WHEN you talk to Chinese officials lately, it doesn’t take long before they express concern about America’s “rebalancing” of forces — the prospect that we’ll shift more troops from the Middle East, where they are containing instability, to Asia, where they would contain China. My standard reply is that China is worrying about the wrong thing. It is not that we’ll shift our Marines from the Middle East to Asia; it’s that we are going to shift them from the Middle East to San Diego — because we can’t afford to be the world’s policeman much longer, and China will have to fill some of the void.
Good luck, world! It’s been fun hanging with you, but we can’t pay for it anymore — not with all of us baby boomers about to retire with no savings. We have a new strategic doctrine coming: “U.S. foreign policy in the age of Alzheimer’s.” We’ll do what we can afford and forget the rest.
Why do I say that? In part it’s because I spent time this week with the Washington staff of The Jewish Federations of North America, or JFNA, which represents the 155 Jewish community federations across America. They may seem like an unlikely interlocutor for a foreign affairs columnist, but they’re not. Like their counterparts, Catholic Charities and Lutheran Services, these Jewish federations operate nursing homes, hospitals, elder-care programs, meals on wheels, job-training, hospices and family social services in cities across America. And the financial challenges they’re all facing today are profound — as the baby boomers are aging — and so too are the trade-offs we’ll have to make between nursing homes in America and nursery schools in Afghanistan. Unless we get some sustained economic growth, Afghanistan is going to lose.
William Daroff, the director of JFNA’s Washington office, starts with this fact: Since the 2008 economic crisis, annual donations to Jewish federations have been flat, while there has been a sharp increase in demand for services and significant cuts in Medicaid and block grants that help pay for them. “We have people who were donors to our programs five years ago, now knocking on the door to use those same programs” — from people in need of job-training to those in need of help to cover a mortgage payment, said Daroff.
And we haven’t seen anything yet, explains Barbara Bedney, the director of public policy for JFNA. “We will see a doubling of the number of older adults — people over the age of 65 — by 2030, as the baby boomers age,” she explained, and one of the fastest growing groups will be the “old-old” — those who are 85 years old and older, who are living longer but requiring even more expensive care. And wait until the baby boomer cohort reaches their 80s. Alzheimer’s Disease Research reports that roughly 5.4 million Americans of all ages had Alzheimer’s disease in 2012, and, by 2050, more than 15 million Americans could be living with the disease — a key reason nursing home residents are predicted to double over the next 30 years.
And many baby boomers, says Steven Woolf, the senior tax policy counsel for JFNA, “are nowhere near prepared in terms of retirement savings” for the kinds of costs they are going to incur after they stop working — in an age in which they will be living longer, the government will have less to offer, they each will have fewer kids to care for them and social service agencies will be swamped with demands.
Indeed, a 2011 survey by the Employee Benefit Research Institute found that a “sizable percentage of workers report they have virtually no savings or investments.” Among those workers polled in its retirement confidence survey, “29 percent say they have less than $1,000. In total, more than half of workers (56 percent) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.”
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