T booktv. Org. Eye unanimous in furchtgottroth and jared meyer argue that government policy are robbing millenials of their future. Thats next on booktv. [inaudible conversations] good evening. Good evening. Im Vice President for policy research at the Manhattan Institute and its my great pleasure to introduce you to to welcome you to discussion by our senior fellow, diana furchtgottroth and her colleague, jared meyer, co author 0s of the book disinherited how washington is betraying the young. The per sissents of debt of the federal government driven by the promises of entitlement programs such as Social Security and medicare have prompted Martin Feldstein to observe that fiscal deficits impose a burden on future generations. Borrowing only postpones the time when taxes will have to be paid. Even more pointedly former u. S. Comptroller general david walker has spoken of the problem of generational theft. Present consumption indulgence that robs the young of opportunities. In their important new book, disinherited. How washington is betraying its young, the Manhattan Institutes diana furchtgottroth and jared meyer elaborate on this theme. We should not be surprised by persistently high levels of unemployment among the young nor by their delay in establishing themselves as independent adults. The young today face an array of obstacles that we are creating for them. Not just spending on longestablished entitlement programs but work force regulations, licensing requirements wage and hour laws and a new and expanded healthcare entitlement that specifically increases the costs to the young. So it is that so many young adults are as paul ryan observed back living in their childhood bedrooms. As taxpayers we have to be concerned about this situation. As parents we cant help but be concerned about this situation. Both jared and diana are multigenerational are here to discuss the findings and arguments of disinherit tan. Diana furchtgottroth will speak first, followed by jared meyer. Dine the former chief economies of the u. S. Department of labor and was an adviser for president george h. W. Bush. A senior fellow at the manhattannen state and directs the institutes washingtonbased economics 21 project. The author of five previous books, including oregulateing to disaster. Jared meyer is a fell low with the institute a graduate of st. Johns university right near new york. Where he receive a bachelors degree of science and finance. To discuss the new book, please welcome diana furchtgottroth and then jared meyer. [applause] ladies and gentlemen, thank you so much for coming to hear us today. Theres so much going on in new york. You could have been going to the theater. You have been going out to dinner. Instead youre coming to hear us. Rear weally grateful. We wrote this book because it seems as though our governments policies are systematically biased against young people and in favor of old people, and just a broad variety of ways. And theres been a lot of discussion about how the young are going to have to pay off the National Debt of 18 trillion. Not so much discussion about the state debt which is another 5 trillion. But very little discussion about the disadvantages we give to young people ahead of that time, before the time that theyre going to be in the work force and paying off those debts. But government policy is biased against children in the field of education, and then when they get into the work force and then children are when theyre young people, to have higher healthcare premiums so that middle aged and older people can have lower healthcare premiums. And we find that the young are doing so well. Their Unemployment Rate of 20 to 24yearolds is twice the amount of to 25 and over. The rate has declined substantially. When it comes to education the first step, we find that all the teachers are given favor over younger teachers. New york city has rubber rooms writ has unqualified teachers who are being paid rather than teach students, rather than being fired. Its practically impossible to fire an unqualified teacher these days. And even though it is impossible to fire these qualified teachers they stay on and children in elementary to secondary school have a worsted of indication. Economic studies have shown that if you replace a teacher in the bottom five percent with just an average teacher the earning lifetime earnings of the entire class goes up by 250,000. So theres a lot we have to gain by letting children have the best future they have. Then when it comes to college 70 of students have some college debt, and the average debt is 27,000. So thats a lot of debt. And it didnt used to be like that. Ten years ago, 20 years ago. Basically as the federal government is subsidizing more and more College Loans taking over the student loan business, colleges are raising their tuition to match this, and this is just a loselose situation for young people. Plus, High School Guidance counselors seem to guide everybody into fouryear college, even though some of them graduate with degrees that make it very difficult for them to find jobs so theyre stuck with the debt and no jobs. And some of them dont even graduate at all so theyre stuck with the debt without the college education. When it comes to actually entering into the work force again we fine that a number of policies that we have are biased against younger people. Lets start with teens. Its really difficult to get a job when the minimum wage is 15 an hour. Today we have just heard the los angeles is following. This means its practically impossible to get one of those summer job that were so common when i was growing up. Also means that kids who dont do that well in school cannot start at the bottom and then work up. Thats one reason the teen Unemployment Rate is close to 20 . But behind minimum wage isnt the only barrier to young people going into the work force. It used to be it was possible to get an unpaid internship at the new yorker. Well after a couple of interns exploitations, one has been in a second summer in a row the Labor Department decide node more unpaid internships in forprofit companies. Imagine you can get an unpaid internship at the white house you can get one at congress, you can get one at new york communities for change or any Community Activist group but you cant get one in your local auto shop you cant get one in a Recording Studio. We tell the story in our book and we have many stories in our book of young people who have been disadvantaged by this system. One of the most poignant stories in our book is a boy called he was 20 years old last summer, and he was offered an internship at a Recording Studio here in new york. And sammy is a philosophy major and has his own band and wants to be a musician but the condition of the internship was that he had to get College Credit because if you dont get. College credit, you cant have the internship. That is the law. Not like working in congress or at the white house. Well he happens to go ton an Ivy League School and they dont give credit for any kind of summer internships so he spent his summer on the street, playing his guitar and violin and roared on his own on the computer. There are many stories like that theres no reason that forprofit companies shouldnt be able to give young people the advantage of unpaid internships. Then we go on to occupational licensing, and we have men stories about people such as Melanie Armstrong who had to get a certificate with six years of experience in order to do african hair braiding. She wants to open her own salon and the hair braiding doesnt involve any chemicals doesnt involve any dyes, but even itch it had so what. You can get plenty of chemicals and dies at the drug store and apply them yourself. The law has changed and he was finally able to do that and qualify but there isnt any reason you shouldnt be able to start your own say interior tee sign business or your own treetrimming business or your own Computer Technology business. All of those are forbidden in some states. Well after the kids have gone through school and then theyve accumulated college debt and then they cant gate job and get in the work force we then expect them to hey higher halve insurance premiums. The Affordable Care act that the only between premiums was three to one you cant charge elderly person more than three times to a young person. Used to be five to one with told the story of tommy who had to go on the d. C. Healthcare exchange, and tommys premiums just about doubled and he spend months trying to get enrolled. And it just not fair to these young people that they should pay higher healthcare premiums so people like me can pay lower premiums because their assets are much lower. The difference between the wealth of a young person and an older person is now about poo 5 to one because of the zero Interest Rate policy the stock market has gone up, people with pensions have seen those the value of the peckses pensions increase older people have houses assets built up a. Through inflationary times through the houses. So it doesnt make any sense at all. What were calling for is im not going say it because im going to turn the podium over to jared who is a real millenial and knows what the solution is. [applause] theres a lot of talk on both sides of the aisle about how young people in america need some sort of change. Things arent working out for them. Diana gave you the numbers. Clearly something is going wrong. Well bat year and a half ago in a Rolling Stone article the awe their laid out his vision embraced by people on the left if you look at Bernie Sanders now with the push for entirely free college. Heres what wanted to do. He wanted to make everything free make everything publicly owned, have a guaranteed job if you want one and if you dont want a job you have guaranteed work. He said that is the way to help millenials. We wanted to write the book to provide another way. Writ shows that the reason that young people have been mistreated and have seen inherited what they have right now is because of government policy. Theres a lot of well intentioned policies that still have the general theme of protecting older interests and keeping young people out. And we all know, young people dont vote. You hear they dont care about politics. But unfortunately even if young people ignore the political process, politicians dont ignore them, and they constantly pass through bills do things like increase pensions for government workers spend more money on Social Security and medicare and push other regulations that put immediate benefits on politically powerful interests but then say you know what . Were just going to cut the costs to people who either cant vote yet arent politically engaged or arent born. These are major changes that will come from millenials opposite the start paying taxes. If we want to right the federal deficit, the 18 trillion on the books debt, we would need an increase, all federal taxes by 57 or cut all Government Services by 37 , excluding the interest were paying on the debt. That means young people are etheir going to be getting less services for the same price or going to be paying a lot more to try to bring these unfunded promises to reality for themselves. And one thing we into is really positive is young peoples attitudes are changing. The last six years have kind of left a bitter taste in some young peoples midmichigans. We know they went enthuseas particularly for he hope and change promises by president obama, but now twothirds of millenials see Government Spending ann as inefficient and wasteful. Thats um from four in ten when president obama took office. If we look at regulations only 16 think that regulations benefit the public. What i see is theyre kind of they see the ridesharing, things like air b b and regulation injures protecting established businesses and see know reason why they shouldnt be able to take an uper d uben or rent out thunder paramount but theyre not hurting anyone else. We put a specific chapter on occupational licensing because this isnt just taxi drivers isnt just hotels. Its all across the economy were seeing concentrated interests getting together and keep ought new competition. Back in the 1950s one in 20 American Workers needed to get a government permission slip to start working and keep in mind you have to do a lot of government required training and pay fees. Now that one in three. So this is expanded drastically. People talk about unions or minimum wage or these other labor market regulations. We see nothing that has exploded as much as occupational licensing. Now moving on to the way to get out of this problem though, its not going to be through doing more Government Programs. Rather we need to pare back the regulatory state that is holing back the economy. The up ins are daunting what we need to do to first the period furth. Taking into Social Security and medicare, the unfunded promises we made means america is 200 trillion in debt. Thats unfathomable. I cant picture what 200 trillion bills would look like. One millenial we talked to my generation has grown up with full acceptance of the National Debt. We have never known anything else. So to get out of this we need to grow the economy and right now the code of federal regulations is 175,000 pages long and this isnt just pages and pages of legal jargon. Instead theres over one million terms in there like must or cannot or shall theyve put real burdens on businesses. And i have hard time remembering if my phone and keys and wallet when i leave the house itch dont know how i can how am i going read a million regulations, much less remember all of them. So when we look at things like pension debt, which diana touched on, which is now five trillion for states, what we need do is take away governments able or at least put pressure on them so they think twice before promising increased benefits for people who arent going to have to pay for them. Of course when the economy is roaring, ann wants to get a higher return on their pensions and politicians are glad to hand out more goodies but eventually the bill is going to come due for people who never wanted the programs in never voted for them and arent going to get the same return back. So we are agent we have soon a lot of pushback against the Affordable Care act. The idea of extending insurance to all of americans is something we all want to do. We all want to make sure that people have access to quality healthcare and they can afford it. Why do they set up the flaw such way that makes young people pay for it . If we look at the advertising they had to do to sell the law it was embarrassing how much they were trying to appeal to millen ya. Talking about millenials. To sign up for healthcare. Gov. Why did need to push this on young people . But as we have seen, a lot of young people arent signing up for the law and they realize that its being placed on themselves which i should point out people under 30 only spend 600 a year on average in health care yet the average premiums shooting pushing 3,000 now and it was at 90 increase for 27yearold males. The highest among any group. So we could see some reforms in the healthcare side. We talked about we need to grow our way out of the current budget situation, but what can we do about education . Thats one of the keys to discuss. When we look at primary education, this is actually where im the most hopeful. We have seen promising develops, from Charter Schools to vouchers Online Learning that we realize that not every american student this same and needs the exact same from their teachers so were moving to a more vizwide it system that gifts parents and students greater control. Thats something where if we could write our Prime Minister mere Education System it would set america up for success. But the College Loans have got an lot of attention. We have Hillary Clinton one of her staffers talking about making college debt free. We have Bernie Sanders talking about making college completely free. So what how can we respond to this . Well the way i see it is theyre putting a bandaid on the problem. Student loan forgiveness. The real issue is that College Tuition has been increasing drastically, over 1,000 percent since the late 1970s. And this is actually being driven by the governments current loan program. And the best way to understand this is the government writes a blank check to colleges, says go to all the lazy rivers, rock kluming walls and while pools and well turn on the spigots have more money coming to you. So we need to look at a way where the same loan doesnt apply to everyone because we have no mark signals right now. Is going to college the best decision for me . High School Guidance counselors say its the right decision for everyone. When youre coming out of the debt drivenly extremely high tuition, this is something we need to think lock and long and hard about. Create a system that actually leads toen investment in education. And again people talk about if we just sent everyone to college it would be great and it would pay for itself. That would be one thing if it were true but its not wind chill hey over eight of college graduators unemployed. Young College Graduates graduates and thats cowboy rate thorns clinton administration, and a staggering 44 of College Graduates are underemployed. This doesnt get captured in the unemployment statistics but what it means is theyre working in jobs that they didnt need to go to school and go 27,000 in debt in order to get. So we have some ideas for how we can help the economy move it forward, but i think the main thing we need to do is evaluate everything through the primp of how the prism of how it affects the younger americans how much does making this promise now without paying for it put a burden on to future generations . These are the kind of question we need to be asking, and we hope by writing the book we could bring this into the debate and young people are extremely energetic people say theyre apathetic but just look at the current four for fossil fuel investment at college win. Key get young people to have the same passion for fossil fuels mass washington, we would start to see real change. Thank you. [applause] thank you jared, thank you diana. Lets start with those who take a more activist view of government like to talk about Government Programs is a investments, not just spending. The government could [inaudible] the role of government visavis the private sector and theres very few investments the government can make that the private sector could not do better. The government should be responsible for keeping a sound currency for National Defense so that young people arent blown up by terrorists and also perhaps in basic Scientific Research because individual companies dont have the resources or the incentive to do that basic research because it gets used by other companies. So i would say thats the role of the government in terms of investment. And another investment the government could make is just rolling back some of its regulations. Politicians could make an investment in reforming Social Security. By gradually raising the retirement age and changing the indexing from wage indexing, where Social Security benefits rise with wages in the economy to price indexing, where Social Security benefits rise with prices in the economy so that young people arent paying for programs that wont even be there when they retire. What we need is an American Association of Young Persons to balance out the American Association of retired persons. [applause] let me follow up with you jared. How do you process a program as a younger person, like Social Security . Again, the activists government types would say youre being relieved of the burden of caring for your elderly parents. You wont have to worry about their hospital bills bus of medicare or their pension buzz of Social Security. How do you take in those kind of arguments . I. I would say one thing im not being relieved of is paying higher tacks to fund the program. If we look at current trends, theyve i continue in 2050, young people are going to be paying a combined 30 of their paychecks just to fund Social Security and medicare. Thats over double what it is today. And you might think thats not possible. Theres no way a government could take 30 just for entitlements ignoring other federal taxes. Thats the level we see in european economies and its not really working out too well for them. Youth unemployment is pushing 50 in places like spain and we see highing you unemployment in portugal italy. So is that where we want to be . Taking a third of young peoples hardearned money to support broken systems theyre note going to get a cent of. Can we open it up to the audience . Young woman in the purple. [inaudible] thank you for your talk. I think especially the Higher Education along those lines i wonder specifically about the balance between having a lower minimum wage and also kids going to college. First i wonder, when you talk about the minimum wage so what extent do you address a lot of the literature that argues that raising the minimum wage doesnt have that effect on unemployment because the the the literature is significant in that direction, and i wonder if you would direct it directly and talk about the methods or anything like that. And then also sorry. Briefly. A lot of the argument about minimum wage in that direction theories are going to assume were talking about perfectly competitive markets about more most of the labor markets theres a balance of power between workers and the [inaudible] i goods i just wonder if not a minimum wage and were talking about everyone not going to college how do we ensure that even when the young people grow to be middle aged, that they do that were able through the market provide a living wage. Well, 97 of working americans earn above minimum wage. Not because of the kindness of their employers but because thats what their employers have to pay in order to retain them. If you were offered a minimum wage job you residents say thanks but no thanks and find a different job. And that is why the minimum wage thats why studies of the effect on the midge wage have found its not that significant because it doesnt apply to that many people. Another reason is some of these studies are flawed and i have written about that. But the important thing is if you suggest raising the minimum wage to the average wage in the economy, and right now is 25 an hour everyone will say thats ridiculous. Some people wont have jobs. But theres some people that dont have jobs because its 7. 25. Or some people wont have jobs when its 10. 10. Some people wont have jobs in los angeles when its 15 an hour. And its really unamerican to say that if you have skills, under 15 an hour or under 10 tuesday an hour were not going day lou you work in the United States. Because if the minimum wage goes up and employers have to pay more theyre going hire different type of person. Theyre going to hire 15 an hour type person. And 7. 25 an hour persons isnt going to be able to get his first job and isnt going to be able to move up the career ladder. I would just add to that, when were looking at the federal minimum wage in particular i dont see how it makes sense to apply one size fits all rate for the entire United States. Sure maybe wealthy suburbs in seattle could handle a 15 tuesday minimum wage. Its only young people. But if you bring it to rural alabama or oklahoma and if you look at the bureau of labor statistics they look at each metropolitan area and calculate what the average earnings are, you can see that in a lot of states over ten sometimes 20 of people are earning under the proposed 10. 10 minimum wage. So the one size fits all federal ones does not make sense and young people are going to be hurt across the board especially in low wage and low cost living areas . Jared look at occupations in los angeles that pay under 15 didnts a hour. Great question. Just summarize a part of this debate right now so i appreciate the question. Yes. [inaudible conversations] now as to the question when you, you know, go through these different policies, some would argue from the other side that advocating against environmental conservationism is kind of punting towards young people an environment they wouldnt be able to perceive because their environment wouldnt be conducive to that, agriculture energy, what have you. How would you respond to concerns like that where the government actually needs to increase programs of environmental conservationallism if your policies were to take effect . [inaudible conversations] go ahead. [laughter] all right. By environmental conservationism, you mean more regulation to reduce the environmental effect of different kinds of emissions . We were originally going to include a chapter on that in the book about basically having these programs that adversely affect young people because it drives away jobs and drives away manufacturing and drives away energyintensive industries. But [inaudible] says that this topic really alienates young people and that it was very fickle to explain that certain things that are purportedly being done for the environment actually affect young people. And so that chapter was omitted. About Green Energy Policies adversely affect the United States. So i think the young people are being hurt by these policies, and im not sure its really helping Global Warming because if were driving offshore Energy Intensive manufacturing then it goes to someplace like china or india or vietnam where their regulations are not nearly as stringent as ours, therell be actually more emissions. So i dont think it really helps the globe it really doesnt help the United States economy it most certainly doesnt help young people. And i should just add if a companys poisoning rivers or poisoning the air, we have regulations to take care of that and thats something that, you know if they were entirely destroying the [inaudible] that would be one question. But the department of energy and the epa, they are the perfect example to get into this, talks about Regulatory Reform. If we looked at something in congress right now, it would actually make it to congress when theres a large bill thats over a certain cost, congress would have to approve it rather than these regulatory agencies functioning as their own branch of government even though theyre not elected. So this is something we could kind of do to rein in the executive branch when they just keep pushing regulations over and over. And, you know, the general tendency of agencies is to overstate the benefits of what theyre doing and understate the costs, because they want to keep adding to what they dont. So we need something to push back on this where congress can retake its power, and theyre more accountable to these people than these executive agencies are. More questions. Yes, the young woman right there way in the back. Me . Yeah, you. [inaudible] i think that youre far more armed with statistics than i in terms of this subject, but i have some issue with you pitting the generations against each other, and thats how it sounded to me. There was an example posed [inaudible] because they dont have adequate money, but theres a tremendous number of very wealthy young people that are being paid sums of money that i know i never got when i was that young, and i have an advanced degree. So i think focusing on people who are very young who are making no money is something to be addressed but to suggest that is all young people is problematic, coupled with suggesting that older people who are people of means which is also problematic. Secondarily, i think that to say to the Guidance Counselors that were pushing everybody to go to college i think is also problematic. I dont think its the Guidance Counselors, i think its coming from a myriad of sources. Its coming from the parents its coming from peer groups. So to suggest its merely coming from Guidance Counselors [inaudible] maybe i should answer hang on. Lets let her get to her question. Thirdly no, no, i mean get to the question. I just think its problematic, i recognize some of this is is because its going to strengthen your argument, but i think that its important that we look at the broader range of issues prior to concluding because i think there are some major issues in terms of policy, but i think in order to really look at it with a keen eye we need to look. And we emphasize were not pitting the generations against each other. This is something older people are concerned about too. Grandparents are concerned when their grandchildren dont have jobs. Parents are concerned when their children are still living at home when they should be moving out. So this is something that covers all of the generations. And being economists, we look at averages. And, of course, there are some outliers, there are some young people who are doing very well, there are some old people who are not doing so well, but on average government policy is taking from a group that has less income and giving it to a group that has more income. And we say that that is something that should be ended. And this is something that all Generations Care about. They all want Social Security to be put in balance so that their kids arent paying for a program that wont be there when they retire. And i would just like to add we actually featured my grandfather in the book. I had a conversation with him and its like the Social Security conversation, you know, where i was bringing up, you know, do you feel like youve earned your Social Security benefits . He was like yes ive paid into this system i worked my whole career. But the reason we blame washington is they sold a false bill to america. They sold Social Security as a personal forced investment program. But because of mismanagement and promises that they couldnt keep now, what young people are paying in are going right to people such as my grandpa. So he never intended this and i dont think it was even, you know, the aarp as much as we covet them, theyre not sitting in a smokefilled room thinking how can we really take it to millennials right now. So these things have accumulated over time because theres a general tendency of Government Action to favor the well organized groups over the politically weak. And also your point on Guidance Counselors thats well taken as a cultural problem. Its not just Guidance Counselors we view, its just something you have to do, you know checking off the box when really going to Community College or maybe an Associates Degree going right into the work force or technical degrees could also be better choices. Thank you. Congress does not have to reclaim its powers. Some of us are very disturbed by the delegation where we have this whole body of Administrative Law which some of us believe is unconstitutional. Congress has the power to enact laws not the executive branch. But my question is this, George Shultz once said he [inaudible] [laughter] [inaudible] why do you two have any confidence that this will happen in the future . Any questions that you can [inaudible] well, we [inaudible] one million in restrictions now and it used to be a shadow thing. You know we had the pages in the federal register, but we really didnt know the real world specs of all of this. But now we have organizations such as the institute for justice and, you know, the Manhattan Institute working with Small Businesses and the regulations theyre going through, and were being able to give a face to this and showing these regulations have real world effects. They do things to americans and were able to also measure it better. We can see how many commandments are in the regulatory tests, we can see exactly what industries, what agencies are promulgating these. So while the amount of regulation has just went like this maybe we have enough tools [inaudible] question to give you hope. Well, president carter managed to deregulate airlines and get rid of one regulatory airline board. He also managed to deregulate telephones and got rid of the monopoly of ma bell. President clinton managed to nut place welfare reform after vetoing the bill three times in the republican congress, he replaced [inaudible] with tanf which changed incentives and [inaudible] number of people who are on welfare. So people in washington is difficult, but its possible with the right leadership. And its very possible that were going to get a new leader in 2017. Were going to get a new leader but we might get a new leader who is interested in pushing some of these programs through. [inaudible] yes. Paul rubin from Emory University is with us. So as an old professor im not sure how upset i am by what youre saying but i wonder if 2050 30 [inaudible] as you get to that [inaudible] people dont work, and then youre not going to have enough money. Do you see us becoming increased . What do you see happening . I wont be here to see it, but one wonders what could happen as tax rates just the real money needed to support the programs, where its going to come from. Well its easy to forecast the past. The future i have more trouble with [laughter] but america unlike many european countries, i think has the ability to have the pendulum swing back the other way. And even other countries, if you look at canada, for example which lowered tax rates about ten years ago and now has found itself with lower deficits than we do, its lower unemployment better immigration system. It is possible for countries to turn around. I dont think we are ever going to get the situation of a 30 payroll tax with income taxes on top of that. People are going to vote the government out and vote in place a new group thats going to put in place a different kind of tax reform. So i dont think were ever going to get there. Jared would you support 30 payroll tax . Yeah, it might work a little bit. [laughter] couple more. J. P. Donovan from chief executive magazine is with us. It would seem to me that the biggest emphasis to the millennials is to switch Social Security to a chileanlike option where instead of paying your deduction to the government, it goes into some preapproved account that you can actually see accrue. And i know the workers in chile were very impressed after they had their blue passbooks actually can see their pension deductions growing. That was the most powerful mechanism for that country to keep that system away from sort of government hands. Yeah. Yeah, its very unfortunate that president george w. Bush wanted to put in place a system which would have taken three Percentage Points from peoples Social Security contribution into individual accounts that people could watch grow, and not only that, they could pass on to their heirs. So if they died prematurely then their heirs would still have something from Social Security, unlike the current system. I dont hold out much hope that we would get the chilean system here, but it might be possible to get a small portion of that allocated to an individual account. But Social Security could actually be brought into balance by gradually raising the retirement age and changing from wage indexing to private indexing. Jared, do you want to weigh in on Social Security . Yeah. I was going to look up the actual numbers here, but we look at what Social Security now is paying benefits to around 58 Million People and thats over 1,000 times more than were being paid when the program began. So the people who put in place Social Security wouldnt recognize it today. Not only are People Living longerrings which is an awe. Longer, which is an awesome thing, people are working longer but we need our program to adapt with this new reality. And also it costs nearly 40,000 times what it did in 1937, and thats adjusted for inflation. So this program was meant to help the truly needy, you know elderly americans who couldnt support themselves and had no savings. Now its, you know ubiquitous, its taken up by medicare, 40 of federal spending. So its really nothing like what it was when it was put into place. So a need for reform, but incremental adjustment is your prescription. Well, it would be great to have dramatic reforms such as going to the chilean system, but our political system doesnt allow it. So far our political system hasnt even allowed us to make the small changes that are necessary over the past, you know ten years. Washington has been [inaudible] because it hasnt even taken small steps, let alone large ones. Yes. The gentleman on the far right [inaudible] [inaudible conversations] thank you. So my question has to do with the governmentrun programs for Higher Education. I know there are some economists take, for example like peter schiff that say not Everyone Needs to go to college and, you know some professions dont require college degrees. How do you guys feel about, you know, this whole idea that, you know not everyone should go to school and in the free market system, i suppose much less people would be getting loans to go to school because if they went to get a loan from a private firm and said i want to get 100,000 [inaudible] so, i mean how do you guys feel about this . I know theres a very, you know, theres a stigma about, you know saying not everyone should go to school, that its somehow antieducation or antiprogress you know something along those lines. How do you feel about that . Exactly. Well, thats one of the problems which when i was referring to the Guidance Counselors. Its very difficult for a guidance counselor to look at a c student and say youre not college material. It upsets the parents it upsets the student. But going to a Community College, and ive done research on this [inaudible] students to get a credential in one of the Health Care Professions such as occupational therapy, physical therapy, nursing or some of the Computer Programming specialties that costs about 6,000, 3,000 a year. And theyre earning 45,000 when they get out. So its a really inexpensive path to a well paying job. And more people should look at doing it. Jared, do you see that among your peers at all . Well they definitely view college as just something as i said earlier that you just have to check off in the box. But i think employers need to kind of shift their view where you know right now theyre just throwing out resumes that dont have college degrees. Its more of a signaling aspect. Its a really expensive and inefficient way to figure out if someones, you know, responsible. And after looking at some of my peers in college, i dont know if graduating means youre actually responsible. [laughter] theres a big shift that needs to happen between the publics perception about needing to go to college and employers views. So this is a large issue. Couple more questions. [inaudible] hang on for the microphone, please. So far youve predominantly discussed the baby boomer generation and the millennial generation. To what extent particularly in the areas of Social Security and health care does a smaller generation x mitigate the problems of scale which youve discussed . Well, anytime that theyre bringing up ideas to change Social Security, generation x isnt going to see as drastic of changes as millennials are. I mean, theyre and, you know, a lot of people on the younger end are kind of in the same boat as millennials. Its weird looking at ages to find an exact age where we would pit the winners versus the losers, its difficult. But i think the people who are younger members of generation x are fitting more into the problems weve discussed with millennials. But thankfully for them they didnt come out of college, you know right into the recession. They werent growing up during that, so they had a little bit of better economic footing to get their careers started. You dont really want smaller numbers of any generation, because that lowers Economic Growth. And one of the problems of the current economy is that the Social Security rate has gone down below replacement rate. We need to move up to 4 growth in order to see the resulting of [inaudible] we need more workers supporting more people as they age. One last question. We will defer to our elders [laughter] this young man. Two questions. One is on the minimum wage. I remember when the New York Times actually said they were against the minimum wage, and they supported the earned Income Credit that basically said because not everyone who gets minimum wage is a needy person. Many of them are dont need a subsidy, okay . So if you limited it if you let the market system work youll have more people working obviously. Let the free market work. And then those who are not making enough because in a free market lets say theyre not making the minimum wage, you basically make up difference from the tax system, if you will through so thats one question. Were really responding to a bigger question the young lady [inaudible] yes. Who asked how do we get to a living wage. Right. Thats the way to get to it. Lets cut to the question because thats actually an answer for her [inaudible] but the second question i have is a more important question. Now, i understand political realities make it difficult. I mean, reagan came the closest in 1986 when he basically changed the tax system where there was no distinction between the rates of ordinary income and Capital Gains and [inaudible] if you got rid of all the regressive taxes like, for example, a sole practitioner who is struggling to make a living not only is paying whatever lets say maybe 25 whatever income tax, but paying 15. 5 fica tax. Its very regressive, okay . You could have if you got rid of every single tax subsidy and congress could do this simply by writing a bill that says no government or subdivision thereof can subsidize anybody other than needy people, human beings, not Small Businesses because they have less than 50 employees, you know, owned by millionaires okay . Or take obamacare. The reality is that the young kids im just going to im going to take the chairs prerogative no, i was actually, would you support such a total revamp if it could be accomplished . Absolutely, yes. And its not just the tax reform would be more fair to younger people, its also the tax reform would increase Economic Growth. The dramatic Economic Growth gain [inaudible] and theres no reason where tax rates should be 39 the highest in the industrialized world that we should be taxing companies on their worldwide income. You know, if an American Company wanted to bring back 100 million and invest it in the United States, that company would have to give 35 million of that to uncle sam. If a Foreign Company wanted to [inaudible] that Foreign Company could use every dollar of that 100 million. Thats why we have so Many American companies inverting; in other words, being owned by foreign corporations. And it shouldnt be like that. And an individual tax rate is now about 43 when you add everything onto it. That discourages work. When you thats just the federal tax rate. If you add the state tax rate it can be around 50. It discan courages work and shows the Economic Growth. That means fewer jobs for millennials. So tax reform, thats the gentlemans question, is that part of your deregulation agenda to help the disinherited [inaudible] yes, and i would argue that the tax code suffers from the same problems we see in regulation where over time it just keeps accumulating and accumulating, and the people who are being protected and who are writing these codes or these regulations are the established businesses and the established players who have an interest in keeping up new competition or getting a sweet deal for themselves. So i would say tax reform fits right in with Regulatory Reform in that pretty much anything we can do to pare it back is going to help young people who havent had a chance to, you know stick their hands into this mess yet and try to work the deal they want. Please join me in thanking diana and jared. The name of their book is disinherited. [applause] [inaudible conversations] youre watching booktv on cspan2