Coming Soon: The Big Trade-Off By Thomas L. Friedman

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DeM Banter: Social issues will only get bigger… but I ponder how this bounces off the MANY social issues China faces as well. China has many issues stemming from the One Child policy. Not to say the US issues are rosy, but China has some big issues as well. Perhaps we can collaborate on those together? If we don’t build a plan now…a strategy or something resembling that, these issues will consume the nation….thoughts?

New York Times
July 29, 2012
Pg. SR1

WHEN you talk to Chinese officials lately, it doesn’t take long before they express concern about America’s “rebalancing” of forces – the prospect that we’ll shift more troops from the Middle East, where they are containing instability, to Asia, where they would contain China. My standard reply is that China is worrying about the wrong thing. It is not that we’ll shift our Marines from the Middle East to Asia; it’s that we are going to shift them from the Middle East to San Diego – because we can’t afford to be the world’s policeman much longer, and China will have to fill some of the void.

Good luck, world! It’s been fun hanging with you, but we can’t pay for it anymore – not with all of us baby boomers about to retire with no savings. We have a new strategic doctrine coming: “U.S. foreign policy in the age of Alzheimer’s.” We’ll do what we can afford and forget the rest.

Why do I say that? In part it’s because I spent time this week with the Washington staff of The Jewish Federations of North America, or JFNA, which represents the 155 Jewish community federations across America. They may seem like an unlikely interlocutor for a foreign affairs columnist, but they’re not. Like their counterparts, Catholic Charities and Lutheran Services, these Jewish federations operate nursing homes, hospitals, elder-care programs, meals on wheels, job-training, hospices and family social services in cities across America. And the financial challenges they’re all facing today are profound – as the baby boomers are aging – and so too are the trade-offs we’ll have to make between nursing homes in America and nursery schools in Afghanistan. Unless we get some sustained economic growth, Afghanistan is going to lose.

William Daroff, the director of JFNA’s Washington office, starts with this fact: Since the 2008 economic crisis, annual donations to Jewish federations have been flat, while there has been a sharp increase in demand for services and significant cuts in Medicaid and block grants that help pay for them. “We have people who were donors to our programs five years ago, now knocking on the door to use those same programs” – from people in need of job-training to those in need of help to cover a mortgage payment, said Daroff.

And we haven’t seen anything yet, explains Barbara Bedney, the director of public policy for JFNA. “We will see a doubling of the number of older adults – people over the age of 65 – by 2030, as the baby boomers age,” she explained, and one of the fastest growing groups will be the “old-old” – those who are 85 years old and older, who are living longer but requiring even more expensive care. And wait until the baby boomer cohort reaches their 80s. Alzheimer’s Disease Research reports that roughly 5.4 million Americans of all ages had Alzheimer’s disease in 2012, and, by 2050, more than 15 million Americans could be living with the disease – a key reason nursing home residents are predicted to double over the next 30 years.

And many baby boomers, says Steven Woolf, the senior tax policy counsel for JFNA, “are nowhere near prepared in terms of retirement savings” for the kinds of costs they are going to incur after they stop working – in an age in which they will be living longer, the government will have less to offer, they each will have fewer kids to care for them and social service agencies will be swamped with demands.

Indeed, a 2011 survey by the Employee Benefit Research Institute found that a “sizable percentage of workers report they have virtually no savings or investments.” Among those workers polled in its retirement confidence survey, “29 percent say they have less than $1,000. In total, more than half of workers (56 percent) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.”

That could pay for one hospital stay and recuperation in a nursing home, or dealing with just one parent with Alzheimer’s. And all that’s before the next president and Congress agree on a long-term fiscal rebalancing plan that will surely reduce Medicare, Medicaid and Social Security benefits. Fortunately, two-thirds of baby boomer households are expected to receive some kind of inheritance over their lifetime to cushion the blow. Also, baby boomers as a generation have been very volunteer-oriented, and we’re going to need a lot of family volunteers to work with the elderly.

Indeed, says Bedney, today “family informal caregivers provide about 80 percent of elder care,” delivering meals to parents or aunts or driving them from place to place and managing their doctor visits and medications. But there are lots of problems associated with this care, she added: “lost work hours, high stress, declines in physical health.” Up to now, though, family caregivers have been largely ignored by policy makers, which is a mistake we must remedy, because “when we support family caregivers, we enable older adults to ‘age in place’ instead of in a high-cost institution,” said Bedney.

But, as any family caregiver can tell you, it is no picnic. “One of the leading risk factors for the institutionalization of older adults is the declining health of the person taking care of them,” added Bedney. “You’re lifting someone and you do it wrong and you both fall.”

Add up all these trend lines and you can see why, over the next decade, we must get more consistent economic growth as a society and, also, adds Daroff, come up with more policy and technology innovations that allow us to provide a lot more elder care, in particular aging at home, for a lot less money. That will require breakthroughs like remote diagnosis equipment in every home that can track a patient’s weight, blood sugar or lung capacity and dispatch it to a hospital, or clothing with sensors woven into the fabric that will be able track all physical indicators around the clock.

Nursing homes, nursery schools or nursing Afghanistan – these are the trade-offs we’ll have to make in this decade, unless we have a real growth spurt. Mitt Romney gave a big foreign policy speech last week, waxing eloquent about how he would be more assertive of U.S. interests abroad than President Obama and ensure that this is an “American century.” Really? I like American centuries. But to paraphrase an old saying: a foreign policy vision without a real plan to pay for it – and manage all the trade-offs back home – is just a hallucination.

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