Saddled with student and public debt, today’s young adults will long pay the price for our elders’ folly.

By Joseph C. Sternberg

May 13, 2019 7:05 p.m. ET

Will 2020 be the political year of the millennial? It ought to be. Some 27% of next year’s electorate will belong to that generation, born between 1981 and 1996—almost exactly matched with the 28% comprised of baby boomers (1946-64). The oldest of us—I was born in 1982—are eligible to run for the presidency. Rep. Tulsi Gabbard, 38, and Mayor Pete Buttigieg, 37, are doing so.

Millennials will probably have to wait to enter the White House, but we’re making our influence felt. Presidential hopefuls like Elizabeth Warren are pandering to us with promises to forgive student loans, and Democratic House leaders are struggling to tame young members on questions like impeachment.

Democrats will work hard to hold the support of millennials, which helped elect Barack Obama but wasn’t enough for Hillary Clinton. Yet Republicans can’t take for granted that today’s young liberals will age into tomorrow’s conservatives. Millennials face a unique set of economic challenges and will impose new demands on U.S. politics in years to come.

The first political challenge is the most frustrating: proving to our elders that we are in economic trouble. Baby boomers look at millennials and see a generation living through the most prosperous era in history. We enjoy creature comforts, technological innovations and varied career opportunities. More of us have gone to college, which boomers view as a definitive mark of social and economic success. And even though we held back from buying houses early in our adult lives, now we’re leapfrogging starter homes and moving straight into bigger ones.

But these hopeful signs mask deeper problems that developed out of the 2007-08 financial panic, the Great Recession, the slow-growth recovery, and a string of bad decisions the baby boomers made in that span.

The job market failed many millennials early in their careers. Partly that’s because the recession accelerated a trend that saw employers replacing younger, less-experienced employees with machines operated by older, more-experienced ones. That’s one reason the wage premium associated with age has ballooned. In 1950 working American men 45 to 54 earned around 4% more on average than men 25 to 34. That gap is now almost 35%.

Other research finds employers required more work experience for many openings they advertised during the recession. Anemic job creation left millennials with fewer opportunities on their way up the career ladder. They stayed in lower-paying positions longer and acquired skills more slowly than earlier generations had. Young workers are always vulnerable in a recession, but this recession was worse, even for college graduates. By one estimate, each one-point increase in total unemployment during the Great Recession depressed employment and wages for young college grads two to three times as much as in previous recessions.

When we wanted to find good jobs, our parents told us to go back to school. They spent their working lives thinking of college as a guarantee of economic security, so the advice seemed obvious. Alas, we followed it. In 2008-11, an average of 41% of Americans 18 to 24 were enrolled in college, up from 37.4% in 2000-07. Because the size of this age cohort was also growing, the additional enrollment amounted to millions of students. We borrowed to make this happen. Total student debt outstanding rose to nearly $1.5 trillion at the end of 2018 from $550 billion a decade earlier.

Boomers presented school as an investment in ourselves, worth financing with debt because it would pay off in higher earnings later. To hear them tell it, education is the only sure investment in history. That’s now proving preposterous. Well-rehearsed evidence that college graduates earn more than high-school graduates on average conceals substantial variations and significant overlap in earnings between the two groups. By one count, the lowest-earning quartile of college grads earn roughly the same as the top quartile of high-school-only workers, but with more student debt to show for it. A severe student-debt crisis has also developed among young adults who reached for college but found it beyond their grasp, racking up debt with no degree to show for it.

Millennials now are entering politics and might have a chance to change course. But an uncomfortable question is what we will be able to do about these and other urgent economic and social problems in the decades to come. The boomers’ fiscal choices threaten to constrain severely our political options.

The long-term problem is federal debt. Including debt owed to the Social Security trust fund, it is now around 105% of gross domestic product. Those are claims that millennials (and their descendants) will eventually have to pay, largely to fund social transfers to the boomers that they weren’t willing to pay themselves.

Worse, some 75% of federal spending over the next decade will happen on autopilot, without any intervention from elected lawmakers. Most of that is Social Security, Medicare and Medicaid, along with interest on the debt. Unless Congress finds the political will to enact a substantial overhaul of these programs, millennials will have hardly any latitude to act on their own fiscal priorities.

Weave these strands together and the tapestry that emerges depicts an enormous heist, in which boomers stole a decade from their millennial children. The boomers’ combination of naiveté, panic and negligence buried millennials in trouble. Digging our way out will be our primary economic and political challenge.

But which shovel do we use? Many are reaching for socialism. A generation that’s supposedly all about the new and high-tech is grabbing hold of an ideology born in the 19th century and thoroughly discredited in the 20th. Yet there is a certain logic to the millennial embrace of the far left.

Millennials seem to be intuiting that what failed most spectacularly under the boomers was the “third way,” which tried to harness the power of the market to deliver the economic security boomers thought only government could give. It sounded plausible, but the results have been one disaster after another: tech bubbles, resource misallocations that skewed the labor market, the student-loan albatross, an entitlement state that saddles us with debt while failing to deliver economic security for many recipients.

The one virtue of today’s socialists is that they have a coherent response to all this. Bernie Sanders, Alexandria Ocasio-Cortez and their ilk spin a story about what’s gone wrong for millennials, their reputations for authenticity bolstered by their freedom from any political imperative to defend failed third-way policies.

Yet this turn to the left isn’t inevitable. The alternative is a turn toward the market. It’s hard to gauge potential millennial support for such policies at the moment, because so few politicians offer them. As the Democrats drift leftward, Republicans remain mesmerized by Donald Trump.

Mr. Trump is a boomer through and through. His better ideas, such as tax cuts and deregulation, hark back to the 1980s, when boomers were reaching political maturity. His worse ideas, especially on trade, reflect policy debates that preoccupied boomers for most of their political careers but seem irrelevant to millennials, who take a global economy for granted. And although he billed himself as a disruptive candidate in 2016, the one thing he resolutely promises never to change is old-age entitlement spending.

It all suggests 2020 could become a depressing slugfest between the ne plus ultra boomer and an opponent peddling century-old socialism, neither of whom offers millennials much of a solution to our urgent problems. But our day will come. When it does, we owe it to ourselves to understand fully what went wrong in the past decade, so that we can make better choices than our parents did.

Mr. Sternberg is a Journal columnist and editorial board member. This is adapted from “The Theft of a Decade: How the Baby Boomers Stole the Millennials’ Economic Future,” out May 14.

https://www.wsj.com/articles/boomer-bequest-is-millennial-misery-11557788725

(http://www.autoadmit.com/thread.php?thread_id=4261362&forum_id=2#38233287)

haha yeah millenial goyim, your only 2 options are socialism or "the market" aka slavenly GC worship

no other options here! looks like you don't have a choice hehe

(http://www.autoadmit.com/thread.php?thread_id=4261362&forum_id=2#38233347)