sent 9 August 2001
Re: "Plundering Baby Boomers," by Robert J. Samuelson, Washington Post, 2 August 2001.

To the Editor:

In his article, "Plundering Baby Boomers" (Washington Post, 2 August 2001), Robert J. Samuelson adopts a crisis tone similar to that taken in the interim report approved by the President's Social Security Commission. Often-cited demographic statistics are brought forth to scare the reader: the number of workers per retiree will plummet from a bit over 3 today to just about 2 in 2030; the percent of GDP absorbed by Social Security and Medicare will rise steeply from 6.3% today to 12% by 2030; and so on.

What Mr. Samuelson fails to tell the reader is that in 1940 there were 42 workers for every retiree, but by 1960 that had collapsed to just five workers per retiree, and to only three today. In other words, the "rising burden" that will be experienced as baby boomers retire is not large relative to the increases that have been fairly easily accommodated in the past. For example, in order to completely resolve the Social Security "crisis," all we need to do is to shift about 2% more of GDP toward beneficiaries over the next 60 years, which does not appear large when one realizes that over the past 60 years we managed to shift nearly 5% of GDP toward Social Security beneficiaries.

Yes, America has a maturing population and an evolving economy to match. Not so many generations ago, the vast majority of individuals in all human societies worked in agriculture. Today, only about one percent of our population works in agriculture. As we move through this century, it is inevitable that a higher proportion of our employment and output will take the form of personal services, including health care. This can be accomplished without crisis and without undue burden because the other side of the coin is rising labor productivity in agriculture, manufacturing, transportation, and construction that frees tomorrow’s workers to perform services. And, yes, we have a "health care crisis"-but it is a crisis involving the millions without health insurance, not those who are covered by Medicare.

L. Randall Wray
Professor, Economics Department
211 Haag Hall, 5100 Rockhill Road
University of Missouri
Kansas City, MO 64110
phone 816-235-5687, fax 816-235-5263