The patience factor illustrates why political solutions to this problem are hard to come by. The American will as expressed through the public sector is arguably no more far-sighted than that expressed through the private sector. For an extreme example, consider the approximately $111 billion in unfunded pension liabilities in the state of Illinois, to draw another figure from Professor Birdthistle. Bloomberg View columnist Megan McArdle has argued it won’t be easy to boost Social Security enough to fill savings gaps.
To sum all this up, over the last few decades the U.S. has been conducting a large-scale social experiment with ultra-low savings rates, without a strong safety net beneath the high wire act.
The first sign of the bill coming due is the uptick in labor force participation rates for older workers since the financial crisis. That is happening at the same time when most other demographic groups are, after adjusting for cyclical forces, working somewhat less.
The second effect is that many elderly Americans will be disappointed by their falling living standards. That means less happiness for them, which as it turns out influences politics for the rest of us, as you can witness in the divisive tone of the Trump campaign.
Trump is himself often portrayed as impetuous. It is less commonly remarked that he may be in part the result of a broader and larger impatience that has plagued American society for decades.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.