Are We Overpaying Grandpa?

Casey Mulligan over at the New York Times' Economix blog:

The total annual income in the United States (national income, as economists call it) is about $12.5 trillion, or about $40,000 per person per year.  The egalitarian view of government is that it taxes persons with annual incomes more than $40,000, and pays benefits to persons with less than $40,000, so that those with less than average incomes could enjoy living standards closer to the average.

For reasons that I began to explain last week, our government actually does the opposite.  The vast bulk of government spending goes to the elderly, whose average living standards are significantly above $40,000 per year.

Also see Mulligan's article with Xavier Sala-i-Martin, "Internationally Common Features of Public Old-Age Pensions, and Their Implications for Models of the Public Sector," which shows – contra my comments last week that entitlements favor the old because the old vote more – that you get this favoritism even in countries where, shall we say, voting doesn't count as much. (Although, in my defense I'd add that even dictatorships have to pay some attention to public opinion, particularly that of classes who, as Mulligan notes, have more money and presumably more influence than the average.)