The Bankrupt Generation
Members of the Baby-Boom generation, along with some of the older Gen-X’s, were offered tremendous post-war opportunities — from the education system to housing support and infrastructure spending. What they chose to do with these resources has come to define America and ultimately has made life worse for their grandchildren and future generations. They turned around and decided that others should not be granted the same chances and tools they were afforded. This includes repeatedly passing the buck forwards in not footing the bill for their actions on climate change or their military spending while at the same time cutting spending on programs that built their generation’s middle class and slashing income and estate taxes to keep more money for themselves and their families. Their generation is taking more out of the pension system than their parents did, all while bankrupting the Social Security program. As a final screw you to young people, they voted en-mass for Donald Trump.
Boomers are traditionally defined as those born between 1946 and 1964, making them anyone between the ages of 54 and 72 in 2018. I should specify that most of the damaging behavior described above and outlined below is the result of white male Boomers, as they held the political power of their generation. During those post-war years when the West saw a population boom, the government passed legislation such as the G.I. Bill of 1944 that paid for vocational schools, mortgages, and low-interest business loans. In the ensuing five years alone, just shy of 9 million vets were given over $4 billion worth of aid. The 1950s also saw record-high levels of spending on infrastructure, as expenditure as a share of GDP shot up from less than 0.1% in 1946 to almost 0.6% by 1960. Education spending similarly rose from 2.6% of GDP in 1953 to 5.7% by the 1970s.
All of this government aid helped boost millions of Americans into a growing middle class. The share of households below the poverty line declined from 34.3% in 1949 to 11.1% by the close of the 1960s. Things were looking up for America, and a generation that grew up without the specter of the Great Depression began to take political control. By 1982, all officially defined Boomers were of voting age. Right around this time is when we start to see the dominance of fiscal and social conservatism as embodied by Ronald Reagan. By his reelection in 1984, the transformation of the national ethos from JFK’s service-driven mantra to Reaganomics was complete.
A generation that took their prosperity for granted took several steps to consolidate their wealth. In the early 1980s, the top marginal tax rate was 70%. As the Boomers gained greater political control this fell to a low of 28% in 1990. In an act of perverse fiscal logic, the Boomer generation coupled these tax cuts with lavish spending on short-term investments like war and their own wellbeing. Boomers were the only generational group that leaned heavily for Bush’s reelection in 2004 in spite of his War in Iraq and tax cuts. As their generation is retiring, we are realizing that there will not be enough money left in public pension programs for future generations of retirees. Across the West, pensioners are now winning more from the governments than in the past even when measured in inflation-adjusted transfer figures. Somewhat ironically given their government pension checks, their generation has the dimmest view on the Affordable Care Act (whereas all groups under age 50 support the law).
There is not even enough time here to delve into the massive environmental debt post-war generations racked up, all the costs of which are going to come down on future generations they will not be around for. Obviously, they did not start burning fossil fuels or polluting oceans, but the Boomers were the generation in power when the science of climate change became undeniable. Doing nothing was a generational decision. The result of that decision will be a global catastrophe as soon as the mid-century including rising sea levels, as many as 1–2 billion new climate refugees, and reduced crop yields.
The culmination of all these cash-grabs and deficit spending has been a worsening of prospects for current and future young people. The growing pension crunch is just one of the reasons people under the age of 30 have seen household income growth lag national averages. Amongst both American and British young adults, that gap is as much as 34% below the national growth rate, and all signs point to the generational wealth gap only getting worse. American infrastructure now has a reported deficit of some $4 trillion in deferred maintenance. Student loan debt has absolutely ballooned. Finally, the number of households living below the pre-tax poverty line, a figure touted above to demonstrate post-war success, crept back up to 17.2% by 2014.
That Baby-Boomers have largely avoided paying for any of their mistakes is particularly infuriating. That they voted to accelerate current trends is even more maddening. Boomers will all be retired by 2034 when Social Security trustees predict program payouts will not be able to be fully paid out. The money to plug these gaps will have to come out of the wages of younger working people. Yet, in 2016 the presidential election broke for Trump because of older, whiter, and less educated people. Just a third of Millennials voted for Trump, whereas he won an outright majority of all groups over 45 years of age.
Given how large the post-war cohort is, and how many older Gen-X’s seem to agree with their politics, we are only just beginning to enter the moment where Millennials will take political control. We will be saddled with the bill that generation left behind for many more years, but if Millennials and Generation Z’s mobilize socially and politically we can begin to turn the tide. We should take all that has been argued above not as a reason to place blame, but as a learning opportunity to always remember how we got where we are and to consider the future implications of our actions. We are at a pivotal moment, all we need to do is reach out and take advantage of the moment and we can improve the world for ourselves and for future generations.
