Sunday, December 26, 2010

Less Spending on the Elderly?

Like most people, I really love my mom and dad. Every morning, as part of my daily prayers, I give thanks for the great parents that they were. Mom stayed at home to take care of us, was deeply involved in our Boy Scout and Girl Scout activities, and was PTA president, for example. Dad was a gentle giant, strong but quiet. The outdoors and baseball - those were his two great interests, and he did his best to teach me about them, and much more. From both mom and dad, we learned values: honesty, hard work, thriftiness, respect, the importance of education. We didn't have much money, but we wanted for nothing that really mattered. Mom and dad did everything a person could have expected from good parents.

Dad passed away a few years ago, after an ugly battle with lung and brain cancer that - in the end - had him in diapers and constantly saying cruel, hurtful things. He was in great pain, mentally and physically. That wasn't the real him, and not the way we wanted to remember him. Mom's 85 now, and not doing so well. Dad really spoiled her, always took care of everything, always looking out for her. With dad gone, mom's gradually gotten worse. Her physical problems have increased, and now she's having a lot of mental issues. She's become rather childlike in some ways, more selfish, but also more paranoid, stingy, and very, very forgetful. It's getting more and more difficult to care for her, even as she refuses to go into a retirement home or get full-time help in her own home.

It's not a pretty picture in other words, and my sister and I wonder how we're going to deal with it all if she lives another 2 or 3 or 5 or 10 years. Surely it won't get much easier.... The other part of this, though, is the realization that we're heading in that direction ourselves. Looking at what happened to dad and is happening to mom, we can't help but wonder: "is that us in a few more years?". Yikes! We all want to go out like my grampa did: 86 years old, sitting on a bench waiting for the bus to take him to my cousin's house for some fresh pies she just made. Apparently he had an aneurysm or something, and just plopped over dead. Until then, he'd been living on his own, healthy and with his wits about him. But based on mom and dad's experiences, we know that we can't count on such a pleasant passing.

So it's not that I'm unaware of the problems that old people have. Nor am I someone who doesn't value the elderly and their contributions to society. And finally, at age 58, I'm on the cusp of elder-hood myself, and obviously have a personal interest in what happens to senior citizens. But I think we pay way too much money on their (and soon - my) health care, and that's a huge problem for our country. It's a problem because the U.S. is in terrible financial shape and it's getting worse, a big portion of the problem is tied to spending on the elderly, and if we don't do something drastic - and soon - we may well end up with something that makes the Great Recession of 2008-2010 look like the good old days. Mostly, it'll be the young who suffer the most from all this.

Our federal government's deficit will approach $15 trillion in the next year or so, a number so huge that we can scarcely comprehend it. Interest payments on that amount, which is certain to rise even more in future years, is around $600 billion per year. That's $600 billion that can't be spent on education, defense, better roads, health coverage, etc. - each year. Yet even $15 trillion doesn't tell the whole story, as state and local governments, corporations, and individuals are in debt by another $45 trillion or so ( Total annual cost for all U.S. debt? Something like $3 trillion in interest, per year. Problem is: those numbers are headed higher and are reaching the point where the U.S. system as we know it may no longer be viable. You think unemployment, outsourcing, outdated infrastructure, home ownership, and the cost of a college education are bad now? Stick around.

The elderly's role in this, which by the way is NOT the same thing as saying their blame for this, is based on a number of factors that all result in them getting a larger and larger share of the national "pie". According to the Cato Institute, spending on the elderly was about 24% of all federal spending in 1980. Twenty years later, it was 35%, and is estimated to be 43% in 2010. As Cato puts it "The elderly will elbow aside all other citizens as they seize the bulk of the federal budget" ( Just to be clear what this means, they also said that "High consumption by the elderly (will be) funded by the young". Now the Cato Institute is a libertarian think tank with its own bias and agenda, but everybody else seems to say much the same thing on this issue.

Most of this spending on the elderly is on health care and/or is a result of improved health care over the decades. Because of better living conditions and greatly improved (and very expensive) health care, people are living much longer now. Because of that, they're surviving long enough to receive many more years of Social Security payments, and have many more years to benefit from Medicare and Medicaid than those programs were designed to support. Meanwhile, overall health costs have soared astronomically, so those additional years of health care for elders get increasingly more expensive. Cutting back on elderly health care spending won't solve the nation's debt problems, but along with limiting other old age benefits, it's a good and absolutely necessary start.

The earlier reference to bigger piece of the pie is a way to refer to the basic truism of economics: there's not enough for everybody to have everything they want, so society needs to make choices. It would be an over-simplification to say that we can spend either on the young, or on the elderly. But sadly, that's kind of what it boils down to. I say the elderly have had their turn, and we ought to focus less on extending their lives even more, and spend our money more on other things. And remember - I say this as a loving son of an elderly woman, and someone who will be elderly himself in a few years.

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The other part of this is there's a ton of money being spent on keeping sick old people alive longer than Nature intended or, in many cases, they themselves want. As a result, we get people who are 80 or 90 years old who've had great lives, but are just falling apart physically; it's their time to go. But we don't let go and instead insist on trying every medication, procedure, or operation to keep them going another month, another year. Billions spent every year just on that kind of medical care; billions that, if we had unlimited money and the elderly themselves wanted it, would be great to spend. But we don't, and in many cases, they don't.

My wife's mom Katy is a good example. Katy was a truly wonderful woman and an even better mother. She made it into her 90s and, naturally, started having more and more medical problems. A nurse in her younger years, she knew a lot about various conditions, treatments and so forth. In her final years, she didn't like getting hauled off to the hospital, getting poked and prodded, awakened every hour throughout the night, etc. She'd say "please don't take me to the hospital; I'm tired, just let God take me if he wants me." But nobody listened, and so Katy did live an extra few years. Years that were full of pain and hospital stays, years that cost many tens of thousands of dollars. She was so happy when the doctors said there was nothing else they could do. Katy knew she could finally be at rest; they gave her heavier and heavier doses of morphine, and she just peacefully slipped away. Finally.

I don't want to go out like that. Or in constant pain, wearing diapers, with no hope of recovering. I don't want to shuffle around in an old-folks home either, just waiting to die. But yet that's what I probably have to face, with our current attitude that it's quantity (number of years) that matters more than quality (of life). Not that I advocate the old Eskimo solution: give an old person a little food and then just leave them in the wilderness to die of cold. But at least in that model, society could use their resources where they'd do the most good (on the young and the strong), and any suffering was short-lived - in some ways a more humane and sensible solution than what we do now, IMO.

My wife and I, we're in perfect agreement. Neither one of us wants to end up in diapers, stuck in a hospital bed, or shuffling around drooling in an old folks home. We've made a pact; if one of us gets to that point (or ideally, before that point), the other has to take them out. Yup. Drive them up to the mountains and finish them off. Then finish themselves off, because society doesn't condone assisted suicide yet, and neither of us is going to spend their last years without the other, and in prison to boot. But don't get me wrong: we love life and really hope we have another 20 or 30 years of good living ahead of us. But if not...we've each had nearly 60 wonderful years of life, and if we were to die tomorrow, we're OK with it; we've had a great ride!

Of course as a society we're much too civilized to do anything like what the Eskimos did now, or what the Streblers have promised each other. Besides, lots of people want to live as long as possible, no matter what.

I'm not offering any specific solutions. It's a very, very messy business indeed, deciding how to cut back on health care for old people so that younger people have their chance at a decent life. But I'm saying we need to start thinking about this; it shouldn't be a taboo subject that nobody will consider. Because if we don't, the country's entire future is in grave danger.

Job Loss in America

This essay is basically an update or addition to "America Reaps What it Sows", written a couple of years ago and archived on this blog. What's new, and the focus of this particular blog, is the plight of upper-middle class Americans who've lost their jobs in our Great Recession.

A great many educated, skilled, upper-middle class Americans have lost their jobs in the last couple of years, and are having a hell of a time finding anything even close to as good as their previous jobs. The TV show "60 Minutes" did a heart-wrenching story on this recently. Here are people in their 40s, 50s, and 60s who did everything right. They got college degrees, even Masters' and PhDs, and went to work for big, prospering companies, and moved up the ladder over the years. These folks were experienced professionals, middle managers earning $100,000, $150,000, $250,000 a year - and they had earned it!

They also earned the lifestyle that came with the territory. The 2500 sq. ft. house in a good neighborhood, the nice cars and SUVs, dining out a couple of times a week, kids going to expensive colleges, regular vacations to Hawaii and Europe - the good life. And now they're losing it all because after many months of unemployment, where a job at Target is the best they can find, their savings is gone, they're about to lose their homes, and they don't know what to do. And it's not their fault; they did everything right!

Or did they? I think maybe not. My thesis is that probably 80% or more of these folks bear a fair share of responsibility for their current situation. The vast majority, I contend, could have and should have done things differently, and wouldn't be in this pickle if they had. And this is more than just "Monday morning quarterbacking", where you look back with hindsight and smugly predict the past.

It is only prudent to live within your means, to save 10% or more of what you earn. This is not revolutionary thinking, this is common advice and has been for many generations. I'm willing to bet that most of these people didn't do that and instead - like most Americans - spent nearly 100% of their growing incomes, if not 105% or 110% (by racking up debt on their credit cards and borrowing against the value of their homes).

It is only prudent to be concerned about the possibility of an economic slowdown or depression, and to take steps to "recession proof" your career. Here's what I mean. Recessions happen, sometimes they're very ugly, and any educated person should know that. They should also know that some jobs are more secure than others. On the contrary, I suspect that the majority of these people felt their days of worrying about their careers ended long ago: they got the good jobs, now all they needed to do was put in their 30 or 35 years and then live happily ever after. But that wasn't very realistic.

In my own case, I left a lucrative career in the investments business years ago because, in part, I saw dark clouds in our nation's economic future and was willing to trade higher income for greater job security. So I became a teacher, taking a big pay cut, but knowing my job would always be there as long as I did what I was supposed to do. For years, lots of folks made fun of my decision as the economy kept moving forward and they raked in the big bucks, but you can imagine what has happened to a lot of those people in the last few years. He who laughs last....

Even more important is the concept of making yourself indispensable at your work site, the idea of - if your employer needs to let people go, make yourself the last person they're going to want to get rid of. How can you do that? From my years in the work world, and from what my wife - who was a manager with Union Bank - tells me, I know that many workers: show up late, call in "sick" too often, do the least amount of work they think they can get away with, do sloppy, low-quality work, don't care about serving the customer as much as they should, etc. In short, they act as if they are "entitled" to their jobs instead of grateful for them. Consequently, the rare employee who consistently does the opposite of these things tends to clearly stand out. He/she gets the promotions, will be the last one to be let go if times get tough and, should he/she have to be laid off, will likely get the most help finding a new job - "Hey Charlie, we're cutting back and I had to let Sue go, but if you're looking for a great employee, you should really hire her!"

Another way to make yourself indispensable is to keep growing professionally. Learn new languages, keep upgrading your computer skills, earn advanced credentials in your field, attend workshops to improve your interpersonal skills, etc. In my own case, I upgraded my Spanish skills in order to earn a bilingual teaching credential, became the first one at my school to earn national board certification, and the first to become an IB examiner. As a result, I'm a highly effective teacher, my students' test scores are impressive, I'm recognized in the school district for these things, and I'm confident that even without "tenure", my job is secure. If for some reason I was no longer needed at my school, I know that other schools would be more than happy to have me on their staff. People in other fields of work could have done the same kinds of things, making themselves ever-more valuable to their employers, increasing their "indispensability".

Do you imagine that most of those poor folks on "60 Minutes" - or most of the other Americans who lost their jobs and are now in a tough situation - had handled their money prudently, carefully chosen and/or modified their career choices and then done everything they could make themselves indispensable at work, in order to protect their future and that of their families? Again, and with apologies to those who did - I suspect that 80% or more did not and therefore, I'm not as sympathetic to their plight as most people are.
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