Young Americans Can’t Keep Funding Boomers and Beyond

You know the expression “OK, Boomer”? Better said as “Boomer OK.” That’s because the social safety net in the United States is increasingly favoring the old over the young. And this affects our political views and the security of future generations.

Younger Americans have valid reason for disgruntlement: Big shifts in income and wealth are dramatically favoring their elders. Under almost every president since 1980, 80 percent of the real growth in domestic spending has gone to Social Security and health care, with Medicare the most expensive health program, according to calculations based on federal data. As a share of GDP, all other domestic outlays combined have declined.

Our current tax system also largely does not help Americans, most of whom are younger, pay for their higher education. That wasn’t as big a deal in the 1960s or 1970s, when the average college graduate most likely had little or no student debt. Today, the average taken out each year is about seven times that in 1971, in part because state governments have stripped colleges and universities of funding. This is happening at a time when owning a house is increasingly out of reach. The median price has risen from about 3.5 times median annual income in 1984 to 5.8 times in 2022.

So it shouldn’t come as a surprise that today, younger generations are more likely to fall into lower-income classes than their parents or grandparents. Nearly a half century ago, it was the reverse. And in 1989, the median net worth of Americans aged 35 to 44 was nearly 75 percent of those aged 65 to 74. By 2022, that ratio had fallen to one-third.

The why is simple. Unlike most other spending, Congress effectively designed Medicare in 1965 and Social Security in the 1970s in such a way that outlays would increase forever faster than our national income. That’s partly because Medicare costs keep rising along with medical prices and new treatments and because Social Security benefits are designed to increase for each new generation along with inflation and wages. And we’re living longer, which means more years of benefits.

Today, tax revenues are so committed to mandatory spending, largely for older Americans, and to interest on the national debt (which has quadrupled as a share of G.D.P. since 1980) that few revenues are left for everything else. So, unless we borrow to pay for it, there’s little for education, infrastructure, environment, affordable housing, reducing poverty, or the military.