Why aren’t young people revolting over debt?
Recently, 120 college student leaders, representing the voices of some 2 million college students across America, wrote the president and congressional leaders, urging them to raise the debt limit. They, along with many Americans, believe we must pay our debts and are concerned about how the fallout from a default would affect their futures.
“While you may disagree over which party shoulders more blame for our current situation, one thing is certain — young people will shoulder the consequences of gridlock during a time that requires bold action,” read the letter.
While it’s refreshing that these students are engaged, I wonder why these leaders and other students aren’t revolting over how Washington is stealing their futures. The wave of well-meaning and growing entitlement programs benefiting today’s Americans are combining to form a quickly growing tsunami that will drown their generation in debt and cripple the nation they inherit.
Consider a few facts:
— The Social Security “trust fund” is really non-existent (witness President Obama’s threat to stop Social Security payments during the debt-limit debate). Social Security was created in 1935 when the average lifespan was 61.7 years. Today, a 65-year-old Social Security retiree can expect to live to 78.2 years. Social Security is neither means-tested nor funded, which is why it is expected to go bankrupt in 2036.
— The fastest-growing entitlement is Social Security Disability, which pays injured workers until age 65. The problem is that it was enacted in 1954 when the United States was manufacturing-based, so it assumes physically disabled people cannot work. Yet shifts in telecommunications, the Internet and our service-based economy allow many “disabled” Americans to perform meaningful work. Moreover, an increasing number of Americans are being judged “disabled” for minor ailments. For example, one judge in Puerto Rico approves all disability claims, and in a suburb of Washington, some 77 percent of police officers retire early with a disability.
— Medicaid provides health coverage for low-income children and adults, medical and long-term care coverage for people with disabilities and assistance with health and long-term care expenses for low-income seniors. Its costs have increased by 1,849% in the last 30 years. Making matters worse, the new health care law — “Obamacare” — extends Medicaid-type health care to 16 million additional Americans. The White House claim that the new law cuts the deficit has already been proven false by the Congressional Budget Office
— Medicare (government health care for those over 65) is another deepening cost sinkhole as our population ages and health care costs increase. Earlier this month, the Senate Aging Committee heard incredible testimony on how drug companies can uniquely charge Americans high prices for drugs with dubious value. In his testimony, Jonathan Blum, the director of the Center for Medicare, detailed how doctors are incentivized to prescribe the costliest drugs possible, drug companies can charge whatever they choose and the federal government must pay even when two drugs have similar efficacy and 100 times the cost difference.
Today, we spend $1.41 for every $1.00 of revenue that the government collects. Given Democrats’ refusal to consider entitlement reform, we are steering the next generation off a financial cliff.
I recently asked our 15 summer interns at the Consumer Electronics Association why there is no youth revolt on the issue of their stolen financial futures. The answers were revealing and ranged from the focus on their studies and jobs, to a focus on the Internet and video games, to an assumption that other, smarter people will take care of it, to the absence of a compelling young leader. But the numbers don’t lie. In today’s social-media world, some clever American(s) will cause a revolt, and it will pit our “greedy geezer” generation against the hopes and aspirations of a generation of disenfranchised youths.
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”