The road to hell is certainly paved with good intentions — just ask a millennial. Ours is, after all, the demographic that is being hit the hardest by decades of social programs and discretionary fiscal and monetary policies that, no matter how well intentioned, are ultimately harmful. It should come as no surprise that those of us between the ages of 18 and 35 will likely not achieve the same financial success as our parents and grandparents — at least not as easily as they did. It will take most of us a longer time to graduate from college, get our first job, and buy our own home. We’ll pay into the current system, but we won’t get much of a return.
As Diana Furchtgott-Roth and Jared Meyer, of Atlas Network partner the Manhattan Institute, masterfully note in their new book Disinherited: How Washington Is Betraying America’s Young, “the old gain and the young pay.” The book is by no means an attack on any one politician or political party, however, and that’s an effective approach. Through objective research and candid interviews of real millennials, the authors are able to lead their readers to understand that many of the key problems faced by millennials are caused by policies enacted by federal, state, and local governments.
To illustrate these problems, Disinherited is broken up into four main parts: “Stealing from the Young to Enrich the Old,” “Keeping Young People Uneducated,” “Regulations That Cripple the Young,” and “Where To from Here? “
Part one starts with a personal anecdote about Meyer’s own grandfather, who was a winner “in terms of government spending.” Understandably, Meyer’s grandfather, August, feels entitled to his monthly Social Security checks — he had been told that he was paying into the system for a comfortable retirement. As government spending continues to spiral out of control, however, it’s young people like his grandson that will have to foot the bill, and that is “neither sustainable nor fair.”
Here, the authors point out the problems with our current “pay as you go” system, but also offer an alternative — a sustainable system “that allows payments to grow as investments that can help pay for retirement,” much like Chile has today. This would prevent a scenario “where workers could be paying a combined payroll tax of 32 percent in 2050 just to cover Medicare and Social Security payments.” The authors make a similar point regarding the Affordable Care Act, noting that “Washington is targeting young people because the costs of their health insurance are high and the benefits they receive are low.”
In part two, the authors move on to explain how government policies prevent young people from accessing high-quality and affordable education. This is happening at all levels of education, in part because of outdated regulations, union domination of school boards, and the detrimental effects of federal student loans. Primary, secondary, and higher education are all suffering at the hands of Washington and its special interests.
American teenagers are scoring below the Organisation for Economic Cooperation and Development average on the Programme for International Student Assessment (PISA) exam, lower than their counterparts in Vietnam, Russia, China, and most of Europe — only to end up at colleges they cannot afford and are not prepared to attend. Charter schools, tuition tax credits, and voucher systems are positive solutions because they open a much wider array of educational choices to families. Policy victories on this front have been widespread, such as with Atlas Network partner the Goldwater Institute’s work on education savings accounts, although most students are still stuck without realistic alternatives.
In part three, the authors moved on to demonstrate how regulations such as professional licensing and minimum wage laws unfairly target young people. As the book notes, “when the minimum wage rises, employers try to replace their less skilled workers with more skilled ones or with machines.” The authors cite the investment that Chili’s made in 45,000 tablet devices for its 823 restaurants as a measure taken to save money after a wage hike. This turn from low-skilled labor toward mechanization effectively blocks young people from being hired by the chain, a phenomenon that is becoming increasingly common as minimum wages rise. Similarly, professional licensing regulations prevent many young entrepreneurs from perusing their passions because the licensing process is costly and can take months or longer to complete.
Disinherited is a must read for individuals who are interested in knowing how decisions taken in Washington will negatively affect them. Free of partisan rhetoric and rich in facts and figures, Furchtgott-Roth’s and Meyer’s book provokes thought and inspires necessary dialogue between millennials and policy makers.
Personally, the book led me to question how the Federal Reserve’s discretionary monetary policies might affect the young, and the authors were quick to offer an answer in a blog post for Atlas Network’s Sound Money Project blog post. There, they reminded me that “simply put, printing money and weakening the value of a currency does not lead to future prosperity. While some American homeowners and investors are currently benefiting from the Federal Reserve’s policies, it is the young who will inherit a poorer economy.”
That’s a scary thought.
Disinherited is a well-organized book that readers will have trouble putting down. It provides a necessary background in the ways that government intervention and regulation often have destructive effects opposite from their purported intentions. The insights it contains provide something useful for every reader, but especially for millennials — after all, it’s our future at stake.
Disinherited: How Washington Is Betraying America’s Young is available at Amazon.
Learn more about Atlas Network’s Sound Money Project.