"Hey - Boomer Moms and Dads: WHAT is Going On?"
An Essay About the Deficit, Debt and Generation X
Based Upon Student Electronic Journals, Student Papers and a Class Web-Site
Professor of Economics
ho wants to know what is going on? Among others, 21 students taking an October, 1996, course Topics in Economics: The Deficit, Debt and Generation X. Their reactions to the issues studied and the condition of their generation were not always unanimous, but they were passionate, concerned, guardedly optimistic. As a professor of some 27 years and father of two children caught up in Generation X, I value these students' opinions and think it immensely important that the rest of society listen to what they have to say. If we do not stimulate a dialogue among the generations, there is little prospect that our country's pressing problems can be addressed and solutions found. You may not agree with how students today see the vital issues of our society or their suggested solutions; but please listen to their concerns and plans for the future.
Thomas Jefferson advised long ago: "We should consider ourselves unauthorized to saddle posterity with our debts and morally bound to pay for them ourselves." Today's youth is troubled over their future and that of America. What are they to make of a $5.3 trillion government debt and continuing annual deficits; runaway entitlement programs which by 2002 will consume two-thirds of federal spending; a doubling of federal expenditures on the elderly; a crumbling educational system; public services in disarray; social and family disintegration; .and political paralysis? They ask: "Who created this mess in America, perhaps the richest, strongest nation on earth? And who will have to clean it up?"
The way many of them see it, the older generations are fast robbing Gen X'ers under 30 of much of their future. A few facts:
• Today Americans over 65 (12percent of the population) receive four times as much federal money as the 36 percent of the population under 18.
• The average pensioner receives today twice as much in real terms as in 1971, nine times as much as a child, and more than a family of three on welfare.
• The percentage of elderly poor has halved since 1970 to 12 percent while the child poverty rate has stagnated at one-quarter.
But surely, the students thought, social-welfare programs are for the poor. Or are they?
• Some $15.5 billion in social security payments go to households with incomes above $100,000, exactly the same amount as is spent for benefits to the 4 million elderly poor.
• More than 85 percent of all social-welfare benefits go to the middle and upper classes (both young and old).
• Households with income above $100,000 get slightly more federal money each year than those earning 1/10th as much.
Are these conditions fair? The students thought not. They asked: What has happened to reason and compromise, moral and ethical concern for the young, the national instinct to pass on to the future a nation stronger, more resilient? Where is the way out? These students believe their generation will have to shoulder much of the burden of cleaning up these problems. They hope to improve intergenerational equity so generations after theirs will not be left such a dismal legacy. But without help from the older generations, it will neither be possible to fulfill at least part of their dreams nor sustain the elderly through old age.
The words used by adults to describe these 13th generation students (born 1961-81) hurt! Here are some of the clichés - they are viewed as dumb, or at least ignorant; slackers; indifferent; unproductive; emotionally bereft; afflicted by rampant materialism; lacking basic instincts of dress and nutrition; a high-expectation, low-sweat generation; "a plugged-in bunch of pubescent children whose bodies throb to orgasmic rhythms while living a life of non-stop, commercially prepackaged masturbational fantasy." Today's youth are not hearing voices of support, encouragement and hope that they believe earlier generations received from their parents. Instead, they feel their generation is being ridiculed, blamed, even ostracized for reasons difficult to understand. Some ask: "What do you think it does to a generation of youngsters who unmistakably get the message that they aren't liked or even wanted?"
The class considered where these supposed traits of the young started. If adults pulled their schools through waves of reform and restructuring, if adults starved schools of the resources and authority to teach the young, how could our children be knowledgeable? If adults experimented as youth with drugs and sex, then embraced no-fault divorce so that 45 percent of today's youth come from broken homes, could their Gen X'ers have the values adults apparently expect of the young? Many in the class believed the experts who say children of agitated divorces suffer psychological damage and often become part of a lost generation, for many of them have experienced it first-hand. If adults did not teach them how to dress or eat properly, the students wondered whether they were supposed to get together as a generation and teach themselves? If their generation was mostly "home-alone" latch-key kids physically and emotionally and spiritually, were they supposed to embrace adult values and lifestyles?
The students in class struggled through the intricacies of entitlements for both young and elderly; deficits; the national debt; line-item vetoes; Constitutional Amendments to balance the budget; monetary vs. fiscal policy; the crowding-out of productive private investment by heavy government borrowing; the impact of workforce downsizing and no mandatory retirement age on the young; the often dim prospects of McJobs in the service sector; and quality human capital as a source of comparative advantage. They concluded that the basic problem in recent decades has been a government living well beyond its means, egged on by equal doses of optimism that the economy could pay the bill, and a "me-first" mentality by those of voting age. They anticipated that with current entitlement programs, a child born in 1994 would by 2050 face total tax rates of over 80 percent of income, up from today's 35 percent level.
The class identified some irresponsible increases in discretionary spending coupled with large tax cuts in the 1980s. But these were found to pale in significance compared to the impact of the real time-bombs in America - entitlement programs such as Social Security, Medicare and Medicaid whose future levels of government-mandated spending will overwhelm revenues. The problem is compounded by high consumption and low savings rates (savings have declined from 8 percent of national income in the 1950s to 4 percent today) and rising shares of wealth and consumption by the elderly. To aggravate the situation, the students found politicians seeking electoral advantage and special interest groups led by the AARP scaring the American public, masking the real dimensions to the problems, and paralyzing the political process. Without bold, dramatic changes in these entitlement programs very soon, the students believed the burden on Gen X'ers will be immense to intolerable, fueling intergenerational warfare.
The class also discussed possible solutions, concluding that it is feasible to salvage the essence of these entitlement programs, yet bring about more equity between and within generations. If major reform of welfare is in the process of being accomplished, which largely affects the young, families and those of working age, the students asked: Can we not mount similar reforms of other entitlements, even those primarily benefiting the elderly? This might include more use of means-testing to receive benefits, extending the age for eligibility, adjusting the CPI measure, eliminating the ceiling on earnings taxed for Social Security, using group plans to deliver medical services, and encouraging higher personal savings for retirement. All of these and more are discussed in our country every week, and yet the students thought our society lacks the political, moral and ethical will to get on with the task: fix the problems, make our government programs self-sustaining over the lifetimes of the recipients, equip and then encourage individuals to be more responsible for their own well-being yet compassionate about the welfare of those less fortunate.
We discovered as a class that Gen X has its own dreams of "entitlements" for the young, those still in need of nurturing, of education, of stable communities and families. Reform in our schools coupled with proper funding of public and private education would take us part way. But without drastic changes in the family and community environment where children are reared, schools cannot be magicians and overcome the worst effects of poverty, child abuse, marital strife, poor nutrition, drug and crime infested neighborhoods. The students asked: What about a new "GI" Bill for the youth of our country, funds to provide an education and make each person a productive member of society, paid back with lifetime earnings in a dynamic economy? What about proper funding of necessary public programs for health, safety and culture? They believed programs like this should have equal standing beside current entitlements which are disproportionately aimed at the elderly regardless of financial need. It was difficult to answer their question: "Why does our society so frequently choose the needs of the elderly over those of the young?"
If I could capture the spirit of what they were thinking, put in words their concerns and dreams, it would be this:
"Hear our voices as we think about the coming decades when we will graduate, start careers, form relationships and mature. Our country is wasting the minds and bodies of too many of its youth. This is reckless, even suicidal for a society. Most narrowly each older generation's welfare depends upon those coming after being able to provide for the elderly. More broadly a society's ability to make progress and prosper depends upon nurturing the full potential of the young, "growing" the human capital to compete in a global economy where knowledge is the most important national resource. To abandon the American tradition that each generation can look forward to quality jobs, a higher standard of living and the fruits of our wealth and prosperity is indeed a devastating legacy to leave for the future."
What is to be done? The students were guardedly optimistic that alone and as a generation they will "make it." I could clearly see their determination to do whatever is necessary to survive. They aspire to a future which in many ways will be different from those of the past and present. They view themselves as determined survivors; loners willing to measure success in personal terms; compassionate for those left out; sensitive to the quality of personal relationships, family structure and communities; turned off by politics and special interest groups; determined that greed will not be a hallmark of their generation; headed toward lives where accomplishments, happiness and relationships matter most; and optimistic that there can be a work-life balance instead of work-life conflict. This not meant as a put down to all that their parents and grandparents have accomplished, for they recognize and appreciate that each generation has its own challenges, difficulties and aspirations. There is an understanding among Gen X'ers that each generation is largely a product of the conditions into which they are born. But these young people also believe each generation can and should be responsive to and responsible for those who follow.
And they want to talk, believing together we just might find solutions and compromises which will work. I agree with them: We need a conversation between the young and old, between parents and children, between retirees and teenagers. They want and need to discuss their concerns with adults. They ask that we adults please be there on these societal problems just as we have often been with them as parents for those personal issues of growing up in our homes and lives.
So please remember that it is our future - and theirs - which is at stake as we think how generations might find new relationships and seek common ground. Perhaps it is time that we started talking to each other rather than just about each other.
Alumni, parents, and friends of CC who are interested in these issues are invited to participate in a World Wide Web-based, not-for-credit course "The Deficit, Debt, and Generation X Revisited." The course will involve readings and on-line discussion with Professor Hecox and and students.
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