed through payroll taxes into the program over their lifetimes. It’s true that for the top quintile, they generally get matching benefits in part because they paid in so much more. So there is a progressive benefit formula already. It’s 90%, 32%, and then 15%. So essentially what that means is you get 90% back of the first chunk of your average income over your lifetime, but then past that threshold—I think it’s about $2,000, I forget where exactly it is—you only get 32% back and then past another threshold, you only get 15% back. So there already is a progressive formula for this, but in Medicare, it’s even worse. People are getting back in terms of Medicare benefits many times what they ever contributed in the form of payroll taxes.
James Patterson (08:22):
So does this have a distortion effect on the American budget in terms of mandatory versus discretionary spending? I, of course, had to teach this class to my students, and I mentioned that I was interviewing you and brought you up in class, so hopefully if they’re listening, they’ll get to hear you tell me how right I was. I’m guessing that these expenditures, they eat up most of the budget.
Russ Greene (08:45):
Yeah. So-called mandatory programs, or I prefer the term autopilot, because they’re not mandatory. Congress if it chose to could change them at any time.
James Patterson (08:57):
Mandatory for them for reasons we might talk about …
Russ Greene (09:00):
Right. I think the preferred framing, like the technical language, is direct versus indirect expenditures. I prefer colloquially to call it autopilot spending. So that’s basically the major entitlement programs, Social Security, Medicare, Medicaid, plus interest payments on the debt because that’s not really optional, that is kind of mandatory. You got to pay that. You add all that together, the entitlement programs and the interest payments, that’s 74% of the federal budget.
James Patterson (09:29):
Not good.
Russ Greene (09:30):
So if you look at recent CBO projections, that’s just going up, up, up, up and up. For example, Medicare is going to double over the next 10 years. Just think about that. Social Security, according to the latest CBO projections, it’s looking like 74% increase during that time. Social Security already costs us about 1.6 trillion a year. It’s the largest single category of expenditures. And there’s also sort of a more political or constitutional issue with this, which is that pretty simple. What is Congress’s job? Why does it have authority? It has the power of the purse, right? It’s supposed to review and approve spending and revenue, right? It doesn’t do that mainly because of these autopilot entitlement spending programs. So if once something becomes an autopilot program, Congress doesn’t review and approve it every year the way it does, for example, for defense spending, that has to be negotiated and approved by Congress every single year.
(10:38):
And that’s a good thing. If we are going to spend a trillion dollars on something like we do on defense, there should be a robust debate and discussion about it in Congress. That does not happen for these entitlement programs. And I think that that’s really distorted our politics at the national level, but also there’s a downstream consequence of it, which is the lack of political debate in DC means that the general public has no idea what’s going on with these programs. There are a few politicians who are brave enough to talk about it like Representative David Schweikert, but no one really knows some very salient facts about these programs. One is very few Americans, according to polling from Cato, are able to identify how high Social Security benefits can go. They don’t realize that they can exceed for single individual $60,000 a year. And another thing is there’s almost no discussion, or at least at the popular level about the fact that the trust funds for these programs, the Medicare Hospital Insurance Trust Fund and the Social Security Trust Fund, they’re running out in six to seven years. So people don’t know that. And as a result, there’s no real public awareness of the need to reform these programs.
James Patterson (12:03):
The populist insurgency we’ve seen both on the left and the right often would complain about the uniparty, right? The uniparty about, say, interventions abroad or open borders when it comes to immigration, but these were their targets. But in the process of targeting these ideas, they formed their own uniparty, and it appears to be on these benefits that the Republicans used to have a lot more people that talked about this. And the outcome was Paul Ryan running as vice president under Mitt Romney, the depiction of him hurling an old woman off of a cliff from a wheelchair in a campaign ad. And the lesson that a lot of Republicans learn from that is accept total boomer luxury communism and even campaign to preserve it. So isn’t this partly a response to the pressures that the elderly put on elected officials given they vote in their interests, and the last time the Republicans tried to run against this, they got their clocks clean?
Russ Greene (13:13):
Yes, all that. I mean, Matt Yglesias has a fairly provocative take on Donald Trump, which I think has some truth to it, which is that he’s the great moderator. He forced the Republican party establishment to move closer to the median voter. The issues where it was furthest away from them, one of them would be normal social conservative issues like abortion, for example. Obviously, yes, he appointed the Supreme Court justices that overturn Roe to his credit, in my opinion. But also if you look since then on IVF or on funding of Planned Parenthood or on FDA approval of abortion drugs, the Republican or on gay marriage for that matter, the Republican party is really moderated on traditional social conservative issues under Donald Trump. For better or for worse, it’s gained politically due to that, but it’s also had to make some sacrifices on issues that were very important to traditional social conservatives.
(14:17):
A similar change happened on federal spending and on entitlement programs where the party has really moved to the center unfortunately on spending and on Social Security and Medicare, where you’re right, Romney and Ryan really wanted to do something about these programs. I think they were going about it kind of in the wrong way, both rhetorically and practically, but nonetheless, it was something that they were talking about and planning to act on and George W. Bush before them, but now that’s almost completely gone, but not for long because these trust funds are running out. I will say to Donald Trump’s credit, and I’m really excited about this, it does look like they’re going to do something about Medicare Advantage, which is the program that I identified in my piece in December, just these egregious examples of horseback riding lessons and tennis and golf, all due to over a trillion dollars in Medicare Advantage overpayments by taxpayers.
(15:17):
Over 10 years, the CMS has put out a proposal to really tackle this issue, and as a result in January, I was very happy to see that stocks of major insurance companies, such as UnitedHealth Group, plummeted on the news. So that was very encouraging because a lot of people will say what you said, that they’ll be doomers about this because we’ll say you can’t do anything. Seniors are too powerful. And I’m not sure that’s true for a number of reasons. One is that things are happening right now. That was a politically bold move by the Trump administration to do, but they were willing to do it. I’m not sure exactly what the calculus was there, but it was the right decision. And the other thing is that this is really about cost and benefits. It’s absolutely true that there’s a political cost to doing anything about an entitlement program that will cut the amount of money that taxpayers are sending out every month.
(16:13):
On the other hand, the costs of inaction are high as well. So the cost of inaction are a higher risk of inflation. The national debt goes up, higher risk of a debt crisis, higher interest payments, and ultimately, most likely pretty significant tax hikes, which are both politically unpopular and economically harmful. So at some point, my prediction is that basically the cost of inaction are going to significantly outweigh the cost of action on these programs. The other thing I’d say, and this is one of the things that I’m most excited about with this total boomer luxury communism stuff, is that the younger generation of MAGA people actually cares about these issues, at least when I’ve been able to speak to them about this. In part because I’m not explaining it using the normal libertarian talking points. I’m speaking to it in terms of like, this is bad for workers, it’s bad for families, it’s unjust, it harms the common good using that language, all of which is true by the way, and not purely economic or financial or quantitative language that speaks to them. And it also sort of addresses the issues they care about most, which is why is living a dignified life in America, why is starting a family as a younger person in America, why is that so difficult? Apparently more difficult now than it would’ve been 20, 30, or 40 years ago? Total boomer luxury communism might not be the only reason, but it’s certainly a very significant reason for lot of the problems that the new right sees in America, and in my opinion correctly.
James Patterson (17:54):
One of the sort of memes or slogans used by younger people on the new right is “this is what they took from you.” And normally it’ll have an image of a kind of fifties style family with a two car garage and all that, and in a way that’s kind of melodramatic, but what are the distortionary, if that’s the word or distortionate, it effects on the economy that harms young people with total boomer luxury communism? What is it that it does to them?
Russ Greene (18:29):
Yeah, first and foremost, it displaces the family and weakens ties between people. So very often conservatives talk about how this happens with welfare programs like Thomas Sowell and others have talked about how you’re basically breaking up nuclear families because the woman now can depend on the government instead of on her husband, which has negative impacts both for the family itself and for their children. A similar thing happens across generations with total boomer luxury communism where parents, instead of maintaining tighter bonds, both in terms of where they live, but even emotionally with their children, they’re encouraged more to depend on the government and their old age, and they live under this delusion of independence where they think, “oh, I’m not dependent. I live off of Social Security and I paid into that. Therefore I am an atomic individual.”
(19:36):
And it’s really, we always talk about welfare harming the morality of younger people like in their twenties, thirties, and forties. In a very similar way, total boomer luxury communism has harmed the morals of the baby boomer generation because they’ve grown up under its assumptions, they’ve become dependent on the government for their lifestyle, and they’re committing grave injustices to younger generations, but they’re not able to see it because their judgment is clouded by self-interest. So that’s very harmful. So there’s a familial and moral dimension to this that it can’t be emphasized enough. Economically, though, there’s very concrete harms that are undeniable. I mentioned earlier that Romney-Ryan somewhat misunderstood this issue. Chris Pope has written about this in City Journal for the Manhattan Institute. He gets into better detail, more detail than I can hear, but one of the biggest ways that Romney and Ryan misunderstood what’s going on with the federal government is they really focused on income taxes, which it’s true are basically almost entirely born by higher-income people.
(20:43):
What they missed is payroll taxes as opposed to income taxes are a disproportionate burden on working and middle class people, and they’re funding benefits for a generation that is on average much wealthier than they are. So this is actually a very populist-friendly issue because when you think about payroll taxes, funding benefits for retired millionaires, that’s profoundly, socially unjust. There is no philosophical or moral justification for that. That also means that we are making life more unaffordable for younger people in a very concrete way because they have to pay, it’s several steps here, they have to pay the taxes that fund these programs, but those taxes don’t fully fund these programs, so the government has to borrow. That borrowing then leads to inflation, so the cost of the grocery store at the gas pump or higher, it also leads eventually to higher interest rates. So it’s harder to get a car loan, it’s harder to buy a house.
(21:44):
It eventually slows economic growth because when the debt to GDP ratio surpasses 80%, that’s a drag on economic growth. We’re way above that already. We’re going to be about double the economy if we stay on our current trajectory by 2050. And then also they’re going to be paying for this their entire lives in the sense of they’re the ones who are going to have to pay, or we are really, are the ones who are going to have to pay interest on this debt forever. So these programs that seniors are benefiting from now are going to be paid for by us our entire lives, and because they’re financially unsustainable, it’s not like, oh, just be patient, right? You’ll get it one day. It’s like, no, these programs can’t go on in their current form. So boomers are benefiting from things that we know cannot continue while at the same time making younger generations pay for all of the burden.
James Patterson (22:44):
So younger people are poorer than they should be, and when they’re old, they will not get Social Security or Medicare as it exists today under any circumstances.
Russ Greene (22:55):
I don’t want to be an absolutist about this because look, if some of the more optimistic AI scenarios happen, who knows what can happen, but I think the most likely situation, if you look at the Congressional Budget Office projections and any of the credible projections from think tanks on the right or left around DC, I mean there’s just no way that these programs can continue in their current format. So what does that mean? There’s going to have to be most likely, this is not what I want, but just projecting empirically, most likely there’s going to be some combination of benefit cuts and tax hikes. I would like to see more benefit cuts relative to tax hikes, and I would also like to see benefit cuts concentrated on higher income and higher net worth people. That would be my preference, but functionally what that means, less benefits in the future, higher taxes is the ratio of benefits to taxes paid that boomers enjoyed, cannot keep going. There’s going to have to be higher taxes and lower benefits, and that fundamentally means oftentimes people will say, if you adjust these programs, you’re breaking the social contract. Social contract was broken a long time ago when they decided to put these programs on an unsustainable fiscal footing.
James Patterson (24:22):
The politics of this sounds really hard and I can’t imagine what they’ll look like. I mean, you’ve mentioned a few leaders on these issues. Do you think that they might be able to forge a path that doesn’t lead to almost a generational civil war, meaning younger voters will attack older voters and older voters will attack younger voters? How do you solve this?
Russ Greene (24:54):
I do think there actually does need to be more generational conflict. And I say that because Gen X, Millennials, and Gen Z, our current strategy has been unilateral disarmament. The booomers are organized, they know what their interests are, and they’re fighting to defend them at our expense. Who’s representing us? So you project that forward. What does that look like? That looks like if it continues to be true that seniors are mobilized and no one else is to defend their interests, then in 2032 and 2033, when these Social Security and Medicare trust funds run out, who’s going to foot the bill? The burden is going to be entirely placed on younger generations, unless that is, there is a broader political awakening among younger generations, and really at this point, gen X will be so close to retirement that might be hopeless. So really it’s going to have to be Gen Z and Millennials. There’s going to have to be some sort of political awakening among them, and they’re going to have to have some equivalent of an AARP or something. It’s going to have to be organized and funded to advocate for their interests in the new settlement that’s going to have to occur at least by the early 2030s.
James Patterson (26:22):
Last year, we had Governor Mitch Daniels on the Law & Liberty Podcast, and we talked about this use of debt to finance peacetime, social programs and how this is historically the craziest thing, right? Historically, debt financed wars and people got very worried about this because it meant that there would be this hangover from a war you might possibly lose, and now we’re largely at peace. I mean, even when we’re at war, it doesn’t feel like it if you lived through the occupations of Afghanistan and Iraq. So why did we resort to this degree of debt for peacetime social welfare benefits?
Russ Greene (27:10):
Yeah, due to two illusions. One is the illusion that debt was free. It was a ZIRP phenomenon, right? The zero interest rate phenomenon.
James Patterson (27:18):
Oh, yeah. Say a little bit more about ZIRP. That’s really important I think.
Russ Greene (27:22):
Yeah, I mean just that’s actually, I was just looking at some economics research indicating that’s actually part of total boomer luxury communism, but from 1983 to 1984 over the next 40 or so years, interest rates were historically low for the most part, and that led a lot of politicians, it should be said on the right and the left (the Republicans weren’t much better than this on this than the Democrats) to basically decide that deficits and debt didn’t matter because they weren’t paying an immediate price for it. They sort of assumed also that inflation was not going to be a serious problem, and that was sort of part of the illusion. The other illusion was that, it was the illusion of inaction or the illusion of passivity, like, oh, we’re not actually choosing to do this because Congress isn’t debating it. It’s just sort of set on autopilot.
(28:17):
So it didn’t register as a decision that we were even making, I don’t think. And also there’s a third illusion, which is that if you ask the average American right or left, what’s driving the debt? Why do we have such high deficit spending? Nobody can identify the right target, right? They’ll pick something like foreign aid or defense spending or tax cuts or something else that they want to blame, something convenient to scapegoat, but almost no one is going to accurately identify, oh, no, it’s Social Security and Medicare. That’s the primary reason, and I want to be clear too, we can have discussions about foreign aid and a lot of the USAID stuff was really appalling to me, and I’m glad it’s under scrutiny. A lot of military spending doesn’t seem to be getting what we’re paying for, so let’s have a discussion about that. But let’s be clear, what’s driving the deficit spending and debt problem is Social Security, Medicare and Medicaid, and that’s largely been overlooked due to the end of ZIRP. Interest rates are first inflation happened. Then March, 2022 was the first rate hike by the Federal Reserve. Even if the Federal Reserve tries to lower rates now as soon as inflation comes back, they’re going to have to raise ’em again. So the era of really zero interest rates, but also zero inflation that is over in addition due to the trust funds about to be depleted. The era of just ignoring Medicare and Social Security is coming to an end as well.
James Patterson (29:53):
When I was teaching the class the other day, I talked about there’s this kind of defying of gravity or the laws of physics that you feel when you’re falling and it all comes to an end when you hit the ground. What’s a parachute we could pull open? What does that look like? You mentioned earlier some of the things that you wanted a sort of tax hike and rate decreases. What would the tax policy be?
Russ Greene (30:23):
To be clear, I was not saying I advocate for tax hikes. I was saying that I think the most likely way this is going to resolve if you just project current trends forward is there will be tax hikes. Cato put out a really good piece on all of the ways that you could actually cut tax loopholes because the tax code has become incredibly complicated, and there’s all sorts of special tax breaks that you can only get under certain conditions. Even if you’re a strict libertarian, you should object to that because that is a form of central planning. It is a form of tax expenditure. It’s really more akin to a subsidy than a tax cut. One of the things that total boomer luxury communism has sort of been activated against recently was in the One Big Beautiful Bill Act under the headline of the working family’s tax cut.
(31:16):
There was a large increase in the standardized deduction for senior citizens and only for senior citizens. I think it was an increase of about $6,000. So things like that, let’s just get rid of ’em. I would say the same for most if not all forms of tax credits for green energy, for example, which have been partially repealed, thankfully, by President Trump and the One Big Beautiful Bill Act, but should be totally repealed. Yeah, the Cato article I found it is it’s by Adam Michelle. It’s called “Slashing Tax Rates and Cutting Loopholes.” They found hundreds of billions of dollars in savings each year just from closing these tax loopholes. That’s at the federal level. I would do a similar thing at the local and state level where most states have either an explicit or implicit as in California lower tax rate, especially on property taxes for senior citizens. I think every case that’s unjustifiable, senior citizens should pay the same tax rates as everyone else. If that means they have to sell their homes, oh, well.
James Patterson (32:29):
That’s kind of what they should do. Why do they live in a five bedroom home?
Russ Greene (32:34):
Right, exactly. On the housing discussion, we don’t talk enough about how housing is inefficiently distributed. So it’s not just about the sheer quantity of housing, but there’s specific locations and types of homes that should be inhabited by working families, and they are in instead inhabited by non-working retirees, empty nesters. And that’s economically inefficient, and it happens because of total boomer luxury communism. So because these people are getting so many thousands of dollars a month from the government and because they pay lower tax rates than everyone else, they’re incentivized to stay in homes that are closer to major metropolitan areas, more expensive, and have more bedrooms, three, four, five bedrooms, than they really need. They disproportionately own the larger homes in America. Senior citizens do. It should not be like that. Right? That is crazy.
James Patterson (33:30):
Well, at the same time, the average age of a first mortgage is in the forties now, which is crazy.
Russ Greene (33:39):
Yes. Connor O’Brien, who’s an economist I respect, has somewhat question that statistic, but even if it’s wrong, it’s more like 35 than 40. Yeah, I mean, there’s no question that senior citizens of the highest ownership rates, they have the highest rate of paid off homes and they get their home equity exempted from means testing frequently. So they’re favored in all sorts of ways. So mostly what we’ve been talking about is revenue side. On the spending side, you just have to cut benefits for however we make this happen, and there’s a variety of proposals of how to do it. Andrew Biggs at AEI has proposed something, Mark Warshawsky, I think is his name, also at AEI, put out a competing proposal, but we have to give less money away to retired millionaires, period. So you could do that. What Biggs says is let’s just flatten Social Security benefits.
(34:41):
So in 2032, when there have to be, by law, when there has to be, by law, 24% cut to Social Security, instead of making lower income people bear the same amount of burden as higher income people, let’s just concentrate most of that pain on the top quintile. Currently right now, you can get Social Security benefits in the United States that are three to four times what you would get in other comparable nations like Australia, New Zealand, Canada, or the UK, right? Again, over $60,000. Other countries, you’re looking at $20,000 at the most, right? So we need to flatten max benefits for higher income people and Warshawsky’s proposed doing that through means testing as opposed through just based on what your lifetime income was. That has some advantages, also some disadvantages. But however we get there, what we need to do is cut government spending on the wealthiest retirees.
James Patterson (35:43):
It is incredible how many times I’m seeing people on social media. The Senate, for example, actually sort of touted this savings for seniors on housing that was in the One Big Beautiful Bill, and I knew that there was something happening because I saw that first of all, they experienced it for people who aren’t on social media, good for you, you shouldn’t be. But second of all, they got what’s called ratio, which means that the number of replies exceeded the number of likes. And if you went to the replies to this announcement on Twitter, you were constantly being referred to. It was about how, what are you doing giving these rich people money? And it has ballooned, this term. It’s really taken on as a brand, and it’s coming into the faces of the communications teams that these politicians are using to sort of tell people how they’re helping seniors. So maybe this isn’t a winning message anymore.
Russ Greene (36:43):
Yeah, no, I want to destroy these people. I want to be very clear. There needs to be a higher political price if you’re going to give a special tax break or any sort of special new benefit or even continue an existing one to senior citizens. And I don’t just mean that for Republicans. We did the same thing to Gretchen Whitmer. I don’t know if you saw that.
James Patterson (37:03):
Oh, yes. 355,000 seniors saving households average. This was a tax relief, right, on property taxes. Yeah, I’m seeing that right now.
Russ Greene (37:13):
Yeah, yeah, exactly. So governor of Michigan, Democrat, and I’m pretty sure I got this going. I think I was the first major account to quote tweet her, and I forget exactly what I said, but it was something about total boomer luxury communism and she got totally ratioed, right? And it was pretty, these are significant numbers. I think it was over a million views. Rightly or wrongly, comms teams and policy teams are going to respond to stuff like that. That doesn’t feel good, right? It’s hard to say at what point it becomes an electoral problem for them, but it’s already a comms problem for them. You also had Dan Patrick in Texas, he was proposing an additional special property tax break for I think it was people, I think there was one for 65 and up another for 55 and up. He’s lieutenant governor in Texas. He got ratioed as well for the same reason. And what’s interesting about it too is the people who are pushing back against this stuff, they run the gamut. They’re not just libertarians. They’re not just on the right. You’ve got NatCon, New Right people. You’ve more free market oriented people, but you’ve also got progressives and pretty far left people all coming together saying, this is unjustifiable because it really doesn’t, if you’re a younger person, it really doesn’t matter what your political priors are. You should be upset about people selling you out. It doesn’t matter what your ideology is. There’s no ideology that justifies our current system.
James Patterson (38:56):
And that’s the thing about social media is that even if it’s a kind of subset of a lot of things, it’s where more young people are than older people and things don’t stay in containment on Twitter, they escape to people who are less online, and then they’ll become more cognizant of these sorts of issues. So it seems to me that you’ve really started pushing something that’s gained its own momentum. And I have to say that I’m pretty excited about it as a person who has really had to come to grips with what I was dealing with myself, I think we’re roughly the same age, and I didn’t understand why things were so difficult, and it was financially for so many people I knew, and for me, and I think this is a kind of political awakening that people need, but I’m just concerned that this is going to become a source for overcorrection and genuinely needy seniors might get harmed in the process. Is that something that bothers you?
Russ Greene (39:54):
Well, as I was saying earlier, I don’t want to see that outcome, but I actually think without this mobilization, it would’ve been more likely because if you have the money’s running out in these programs, default setting is going to be just cut across the board everyone, which means that’s going to harm the most, the lower quintiles of socioeconomic status. What I’m advocating for is to protect poor seniors as much as possible. Ideally, we could even raise benefits for them while focusing most of the cuts in tax equalization on the higher quintile. That’s what I want to see, that I’ve been very clear about that and all my messaging around this. The other thing I would say is I wouldn’t have been successful if I had been trying to persuade younger people to get mad. I’m not the reason they’re mad at older people. They just didn’t know why.
(41:01):
And I actually think it’s healthier politically to not just have vague anger, but to have specific anger that leads to action, that leads to deliberation, that leads to policy change as opposed to people just young men mostly sitting in their basements being mad about America, but not knowing exactly what went wrong. So maybe it was the Jews, maybe it was the capitalists, I don’t know. So people have a sense something’s gone wrong, and I think too often people like you and me who are more on the side of pro-American founding on net, pro Constitutionally limited government, our response to this youthful anger was basically line goes up, like per capita, GDP has gone up. What the hell are you complaining about? More appreciative of the fact that you have a smartphone in your pocket and TVs are a lot cheaper than they used to be. There’re some truths to that argument, and people should listen to the economists who are trying to correct them or at least take them seriously. On the other hand, man does not live by bread alone, A, and then, B, is, there are significant economic grievances that younger people do have, and I think total boomer luxury communism is part of explaining to them what’s gone wrong and what to do about it.
James Patterson (42:31):
Yeah, TVs and phones getting cheaper, but mortgages and college debt being a very significant amount of monthly paycheck for people like our age and younger, that’s going to put a pretty significant damper on the enthusiasm. One other thing is, like, if you ever say to students that are now in college, well, you’ve got this supercomputer in your pocket, they’re going to not necessarily be happy about that. Right? There’s something that I think is really interesting, is that that pitch really weak now because of how much these younger students have an ambivalent relationship to social media, and they see phones as a source for surveillance as much as for communication.
Russ Greene (43:15):
Yeah, absolutely. And now there’s concerns about AI. I’m pretty pro-AI. Obviously, people have some concerns around protecting children and pornography and all that, and that’s all legitimate. But on net, I’m pretty pro-AI, I think it’s very important that we find ways to make labor more productive, especially given our demographic challenges. In other words, if we’re going to have fewer and fewer workers for each retiree, our workers had better be really empowered by technology if we want to make that economically work, but that also means there’s going to be a lot of technologically driven disruption in the lives of people who are in their twenties right now or in their teens, and that’s going to be difficult. There are probably some things that government can do to make it a little easier for them to deal with, but on the other hand, for them to have to go through what we all know is going to happen over the next painful transition period we know is going to happen over the next five or 10 years will be even more difficult and more gut-wrenching if it happens. While we also maintain a commitment insulating the people 65 and older who are most responsible for these problems from any consequences, that just compounds the injustice and it’s going to compound the anger.
James Patterson (44:44):
Again, the article is “What Is Total Boomer Luxury Communism”? I believe at the beginning, I forgot to mention that. This is at the American Mind website put up by Claremont, so everyone please go read it. I imagine that we might get some pushback from older listeners, but that’s part of the fun of all of this. Russ Greene, thank you so much for joining us here at the Law & Liberty Podcast.
Russ Greene:
Thanks for having me on.
James Patterson:
Thanks for listening to this episode of Law & Liberty Podcast. Be sure to subscribe on Apple, Spotify, or wherever you get your podcasts, and visit us online at www.lawliberty.org.
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