The poverty rate for people over age 65 dropped dramatically over the last several decades. Today it is the lowest of any age group, at about 9 percent. The aged vote, and so they drove the creation of a system of programs that lifted them out of poverty. That system has virtually disintegrated, but we have not yet felt the shock. We will….
And while many public-sector workers are seeing their pensions being cut back dramatically, about half of private-sector workers have no pension at all. Tens of thousands of older workers are taking Social Security early — foregoing a substantial portion of their maximum benefit — because they’ve lost their jobs and cannot find employment.
The net result of all this is a looming crisis for state and local governments, both because of the declines in tax revenue resulting from lower incomes as well as the fact that poor people put far more demands on government services than the non-poor. In addition, the creation of a vast new class of formerly middle-class, now poor, elderly will bring with it significant political and social instability.