David Leonhardt writing in the NYT:
If you wanted to help the economy and you had $14 billion to bestow on any group of people, which group would you choose:
a) Teenagers and young adults, who have an 18 percent unemployment rate.
b) All the middle-age long-term jobless who, for various reasons, are not eligible for unemployment benefits.
c) The taxpayers of the future (by using the $14 billion to pay down the deficit).
d) The group that has survived the Great Recession probably better than any other, with stronger income growth, fewer job cuts and little loss of health insurance.
The Obama administration has chosen option d — people in their 60s and beyond.
Oy. So, to prove that 1) nobody wants to hack Medicare to the bone or 2) institute death panels, or that 3) Obama isn’t a double-secret Muslim, we’ve gotta sweeten the deal for seniors by putting a $250 cherry on top?
This rankles folks because seniors collecting Social Security actually got a huge cost-of-living increase this past year (5.8%) — even the flat benefit increase this year will actually amount to a net increase due to deflation of the dollar.
U of M economist Joel Slemrod has the money quote: “If the long-term issue is entitlement reform, the fact that the political system cannot say no to $250 checks to elderly people is a bad sign.”
Also, look at that number on top — 18% unemployment for teens and young adults! Eight-Teen Percent — and that doesn’t include people living at home, recent grads seeking shelter in grad schools or in volunteer positions. Almost one out of five young people – cheap, easily insurable young people – can’t find work! It’s like everyone under 30 is living in a super-Michigan. Add our catastrophic student loan and consumer debt, and our parents’ suddenly uncertain economic futures, and we’re also living in an ultra-California.
And still no health care yet! No universal pre-K. No increase in benefits or reduction of troop levels for military families. No end to don’t ask, don’t tell. Even though we voted for Obama!
Speaking of Michigan and California, check out this article about the rising costs and declining quality of public universities (even the flagships):
In this particularly hard year, in which university endowments have been hammered along with state coffers, federal stimulus money has helped most avoid worst-case scenarios. The 10-campus University of California system, for example, has received $716 million in stimulus funds to offset its $1 billion gap. But that money is a temporary fix. A quip circulating among college presidents: The stimulus isn’t a bridge; it’s a short pier.
This fall, flagships still had to cut costs and raise tuition, most by 6.5 percent or more. And virtually all of the nation’s top public universities are likely to push through large increases in coming years.
“The students are at a point of rebellion, because they’re paying more and getting less,” says Jane V. Wellman, executive director of the Delta Project on Postsecondary Education Costs, Productivity and Accountability…
I wrote a speculative essay for the Chronicle a few months back speculating about the collapse (and partial privatization) of the University of California system and the University of Michigan sometime between now and 2029. I didn’t realize just how close I was:
The transformation of the University of Michigan’s finances began with Harold T. Shapiro. In the mid-1970s, Mr. Shapiro, then a professor of economics and public policy at the university, studied Michigan’s economy and predicted that the state would lose tax income compared with the rest of the country in coming decades. He was right.
While the state trimmed a third of its support for the university in the 1980s, Mr. Shapiro, as the university’s president, worked to build a more secure budget base. Michigan increased private fund-raising and developed a tuition structure that took advantage of a growing number of out-of-state students, who now pay $36,163 a year in tuition and fees — about the same as Princeton…
Still, Mr. Duderstadt says, the university fulfills its public mandate by helping to drive the state’s economy and continuing to educate Michigan’s top students. While lawmakers still grumble about the large number of students from other states, the university, he says, didn’t have alternatives. Earlier this year, state lawmakers studied the idea of taking privatization to the next level, by eliminating annual state funding. The university remains public, for now.
So how could the Obama administration stimulate the economy by helping out younger people, who are actually deeply suffering, rather than by transferring it from the young (including the unborn) to the old?
- Student-loan forgiveness and rate reductions
- Checks for parents of young children
- Making all college tuition paid tax-deductible
- Weighting tuition as a credit rather than a straight deduction, making it a better benefit for low-income workers and young people paying/borrowing their own way
- (ahem) passing health care reform, creating a solid public health care option, and letting us into the health-care exchanges, so we can take our health care from state to state and job to job while we look for career work
I’m sure people who are better public-policy heads than I am can come up with better ideas.
While we’re on the topic of California, public policy, and robbing the future to pay off folks in the present who don’t deserve it, I’d be remiss if I didn’t link to this dynamite LATimes essay by Rebecca Solniton how California squanders its inherent material and economic abundance:
My friend Derek Hitchcock, a biologist working to restore the Yuba River, likes to say that California is still a place of abundance. He recently showed me a Pacific Institute report and other documents to bolster his point. They show that about 80% of the state’s water goes to agriculture, not to people, and half of that goes to four crops — cotton, rice, alfalfa and pasturage (irrigated grazing land) — that produce less than 1% of the state’s wealth. Forty percent of the state’s water. Less than 1% of its income. Meanwhile, we Californians are told the drought means that ordinary households should cut back — and probably most should — but the lion’s share of water never went to us in the first place, and we should know it…
Examine the way that we changed corporate income tax policy in the crisis years of 2008-2009 to give a small number of corporations tens of millions of dollars a year in tax breaks — $33.1 million apiece, on average, for nine corporations; $23.5 million to six others, according to the California Budget Project. There’s money there, ripe for the picking, and powerful forces to prevent that from ever happening — or maybe weak forces, because it’s our Republican legislative minority that prevents us from ever achieving the supermajority to raise taxes (and our weak Democratic majority that goes along with crazy tax cuts amid a crisis).
Turning California into a Third World nation where the environment is neglected, a lot of people are genuinely desperate and a lot of the young have a hard time getting an education or just can’t get one doesn’t benefit anyone.
Hear, hear. In fact, this seems like one of those situations where we could use some change we can believe in.
(Although, you should note: today is the last day that I can be a sincere advocate for folks under 30. After tomorrow, screw you guys.)
(h/t Alexis Madrigal)