There's a chance convergence this week inside the Beltway. On Capitol Hill, the budget debate enters a new act as Ryan's proposal draws both applause and guffaws. And, a few miles west in Woodley Park, the American Society on Aging will have its annual meeting. The convergence is pure coincidence, but the lesson to be drawn from it is not. On both the Hill and the Woodley Marriot, the driving, underlying cause of the debates will be the mismatch between 20th century models of aging and 21st century demographic realities.
As Americans live longer -- 30 years added just in the last century -- is it any wonder the country is struggling to balance its budget? Is it any wonder we can't figure out how to pay for long-standing "entitlements"? It's a difficult and even bitter struggle, but the suits in Washington should take solace.
We're not alone. In the UK, there's an equally contentious budget debate. In the EU, Greece, Ireland, Spain, Portugal, and Italy are each at or past the point of budget crises. And, across the Pacific, the Singaporeans have begun "special employment credits" for older workers. With the lowest fertility rate in the world − and thus a dearth of workers to pay into pension and retirement schemes − Singapore is trying all sorts of budget-balancing maneuvers.
What Singapore is getting to, and what the U.S. needs to recognize, is that we need to fundamentally rethink what it means to age in the 21st century. At the heart of the budget debate, and at the top of the agenda at the American Society of Aging, is how to transform the ways that populations age − how to move away from models of disability and dependency and towards models of health and activity. Without these changes, neither the Obama nor the Ryan budget will get us anywhere.
Looking ahead, we need to stop focusing on competing budget plans and start focusing on how to stimulate economic growth. There are two keys to doing so: lowering old-age dependency ratio, and raising the bar on healthy aging.
First, let's look at old-age dependency ratios. In the U.S., there are 77 million baby boomers passing through traditional retirement age. With life-spans commonly running into the 80s and 90s, this is going to skyrocket the number of older dependents within the American economy. Already, the U.S. old-age dependency ratio is 22. That means that for every 100 working-aged people there are 22 people over 65, roughly a 5:1 ratio. This ratio, which is already almost double that of China, is going to devastate the American economy if it is allowed to continue on its current trajectory. This is exactly why Singapore -- which is even "older" than America -- has made initiatives to re-employ older workers.
The same holds across the Atlantic. In Italy, where dependency ratio is 34, and where the European social welfare system has failed to adapt to new demographic realities, the national economy has tanked. Once one of Europe's strongest economies, many are now predicting that Italy will become the next Greece. And in Japan, where the old-age dependency ratio is the highest in the world at 38, the country is at the point of crisis. And the future is bleak.
The underlying trigger for the meltdown of these two traditional economic powerhouses is the failure to integrate the aging into social and economic life. Retirement and pensions for 20 to 30 years for upwards of 40 percent of the population relies upon an impossible arithmetic.
The second key to economic growth during an unprecedented aging phenomenon is to invest in and create paths for healthy aging. Most critically, this means treating and preventing the non-communicable diseases (NCDs) that are directly related to aging. As the United Nations recognized last September in a historical summit, the new global health threat is diseases like Alzheimer's, diabetes, and cardiovascular disease. And the World Health Organization agrees, referring to NCDs at "the invisible epidemic."
As the American population becomes older, NCDs rates will skyrocket. With cardiovascular disease, for example, each decade of life brings a two- to three-fold increase in mortality from the disease. With diabetes and Alzheimer's, the story is similar. The burden of NCDs is two-fold. On one hand, it costs billions each year to treat them. On the other hand, millions of workers are isolated from social and economic life as they suffer from these diseases−−. Indeed, from an economic standpoint, the sword is double-edged.
The parallels between NCD rates and unhealthy aging are inextricable. Looking ahead, we need to stop bickering over Medicare payment plans and start discussing how to reduce the demand for care by keeping older adults healthier and more productive. Both the Ryan and Obama budgets fail to recognize this, and the Europeans and Japanese are no more focused. Indeed, to solve our budget crisis, we need a culture shift on what it means to age. Let's hope that the conversation at the ASA Conference this week can lead Capitol Hill and beyond the two Oceans into Europe and Asia.
http://thefiresidepost.com/2008/10/05/old-people-exercising/
The 30 year statistic is misleading. The change in American life expectancy at birth between 1910 and 2007, the last year for which the CDC has published tables, was 25.4 years not 30. Much of that change is due to improvements in the prevention of childhood deaths. The life expectancy of a 15 year old American in 1910 was 16.0 years less than for a 15 year old in 2007. By 1939, a year before the first regular Social Security benefit was paid out, the life expectancy of a 15 year old was 10.6 years less than in 2007. For Americans who turned 15 in 1979 through '81, when the Greenspan commission began work on the Social Security reforms adopted in 1983, life expectancy for a 15 year old was 3.5 years less than in 2007. The life expectancy of an American who turned 65 in 1979 through 1981 was only 2.1 years shorter than in 2007.
The major reason for the imbalance in the Social Security programs the increased proportion of wages that are above the cap Social Security taxes. It is a little known feature of the program that all wages earned before the year in which the beneficiary turns 60 are indexed by the increase in average W-2 wages including wages not subject to the tax.
So neither you nor your mother receives a SS payment or Medicare? You're working and making money, but do you REFUSE these "pile of bs soc sec Medicare" (sic) benefits?
I'm sure your 97 year- old- mother, who has been collecting checks and benefits for over 30 years, has more than used her "fair share" in benefits if so.
If I am wrong, and neither of you are accepting government-paid benefits, I apologize. But if you are, you have a lot of nerve saying you and your mother aren't dependent on anyone.
isn't it interesting
that the country that ranks head and shoulders above all others in per capita health care costs
should rank
36th in longivity.
Whatever could that mean?
In public, they rant on horrors of "death panels". With GOP, it's always money before humanity.
Instead of doing the things needed to save for this "rainy day expense" we have allowed the Government to spend away and ignore the problem that SHOULD have been foreseeable 60 years ago.
There are obvious fixes to this problem. One would be RAISING the currant cap on income that Social Security is currently withheld from.
Also, the ridiculous CAP on the income people who choose to take early retirement can make, or lose a big portion of their SS benefits, in my opinion this makes no sense.
The MORE income people earn, the MORE they pay into SS, an this rule DISCOURAGES early retirees from continuing to work and be productive as long as they are able.
Early retirees already take reduced monthly benefits to compensate for more years of benefits. What sense does it make to penalize them for continuing to work and pay into SS?
Social Security should work like any other "Insurance"
You PURCHASE retirement insurance "benefits" out of every pay check you earn, as with any other Insurance PREMIUM you pay for, until the time comes for the benefits you have paid for arrives, whether it is Auto Insurance, Home Hazard Insurance, Life Insurance, what-ever!
Retirees PAID for benefits with the LIFE time of "Premiums=tax" they paid.
There were MORE workers/ Boomers, CONTRIBUTING into SS for the last 50 years then ever, and they are NOT "freeloaders"
The earnings rules are misunderstood. If early retirees earn wages above a certain amount, currently $14,640, their benefits are reduced by $1 for every $2 earned. However the amount of benefits received after the individual reaches full retirement age are increased in proportion to the amount withheld. If the full benefit at age 66 would be $2,400 a month, the worker retiring at 62 gets $1,800. If they earn $36,240 a year in wages, benefits each year will be reduced by $10,800. If they work two years, their monthly benefit will increase to $1,920 at 66. If they live to age 81, which is just about the current life expectancy for a 66 year old, they wind up even on Social Security benefits collected in addition to having had the after tax portion of the $72,480 in wages.