Young people today have been “disinherited” from America’s promise of economic opportunity because of profligate government spending and the endless expansion of the welfare state. That is the premise of the important and highly-relevant new book, Disinherited: How Washington is Betraying America’s Young, by Diana Furchtgott-Roth and Jared Meyer of the Manhattan Institute.
“Politicians in Washington are taking from the future earnings of young people, many of them not old enough to vote, to pay for services for their parents and grandparents, who do vote,” they write. The result is a “future of decreased opportunity” for adults under age 30, many of whom “have given up on finding work and are leaving the labor force.”
Furchtgott-Roth and Meyer focus on the huge tax burden young people face in financing the nation’s burgeoning debt, driven largely by New Deal and Great Society entitlement programs, as well as the cost of the regulatory state, the failure of our educational system, and the mountain of college debt young people face today.
They single out the Affordable Care Act as a new direct hit on young people.
Young adults are harmed in a number of ways by ObamaCare, they explain. They must purchase expensive health insurance covering a long list of “essential health benefits” that few want or need. Failure to comply triggers federal financial penalties.
Buying this expensive insurance puts undue financial burden on those struggling to find a job in this weak economy and, for many, paying off expensive college loans.
But the discrimination against the young doesn’t end there. The health care law also requires them to pay more for their health insurance so older people can pay less through a federally-imposed system of insurance pricing rules.
“In 2014, 27-year-old males saw their premiums rise an average of 91 percent because of the law. In contrast, premiums for the average 64-year-old rose only 32 percent,” they write.
And for most young people, buying this expensive insurance makes little economic sense. “People under 30 spend on average $600 a year on medical costs,” they explain, yet “a typical 27-year-old would have to spend $2,513 [out of pocket on medical costs] before getting any benefits [from insurance]. No rational person would buy such a product.”
The penalties aren’t steep enough to coerce a healthy number of young people to enroll in ObamaCare coverage for the risk pools to balance out. So the Obama administration targeted Millennials through slick advertisements encouraging them to sign up. More than $700 million marketing dollars were spent on everything from magazine ads in Cosmopolitan to the president himself appearing on Zack Galifianakis’ “Between Two Ferns” to promote the ACA. Even still, Millennial enrollment fell short of the White House’s 2013 goal of 40%, coming in at just 28% in 2014.
But the cynical targeting of the young – who voted overwhelmingly to elect President Obama – doesn’t end there. The ACA also requires employers to provide expensive, ACA-compliant coverage for their workers or pay a fine. This makes it even more expensive for businesses to hire new, full-time employees – especially young people needing to learn job skills so they can get started in their careers.
The authors urge Washington to get rid of the unnecessary regulations imposed by the ACA to allow for a more robust health insurance market that allows young people to select coverage that is right for them. They also call for repealing the employer mandate, which is crippling creation of the very jobs that young people most need.
Young Americans voted for then-Sen. Obama over Sen. John McCain 66% to 32% in 2008 – more than a two to one margin. In 2012, they voted 60% to 37% in favor of President Obama over former Gov. Mitt Romney. Since young people were such overwhelmingly strong supporters of Mr. Obama in both elections, it is especially cynical that they were in the bull’s eye of his signature health reform legislation.
Furchtgott-Roth, former chief economist at the Department of Labor, says that “Young people have been the biggest losers in the economic recovery.” She and Meyer conclude that the ACA “constitutes a major deterrent” to economic expansion and is “costing the economy jobs.”
And they write that the harm of the law is only beginning since the Congressional Budget Office projects the ACA will add $1.4 trillion to the federal budget deficit over the next 10 years while it forces people to purchase ever-more-expensive health insurance – new hidden taxes on the young.
“Greater engagement by the young alone will not sufficiently pressure Washington to change course. Americans of all age groups need to understand the level of unfairness current policy creates,” they write. “At the same time, Washington must allow young people to use the skills they have. This means America must evaluate its countless regulations, laws, and policies through the prism of how they affect new entrants to the workforce.”
Their analysis in this book is based upon hard data and exposes a deep fault line in the welfare state. The phrase by former British Prime Minister Margaret Thatcher could be more accurately rephrased to say “at some point, you run out of young people’s money.”
Meyer and Furchtgott-Roth’s plea is to “let young people flourish.” Let’s hope legislators wake up to the harm they are doing to the next generation before their promise of success is forever lost.
Disinherited: How Washington Is Betraying America’s Young
By Diana Furchtgott-Roth and Jared Meyer
Published May 12, 2015