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In the Nation's Interest

Baby Boomer and Millennial Opinions on the U.S. Debt: Why the Rising Debt Won’t Discriminate By Age

by Courtney Baird

Here at the Committee for Economic Development, a key policy issue we work on is “fiscal sustainability”—the goal of getting the government’s spending and revenue programs into better balance such that the public debt, and the costs of servicing that debt, will not keep claiming a larger and larger share of our nation’s economic resources.  Our problem with deficits and debt isn’t from a narrow accounting standpoint, but from the fact that an unsustainable fiscal situation is really an unsustainable economic situation.  If our economy—in a sense, our society’s greatest shared asset—is to be as strong and vibrant as it needs to be to maximize our collective well-being, our resources must be free to move into the uses we as a society value most highly.  If those resources are instead sopped up by interest payments and other purposes that don’t have high social value, our economy—and our collective well-being—necessarily falls short of its potential.

Assessing our collective well-being and the sustainability of our fiscal and economic outlook requires more than taking simple, static snapshots of how large the current federal budget deficit and various categories of government spending are as a share of GDP.  We need to understand where we’re headed in the near and longer-term future under current policies, and how those paths are likely to affect our economy and the benefits it will confer to all of us.  And “collective” does mean all of us—young and old, rich and poor.  We are essentially “all in this together” and should all have an interest in making the most of our economy by reducing the public debt’s claim on our economy.

Yet unfortunately too often public discussions about deficit reduction devolve into “generational warfare” pitting the “young” against the “old.”  It usually starts out with fiscal policy experts pointing out (correctly) that the largest, most unsustainable parts of government spending happen to be the programs that benefit (mostly) the retirement-age population.  Then the story continues by explaining (correctly) that deficit financing imposes economic costs that are largely pushed off into the future (and onto future generations) in the form of taxes that will eventually rise and/or benefits that will eventually be cut.  Older people are benefitting from government programs more than they’ve contributed in taxes, meaning young people will benefit from government programs less than they will contribute in taxes.  So it’s “Us” vs. “Them.”  Or here on the CED staff, “Diane” vs. “Courtney.”  Or is it?

Both of us care about fiscal sustainability, and not just because we each want solutions that will most benefit our own generation.  We both recognize that it’s impossible to separate our own individual well-being from that of our other family members, friends, and society in general.  And because it’s such a vast and interdependent system, our nation’s economy is like the ultimate version of a true “public good”—meaning something that conveys benefits that spill over onto others who aren’t necessarily directly buying or selling it (or the various components of it).

What follows is some give and take between the CED “generations” on the national debt.


Whenever I attend parties outside of the wonky Washington, DC area, many of the older adults often think it is peculiar that I, a 20-something female, am so concerned about the fiscal health of our nation and that I spend my time engaging with groups that discuss the long-term debt issue.  However, I think it is very natural that I developed an interest in this area, given when I came of age.

Millennials have entered the workforce at a time of great economic hardship: the financial crisis, double digit unemployment rates, rising healthcare costs, skyrocketing tuition, household income stagnation and growing income and wealth inequality.   In fact, as the Pew Research Center has emphasized, Millennials are the first generation in the modern era to have higher levels of student loan debt, poverty and unemployment than their two immediate predecessor generations had at the same stage of their life cycles.  To aggravate the problem, Millennials also have lower levels of wealth and personal income than Gen Xers and Boomers had at the same life stage.  This is why many have labeled Millennials the “Boomerang” generation – returning to their parents’ homes after college, often from our inability to find a job or afford our own rent.

Naturally, entering the workforce during these conditions has instilled a high level of concern about money and the economy in me and the Millennial generation.  According to a recent Nielsen survey, Millennials are more austere, more money-conscious, more resourceful and more wary of investing in the stock market.  And we are not only concerned about our own financial standing, but the government’s as well.  We realize that when the national debt explodes 10-25 years from now, our generation will be the ones to bear the brunt of the problem.  Unsurprisingly, Millennials have begun to call for reforms that ensure long-term, sustainable deficit levels.

Recently, in an effort to engage Millennials in open dialogue on this issue, The Can Kicks Back invited Millennials to contribute to a new report, Restoring Balance: Millennial Perspectives on America’s Spending and Investment Challenges. The report examines ways to “restore balance” between deficit spending and long-term investment and features six policy recommendations from Millennials on issues ranging from Social Security reform to infrastructure investment.  Other organized efforts, like Generation Opportunity and, have also given my generation an opportunity to express our concerns about the debt issue. 

Unfortunately there are a lot of negative misconceptions about what Millennials are trying to achieve through these organizations.  Just a few months ago, I attended a party at a friend’s house and found myself speaking with another woman about my job and the long-term debt projections.  I explained that the pressures on the federal budget will primarily stem from costs associated with Medicare, Social Security, and interest on the debt.  The second that I mentioned the word “reform” following the word “Social Security,” her face went sour and she interrupted me saying that Social Security is vital to the country’s health and that she couldn’t believe I wanted to eliminate it.  She left for the bathroom before I could get a word in edgewise (and never came back).  It’s a shame that she didn’t give me the chance to respond, because I would have told her that I completely agree – Social Security has a long-standing history of success in reducing poverty in old age and protecting the middle class against inflation and the ups and downs of the market.  Unfortunately many people equate the word “reform” with “completely eliminate,” and this perpetuates the false notion that the deficit reduction debate pits generations against one another.

However, there is no need for generational warfare.  Many Millennials are suggesting entitlement reform as just one way to ensure long-run fiscal health, but there are very few Millennials who advocate for complete elimination of these programs.  In fact, according to the Pew Research Center, the views of Millennials on how to address our fiscal challenges are not far from those of their elders: about six-in-ten Millennials oppose benefit cuts as a way to address the long-term funding problems of Social Security, a view held by about seven-in-ten older adults.  Millennials, like all other generations, have parents, aunts, uncles, and grandparents for whom they care dearly.  In fact, the Nielsen survey shows that Millennials have a strong sense of responsibility for their parents:  63% of Millennials feel it is their responsibility to care for an elderly parent, compared with 55% of Boomers.  And Pew’s survey indicates that a record 50 million Americans are living under the same roof in multi-generational family households.  These households are tied together with both love and shared economic responsibility.   This is just one more reason why Millennials have a great interest in ensuring that their parents and grandparents have long, healthy and financially stable retirements. 


Ah, I’m so glad to hear that your generation cares about your parents so much, Courtney—speaking as a mom of four Millennials myself!  You young people do have a lot more to worry about in terms of your future government benefits and taxes than my generation does though; most politicians will stay away from proposing any policy reforms that would reduce benefits or raise taxes for the Baby Boomers, for understandable fear of the political consequences.  Most policymakers and even policy experts who talk about Social Security or Medicare reform have made clear that they would not reduce net benefits for anyone age 55 or over.  That means I have only a couple years before I can say “phew”—but it also means any policy changes will soon be exempting the entire Baby Boom generation (those born between 1946 and 1964) from paying for any of the bulge in benefits caused by our bulge in the population.  And that means that your generation—you, and my own kids—will end up bearing the costs in the form of higher taxes and reduced public benefits and services.

But even more worrisome than the simple accounting-style math that says that if my generation doesn’t start paying the debt down, your generation will have more paying to do, is the adverse but more complex economic effects of “kicking the (debt) can” down the road.  It’s not just that you guys will have more bills to pay thanks to my generation.  It’s that more and more of your income will be going toward things from the past (things my generation will have already consumed, on credit), rather than for investments that would pay off in your future—for you personally, and for the economy more broadly (which means for everybody).

When my friends who know me mostly as another “mom” ask me what I do in my economist job, I always have a little explaining to do about why I have worked so much on the issue of “fiscal responsibility” and “deficit reduction” in my career.  (Eyes tend to glaze over at first.)  Most of my mom friends don’t understand what the federal budget deficit has to do with them personally, because it’s a very abstract and aggregate concept that is hard to relate to one’s personal circumstances and everyday lives.  When I explain that the deficit financing of government spending or tax cuts isn’t actually “free” but will eventually have to be paid for with higher taxes or lower spending in the future—meaning paid for by our kids—that’s when the moms’ eyes perk up.  And when I explain that it’s not just that our kids will have greater burdens but that they may likely have less economic capacity to handle it, they really worry.  We Baby Boomer parents do so much to make sure our kids get off on the strongest economic footing possible—from preschool through college, we’ve tried our best to give them every possible “enrichment” opportunity and prepare and send them to the best schools we can.  We’ve invested a lot of time and money in our kids’ economic futures.  So it’s kind of a shock to realize that many of us are actively opposing paying higher taxes or accepting reduced benefits, and that such a strategy of seemingly looking out for our own generation’s best interests might actually backfire—because it turns out that for most of us, our own best interests are first and foremost whatever’s in our children’s best interests. That sounds more unselfish than it really is.  I’m just speaking as a (caring, generous) mom who’s also an (efficient, optimizing) economist, and from that combined perspective, I’m saying there are surely better ways to allocate our resources among purposes and across the generations than the way we’re doing it, to produce the greatest economic benefit for all of us. 

Paul Taylor, who authored the Pew Research Center study on Millennials, concludes his description of the Pew findings on this upbeat note (emphasis added):

Does this [unsustainability of the fiscal outlook] mean a generational war? Let’s hope not. We live at a time when there are large generational differences on many political issues, but Social Security and Medicare have not become a source of conflict between old and young, even though they have some different views about how the program should be reformed.

As the fiscal stresses on these programs mount, it’s possible this will change. But if Americans of all ages can bring to the public square the same genius for generational interdependence they bring to their family lives, the politics of entitlement reform will be less toxic and the policy choices less daunting. That’s a big if. It’s also the most promising way to frame the conversation.

And we, Courtney the Millennial, and Diane the Baby Boomer, agree.

Courtney Baird is CED's Research Associate (and a Millennial), and Diane Lim is CED's VP, Economic Research (and a Baby Boomer). Photo: Ryan Schoenike, Executive Director of The Can Kicks Back, a non-partisan, grassroots organization launched in 2012 to educate, organize and mobilize the younger generation around the issue of fiscal responsibility; and (in TCKB’s “AmeriCAN” costume) Diane Lim.