A TIME.com op-ed by Michael A. Peterson, President and CEO of the Peter G. Peterson Foundation
For the April 25 cover of TIME, James Grant offered his opinion on America’s national debt, which is at its highest level since 1950 and is on a path to grow rapidly in the coming decades. While there are many dangerous consequences of America’s fiscal outlook, absent a solution, no one will feel more pain than the next generation.
This election year, young people are playing an important role in choosing America’s next leaders. But are the candidates paying enough attention to how fiscal uncertainty will affect economic security for these young people? Millennials, now the single largest American generation, face a unique set of challenges. They are much more likely to be saddled with higher debt burdens, which affects their economic opportunity and pathways to success. The cost of attending a four-year institution has skyrocketed, increasing by 68% between 1993 and 2013 (after adjusting for inflation). Following suit, student loan debt has tripled in roughly the same time period.
Within our slowly recovering economy, it’s clear that many millennials are being left behind. The unemployment rate remains higher for younger Americans than pre-recession levels. And for those who are able to find employment, wages are no higher than they were 10 years ago.
While millions of young Americans lack economic opportunities to thrive and succeed, what they may not realize is that there is a much larger threat to their future prosperity: our nation’s long-term fiscal challenges.
Driven largely by demographics, the non-partisan Congressional Budget Office projections show that within 25 years, debt held by the public could climb to 131% of GDP under current law, and to a staggering 175% of GDP under less optimistic assumptions. CBO projects that annual deficits will once again exceed the $1 trillion mark by 2022.
On our current path, we will spend nearly $6 trillion on interest alone over the next ten years, and interest will become the third largest “program” in the federal budget. In just six years, we will be spending more on interest than we have historically spent on education, infrastructure, and R&D, combined. That means that we will be spending more on our past, than on our future.
Whether and how we deal with our nation’s debt will affect the next generation’s economic opportunity, earnings power, and ability to pay off student loans, buy a home, or start a business. There’s a direct connection between the nation’s fiscal health, and the economy they will inherit.
Not only is fiscal policy a critical issue for their future, it’s an important way for candidates to connect with millennials in this election. Recent polling confirms that core economic and fiscal policy issues are significant factors in what millennials look for in their leaders, and for whom they vote. Importantly, a February survey from Global Strategy Group and North Star Opinion Research among 1,006 registered voters nationwide shows that candidates of either party could benefit on Election Day by putting forward a plan that addresses our fiscal outlook and the economic insecurities faced by younger Americans. Consider the following results:
Still, electoral participation among this group lags behind other generations. Millennial turnout dropped between 2008 and 2012, and is down again this year so far. This gap between the electoral potential of America’s largest generation and their actual participation level represents a significant engagement opportunity for candidates in both parties.
Millennials are looking for leaders who offer bold solutions and new ideas that speak to the economic circumstances they face. By stabilizing our long-term fiscal path, we can create a growing, thriving economy of the future, with widely shared prosperity and opportunity, especially for the next generation. After all, America’s young people have the most to gain — and the most at stake — in how we address our pressing fiscal policy challenges.