A period of downward mobility lies ahead for Americans, veteran journalist Robert Samuelson warned during a March 1 lecture at the Lewis Science Center. Samuelson, a columnist for Newsweek and The Washington Post who writes about economic issues, said the “era of good feeling” about U.S. economic prosperity since World War II is likely coming to an end. And while there has never been a period in which the living standard of one generation of Americans was not better than the previous one, Samuelson said, that may not be the case for our children and grandchildren.
Per-capita income will continue to increase, Samuelson said, and “we will remain an extraordinarily wealthy society.” But after-tax income may stagnate, he said, citing a projection that if health-care costs continue to rise the way they have been, they will consume about half of the increase in per-capita income by 2030.
Unless Social Security, Medicare, and Medicaid benefits are changed, “a huge increase” in taxes would be required to balance the budget over the next two decades, Samuelson said. The tax burden as a percentage of the country’s gross domestic product, which has been virtually unchanged for 50 years, would need to jump 50 percent to maintain all existing benefits.
This could lead to serious conflict between workers and retirees, he said: “You may get something of a tax revolt among younger workers” who, while struggling to support their families, are paying for “retirement subsidies” for those who are much wealthier than previous generations of retirees. “We are now in a position where we must be unfair to somebody,” Samuelson said. “There are only bad choices.” He said he did not see any current political leaders ready to confront the issue. “This is not going to be solved until a crisis forces it to be solved,” he said. By W. Raymond Ollwerther ’71