Libertarian populism for a new generation
With the libertarian wing of the Republican Party on the rise, the phrase “libertarian populism” has been gaining ground recently in the political sphere. The up-and-comers have yet to mount a substantial challenge to the party’s policy consensus, but various writers have been working on figuring out what that challenge might look like. The idea that big government and special privileges for corporate interests hurt the least well-off has always been a powerful libertarian critique, as well as the notion that direct government interventions are often counterproductive. They have always recognized that a gigantic state does not serve the interests of the many; least of all the poorest among us. Instead of being held accountable to the voting public, politicians, as they gain more and more influence in society, inevitably answer to the wealthy elite.
Young people are almost always on the losing end of government patronage. It is no surprise, then, why the Ron Paul movement caught on so well with the youngest voters in the past two presidential elections. Put simply, the state is screwing them. The amount of government distortion in the marketplace is colossal, and it disproportionally harms the less financially secure younger generation.
In just a little over a decade the young have witnessed their futures being mortgaged to pay for two wars, corporate bailouts, and a failed economic stimulus. Federal government debt, as a percentage of GDP, has skyrocketed from about 58 percent in 2000 to more than 100 percent.
The Federal Government is spending more and more, without regard to the fact that today’s young people are going to be paying for it all as future suffering taxpayers. To treat the current levels of government debt as remotely sustainable is clearly absurd yet the government continues to do so, no matter who is in power. With growth levels dismal and higher taxes looming (despite what any politician might say, since the debt will have to be paid somehow) the future looks bleak for the students and young adults of today. To prevent young people from being bombarded with higher taxes to pay for the debt they had no part in creating, massive cuts in spending are necessary.
In addition to the massive burden of government debt that is being placed on today’s young there is also the problem of their own, personal debt; mostly in the form of student loans. While it may seem as if the federal government is doing students a favor by lending them money so they can go to school now and pay it back later, it will, as the statistics are starting to show, completely backfire. College tuition prices have been rising at ridiculous and unmatched rates.
The government is financing the tuition bubble and causing prices to climb, and colleges are taking advantage of this shortsighted government policy. Universities aren’t dumb; they realize if the government is going to continue to subsidize students, they can charge higher and higher prices. Instead of being assisted by the government, students are actually being harmed by the student loan policy. This bubble will eventually burst and the young will, again, get the short end of the stick.
The area in which the young are arguably getting hurt the most is entitlements. The payroll tax, which is used to fund Social Security and Medicare, is one of the most regressive taxes on the books. Currently the payroll tax is imposed on both the employer and the employee with a 6.2% rate on wages, up to a maximum of $110,100 for Social Security, and a 1.45 percent rate on all wages for Medicare. Not only does this tax disproportionately hurt the poor, which tend to be the youngest workers, but the way in which benefits are disbursed is regressive. The old are, on average, wealthier than the young, but the entitlement system is set up so the young are subsidizing the old.
We are told Social Security and Medicare act like pension programs. Throughout your working life you pay a certain amount from each paycheck into the program and when you retire, your savings are there for you to use. But this is false. These programs are nothing but dressed-up transfer programs. The money today’s workers’ pay in is used to subsidize today’s retirees and tomorrow’s workers will pay to subsidize tomorrow’s retirees. The money is spent immediately and with looming shortfalls in these programs’ funding, there is no guarantee any money will even be there for the workers of today. They are paying in with the possibility of getting nothing in return.
For these reasons, to say nothing of their more permissive social attitudes and war-weariness, libertarian populism ought to be an attractive platform for young people. A platform devoted to limiting power concentrated in the state, but also power concentrated in corporations, is the solution young people need.