Much of the world has lived under gerontocracy since the 1970s. That is, countries throughout the world -- democracies and nondemocracies alike -- have awarded much of their tax dollars to programs for the elderly. Social Security -- which writes checks to the elderly -- is the largest federal program in the U.S. The second largest is Medicare -- a publicly-funded first-class medical insurance program for persons aged 65 and older. Medicare is on its way to becoming the largest federal program, and not because Social Security is shrinking.
Outside of the U.S., many governments spend even more of the national income on programs for the elderly. In some Western European countries the elderly receive from the government (not to mention their receipts from private sources) a fraction of national income that exceeds their fraction of the population. In those places, the elderly had already proven that their share of need placed no limit on what they could obtain from the public treasury.
Only three years ago, the march toward gerontocracy seemed unstoppable. Elderly programs had been growing for decades, and seemed destined to grow further as the baby boom retired. President Bush -- the leader of a Republican party that supposedly believed in "public spending control" -- signed the expensive Medicare Prescription Drug Act with much fanfare.
The political landscape couldn't have been better for the elderly. They were healthier than ever, selling their homes to young people at high prices, and cashing dividend checks from sizable stock portfolios. Most important -- and thanks to the above -- the elderly enjoyed long retirement periods that permitted them to devote time and attention to important political issues. As they prepared to welcome the baby boomers to the retirement class, they could expect to add numbers to their politically robust ranks.
To add to the euphoria, Senator McCain helped pass campaign finance reform , which put financially-funded political groups at a further disadvantage relative to grass-roots organizations. It's no accident that the AARP enthusiastically endorsed that reform, because the elderly don't lobby with money -- they influence political change with time and attention.
2008 did not stop the aging process for the baby boom, or for anybody else. However, the stock market and housing crash delayed many retirements. With many of the baby boomers remaining in the workforce with the young, it is less likely that they will identify with retirees. Even if they do, work will keep them busy -- maybe too busy to pay much attention to political matters.
This year also witnessed significant innovations in political fund raising, with much of the credit going to the Obama campaign. The previous campaign finance reform ultimately did not stop the collection and disbursement of hundreds of millions of political dollars.
The young survive to fight another political day, and to do so with more numbers and dollars than we previously expected.
However, notice that the young as a portion of all voters did not grow in 2008 compared to 2004. The young did strong shift their allegiance to the Democratic candidate, the same candidate that promised to raise taxes on the working population to stabilize Social Security. Jagadeesh Gokhale estimates that a young Obama supporter who gains a college degree will pay an additional $40,000 in Social Security taxes if Obama acts on his promise.
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