Is it ethical to make a commitment that you know you can’t keep? Heck, no! Some employers used to promise retirement benefits that they didn’t set aside money for. The government decided to outlaw such unethical behavior: now the law requires employers who promise retirement benefits to set aside funds to pay when the benefits come due.
Sadly the government isn’t about to do what it’s required employers to do. The government has promised Americans that they’ll be covered by Social Security and by Medicare, and—if they’re poor—by Medicaid. The costs of these “entitlement” programs are growing steadily as:
1. the baby boomers are just starting to come under Social Security and Medicare. (The first boomers, born in 1946, become 65 next year, then an avalanche in the next ten years.)
2. life expectancy is increasing—babies born this year have a 50-50 chance of living to 100
3. medical care gets more expensive as people grow older, and
4. medical science is developing ever-more-expensive treatments.
All in all, this “perfect storm” will either bankrupt the country or force America to break its promises to the elderly.
So what are our politicians doing to fix this problem? Some are calling for budget cuts, knowing that the entitlement programs are not cut-able under present law. Others are calling for reform, knowing that reform can’t come close to solving the funding problem. Every one of our legislators knows about the problem. But it’s not being addressed. This is profoundly unethical behavior: they agreed to do the people’s work if they were sent to Washington, and having won election they are sloughing off the problem to our grandchildren.
Whose fault is it and what can be done? I’ll address this in coming blogs.