We have come across two (actually three, but one is a 2 parter) great posts about how government is basically stealing from our children. Now we fully understand the Libertarian slant here– and we also fully appreciate that such alarm sounding is nothing new. What got our attention and our senses perked were the people who wrote these and the relatively mainstream places we found them.

The first piece is small, from a money manager named Bill Frezza and is titled Watching Social Security Eat the Young Alive. What’s striking about the piece is that he is reading from the social security brochure that we all get in the mail each year, that of course none of us bothers to read (like cell phone contracts and all the rest). Well, his reading is what makes this piece so neat. For example:

The two-page pamphlet entitled “What young workers should know about Social Security and saving” reminds us that 50 million, or one in six, Americans will collect more than $614 Billion dollars in Social Security benefits this year. It informs young people that the Security Taxes they now pay go into a “Trust Fund” that is used to pay current beneficiaries. Paying off early investors with funds taken from later investors is precisely how Wikipedia defines a Ponzi scheme. The pamphlet advises that the Social Security Board of Trustees estimates that the “Trust Fund” will be depleted before my son’s 54th birthday. Because people are living longer and the birth rate is low, it goes on, taxes paid by workers in the future will not be enough to pay the benefits promised in his personalized retirement account statement enclosed with the pamphlet. Imagine what hell would break loose if Schwab or Fidelity Investments enclosed a confession like this when they mailed investors their 401(k) statements.

Yes. Indeed.

The other 2-part piece is from Robert Samuelson from Newsweek. He starts early with:

Comes now the House-passed health care “reform” bill that, amazingly, would extract more subsidies from the young. It mandates that health insurance premiums for older Americans be no more than twice the level of younger Americans. That’s much less than the actual health spending gap between young and old. Spending for those aged 60-64 is four to five times greater than those 18-24. So, the young would overpay for insurance which — under the House bill — people must buy: 20- and 30-somethings would subsidize premiums for 50- and 60-somethings. (Those 65 and over receive Medicare.)

And then, he gets a great quote from the AARP:

AARP justifies the cost-shifting as preventing age discrimination. Premiums based on age should be no more acceptable than premiums based on medical expenses reflecting race, gender or pre-existing health conditions, it says. The House legislation bans those, so it should also ban age-based rates. AARP dislikes even the 2-1 limit. It thinks premiums for someone 22 and someone 62 should be identical. (In insurance jargon, that would be full “community rating.”)

This is unconvincing. All insurance aims to protect against risk — but within groups facing similar risks. Put differently, most insurance is risk-adjusted. Auto insurance premiums vary by age; younger drivers pay higher rates because they have more accidents. Homeowners’ policies for similar houses cost more in high-crime areas. This is not “discrimination”; it’s a reflection of risk and cost differences. Insurers that ignored these differences would soon vanish, because they’d suffer heavy losses and lose customers.

Agree or disagree about the need for HCR, the methodology in action at present to secure it, or even the need for it. But, it is very difficult to disagree with the premises of all these articles. We are doing these things, and like NINJA loans (NoIncomeNoJobApplication) for homes in 2006 and 2007 and the great internet bubble of 2001 (AOL-Timer Warner and Pets.com ring any bells?), the day of reckoning for the choices we are making now will happen. It is just a matter of time and a matter of what we will be prepared to do about it.