As a Pennsylvania college student, I appreciated hearing President Obama address the cost of higher education and the value of education during his recent visit to Scranton. As an American who will soon be looking for a job and saddled with having to pay for her share of a $17 trillion national debt, I’d also like to hear his plan for getting our fiscal house in order.
Student debt and the value of college are worthy topics and I commend the president for bringing them forward, but his leadership is required on this far larger issue.
A college degree is no longer a surefire defense against the high unemployment and low wages that have become the norm. As a result, the $23,000 of student loan debt carried by the average college graduate is looking more like a burden and less like an investment. The outlook is even grimmer for those without college degrees. Overall unemployment for young people is 11.1 percent, more than three points above the national average. Half of young people are taking jobs they don’t want just to pay the bills, and nearly a third are delaying major life decisions such as getting married and having children.
A recent report by Demos indicated that our economy needs to add 4.1 million more jobs just to get young people back to the point at which we were before the recession. And yet, the political gridlock continues in Washington – thwarting any sort of “grand bargain” to tackle the debt. An agenda for creating more jobs for young people includes increasing high school graduation rates, lowering costs of higher education and expanding skills-based and vocational training. However, it must begin with fixing our national debt, which represents both a short- and long-term threat to economic growth.
First, the inability of Republicans and Democrats to set out a clear path to economic recovery means businesses remain uncertain about future government tax and spending policy. This uncertainty holds back investment, which in turn, holds back job creation. Partially as a result, U.S. companies are keeping more than $1.4 trillion in cash in their corporate coffers.
Second, brinksmanship in Washington regularly causes artificial crises that scare the markets and slow the economy. During the debt-ceiling debacle in 2011, for example, job creation was nearly cut in half for four months. And while the fiscal cliff fiasco of 2012 might not have immediately hurt as hard as expected, it certainly did not help.
Third, growing public debt will crowd out private investment and, left unchecked, will eventually cause a debt crisis. This might not happen in the next decade thanks to recent tax hikes and spending cuts. Nonetheless, due to Washington’s failure to address the fundamental drivers of our deficit, primarily health care spending, we remain on track for an explosion of debt in the decades that follow. At best, more debt will lead to slow growth. At worst, it will lead to what some call the most predictable economic crisis in history.
A solution to our fiscal imbalance requires a deficit reduction agreement that couples structural changes in entitlement programs with pro-growth tax reform that raises additional revenue. Moreover, it is important that crucial investments in our future such as education, infrastructure and research – which have already shouldered a disproportionate amount of cuts – are protected under any debt deal. These are the kinds of investments that will help grow our economy and keep our country competitive for generations to come. A deficit agreement can spur confidence, investment and, most importantly for young people, jobs – and lots of them.
Recent polling indicated that Millennials’ top two issues are creating jobs and reducing the federal deficit. Young people understand these issues are not mutually exclusive. In fact, they are interdependent; future economic growth depends on getting our fiscal house in order and vice versa. It’s time for both parties in Washington to stop bickering and pay attention: The largest and fastest growing voting bloc in America wants our leaders to work together to fix the debt and grow our economy.
Robert Klein is a member of the class of 2016 in the University of Pennsylvania’s College of Arts and Sciences. April Meehl is a member of the Class of 2016 at the University of Pennsylvania’s Wharton School. They are volunteers with The Can Kicks Back, a non-partisan Millennial movement to defeat the national debt and reclaim the American Dream.