The U.S. has a proud tradition of passing to each generation a nation safer and more prosperous than that inherited by its predecessors. The continued meeting of this shared goal has bred a confidence in America's young that they, too, will succeed; that their future is just as bright as shining achievements of today's leaders; and that meeting their dreams is just a matter of time and hard work.
That confidence has been shaken. The financial crisis, recession prolonged high unemployment, subpar growth, and staggering loan debt has left a generation doubting their dreams, skeptical of their leaders, and pessimistic about the future.
How can the U.S. grow faster? How can it employ the legions of idled workers? How can it improve opportunity and restore the dreams of the young? How can we make true on our tradition, and hand the next generation a flourishing country?
A starting point is fixing the federal budget, which is stacked against the young. For years now the large and rapidly growing entitlement programs like Medicare and Social Security, legacies of - and largely serving - the past, have been crowding out investments in infrastructure, basic research, education, and national security. These are the places that government most directly contributes to a more prosperous and safer future, yet the federal budget is engineered to let the past crush the future.
This core spending dynamic has been exacerbated in recent years by the so-called sequester. Across the board it places tight future caps on discretionary spending like infrastructure and education, but left the explosion of entitlement spending, including the Affordable Care Act, unchecked. This only accelerates the unfair budgetary dynamic.
There are two possible solutions to the problem. The first is structural reforms to our entitlement programs that secure our social safety net for future generations. Often calls for entitlement reform are dismissed as misguided attacks or portrayed as part of a war between the generations. While certainly the young will benefit from a budgetary climate not stacked against them, the truth is that structural reform is needed to secure these programs for years to come.
Take Social Security, for example. Under current law, the plan is to cut retirement benefits across-the-board by 25 percent in 20 years. Seniors in retirement will see their standard of living slashed. This isn't a plan worth defending.
Medicare has similar problems. The program is currently hemorrhaging $300 billion a year and delivering subpar medical care in return. Unless restructured it will fall under its financial weight and betray senior citizens.
The second possibility is raising taxes - massively, as the increases would have to cover the explosive growth of our entitlement programs and any merited rise in spending on the other side of the budget. This would be doubly unfair to the young.
First, they would have to pay those taxes and effectively be charged the bill for the entitlements of the past and the investment for the future. No amount of rhetoric about making the rich pay their fair share--which is too small to fill the budget gap--can disguise this bottom line.
Second, the higher taxes would impede economic growth, and harm the prosperity of the young. Higher taxes mean less in the pockets of the next generation - a generation that has struggled to find work to begin with, let alone a hefty paycheck ready to bear the weight of the growing federal budget.
While reasonable people can disagree about the negative impacts of taxes, it simply makes sense that financing federal investment without tax increases will be better than adding in large tax hikes. Entitlement reform is the route to a budget that is fairer to the young.
The Congress is beginning negotiations on the budget. If the end result is a budget dominated by tax increases and discretionary spending cuts, the deficit will be lower but the unfairness will be magnified. If the focus is on structural reforms to programs of the past, there will be room for the spending of the future, and both the deficit and the balance of fairness will be moving in the right direction.
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