If you’re of a certain age, you probably carry in your wallet the little red-and-white card of the AARP — the association for older Americans. You pay twelve and a half dollars a year for that card, and it gets you discounts on insurance, movies, and travel. It also funds political lobbying aimed at increasing taxes, expanding the size and scope of government, increasing government spending, and fighting entitlement reform.
That’s right. If you think the AARP is about saving some gray heads a couple bucks at the movies, you’re sorely mistaken.
In 2003, political support from the AARP was essential in the narrow passage of the vast and costly expansion of Medicare to include a prescription-drug benefit. In 2005, opposition from the AARP was a key factor in the defeat of President Bush’s initiative to reform Social Security through personal accounts and reined-in benefit growth.
And now, take a look at what the AARP is saying about the runaway cost of entitlements — the very entitlements it promoted and the very costs it refused to consider reducing.
The AARP Public Policy Institute — a unit of the AARP whose mission is to “influence public debate” — recently published a research paper called “Population Aging, Entitlement Growth, and the Economy.” Here’s how the paper sums up the problem of an aging America facing runaway entitlement costs:
Today, we have a workforce that will grow more slowly, a rising dependency ratio [fewer workers and more retirees], rising budget deficits, a national security budget that is growing rather than declining …
So far, all that is approximately true — though the federal budget deficit has been falling since 2004. But here’s the rest of the sentence:
… and a prevailing antitax ideology.
The implication is that none of these other problems — an aging workforce, more retirees, deficits, and defense spending — would matter if it weren’t for that pesky “antitax ideology.” No such ideology infects the minds at the AARP.
According to the AARP, it is meaningless that federal tax revenues are already at an all-time high in dollar terms. The paper claims that revenues “are still below their long-run average, and substantially below where they need to be.”
Actually, at an estimated 18.5 percent of GDP in 2007, revenues are above — not below — the 18 percent average of the last 50 years. They’ve only been higher than today in 6 of the last 20 years, and 9 of the last 50.
But the facts won’t deter the AARP any more than an anti-tax ideology will. The AARP’s paper calls for “not only higher tax revenues from existing sources, but a new tax on consumption as well.”
Fairness aside — and indeed, the AARP sets aside the matter of whether a falling number of young workers ought to be made to pay for a rising number of retirees — won’t all those taxes hurt the economy? Not according to the AARP paper:
… some critics regard growth in federal spending financed by higher taxes as a threat to economic growth. While this view is derived from rigorous microeconomic theory, the empirical evidence (micro and macro) does not support it.
There have been only two times in history when taxes, as a percentage of GDP, grew above 20 percent, levels that begin to approach what the AARP is advocating. The first time was during World War II. Does the AARP really believe that sustaining the unrealistic promises of Social Security and Medicare is the moral equivalent of war? The second was during the “bubble economy” of the late 1990s. Does the AARP really believe that once-in-a-lifetime growth like that is “evidence” of anything?
The AARP’s factual distortions and its reckless advocacy of higher taxes are all the more odious in the context of its previous public positions on Medicare and Social Security.
In the case of Social Security, the AARP’s major thrust has always been to oppose private accounts; it mobilized members to make more than a half million calls to senators and congressmen to help defeat President Bush’s 2005 reform initiative. Whether or not the AARP was really trying to protect its own mutual fund business, it has always taken the position that “Social Security is not going broke.”
But now we need both higher taxes and brand new taxes?
In the case of Medicare, in 2003 the AARP was noisily politicking in favor of adding a prescription-drug benefit. Was that because the entitlement would send new government-funded business to its insurance companies? Who knows. But I can’t find a single instance in which the AARP ever even mentioned the need for higher taxes to fund the benefits it has lobbied for.
Again — now we need both higher taxes and brand new taxes?
I’ve torn up my AARP card. I’ve decided that the twelve and a half bucks I was paying to the AARP was getting me the most expensive discounts in history. Why save a couple bucks on a movie if I have to pay that back thousands of times over in higher taxes?