Who really has a plan for repairing the American Dream?
The 2016 presidential election begins in earnest in roughly 6 weeks. Caucus-goers and primary voters will soon need to make up their minds about who they will select to be the Democratic and Republican nominees. Although it may be tempting to back a candidate based on momentum, edgy debate performances, or a position on a single issue, I would encourage you to dig a little deeper before making up your mind. Similarly, if you are a frustrated voter who would like to use this election cycle to “send a message,” I would encourage you to think carefully about what message you would like to send, and the best way to convey that message with your vote. By sending a Mr. Smith or Don Quixote to the White House, the only message voters would be sending is that they prefer one type of utter dysfunction to another. For those of us in the 2040 Matters community, there are many messages we will want to send with our votes, but the most important is that we will support candidates who have credible plans for repairing both components of the American Dream – generational justice and economic opportunity.
The central duty underlying the American Dream – that each generation has a responsibility to leave the country better off than they found it — receives relatively little attention from most political candidates. Why would it? The most important and tangible policy commitment to this duty – reforming Social Security and Medicare to stop the transfer of wealth from young people who need money to those older people who do not — is decidedly unpopular with the largest group of voters. To propose entitlement reform is the opposite of pandering; it is an act of political courage. The 2040 Matters community should reward those who carry this torch for future generations.
The next most important policy reform – curbing the debt burden on younger generations – is only slightly more popular than the first. Candidates love to talk about spending money and/or reducing taxes. Who wants to talk about the fact that the cost of servicing the debt, which is growing by the minute, is going to explode when interest rates begin to rise? Perhaps rather than asking candidates about their proposed spending increases and tax decreases, we should be asking them about their plans to reduce discretionary spending, raise taxes, and increase inflation to service our mushrooming debt? This is not to say that any proposed spending increases or tax decreases should be off limits in policy debates; rather, the 2040 Matters community should insist that any such proposals be designed in a way that does not add to the debt burden we have already foisted on younger generations or crowd out other necessary federal spending. And we should reject overly simplistic assertions that we can simply tax the wealthy or grow our economy in order to service our debt and return our debt-to-GDP ratio to a healthy level.
There is one generational justice issue that does receive a substantial amount of attention from at least some political candidates – climate change. Those who are concerned about climate change are worried about the kind of country (and world) we will leave younger generations. To accept that climate change is about generational justice, however, does not mean that one needs to agree with every proposed measure to curb climate change. Instead, we should acknowledge that there is a range of reasonable responses to climate change in light of the best available science, and we should insist that candidates stake out defensible positions along this spectrum. Candidates who care about generational justice should have policy proposals on: (1) the pace and scope of changes to energy sources; (2) the urgency of other proposed measures to curb climate change; and (3) the costs and benefits associated with carbon taxes, regulatory regimes that govern emissions, and clean energy incentives, for example. Moreover, even if members of the 2040 Matters community believe that climate change is the most pressing issue facing our next President, this does not mean that they should simply line-up behind candidates who are concerned about climate change. Instead, the 2040 Matters community should reward candidates who have coherent policies on all aspects of generational justice. Generational justice is not served by bankrupting our children while saving polar bears or by growing our economy while watching sea levels rise.
As much as political candidates avoid generational justice, they love talking about opportunity, especially economic opportunity. Every candidate has a plan that he or she claims will improve economic opportunity, running the gamut from expanding subsidies for college education, to increasing the minimum wage, to reducing immigration (to increase jobs and wages), to increasing immigration by highly-skilled workers (to spur entrepreneurship and growth), to reducing income tax rates, to increasing taxes on the “wealthy,” to increasing the Earned Income Tax Credit, to curbing regulations (to spur growth).
When assessing these proposals for expanding economic opportunities, it is important to look behind the curtain to see if they are consistent with the notion that everyone should have an opportunity to realize their fullest potential through hard work. The American Dream is not about entitlements or particular outcomes, it is about macro political and economic conditions – creating an environment where individuals face no artificial barriers in their quest to achieve their goals and reach their fullest potential.
With this is in mind, here are some questions to consider when assessing the economic opportunity policies of the presidential candidates:
- Do the policies reward everyone equally or benefit those who work hard?
- Who best understands the role of government in preparing people for success in a 21st Century global economy?
- Has the candidate accurately identified the barriers to economic opportunity and developed narrowly tailored policies to reduce those barriers (e.g., should we worry more about the cost of higher education or the fact that a young person can obtain a college degree and nonetheless be woefully unprepared for the job market)?
- Do the policies promote a particular educational outcome (e.g., everyone should have a college degree) or focus on providing a more rigorous educational environment that prepares people for wide-array of occupations (e.g., expand and reform early childhood through high school education, support vocational training and community college programs designed to prepare people for skilled work in various trades and high-end manufacturing, and tie student loan subsidies to student and academic institution performance)?
- Do the policies encourage moral hazard (e.g., encourage people to take on too much debt knowing that they can default with little or no penalty)?
- What are the unintended consequences, and are they outweighed by the benefits (e.g., would a minimum wage increase make economic sense if it would cause widespread job losses and/or price increases)?
- Who pays? Are the policies designed to encourage economic benefits today that will be paid for tomorrow, thereby violating the principle of generational justice?
- Do the economics make sense? What do history, economics, and social science teach us about the efficacy of various proposals?
As these questions clearly demonstrate, economic soundbites are not the same as sound economic policy prescriptions. The 2040 Matters community should reward candidates who have serious proposals for expanding economic opportunity consistent with the tenets of the American Dream, acknowledge the costs and benefits of their policy prescriptions, and provide actual evidence that their approaches are better than the alternatives.
Supporting those who make the grade
In the New Year, I intend to start scoring the candidates against the above criteria and others that I will describe in future Posts. In the interim, I would encourage you to start thinking about the candidates in terms of whether they truly care about the American Dream and have coherent approaches to repairing that Dream. Viewed through this prism, the field of responsible candidates is actually quite narrow and, notably, inconsistent with much of the current polling. Given that we cannot afford to squander four-to-eight of the next 25 years, this means the 2040 Matters community is going to have to engage more strongly on behalf of candidates early next year if we want to make a difference.
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