Young In America

By John Lumbard.

According to The Daily Kos, 27% of recent college graduates (ages 21 to 24) are either unemployed or underemployed.  The Democratic Underground says that recent college graduates earn $3,200 less than they did 13 years ago.  Of course, it’s not just college graduates;  low starting salaries and meager opportunities for training will follow today’s 20-somethings throughout their working lives—depressing their lifetime earnings by hundreds of thousands of dollars.

Meanwhile, Fidelity Investments wants you to know that the average 2013 college graduate has $35,200 in debt of various kinds.  Her generation is staggering under a trillion dollars’ worth of student loans.  The default rate is one in seven, and it’s rising.

Default is a rational response, because this is also the generation that will have to carry the $17 trillion in federal debt that is mostly the result of vote-buying by politicians.  If you assume that the burden of the federal debt will fall on the young half of the population (people 38 and under), they’re each carrying $100,000 in federal debt right now. In 2014 they’ll assume additional federal debt of $4,650 each.

And that $17 trillion is only part of the story.  Our government’s accounting rules are more like Enron than GAAP.  Our true liabilities are much higher;  the trustees of the Medicare trust funds say that future Medicare outlays will exceed future Medicare taxes by about $38.6 trillion, or $244,000 for each American under the age of 38.  The Social Security trustees have a similar (but happily smaller!) complaint.

These issues have been front and center for more than 20 years, but we haven’t made any headway at all.  No President has even spoken frankly to the nation, as the future crisis has drawn closer and closer.

And, oh, one more thing.  Health insurance premiums for the young have just been increased by 100% or so, in the name of fairness.  The extra cash will be used to subsidize the health insurance of Baby Boomers, who spend lots more on doctors and hospitals.  If, that is, Young America decides to sign up for insurance at all . . . This is a great nation, and it is absolutely in our power to fix this intergenerational injustice.

 

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