The recent debate over the debt ceiling has highlighted a broader theme in American politics, one that I don’t hear a lot of other people talking about. Republicans accuse Democrats of attempting to wage class warfare (poor versus rich) while Democrats accuse Republicans of attempting (to my mind, more successfully) to wage class warfare (rich versus poor). What is happening in America today, however, is not a war between the classes, but rather a war between the generations.
So far, old people have been dominating this war, mostly, I think, because young people don’t realize they’re at war.
The Old Rich
That America is engaged in generational warfare should surprise no one. Old people disproportionately occupy our positions of power. The average age of a member of the House of Representatives is 57.2; Senators average 63.1 years. Policies created by old people for old people are not new. After all, Congress has always been older than the voting public. But, what seems to be new is how exclusively those policies benefit old people and how that benefit comes at a direct and enduring cost to the young.
The reason we don’t tax the rich is because it is the rich doing the taxing. Forty-four percent of our congress members are millionaires (about forty-four times the national average of 1%). Fifty (of the 535) members have a personal fortune of more than $10,000,000.
Where Congress is both old and rich, it can be difficult to determine whether it’s waging a class war with its policies or a generational war. The confusion arises because the rich are also the old—people who have been around long enough to benefit from the miracle of compound interest and pyramid schemes like law firm partnerships. The rich are the old. The old are the rich.
Nothing demonstrates the cravenness of our elders like deficit spending. Baby boomers have been writing checks for years that my generation’s collective ass will have to cash. What did we spend our money on while we were running up these deficits? We blew our wad on the Bush tax cuts (benefitting primarily the rich/old), two wars (in which young people died), and a prescription drug benefit for Medicare (which, by definition, benefits only the old). The prescription drug benefit alone will cost us more than $727,000,000,000 between 2009 and 2018.
I know Keynes. I understand that, at times, the cost of interest on our debt is worth the benefit of injecting additional demand into the economy. Dick Cheney wasn’t entirely wrong when he proclaimed, “Deficits don’t matter.” (Remember that, Tea Party?) But, the deficit spending shouldn’t be any larger than required. The deficits our country is running are larger than they need to be because we don’t tax the rich nearly enough in this country. Currently, individuals in the top income bracket are purportedly taxed at 39%. I say “purportedly” because we all know they actually pay far less. Warren Buffet, one of the richest old people in the country, has famously calculated that he pays less tax (as a percentage of his annual income) than his almost certainly younger secretary.
I’m with Robert Reich: we should raise the taxes of those making more than $15,000,000 to 70%. This is 20 percentage points less than what those in the top tax bracket paid under Republican Eisenhower. Those making between 5 and 15 million would pay 60% and those making between 500,000 and 5 million would pay a patriotic 50%. This plan would generate additional revenue each year while allowing a significant cut in the taxes paid by those making less than $100,000 (a demographic in which most young people find themselves).
I’m not the only person who believes various revenue-raising measures are the best way to get our fiscal house in order. I’m not even in the minority on this issue. 72% of all Americans believe we should reduce the national debt by raising taxes on those raising more than $250,000.
While deficit spending is the most obvious example of generational warfare, the ruling generation’s failure to address the unemployment crisis is causing the most immediate damage to younger generation’s ranks. 23.1% of 18–19 year olds are unemployed. Those are the people with a high school education (or less) who are not attending college. Among those between 20 and 24, the rate is still 14.6%. Young people can’t find their first job. They can’t begin to build the skills they need to find their second, better job. And, when they do find a job, it’s almost certainly not at a factory with a strong wage and a pension plan. It’s at the mall. Selling shoes. Selling Chinese-made shoes.
Despite the private-sector’s failure to create jobs and opportunities for young people, the government has not passed any meaningful legislation that would either a) provide those jobs through a WPA or CCC-like program or b) incentivize employers to hire people, especially young people.
If Congress were committed to preserving tax breaks for the super-wealthy while we only wage two wars and unemployment hovers around 9%, I might agree that this is a straightforward case of class warfare. But, that’s not what’s happening. While the rich and old tax themselves at fantastically low rates, our government is failing at its most basic duties to the next generation: educating them and providing them with the infrastructure (technological, economic, and physical) they need to continue to innovate and create. That’s generational warfare.
We are not doing what we need to do. We are not doing what we need to do because we don’t have the money to do it. And, the things we are not doing are largely those things that hurt young people. Everybody should be taxed as little as possible. But, everyone should be taxed as much as necessary.
A Pocketful of Lint
One fall, when I was a kid, I found a $10 bill in the pocket of my winter jacket. Six months earlier, I had forgotten it there and discovering it felt like winning the lottery. I liked the feeling so much that I still put money in my winter coat before storing it for the summer.
The gifts we leave for future generations are not much different. When the Baby Boomers came into power, they found the Hoover Dam, the Interstate Highway system, and a vibrant system of public education in the pocket of their winter jacket. Gifts from their parents.
When it’s my generation’s turn to govern, we will find in our pocket some lint and a receipt from our parents’ bar tab charged to our credit card.
The current government’s failure in education is the most salient example of generational warfare. Where I live, 25% of the students who enter high school will not graduate. In other words, 25% of the young people will not have even the most basic skills needed to work, earn, or think critically as a citizen. Until our dropout rate falls dramatically, I think we should be talking about tax increases, not tax decreases. Anything less is generational warfare.
The government’s treatment of college students isn’t any better.
We just emerged, barely and temporarily, from a manufactured crisis over the previously-routine decision to raise the country’s debt ceiling. I am all for reducing the deficit—I get that I am going to have to repay the money my parents’ generation is borrowing. I am offended, however, by Congress’s approach. Republicans refused to entertain any “revenue raising” measures as a part of a negotiated plan to reduce the deficit.
Instead of reducing the deficit by raising rates on the mega-rich, Tea Party members of Congress hoped to reduce the deficit by cutting $17,000,000,000 in Pell Grants to low-income, mostly minority college students. They ultimately did not cut Pell Grants (this time), opting instead to just eliminate federally-subsidized student loans for America’s six million graduate students.
The federal government is cutting student aid for a generation of students while most lawmakers were happy to benefit from previous generations’ generous support of higher education. Just 25 years ago in Kentucky, a resident could go to UK for $1,228 a semester ($2,408 adjusted for inflation). Today’s student pays 89% more per semester ($4,564). A law student in 1986 paid $1,645 a semester ($3,226 adjusted for inflation); today, that student pays $16,021—a 400% increase.
Declining support from the government for public education.
In other words, Baby Boomers don’t want to tax themselves enough to keep prices for public education stable and affordable in Kentucky. They would rather burden their children’s generation with more and larger student loan debt. The University of Louisville just raised tuition 6%. In the past 11 years, Frankfort has cut Louisville’s budget 11 times with cuts totaling $150,000,000. That’s money Frankfort didn’t want to tax and that young people will now have to pay (with interest). That’s generational warfare.
It shouldn’t surprise anyone to learn that with rising tuition and a poorer job market, default rates on (non-discharageable, mind you) student loans has doubled recently to almost 9%.
In a new and diabolical twist to generational warfare, old people have figured out a way to charge young people even more for higher education and sell stock in their student debt. Most students who graduate from proprietary schools (for-profit schools) will emerge with a debt load ($30,000) more than three times larger than a student who went to a public institution. Almost 90% of the revenue from these profit-seeking, publicly-traded companies comes from student loans. The percentage would be higher except for a federal law mandating that at least 10% of the tuition come from private sources. So, most of these institutions make private loans to its students for the final 10%, often at high interest rates. Said another way, in proprietary schools old people (investors) have found a way to capitalize, literally, on the loans young people take out. Remember: these schools exist because old people have failed to adequately support a public system of higher education system that includes community colleges. This profiteering is sinful—there are other words I could use, but none more accurate.
(For the full skinny on the evils of proprietary schools, here is the National Consumer Law Center’s report: “Piling It On: The Growth of Proprietary School Loans and the Consequences for Students.” NCLC is the best.)
The existence of for-profit schools is the best and most depressing evidence of generational warfare. These schools cost multiples more than their state-supported counterparts and graduate their students at a much lower rate than their state-supported counterparts. Contrasting proprietary schools with their “state-supported counterparts” is not even accurate, however, for these proprietary schools depend on public support in the form of federal student loans for almost 90% of their budgets. That is, these for-profit institutions are far more dependent upon state support then their state-supported counterparts.
According to the Government Accountability Office, after four years, 23.3% of students who attended a proprietary school are in default on their student loans. Compare this to 9.5% for public school students and 6.5% for students who attended private, non-profit institutions student. In other words, a student is between two and four times more likely to default on her loans if she gets suckered into going to a proprietary school. Our government’s continued tolerance of support for proprietary schools is a new form of equity-stripping, except, amazingly, old people have devised a way to divest my generation of our equity before we even have any. Parents are not stripping equity, but rather debt from their children.
Proprietary schools exist primarily as a front to shovel our tax revenue ( in the form of federal student aid) into the hands of investors (and by “investors” I mean rich people and by “rich people” I mean old people.) According to the NCLC report, one of the country’s largest for-profit education companies, Education Management Corporation (EDMC), is owned by Goldman Sachs, the company that has raised funneling tax dollars into its bottom line into an art form. Goldman Sachs took EDMC public in 2009. It has a market cap of 2.3 billion dollars and is currently trading at 17 bucks a share.
It’s not just federal money going into proprietary schools; it’s also the student’s own money—often money the student doesn’t yet have in the form of privately-funded (generously provided by the school itself) student loans. These loans, along with the federal student loans, are generally not dischargeable in bankruptcy. No matter what, these young people will be saddled with this debt forever.
Our officials (and by “officials” I mean old people) have failed to support higher education despite having benefited themselves from previous generations’s generous support of higher education. Worse, they have allowed a dysfunctional, predatory system of for-profit education to capitalize, literally, on their own failure. As a result, many students today emerge from college today as little more than indentured servants. For European immigrants during colonial times, a period of indentured servanthood typically lasted 7 years. For people in my generation, it could last a lifetime.
This is What Happens
The generational warfare is not just limited to dismantling public education and capitalizing on student debt. It extends to the ruling generation’s failure to invest in new sources of energy, failure to maintain and expand the infrastructure we need for a 21st century economic revival, failure to pass the DREAM Act (a bill which only affects young people), and their failure to pass a jobs bill (any jobs bill) despite an unemployment rate of 23% for 18–19 year olds and 14.6% for 20–24 year olds. (Compare these double-digits to unemployment rates of 7.3% and 6.9% for Americans 45–54 and 55–64, respectively.) It is evident in their willingness to reform entitlements such that younger generations get less while their generation’s benefits are preserved. I will leave it to other writers to explore the full implications of generational warfare on these fronts.
I want to spend the rest of the essay exploring what to do about this war.
There is really nothing to do but fight.
I don’t have any new solutions or novel advice.
I think the first step is for my generation to recognize that they are under assault. I know that we feel a mounting pressure, a growing sense that our shared future may be growing dimmer. But, this foreboding has remained a nameless and veiled dis-ease. Let’s name it: it’s generational warfare. Naming a thing is the first step of gaining power over it.
Beyond that, ending the generational war is really is as simple and complex as caring a lot, voting, getting other young people to vote, getting involved in local party politics, helping people get elected, and getting elected yourself.
In this fight, the first thing we must recognize is that this is not a partisan war. This is not Democrat v. Republican. It’s young v. old. Both parties, dominated by old people, are waging this war against young people. Just because this is beyond partisan doesn’t mean young people shouldn’t recognize their allies.
My thesis is, given our annual deficits and inability to invest in the next generation, government doesn’t tax the rich (old) enough. Lawmakers (from both sides) would rather write checks my generation will have to cash. All but six federally elected Republicans have signed Grover Norquist’s pledge to never, under any circumstances raise a single dollar of additional revenue; Republicans will be ineffective allies in a generational war. (I recognize that some Republicans have, at times, shown a willingness to break from Norquist’s orthodoxy. Rather, we must acknowledge that the intra-party systems that exist in the Republican Party will make it more difficult for Republican lawmakers to support the kind of tax increases on the old-rich we need.)
In a two-party system, that leaves the Democrats. As a party, Democrats have folded so often on issues critical to the success of the young—from weak-kneed regulations on proprietary schools, to the extension of the Bush tax cuts, to the cuts to federal student aid. More broadly and more catastrophically, Democrats have allowed Republicans to define for the American public the terms of the debate over deficits, taxation, and the proper role of government in vouchsafing our collective future. Democrats’s failure on this front makes any policy change more difficult than it otherwise might be.
But, as much as the Democrats as a party have failed, Democratic officials individually seem to get these issues. Democrats advocated revenue-raising measures in the recent debt ceiling debate; many support the DREAM Act; they are committed to maintaining and expanding public infrastructure. Fundamentally, Democrats view government as having a positive role to play in creating the conditions in young people’s lives for individual and collective achievement.
Democrats have shown a willingness to try and solve the most immediate crisis for young people: the lack of jobs. John Larson (D-CT) wants to create a supercommittee on jobs with the goal of eliminating unemployment by 2021. This probably should have been part of the debt ceiling debate, but late is better than never… . Rep. Jan Schakowsky has introduced legislation that proposes to create 2.3 million jobs (teachers, firefighters, police, health care, housing rehab, etc.). She pays for the $227 billion bill by raising taxes on millionaires and billionaires and oil and gas corporations. This is what I am talking about. This is what punching back in the generational war looks like.
The ruling class has spent their time in power frittering away the gifts of previous generations. They seem content to eat the seed corn. When I say “seed corn,” you should know by now I mean “the young.” The rich-old are maintaining their power and standard of living by eating their young. No examples exist in nature of a species that eats its own offspring—those species extincted themselves long ago—but that’s what’s happening in American politics today. It’s unnatural, it’s cannibalism, it’s disgusting.
We, the young, need to stop them. Now.
This is not to say that the rich are not also and simultaneously waging a two-front war against both the young and the poor. This is not an either-or proposition. I am not naive enough to underestimate the ruling class’s ability to wage both a generational war and a class war. Conveniently, the young are often the poor; this fact makes a war against both more straightforward. To some extent, a generational war is a class war.↩
Excel spreadsheets for these numbers can be found here.↩