Those Gosh Darn Millennials

The recent article "Why are Millennials So Unfazed by the National Debt?" by Stuart M. Butler caught my eye. This light-weight article was beaten up on my Twitter feed, but I think it does appear to offer some insights in how the the changing media environment has changed how the younger generations interact with self-appointed economics experts. Very simply, raw government debt hucksterism is not something that easily sells, outside of the libertarian community. Fiscal conservatives who want to prevent certain types of policies of happening need to stick with the rather ambiguous "we can't afford it" story.

The key paragraph of the Butler article is as follows:

The third observation is the contrast between the passion among young Americans for action on climate change, and the giant Millennial yawn that greets any policy expert or politician trying to draw attention to the problem of surging deficits and national debt. Yet, like climate impact projections, the fiscal picture is dire. According to the bipartisan Congressional Office, federal debt held by the public is rising rapidly and will be close to 150% of GDP by 2050. That would easily surpass the previous record during World War II— with the growth fueled by long-term entitlement promises like Medicare and Social Security that are hard to change, rather than by short-term defense needs that can later be trimmed back. Even now, the debt tab for the average family of four is over $250,000. Economists of all political stripes worry about the potential consequences of such a “debt overhang”, from high inflation to sharp increases in interest rates and much slower growth. [emphasis mine] But while young Americans are increasingly concerned about college loan debt they feel personally, few are stirred to demand action to tackle the national debt, with its climate change-like threat to our economic and social future.

I am not going to hold out myself as an expert on polling trends in the United States, but I would assume that Butler's assessment of the lack of interest in younger generations in the problem of "surging deficits" is accurate.

This seems to be a large generational change; older generations of rubes were greatly mesmerized by things like debt clocks (which is of course in the graphic for the article). The reason that worked was that the editors of the business press liked the "out of control debt" story, and ran with it. And to be fair, such headlines sold newspapers, so there was an audience for it. The "Tea Party" were bugs on national debt levels, and they notoriously skewed to the geriatric demographic.

The problem with reaching young people is a key word in the previous paragraph: newspaper. How many young people do you see nowadays reading newspapers in coffee shops? How much network news do they watch? To what extent they read newspaper articles, they are inter-mediated by social media.

Take Butler's article. I only saw it because it was being mocked mercilessly on Twitter. Admittedly, my Twitter timeline skews liberal left, but I would guess more lefties followed the link to have a laugh than true debt doom believers read the article to renew their beliefs.

The reason for the mocking relates to the highlighted text in the Butler quote. Very simply, it is rather awkward making bald-faced misrepresentations of facts in a world where we no longer have a small circle of like-minded individuals acting as gatekeepers for opinion.  The reason I read the article was the observation by J.W. Mason that the (highlighted) assertions by Butler contradicted the reality that the 1970s inflationary experience that scarred the Boomers was an era with low government debt ratios. (The figure above is a chart I show a lot, which directly contradicts the assertion that a "debt overhang" is associated with "sharp increases in interest rates.")

Even if one believes that climate change claims are fraudulent, they are not disproved by looking at a pair of time series in under ten seconds. Therefore, in the new media environment, fiscal conservatives need to up their game compared to what they got away with in a more tame media environment.

They are stuck with the nearly-impossible-to-prove "we cannot afford it." Unfortunately, anyone who values internal consistency in logic will generate problems for the other policies that fiscal conservatives invariably support. For example, one could ask "Can we afford a tax cut for higher income tax brackets?", which is a question that is not supposed to be asked.

Finally, there's no real scare behind debt fears. How many young Americans know or care about the historical episodes that fiscal conservatives keep droning on about? For a generation that is buried in student loan debt, how exactly is inflating away debt a problem?

The final result is that "centrists" are stuck with political economic debates about a nebulous concept -- "can we afford it?" -- which is largely meaningless to the broad public. Meanwhile, MMTers are ripping up social media, mocking anyone using that framing. This creates an environment of broad apathy on the issue, with the only interest from a few polarised groups (libertarian, MMTers), who have  a low opinion of the centrists' lack of convictions.

(c) Brian Romanchuk 2019