Pronatal Fiscal Reform
The United States has the world’s largest economy, with an annual GDP surpassing 23 trillion. We are, by any historical standard, a wealthy and productive nation. But we also have a daunting national debt, now surpassing 31 trillion. That comes to nearly 100 thousand dollars per citizen, and 250 thousand for each contributing taxpayer. Our debt-to-GDP ratio has surged well above 100%, which is generally a warning sign that policymakers should heed.
Is this a crisis? It’s hard to say. Sometimes it’s reasonable to take on debt. In private life, it is quite common for high earners to carry a sizable debt load, especially in their younger years. Debt can be a part of a prudent life plan, if it’s managed prudently. Nation states are different from individuals in important ways, but the analogy may be still be helpful insofar as nations, like individuals, can often thrive with a significant debt load, provided they establish both checks and prudent strategies to ensure that it doesn’t spiral out of control. Debt becomes a life-blighting, or society-blighting, problem only when it is a consequence of an unsustainable lifestyle that nobody plans to change. Unfortunately, that does seem to be the situation here in the United States.
Our federal spending commitments are out of control, but we don’t seem able to curb them. The harrowing twists and turns of recent debt-ceiling negotiations show how impossible the situation has become. Reducing spending was the signature issue of the Tea Party years, but it was casually jettisoned as soon as the Republicans resumed power. Once removed from power, the right again became interested in debt and spending, but wouldn’t it be nice if they made reforms when they were empowered to do it prudently, instead of playing chicken with the US economy? The reality is that elderly entitlements, especially Social Security and Medicare, are the thing most badly in need of reform. This has long been clear to everyone who is paying attention, but no one seems willing to touch the issue, even Republicans in their debt-hawk guise.
I have a novel suggestion. The key to securing America’s fiscal future may be pronatalism: an embrace of fecundity and family life. I realize that this is counterintuitive. Debt hawks and pronatalists are rarely the same people. But both camps seem to be facing down near-intractable problems, in ever-falling birth rates and ever-rising debt. What if it is simply necessary to tackle these problems together?
“Budget-balancing babies” are admittedly a hard sell. Across the developed world, pronatal policies do seem to be growing in popularity, as more and more people recognize the downsides of a collapsing population. Both progressives and traditionalists have flirted with possible pronatal policies, but if any publication is emphatically not on board, it’s the Wall Street Journal. Deficit hawks are skeptical of pronatalism, because kids are expensive, and “family policy” generally involves sloshing out a lot more taxpayer money for preschools, child allowances, or paid parental leaves. When a person self-identifies as pronatalist, it’s generally safe to assume that they’re preparing to pass a hat.
I have no hat to pass at present. I might get there. Truthfully, I remain undecided on the merits of more generous family policy. On a practical level, I am wary of new entitlement programs and spending commitments. We can’t afford them. On a more theoretical level, I am of two minds. Sometimes, in a particularly heroic mood, I relish the American inclination to leave childrearing to families, without the constant interference of a nation-sized “village.” But I also understand that we’re no longer living in the kind of world where kids are a financial asset by their teenaged years if not before. It takes a tremendous parental investment to raise a productive, information-age citizen, and falling birth rates reflect more than just birth control and a “culture of death.” They also reflect a drastic shift in the cost-benefit calculus of parenthood. It also seems quite possible that showering money on families might be a way to drive innovations that will make family life easier and more enjoyable. When single professionals have lots of expendable income and parents very little, cultural centers will accommodate the former more than the latter, and that may not be good for society at large.
Perhaps then, over the longer term, we will need to spend more public money on families. I remain on the fence. At the moment though, my favorite pronatal policy is entitlement reform. In the short-to-middle term, it could avert a building debt crisis before it becomes socially destabilizing. But that’s really just the beginning. Ideally, pronatal reform would create a virtuous cycle, bolstering fiscal stability while reversing some of the cultural decline of the past several decades. Entitlement reform may be the most promising step we can take towards reversing our culture’s anti-natal drift. But pronatalism is also potentially key to generating the political will to reform elderly entitlements. It’s difficult to find the entry point that could initiate the process, but if pensions have become our poison pill, babies could ultimately be the cure.
The Entitlement Parasite
It is important to understand how central elderly entitlements are to America’s long-term debt problems. Naturally, everyone can list other spending commitments that they would happily axe in lieu of grandma’s pension. What about all that waste and corruption? Let’s cut congressional salaries. And do we really need a world-class military?
This can be fun as a party game, but it’s really just an exercise in escapism. Elderly entitlements are indeed very expensive, but the price tag doesn’t really tell the whole story. These programs have a deep design flaw. They consume ever more energy over time, even as they slowly smother society’s capacity to produce more. Social Security and Medicare are like public-policy parasites, sapping all resources placed at their disposal, and growing ever stronger as their host becomes weaker. Given enough time, a parasite can fell a giant, even a vast economic powerhouse such as the American economy.
By writing a blank check for the needs of elderly people, entitlement programs extended life spans, and incentivized medical research that could extend it still further. That’s good in many ways, but it continually increases the cost of these programs, with no natural check on their growth. But that’s really just the beginning of the problem, because over a longer span of time, elderly entitlements also sap natural incentives to reproduce. Historically, people expected their children to care for them in old age. By redistributing the earnings of working-age citizens, entitlements create a free rider problem, minimizing the most obvious, natural incentive to raise a family. Why raise your own kids when other people’s will support you in your old age?
The ripples of that sea change move further outwards as entitlement programs are woven ever more deeply into the fabric of our society. Once it becomes a commonplace that elderly care is properly a state function, younger people’s sense of personal obligation to elders tends to diminish. They forget why piety was ever considered a virtue. Intergenerational ties weaken, and it becomes harder to predict whether adult children will even remain a robust part of their parents’ lives. Growing numbers of younger adults prefer to be and remain estranged from their parents. As marriage and childbearing grow less common, parents cannot tell whether they will ever have the pleasure of playing with grandchildren. It would be nice to think that elderly entitlements enabled people to stop thinking of kids as a retirement plan, and focus more on the intangible rewards of family life. Unfortunately, people aren’t always good at maintaining bonds of love when practical reinforcement falls away.
Even in pre-industrial days, parenthood involved considerable hardship and sacrifice. Pregnancy was still difficult (and dangerous), and infants still required considerable care. People reproduced anyway, to generate laborers for the family farm or business, to secure old-age support, and also because babies were the natural consequence of normal marital relations. Beyond that though, people in earlier eras seem to have had a stronger sense of connection, both to ancestors and to generations as-yet-unborn. Aristocrats planted trees that would come to fruition for their grandchildren; peasants felt pride in working the same soil their forbears worked. Even some destructive patterns, such as family feuds, rose from strong attachments to kin that can be hard for modern people to fathom. Blood ties provided community, but also a link to both past and future.
As those connections erode, it becomes harder to explain why it’s worth shouldering the tremendous costs of having children. It becomes harder, too, to get citizens of wealthy nations to care about the future, instead of electing politicians who simply promise to secure their own present comfort. Partly this reflects the fact that childless adults are especially keen to ensure that someone will look out for them when they are old. But there may be deeper psychological realities in play. When the future is viewed as “the world my beloved offspring will inhabit,” the desire to make it a good one can be quite intense. People who interact mainly with their own age cohort may not feel that same sense of urgency.
The entitlement parasite has replicated itself across the developed world, and by now seems to be remarkably robust. The French take to the streets whenever a politician even considers trimming back pensions, or asking older citizens to work a bit longer. American politicians still regularly reassure older voters each election cycle that their benefits are entirely safe. Even China is struggling to quell popular dissent as it weighs obviously-needed reforms to its pension system. After watching older generations reach their sixties, retire, and ease into a more leisurely life, it’s understandable that people feel disgruntled at the notion that they might not get their turn. But the panic over every proposed modification still seems hyperbolic. It’s now widely recognized that these programs have deep problems. Are older people not willing to make any sacrifices to give children a future?
The reality may be that they haven’t been taught to see the matter in that light. People need a reason to give up ease and comfort. Why should they work longer, or save more? Really, they’d rather not. For politicians, it can be convenient to exploit that preference. After all, older people tend to vote in large numbers. To change people’s attitudes, reformers will need to change their own tune, finding better ways to motivate the demand for greater sacrifice. They need an approach with more emotional resonance than a bank book can command. It’s time for our leaders to kiss some babies.
As the movement for mass euthanasia gains momentum, one hesitates to say too much about intergenerational injustices. Let me state clearly, then, that I am emphatically opposed to euthanasia as a “solution” to an overburdened entitlement system. However, I do not think we can avoid that problem simply by running away from the entitlement issue. It’s simply a fact that Medicare spending is exploding; within the next few decades it will become utterly unsupportable. If we want to avoid heinous and dehumanizing responses, we must face the issue squarely. It is simply unjust for older citizens to enjoy a comfortable retirement while systematically undercutting future generations’ ability to build and maintain that prosperity. This cannot go on forever, and the longer we wait, the likelier it becomes that the end will be ugly.
In contemporary discourse, social justice is a major theme. Could we shift that focus towards generational responsibilities? Older people especially may find it hard to focus their attention on the nation’s long-term fiscal outlook. Numbers are boring! But most seniors are very interested in children. It’s a rare octogenarian who won’t return a baby’s smile in a grocery store line. Politicians need to use that natural sympathy to appeal to older voters. Everyone will need to make sacrifices, but we’re not just doing it to slow the numbers on “the debt clock.” We’re doing it for our children, so that they can have a future.
Hopefully, that concern will be reciprocated in the other direction. In a healthy society, younger people do have a pious respect for their elders, understanding that these are the people whose work and sacrifice enabled them to live and thrive. It’s harder to generate that piety when the state stands as caretaker-in-chief, and even harder when policy choices give younger citizens good reasons to resent their elders. COVID policy has done serious damage along those lines, so there is plenty of ground to make up now. But the benefits of ameliorating that damage could be rich, for seniors as well as children. I’d like to tour the national parks as much as the next person, but given a choice, I’d like even more to spend my waning years in the company of loving descendants, enjoying the respect and honor that has traditionally been given to the old.
The United States is a wealthy nation, which still has great potential for dynamic economic renewal. Politically and culturally though, we seem to be stuck in a rut. Will those defects ultimately undermine the greatest economy the world has ever known, or could the order of causality go the other way? We still have some choices to make, but they will grow fewer and grimmer the longer we delay. It’s time to “choose life,” for our families and our nation.