We’ll have to wait six months for the outcome of the Donald Trump and Hillary Clinton presidential race, but one thing is already clear: Young Americans have lost.
There is no issue that poses a greater threat to younger Americans than the mounting national debt, which is being driven in the long term by unsustainable spending on entitlements.
Yet in 2016, young Americans will be facing a choice between two candidates who will only make the problem worse. Clinton and Trump, both approaching 70, are happy to perpetuate a system that provides benefits their own generation by confiscating the earnings of the young.
To start, it’s worth laying out the problem. Within a decade, according to the Congressional Budget Office, there will be nearly $24 trillion in debt held by the public.
Under the more optimistic estimates put out by the CBO, around the time a child born today graduates from college, the entire annual U.S. economic output won’t be enough to pay off the public debt.
Under a more pessimistic scenario, by the time that child gets to middle age, debt will reach 250 percent of gross domestic product — after which point the CBO’s model breaks down. By that point, the U.S. government would have to collect double the amount of taxes than it does now just to avoid adding more to the debt (forget paying it down).
Of course, that’s only in theory. In reality, the federal government could not collect that much money, because such levels of taxation would grind the economy to a halt.
The grim future that awaits young Americans can only be avoided by making serious changes now, particularly to the main driver of the nation’s fiscal crisis: unsustainable programs of Medicare, Social Security, and Medicaid.
Unfortunately, neither Clinton nor Trump is going to fix the problem — they’d rather just foist it on the next generation. They want to maintain the status quo or worse, and thus facilitate a massive transfer of wealth from the young to the old.
Far from fixing the problem, Clinton has vowed that she’ll actually expand the unsustainable Social Security program by raising taxes to provide more benefits. At a time when it would be responsible to consider raising the Medicare retirement age, Clinton recently remarked that she’d consider expanding the program to allow individuals as young as 50 to join.
A study from healthcare research firm Avalere found that this change would add 13 million beneficiaries to the welfare program. She also wants to continue Obama’s push to expand Medicaid through Obamacare, a program that is already adding the debt and crippling state budgets.
Trump has run his campaign premised on the idea that unlike politicians, he’s a straight-talking businessman with the guts to be politically incorrect and tell hard truths.
Yet on the most important national challenge, he has proven himself utterly politically correct.
“I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” Trump vowed last year.
During the Obama years, Republicans made some progress toward embracing entitlement reform through House Speaker Paul Ryan’s budgets. But Trump has emphatically said, “I am not ready to support Speaker Ryan’s agenda.”
This has been apparent throughout his campaign.
On Medicare, one tangible proposal he’s made is a long-time favorite of liberals: allow government to negotiate drug prices. Though he’s claimed the government could save $300 billion a year doing so, in 2014, Medicare spent about $78 billion on prescription drugs — and if you combine all of the spending on prescription drugs both by government and private sector you only get $297.7 billion. In the past, CBO has concluded that allowing the government to negotiate drug prices would have a “negligible effect on federal spending.”
Trump’s indifference to the entitlement crisis comes on top of his promises to offer massive tax cuts, massively boost infrastructure spending, and somehow renegotiate debt as he did during his business career (which involved manipulating bankruptcy law).
Overhauling the nation’s entitlements and putting the nation on a sustainable fiscal course is an undertaking that requires a substantial commitment from elected leaders, especially given the short-term political risks involved.
Those young Americans hoping for a change with President Obama out of office, can defer their hopes for at least another four years. Because both Clinton and Trump are determined to prolong the government’s war on youth.
