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Heavily In Debt Millennials Now Must Foot The Federal Deficit Bill Too

By Evan Feinberg

Millennials were born free, but everywhere we’re now in chains. The culprit is the skyrocketing national debt levels of the past decade, which have hurt young Americans and Millennials more than anyone else. We’re already facing enough personal debts as it is — and now we’re being asked to pay for everyone else’s.

Our debts start close to home. Today, the average college graduate is trying to pay down $35,200 in student loan debt. If that weren’t bad enough, we’re also looking at a job-market with near-record 16% unemployment rate for 18-29 year olds. That means we have more bills than ever — and fewer jobs to pay them off.

With such burdens, it’s hard for us to plan for the future. But our personal debt problems pale in comparison to the one that politicians are foisting upon us with out-of-control spending in Washington. The national debt, which now clocks in at nearly $17 trillion, continues to grow.

And just like our student loans, we’re going to be stuck with paying the bill.

Unfortunately, paying down these debts becomes harder with every passing day. Our debt to gross domestic product ratio now exceeds 100% — which means our government has produced more debt than the entire American economy produces useful commodities each year. Politically easy proposals such as “taxing the rich” can’t fix this crisis — even taking every last penny of the one percent’s money won’t put a dent in our debt. The U.S. can pay off its debts, but it’s going to take significant to government spending.

Clearly, our elected officials need to make some tough decisions. But they had an opportunity to do just that with the debt ceiling.

Lawmakers once again failed to avoid the complacency that has made continued debt ceiling increases the status quo. Inaction by our elected leaders is at the root of the problem. Passing the buck works great for re-election campaigns, but only at the cost of a bright future for my peers, my children, and every future generation thereafter.

That’s why Millennials need to take a stand. At a bare minimum, we need to demand dollar for dollar cuts as a condition for raising the debt ceiling again in January. That’s right: for every new dollar our government wants to spend, they should also find another dollar to cut or save. Good thing there are no shortage of options.

Major entitlement spending consumed nearly half of the entire federal budget in 2012, and will grow to nearly two-thirds of budget in the next decade. Trustees for both Social Security and Medicare admitted that neither program will survive past 2033 without changes. Only 18% of young Americans actually believe they will receive Social Security benefits. Serious entitlement reform is a necessity, and simply raising the Social Security eligibility age by two years could save $148 billion. The program will collapse without serious reform; the only missing ingredient is political courage.

Fraud, redundancy, and wasteful spending across government agencies are costing taxpayers billions of dollars every year. In light of the recent shutdown, perhaps it’s not such a bad idea to figure out just now “non-essential” some of the federal government really is. Just reforming and reducing the massive federal workforce would save another $150 billion.

Additionally, the federal government owns vast amounts of land west of the Mississippi river — land that’s valued between $500 billion to $1 trillion according to the Congressional Research Service. Selling that land for private use would bring huge financial windfalls that could be used to responsibly pay down federal deficits, and provide untold economic growth. On top of that, the government spends more than $8 billion a year just maintaining 70,000 vacant buildings and properties.

The list of possible changes goes on. Now we just need for our elected officials to have the courage to make these hard choices and stop kicking the can down the road no matter what. It’s time for politicians in Washington to put the next generation before the next election.

Evan Feinberg is the President of Generation Opportunity.

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The War Against The Young: Warning From Italy and Japan

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The war on the young is led “by cadres of elderly men, content to manage decline” and exacerbated by younger generations, who don’t seem to know what’s going on or understand the gravity of the financial situation that will hit them in the future. Luke Johnson, writing in the FT, describes the Italian and Japanese version of this trend.

Neither country has renewed itself because vested interests have failed to take the tough decisions. Their traditional cultures have not caught up with modern lifestyles. The male bureaucrats, policymakers and bankers who run all the important institutions must be forced to take radical steps to unleash the energy and imagination of their young, because in both countries they are very pessimistic. Many cannot obtain the job security and standards of living their parents took for granted. Traditional employees enjoy cast-iron protections, so companies are reluctant to create such positions.  So, only temporary or part-time work is available for most newcomers to the workplace.  Consequently, young Japanese and Italians pursue increasingly cautious lifestyles.  Nearly 80 per cent of unmarried Japanese between the ages of 18 and 35 live with their parents.  The ratio is nearly as high in Italy.

Such unadventurous living means people do not grow up, and do not take risks – such as having children or starting a business. Meanwhile, their parents bask in comfortable retirement, busy consuming their considerable savings.

Both nations are burdened by weak leadership, over-regulation, feeble productivity growth and a lack of economic dynamism – despite plenty of natural ingenuity and ambition. It appears that the vitality of Italy and Japan is being sucked out of their cultures by deteriorating demographics, high taxes, the burden of caring for elderly relatives and a youthful cohort with a diminished sense of self-confidence or optimism.

The war on the young is most intense in countries (and, in the US, industries and states) which have the blue social model deeply embedded in their social institutions. It is an interesting struggle: these days, the young face serious trouble finding employment and will be saddled with debts run up by their elders as they grow up.

The older generations benefited from a kind of escalator system in life.  You step on the escalator after finishing your education and it almost automatically carries you upward in life, with higher pay and higher status until, at retirement, you step off and enjoy a good, level standard of living for the rest of your days.

One of the younger generations’ biggest problems is that many of those escalators don’t work anymore.  In Italy and Japan, companies are reluctant to hire young people on what American universities call “tenure track”; unsure about their future needs and resources they don’t want high cost employees that can’t be fired.  The older workers are too powerful to dislodge — just as in American universities the tenured professors are too powerful to give up tenure.  So younger workers increasingly are hired if at all on temporary contracts, with lower benefits and fewer prospects for promotion.

To succeed today, many young people need to recognize that no job will be waiting for them when they finish studying.  They are going to have to create their own opportunities.  It is a good time for creative entrepreneurs.

The young will not find it easy to strike off on their own, especially as fewer opportunities makes them more risk-averse.  But the examples of Italy and Japan suggest that many young people today face a choice: collective depression about their sorry state of affairs or somehow spurring elder generations to seize and nurture the potential embodied by passionate and hard-working youths everywhere.

Italy and Japan have particularly bad cases of the blues; with relatively small numbers of young people and large ones of older people, the old are not only cunning and entrenched in positions of power: they can still beat the kids in elections.  Politicians reinforce generational privilege rather than acting on the knowledge that, in the end, an economy that doesn’t work for the young is an economy doomed to decline.

What many countries need, and I include the United States, is a real youth movement composed both of younger people and of future oriented oldsters that looks at every political and social question from the standpoint of how does it affect the interests of youth.  This isn’t about convening death panels and cat food commissions for grandma, but it’s about making sure that our institutions and our policies are opening opportunities to the young rather than closing them off.

Original Article

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