Demographic change and its effect on the economy and the budget was a main topic of discussion at the 10th Annual Peter G Peterson Foundation “Fiscal Summit” Tuesday in Washington.
Policy experts discussed the importance of dealing with projected deficits as soon as possible both because that would lessen the inevitable harm of deficits on the economy, but also because the unique structural challenges faced by the millennial generation and those after will take time and focus to address — something not being done now.
On one panel about the fiscal and economic legacy for future generations, speaker Bill Gale, a senior fellow at The Brookings Institution, discussed the many economic and lifecycle disadvantages the millennial generation (those currently between the ages of 23 and 38) faces, noting that in numerous measures of wealth they are “doing worse than any generation born before the financial crisis in 2007.”
Those disadvantages will make it difficult to save for retirement and yet with Social Security they are also “going to be hit on the head” because “baby boomers have basically escaped the benefit cuts or tax increases that we all know are coming,” since Social Security reform plans tend to hold those 55 and over harmless from reforms. Thus “the baby boomers have gone all the way through their lifecycle without dealing with the ultimate Social Security reconciliation.”
Gale noted that for Medicare that’s not necessarily the case, “because if we reformed medical practices it would affect current beneficiaries.”
In his remarks, Michael Peterson, Chairman and Chief Executive Officer of the Peterson Foundation, challenged those in both parties who were casting aside fiscal responsibility, calling the effort “some combination of wishful thinking and political procrastination.”
He said if current borrowing was for actual investment in the future, or for combating a recession, it might be justifiable but that’s not what is happening. Instead “The willful disregard for the impact of our debt represents a morally bankrupt fiscal policy. Our current path is an injustice which harms the future budgets and economy for the next generation even if low (interest) rates obscure this today. At its base it’s a form of fiscal corruption making the easy choices today at the expense of the future. And it needs to stop.”
Other Summit highlights included interviews of current government officials: Speaker of the House Nancy Pelosi; Acting White House Chief of Staff Mick Mulvaney; Chairman of the House Budget Committee John Yarmuth; and Ranking Member of the House Ways and Means Committee Kevin Brady. Attendees also heard from new Congressional Budget Office Director Phillip Swagel.
The summit concluded with presentations from seven different think tanks, who each compiled comprehensive plans to put the nation on a sustainable fiscal path. The plans contained numerous areas of overlap, despite their authors representing a wide range of ideological viewpoints.
Videos of the summit programs and Information on the panelists and interviewees are available on the Peterson Foundation’s website.
The Concord Coalition receives financial support from the Peterson Foundation.