The War on the Young


Published October 11, 2010

The Weekly Standard

Last week, in an effort to limit the damage to congressional Democrats in November's elections, President Obama set out in pursuit of the youth vote, traveling to several college campuses to rally the young activists who were so important to his presidential campaign. “What I want to do is just to speak to young people directly and remind them of what I said during the campaign,” he told reporters on Monday.

But rather than listen to the president talk about what he said two years ago, young voters should look at what he has been doing ever since. In fact, it is precisely younger Americans who should be most distressed by Obama's agenda and governing choices as president: Their future is at stake, and they are on the losing end of his key policies.

To begin with, the debt we are amassing will have to be shouldered by the young throughout their working lives. President Obama has added nearly $3 trillion to that debt in his first two years in office (after his predecessor had added more than $4 trillion in his eight years). And Obama's budget would add a total of more than $11 trillion over just the next decade. By the time today's young workers are at the peak of their working lives, America's national debt will equal more than 200 percent of our GDP (up from roughly 60 percent today), according to the Congressional Budget Office. Today's young voters will be left with the bill, but without many of the benefits of that spending.

That is because our entitlement system, which transfers immense amounts of money from the young to the old, cannot be sustained. Welfare states are always built on the backs of the young, and some degree of age-based wealth transfer is reasonable, as able-bodied workers help older people who can no longer work. But to sustain themselves, and to avoid suffocating the larger society, such entitlement programs must take care to allow young workers to build wealth, and to start families of their own.

In America — as our society ages, and as health care costs grow far more quickly than the economy — our major entitlement programs are clearly failing that test, and the burden of Social Security and Medicare spending will increasingly crush the dreams of the young, leaving them with less disposable income and a less prosperous and competitive country. Both the Social Security and Medicare trust funds are projected to be depleted long before today's young workers retire, and the resulting drain on general government revenue will squeeze out other programs and require colossal tax increases.

Rather than address these problems, President Obama and the Congress have chosen to pile an enormous new entitlement program atop them. The health care bill enacted in March is a massive transfer of wealth from people at the beginning of their working lives to (generally much wealthier) people toward the end of their working lives. Beyond the sheer cost of its new system of subsidies, the law strictly limits the difference between insurance premiums paid by 18-year-olds and those paid by 64-year-olds-despite enormous differences in health care costs between the young and the old. It therefore makes health insurance far more expensive for younger people while compelling them to buy it. It is also slated to increase overall national health care spending, which will of course be borne by today's young taxpayers in the coming decades.

The flimsy assertion that the health care law will reduce the deficit, moreover, is based on the Congressional Budget Office's calculation that over the next ten years, if the law is carried out precisely as written, its gargantuan net tax increase of $525 billion will exceed its gargantuan net spending increase of $410 billion. But higher taxes and more spending are not the way out of our fiscal dilemma. And in any case, as the CBO itself acknowledges, the spending figure relies on some unrealistic projections and promises. In reality, spending under the law is likely to be even greater than the tax burden, and the deficit and debt are likely to rise further still as a result.

All of this amounts to an assault on the economic prospects of young Americans. That assault was not launched by President Obama alone, to be sure. It is the result of a failure of two generations of American policymakers (and citizens) on the right and left alike to avert the looming collapse of our entitlement system. But President Obama and the Democrats seek to turn that failure into a governing philosophy — willfully ignoring the entitlement crisis, compounding its causes, and maligning those (like Representative Paul Ryan) who take it seriously.

The fact is that the implicit ideal of the left — the European-style social-democratic welfare state — is hostile to the young and to future generations. It prioritizes present benefits over future growth, present retirees over productive workers, and the present generation over those to come. No society can remain wealthy and strong with such distorted priorities. It is up to the young in particular to resist further steps in this direction, and to press the nation's leaders to change course and reform our entitlement system.

To do so would not be selfish of today's young voters. On the contrary, to keep America strong, members of this generation will need to be exceedingly unselfish — paying taxes now to support the retirement of their parents and grandparents, but trimming and means-testing their own future benefits so their children and grandchildren can thrive.

One way or another, today's younger voters will be the ones to shoulder the costs of reforming the American welfare state, and the longer we wait the more burdensome and difficult that reform will need to be. Therefore, the best thing today's policy-makers can do for young voters is to get on with that work.

Among other steps, such reforms will need to include raising the retirement age, tying benefits to prices rather than wages, some means-testing of Social Security and Medicare (carefully designed to avoid creating disincentives to save) so that benefits go to those who need them, and turning Medicare in particular into a defined-contribution program so that it stops inflating health care costs uncontrollably. This should be combined with greater tax incentives for private retirement savings. No one over 55 should be affected by these changes, and for those below that age reforms should be phased in gradually to allow people to plan.

But if such gradual reforms are to be possible, they must begin soon. That means taking the blindfolds off of our eyes and acknowledging the plain reality that the century-old liberal dream of a social-democratic welfare state — the dream at the heart of the Obama administration's agenda — is neither attainable nor desirable.

Instead, we should pursue a free economy with a robust safety net — a society that values young workers and parents no less than retirees, and that helps the poor become more independent rather than making the middle class less so.

Everyone should want that, and especially the young.

Yuval Levin is the editor of National Affairs and the Hertog fellow at the Ethics and Public Policy Center.


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