More Economics

Robert Samuelson has another interesting and prescient column up today. In it, he compares the welfare state that is General Motors with the welfare state that is the United States. It is widely known that GM pays retirement benefits that are entirely unsustainable because

1) There are more GM retirees than current employees,
2) The unions were able to extract ever-increasing benefits because of bottlenecks in the manufacturing process,
3) The political interests of Democrats aligned with those of unions to bolster their untenable position, and
4) The MSM has long been a sop to unions and Leftist causes generally.

Those are my reasons. Samuelson offers some history that is, he posits, likely prologue to the welfare benefits promised by government.

In contracts with the United Auto Workers, GM promised high wages, lifetime employment, generous pensions and comprehensive health insurance. All this is ancient history: New workers get skimpier benefits.
As metaphor, GM's bankruptcy marks the passage of this model. Companies still provide welfare benefits to attract and retain skilled workers. But these shelters against insecurity are growing flimsier. Career jobs remain, but lifetime job guarantees -- whether formal or informal -- are gone.

To anybody who hasn't entered dementia or has learned to read, the connection is obvious. America will someday soon not be able to pay the benefits it has promised to its workers. Social Security, Medicare, Medicaid, SCHIP, WIC and a whole raft of other benefits are unsustainable. Eventually those benefits will have to be cut, probably in some ad hoc way that spreads the political pain across the spectrum, or collapse will be upon us. Young people everywhere are aware that this pain is coming. We know that we'll be asked to pay the freight for our parents without the promise of future benefits.

But unlike the GM example in which younger workers do not get the benefits promised the oldsters -- but for which they suffer no immediate detriment -- the federal example depends on the votes of all voting blocs. Eventually the younger workers will vote to cut the benefits of retirees because that will mean short-term benefits in the form of lower taxes or greater future benefits. The idea that middle aged workers looking toward their own retirement while funding current retirees and their own children's lifestyles will continue to passively accept what may come from their political betters is absurd. It will not stand. So unlike GM, which had the option of bankruptcy, America will not (I think.) allow oldsters to keep their benefits while youngsters agree to less.

Exit Questions:
Democrats and the MSM have perpetrated the fraud of the current system upon us. Will they be able to blame Republicans for the disaster that is coming? And will Republicans be stupid enough to let them?