“Total Boomer Luxury Communism”: Why the Federal Deficit is on Autopilot

The budget can’t be balanced without reform to Social Security and Medicare. Why won’t politicians admit it?

In the 2021 black comedy Don’t Look Up, Leonardo DiCaprio plays an astronomer who discovers a comet is about to collide with Earth. Politicians claim they will avert disaster despite having no plan for doing so. The rest of the world mostly ignores the problem, even after seeing the comet with their own eyes. The film ends with humanity being wiped out.

The same thing is happening with entitlement spending. Under current policy, Social Security and Medicare will cause the U.S. to default on its debt within 25 years, upending life as we know it. Republicans claim they can balance the budget without cutting benefits; they’ll instead root out fraud and cut other spending. Democrats say they can do the same by increasing taxes.

Anyone with a calculator and the math skills of a fourth grader knows those claims are baloney. So why does no one talk about it?

The Numbers

The federal government spent $7 trillion in fiscal year 2025 but collected only $5.2 trillion — a gap of $1.8 trillion that was added directly to the federal debt. Even in an extreme scenario where Congress axed all discretionary spending — eliminating the entire military and almost every other federal government function — the budget would have just barely been balanced.

Let’s try it another way. The Government Accountability Office estimates that $233 billion to $521 billion is lost to fraud annually. The top one percent of wealthiest Americans pay $824 billion in income taxes, and corporations pay $497 billion. That means even in a fantasy world where fraud was nonexistent and corporations and wealthy individuals both doubled their tax payments, the budget would just barely be balanced.

A slightly more feasible, if unlikely, scenario: eliminate 50% of fraud, increase income taxes on corporations and the wealthiest Americans by 25%, and cut discretionary spending by 25%. Nope, it still doesn’t work. The federal deficit would have been $800 billion last year. And that was before President Donald Trump proposed a 19% increase to the discretionary budget for 2027, which would be the second-largest one-year spending spike since at least 1962.

The Politics

Most Americans are blissfully unaware of those dollar figures, and the resulting dissonance drives almost every decision Washington makes.

A 2025 Harvard-Harris poll found that 80% of voters think Congress should balance the budget “in the next few years.” That would require substantial cuts to Social Security and Medicare — but 80% of voters oppose even minor cuts, according to the Cato Institute and KFF.

Only 24% of Americans know that Social Security is “extremely underfunded” (It’s short by an incomprehensible $75.6 trillion). Almost half of retirees think their benefits will never be reduced (It’s mathematically impossible to avoid cuts within the next decade).

Gen Z doesn’t even know what Social Security is. Just 29% of workers under 30 realize their payroll taxes fund benefits for current retirees, the Cato Institute found.

Faced with those poll numbers, most politicians choose to peddle the illusion that Americans can have their cake and eat it too. Trump claims that Vice President J.D. Vance will “literally be able to balance our American budget” by stopping fraud in blue states. Democrats exclaim that fighting fraud is equivalent to taking food from the mouths of the hungry or, in classic political parlance, throwing grandma off a cliff.

Merely acknowledging the inevitability of reducing benefits opens politicians up to partisan attacks. House Republicans absurdly said of the 2025 budget, “President Biden’s plan would cut benefits by 23% in 2033.” Those cuts were not a “plan” — they were a mathematical certitude calculated by the Treasury. Trump’s Treasury Department reached the same conclusion this year.

Rather than explain that certitude, Biden’s spokesperson falsely claimed that “We could extend the life of Medicare’s Trust Fund permanently — without cutting benefits — if Congressional Republicans would get on board with the President’s historic budget proposal to raise taxes on the wealthy.”

More recently, Elon Musk vowed that the Department of Government Efficiency (DOGE) would cut $2 trillion of federal spending and balance the federal budget. While Musk never explicitly called for reducing Social Security and Medicare benefits, his goal was mathematically impossible otherwise.

The Trump administration permitted DOGE to generate flashy headlines about firing federal workers and cutting grant funds for alpaca farming. But any time Musk alluded to actually balancing the budget, the White House balked and said, “Trump will always protect Social Security and Medicare.”

The political motivation behind such a statement is clear. Though DOGE’s mission of cutting government waste drew wide support from voters, its execution was unpopular overall. However, seniors were more likely to support Musk’s approach, with roughly 50% having a favorable view. Imagine how much more backlash Musk would have received had he targeted entitlement spending.

It’s a political game of chicken. Both parties know that cuts to entitlement programs are inevitable, but neither wants to be the one that signs the bill.

The Wealth Gap

Russ Greene, managing director of the Prime Mover Institute, dubbed the phenomenon “Total Boomer Luxury Communism” in a viral think piece last year. America, by Greene’s math, has six times more wealth redistribution than communist China. He says it’s created a “Marxist paradise” that “is driving every aspect of American decline.” Federal data backs him up.

Seniors’ net worth has grown at a much faster rate than younger Americans’. In 1989, the median household aged 65 to 74 had a net worth 10 times higher than a household owned or rented by someone under 35. By 2019, seniors were worth 19 times more than young people.

Younger families started to catch up in 2022, but that was likely a one-time anomaly caused by the Covid-19 pandemic. The market value of young families’ homes soared after the Federal Reserve slashed interest rates, and they also benefited from stimulus programs like student loan forgiveness.

Source: Survey of Consumer Finances

Note: All figures are adjusted for inflation to 2026 dollars.

Meanwhile, Social Security and Medicare are spending more than ever before as a function of young workers’ earnings. That’s often attributed to the sheer size of the baby boomer population; there are more seniors today than ever, and thus more Social Security beneficiaries across the retirement, survivors and disability categories.

But that’s not the whole story. Social Security costs more than twice as much per beneficiary today compared to 1970, adjusted for inflation. The total cost has grown by more than 450%. Meanwhile, the taxable income of 25 to 34-year-olds that helps support the cost has only grown by about 150%.

Advocacy groups such as the Senior Citizens League have argued that the purchasing power of Social Security checks has declined over the last decade. However, the Senior Citizens League’s calculations are based on a “proprietary dataset” compiled by the think tank. Official data from the Bureau of Labor Statistics shows that inflation for seniors has essentially been equal to Social Security’s cost of living adjustments for the last 10 years Meanwhile, payments to recently-retired baby boomers have raised the average per-beneficiary cost higher than ever; their wages were greater than their parents’ and thus they receive larger Social Security checks than any previous generation.

At the same time, government intervention in certain sectors has made those products and services far more expensive, whether you’re on a fixed income or not. It’s true: the best way to make something expensive is for government to make it affordable. Truth in Accounting has charted the inflation in housing, health care and education-related expenses, the places where the invisible hand of Adam Smith is getting the greatest tug from government.

Truth in Accounting also notes that the purchasing power of $100 has dropped by 95% since 1925. While cost of living increases to Social Security have offset that lost purchasing power, advocates argue those increases don’t always reflect seniors’ reality. The increases are based on inflation for America as a whole. But if the increases were instead based on CPI-E — a measure of inflation for seniors only — they would have been slightly higher since 1985.

America’s fiscal outlook gets even worse when considering Medicare costs. Healthcare bills are far more expensive today than in 1970, but again, that’s not the whole story. Medicare costs per beneficiary have increased almost three times as fast as the price of the average medical treatment. Seniors are living longer and require more care than originally anticipated when the program was created. Again, the pool of qualifying seniors has grown as has the cost for each of them.

Click here to download the data.

Sources: Census Bureau, Social Security Administration, Centers for Medicare & Medicaid Services

Framed another way, since 1970 the total cost of these safety net programs swelled to the point that it began to account for every dollar of taxable income earned by younger Americans. As of FY 2020, the combined cost of Medicare and Social Security ($2.438T) surpassed the total gross income of taxpayers 25-34 years old ($2.4T).

The end result is a federal government that spends 98 times more money per American today compared to 100 years ago, adjusted for inflation. The per-person gross domestic product meant to support that spending has increased only 6 times.

Okay, boomer!

The Finer Things

Don’t blame today’s young people for exacerbating the wealth gap by wasting their paychecks. They spend a much smaller share of their income on “wants” as opposed to “needs” compared to 40 years ago. That’s not the case for seniors.

In 1985, both seniors and younger households spent slightly more than $4,000 per person on the following annual expenses, regardless of age: restaurants, entertainment, hotels, mass transit including airfare, tobacco and alcohol. But seniors’ spending gradually increased, and by 2024, households owned by 65 to 74-year-olds spent $5,301 per person on those “wants.” Younger households spent just $2,613 per person.

Seniors’ income has not risen any faster than younger Americans’. They’re just spending less of it on necessities and more on vacations.

Source: Consumer Expenditure Survey

Such “wants” are often covered by Medicare Advantage, a program that sees the federal government pay private insurance companies to cover seniors looking for an alternative to traditional Medicare. To attract customers, Greene says Medicare Advantage plans cover “golf balls, greens fees, social club memberships, horseback riding lessons, and pet food.” City Journal notes that 172 insurers cover hairstyling and beauty services.

Federal law used to mandate that these “supplemental benefits” be “primarily health related,” such as dental and vision coverage. The definition changed in 2018. Insurers can now use federal money to cover anything with a “reasonable expectation of improving or maintaining the health or overall function” of patients. Suddenly, expenses for hunting licenses, insect extermination, flea shampoo and high-speed internet all fit the bill. They’re often funded by prepaid “flex cards” issued by more than half of Medicare Advantage plans in 2025 — up from just 4% of plans in 2021 — which cost taxpayers $879 per enrollee on average.

When the Atlanta-based Sonder Health Plans began offering Medicare Advantage in 2022, it made flex cards a core piece of its advertisements. “It’s very marketable,” Sonder Health CEO Suzanna Roberts told the Atlanta Journal-Constitution. “It encourages people, who maybe are sitting in the house and they’re like, ‘Oh, man, I haven’t been fishing in forever, they’re gonna pay for it, I may as well.’”

Humana advertises its Medicare Advantage plan by highlighting a Healthy Options Allowance that can be used “to pay for eligible groceries, over-the-counter products, utilities, rent, pet supplies and more.” The allowance is mentioned in the ad before any traditional medical benefits.

The federal government spent $86 billion covering supplemental benefits last year, more than quadruple the cost in 2018. Nobody has a detailed breakdown of where the money went, including Congress. Insurance companies submit “incomplete” records showing their payments for supplemental benefits or ignore the records requirement completely, according to the Medicare Payment Advisory Commission. The Commission says there has never been a full study of supplemental benefits “because the reliability of the data has been unclear.”

Medicare Advantage companies also bilk the government through “upcoding.” Insurance companies receive extra federal subsidies for covering seniors with a high risk of serious illness, so they will often exaggerate or even fabricate their patients’ pre-existing conditions. The Committee for a Responsible Federal Budget estimates this scheme will cost taxpayers up to $1.4 trillion from 2024 to 2033. Overall, Medicare Advantage costs 22% more per enrollee than traditional Medicare. Read more: A Trillion-Dollar “Advantage”.

Conclusion

“I’m a millennial who grew up in the 90s and what boomers don’t understand about us is that we’re working three times as hard for a third of what they had at our age…And the milestones they want us to hit weren’t postponed by laziness, they were priced out of reach by the economy they voted for.” - A Reddit/economy commenter via Yahoo! Finance

America’s entitlement programs have morphed into something their creators never intended: an intergenerational wealth transfer sustained by promises that are completely removed from fiscal reality.

The numbers are no longer debatable. Social Security and Medicare are on a collision course with insolvency that polite political rhetoric cannot wish away. While rooting out fraud and improving efficiency should be one of Washington’s top priorities, that alone cannot close the gap.

The baby boomer generation benefited from favorable demographics, strong wage growth and affordable homes and mortgage rates during their working years, but those conditions no longer exist. Younger Americans now face stagnant wealth, crushing housing costs and the prospect of paying into programs that may not be there for them — all while watching their tax dollars subsidize golf outings, pet grooming, and high-speed internet for retirees.

Ignoring the numbers won’t make them disappear. Politicians on both sides know the truth but fear the backlash of admitting it. The result is rising debt and a crisis that will eventually force far more painful choices than if we acted responsibly today.

Throughout the year, Open the Books will continue digging into the numbers to evaluate government intervention’s role in affordability for basics like housing, health care, education and more.

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