ON OCTOBER 13, 2008, just one month after the collapse of Lehman Brothers, presidential candidate Barack Obama delivered a speech in Toledo, Ohio, outlining his “economic rescue plan” that would bring the country out of the deepest recession since the Great Depression. “It’s a plan that begins with one word that’s on everyone’s mind, and it’s spelled J-O-B-S,” Obama said. He then rattled off a list of initiatives that would later make up his $862 billion stimulus package.
On November 4, 2008, voters hired Obama to fix the economy. But four years and $5 trillion in deficit spending later, the jobs haven’t come back. The unemployment rate rose to over 10 percent and rested in July (the most recent monthly figure available at press time) at 8.3 percent—all this despite a promise from the Obama administration that the stimulus package would keep unemployment below 8 percent. But if the Obama economy has been bad for the country at large, it has been disastrous for one cohort of Americans who provided the president with his decisive victory in 2008: young voters, who now face an unemployment rate 50 percent higher than that of the nation as a whole.
Like the rest of the population in 2008, young voters were overwhelmingly concerned about the economy. According to the national exit poll, 61 percent of 18- to 29-year-olds said the economy was their top issue, compared to 63 percent of all voters. But the young were much more bullish than their elders about Obama’s ability to get the job done. The race between Obama and McCain was actually a dead heat among voters 30 and older. But 18- to 29-year-olds broke 2 to 1 for Obama. In fact, although they only made up 18 percent of the electorate in 2008, they broke so strongly for Obama that they provided 6 percentage points of his 7-point margin of victory. Obama’s margin among the young was unusual compared to the two previous elections. In 2000, Al Gore edged George W. Bush among these voters by 2 points (48–46, with Ralph Nader nabbing 6 percent). In 2004, they backed John Kerry over Bush by a 54–45 margin.
To say the least, betting on Obama hasn’t worked out very well for the president’s biggest supporters. The unemployment rate among 18- to 29-year-olds is more than 12 percent. In a bad economy, those with the least experience are hurt the most. According to Gallup poll from this spring, 32 percent of 18- to 29-yearolds are underemployed—meaning either unemployed or working part-time but looking for full-time work. In comparison, 14 percent of Americans between the ages of 30 and 65 are underemployed. And those young workers who do have jobs are paid wages significantly lower than young workers earned a decade ago. According to a study by the liberal Economic Policy Institute, pay for college graduates is down 5.4 percent in inflation-adjusted dollars. For young high school graduates pay has dropped 11.1 percent over the past decade.
The consequences of unemployment, underemployment, and wage erosion are battering the lives of young Americans. According to a survey conducted in 2011 by the Polling Company, 77 percent of 18- to 29-yearolds “either have or will delay a major life change or purchase due to economic factors.” That includes 44 percent who will delay buying a home and 28 percent who say they’ll delay saving for retirement. Nearly a quarter of young Americans say they will delay starting a family, and 18 percent will delay getting married because of the economy. The Obama economy has given rise to ever more “boomerang kids” who must return home to live with Mom and Dad after graduating from college without a job.
President Obama is obviously not to blame for the 2008 financial meltdown, but his economic policies have utterly failed to produce a normal recovery. Nearly every part of the almost $1 trillion stimulus package was a failure of big-government liberalism. Rather than forcing states to make the hard choices and necessary reforms carried out by Republican governors like New Jersey’s Chris Christie and Wisconsin’s Scott Walker, billions of stimulus dollars provided a temporary reprieve to states’ health care and education programs. Infrastructure spending proved little more than a payoff to unions. Billions more were wasted on green energy firms like Solyndra and Abound Solar. Tax rebates in the stimulus package (which, to be fair, were doled out under the Bush administration, too) had little effect on job creation or economic growth. “I’m not a Keynesian, so I don’t think sugar-high economics works,” Rep. Paul Ryan said in the summer of 2011 amid renewed calls for even more tax rebates. “We’ve sort of proven this already, a number of times. Temporary tax rebates don’t work to create economic growth. Permanent tax changes do.”
PRESIDENT OBAMA'S SIGNATURE legislative achievement—the Patient Protection and Affordable Care Act, aka Obamacare—will be a disaster for many young Americans. Although the president sold the plan as a boon to youth, who can stay on parents’ health insurance plans until the age of 26 (a policy of dubious merit that is already in effect in many states), Obamacare is ultimately a very raw deal for young people in simple terms of dollars and cents.
Most Americans will not be directly affected by Obamacare’s individual mandate, the requirement to purchase health insurance or pay the federal government 2.5 percent of their adjusted gross incomes. Those who are hit by the mandate will largely be the young and fit, who have judged for themselves that it is not in their economic self-interest to purchase health insurance. President Obama and other Democrats have argued that these individuals are “free riders” who are driving up the cost of health care by receiving uncompensated care—in emergency rooms, for instance. In fact, the “free rider” problem accounts for little more than 2 percent of health care costs in the United States, according to the Urban Institute.
Nor will healthy Americans be able to satisfy the mandate’s requirement by purchasing low-cost catastrophic insurance. Obamacare requires plans that cost thousands of dollars a year and cover “essential health benefits” and preventive services, including substance-abuse treatment, pediatric services, and contraception. During oral argument before the Supreme Court over the constitutionality of the individual mandate, attorney Michael Carvin, representing the National Federation of Independent Business, honed in on this fact: “The young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries,” Supreme Court justice Anthony Kennedy said during oral argument. “That’s my concern in the case.”
“They’re compelling us to enter into the marketplace,” Carvin replied, but “they’re prohibiting us from buying the only economically sensible product that we would want, catastrophic insurance.” The individual mandate is much more about conscripting young Americans into the health care market in order to subsidize the health care costs of older Americans than it is about fixing the so-called “free rider” problem.
Even while it hits young Americans’ pocketbooks, it will surely hurt their job prospects as well. Obamacare not only forces individuals to buy insurance, it also forces companies with 50 or more employees to provide their workers with health insurance or pay a $3,000 per-employee tax. “It can literally shut many restaurants down,” Paul Demos, owner of Demos’ Restaurants in Nashville, told the Nashville Business Journal in June. The restaurateur is considering cutting hours for employees and closing restaurants to make up for the extra $500,000 he’ll have to pay. For employers who already provide health insurance, Obamacare’s “essential health benefits” requirements and the provision that all people must be charged the same for premiums regardless of pre-existing conditions will drive up health care costs, which will cut into employees’ wages and hinder entrepreneurs’ abilities to grow their businesses.
POLLING SUGGESTS that many young Americans just might not be willing to take four more years of Obamanomics. A poll of 18- to 29-year-olds conducted by Harvard’s Institute of Politics in the spring of 2012 found that only 41 percent approved of Obama’s handling of the economy. A higher number (52 percent) approved of his overall job performance, suggesting that a sizeable number of young people support him for reasons other than the economy. Still, if Obama can’t get more than 55 percent of 18- to 29-year-olds, he’s probably going to lose.
The Harvard survey suggested that kids these days have been misunderstood as economic liberals. Only 17 percent said they support Occupy Wall Street; 40 percent do not, and 43 percent were not sure. By a 12-point margin, they disagreed with the statement that “government spending is an effective way to increase economic growth.” Asked if they were more likely to vote for Obama or “the Republican party’s candidate,” young voters favored the Republican 42 percent to 21 percent. But asked to choose between Obama and Mitt Romney, they picked Obama 43–26.
What gives? Is Romney’s problem simply that he’s a businessman and straitlaced Mormon—the antithesis of cool? Perhaps. There will certainly be no hip YouTube videos in 2012 of a buxom “Romney Girl” pining for the former Massachusetts governor like there were of the “Obama Girl” in 2008. Hip-hop artist will.i.am will not be Auto-Tuning any of Romney’s speeches into songs.
But maybe part of the reason young voters concerned about the economy aren’t all prepared to vote their economic interests is that Romney has not fully made the case that a Romney presidency is in their economic interests. He would surely do well to warn of the threat Obamacare poses to all Americans, including the young. But he will also need a positive economic agenda. Luckily, one is lying right under his nose. Although the budget resolutions passed by the House Republicans these past two years are viewed as politically dangerous by many campaign operatives, the GOP House budget provides a forward-looking economic agenda that should appeal to young voters.
Whereas Obama has offered stale class-warfare rhetoric about raising taxes on the rich, the Republican budget calls for bold reform of both individual and business taxes by nixing or reducing loopholes in order to lower tax rates and create a more competitive and fairer system that will grow the economy.
Whereas Obama has avoided offering any proposal to reform Medicare—a program on track to drown the country in red ink—House Republicans have offered modest reforms for future retirees that will keep spending in check and provide more choice for beneficiaries. Young voters, who don’t even think entitlements will be around to help them when they retire, are therefore the group most likely open to reform.
As a disciple of John Maynard Keynes, Obama apparently believes that in the long run, we are all dead, so he might as well spend his way to re-election. Mitt Romney has the opportunity to remind young voters that, in fact, when the bill comes due for Obama’s reckless and ineffective spending spree, they and their children will be very much alive.