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June 25, 2007

an AARP for youth (II)

In January of 2005, I wrote a post about "an AARP for youth"--a national organization that would lobby for young people's interests, as a counterpart to the powerful American Association of Retired People. Lately, two different people have asked me about this idea, which is being actively considered. I still think the concept is worth consideration.

Young people as a category have interests that conflict with those of older generations. When the government borrows money, young people pay most of the interest over the course of their lifetimes. Interest currently constitutes eight percent of annual federal spending. If the borrowed money is spent on Medicare, Social Security, or other programs targeted at retirees, young people get little direct benefit.

Eighty percent of people in the military are younger than 36; thus higher military salaries would benefit youth, but combat deployments disproportionately harm them. Cutting down a hardwood forest generates goods and jobs now, but denies the forest to later generations. On the other hand, government subsidies for college tuition (unless they are poorly structured) should lower costs for young people and increase their lifetime earning capacity.

There is always a temptation to take benefits now and pass the costs on to later generations. Jagadeesh Gokhale and Kent Smetters ("Fiscal and Generational Imbalances: An Update," National Bureau of Economic Research, August 2005) calculate that if current policies were sustained, Americans who are now older than 14 would (over the course of their lives) reap $11 trillion more from Social Security than they pay in, whereas today’s children and subsequent generations would pay $1.5 trillion more in Social Security taxes than they received from the program. However, current policies would leave Social Security in an enormous deficit. That projected gap will have to be closed by increasing taxes and cutting benefits by a total of about $8 trillion. Unless those painful changes start soon, Gokhale and Smetters argue, they will be entirely borne by people who are now younger than 15.

These estimates rely on various assumptions about growth, productivity, and policy; they are by no means precise. But they reflect a reasonable guess that today’s adults are taking trillions of dollars from today's children and future generations by borrowing instead of paying for their own benefits. That might be acceptable if it were a fair and public decision, perhaps grounded on the argument that future generations will be so much better off--thanks to improving technology and bequests from their parents--that they should pay for today's retirees. However, this rationale is rarely acknowledged or fairly debated. Young people vote at such low rates that their interests are simply overlooked.

These are arguments (lifted, by the way, from my new book) that young adults have interests that are unrepresented. Hence the move to create an AARP for young people. But here are some objections to the idea that should, I think, be considered:

1) Perhaps it wouldn't be such a great thing to have another organization like the AARP, which is a special-interest lobby that may undermine the public interest (by, for example, protecting programs for the elderly even when they should be trimmed). If young people had an equivalent to the AARP, there would be more balance in social policy. But other groups would still be left out, e.g., young children and middle-aged folks (like me!). And if every age group had a lobby, politics would become even more a matter of negotiations among interest groups, rather than deliberations about the common good.

2) A practical concern: There are no programs that affect and benefit almost all youth. AARP probably hangs together because all retirees qualify for Social Security and Medicare. But only a small minority of youth benefit from federal financial aid. Another groups gets welfare or job training; another group enrolls in community colleges; and some are in the military. Many are not in programs at all. Arguably, programs should be built for all youth, e.g., universal civilian national service. But we have to decide whether that proposal is a good idea on its merits. It's not a good idea just because it would unite young adults into an interest group.

3) Pyschological factors: If elderly people identify as old, it could be because that's the final stage of life--and because they are all influenced by massive universal programs for retirees. Young people don't necessarily identify as young, because they expect to enter other stages of life. Also, their life experiences are enormously diverse--compare a Harvard law student with a state prisoner. Thus I'm not sure how much solidarity could be built around the theme of age.

June 25, 2007 3:38 PM | category: none


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