Young Americans deserve more attention from US policymakers because they’re only getting a fraction of the average $29,000 doled out annually to people over age 65, according to the scholar who directs the Aspen Economic Strategy Group.
“I’m not saying we should renege on our promise to take care of the elderly,” Melissa Kearney said Wednesday on Bloomberg Television’s Wall Street Week with David Westin. “But there are kids where we know when we spend more money on them, they do better in school, they have better health, and ultimately they make more money as adults, pay more in taxes, rely on government programs less.”
Kearney, an economist at the University of Maryland, is helping drive the strategy group’s conference this week in Aspen, Colorado. Co-chaired by former US Treasury Secretaries Hank Paulson and Tim Geithner, the group bills itself as bipartisan and devoted to promoting “evidence-based solutions to some of our most significant economic challenges.”
The event features Paulson and Geithner, Bank of America Corp. Chief Executive Officer Brian Moynihan and Princeton University professor Cecilia Rouse, a former chair of the White House Council of Economic Advisers. Papers from the conference are being prepared around the theme of strengthening the US economy, with publication probably in late November, Kearney said.
“Part of building a more resilient US economy is investing in our workforce,” Kearney said. With that framework, she said, it makes no sense to have a balance in social spending that tilts about fivefold in favor of over-65 Americans versus those under 18.
“If we just want to be cold-hearted economists about this, we are not putting our money into the future generation of kids,” Kearney said.
The timing this year is significant, with economists and business leaders gathering in the aftermath of Fitch Ratings’ surprise decision to downgrade the US government’s debt rating. Fitch cited US deficit spending and political uncertainty as triggers, which caught Wall Street and Washington off-guard because those issues are hardly new, especially since the White House and congressional Republicans dodged a possible default earlier this year with a bipartisan debt-ceiling deal.