One fact of economic life that has become obvious to all of us is that our offspring will not have it as easy as many of us did.
We went to school, graduated, got a job, and married, and we had a good expectation that we could support a family well on our income, even including paying college tuition.
Such a plan in today's environment is like a pipe dream.
What happened? Why do our children look at what we accomplished economically and feel that with few exceptions they won't be able to match it in their own lifetimes?
Is Debt to Blame?
Some look at our national debt, which is rapidly approaching $4 trillion, and they hold that this is the cause.
"You mortgaged our future by generating this debt you are passing on to us," is the cry.
There is an answer to this: We are passing on the assets that the debt financed as well as the debt itself, so it is a wash. The national debt has to be owed to someone.
And we are turning over to our kids these bonds, either directly or in the form of insurance policy claims, bank deposits, and the other assets that reflect the liabilities of the institutions that own the bonds directly. Assets and liabilities must match. So if we pass on one, we pass on the other.
Foreign-Owned Assets
What about so called "foreigners." Haven't we so abused our international position that we have become the world's largest debtor in history.? Aren't our children's prospects damaged by the fact that foreigners have these huge claims that must be met?
But ask yourself, how are these claims to be met? If foreigners buy American goods, which we want them to, they help provide American jobs. And if they invest in American real estate, industries like movies and the like, they provide the capital for our growth and also again provide new jobs.
Look at the success of the Japanese auto industry in building cars while making employees happy in many southern U.S. communities.
Can they take the money out of our country? No, dollars are American bank deposits. They remain here. All they can do is spend them or switch them over to others who are willing to buy or hold them.
The Japanese and others who are earning dollars are realizing the only way they can use their earnings in the long run is to spend them here for goods and services. We are beginning to see this as Japanese tourists flood the United States.
We Enjoyed a Free Ride
I think what is really behind the fact that American youth can not expect to do as well as their parents did is that we, the older generation, got a lot of our benefits by living "off the backs," so to speak, of less fortunate people - both at home and from abroad.
America always had immigrants who worked for very little. We benefited from their labor. We had minorities who also were paid below the regular wage level.
But now we find that immigrants, minorities, and less skilled people are unwilling to, accept lower wages than others earn, and they are using their political clout to even matters out.
Something Has to Give
When the bottom of a seesaw goes up, the top goes down. In other words, as the wage level of the bottom rises, since there are only so many goods and services to go around, the top must fall, and this top is the children who will not do as well as their parents.
Look at the movie "Hoffa". The basic conclusion of the truck driver is, "He made us part of the middle class."
Now, without sounding like a snob, if truck driving is a middle class occupation - something you can learn pretty rapidly, then what is banking.? Is banking now an aristocratic field? No.
It means that through the clout of the Teamsters Union, we have given this truck driver the same pay and benefits a banker gets, despite the years of education and training the banker needs to handle his job.
Similarly, bankers worry about the fact that a checker in a grocery store can earn, double what a bank teller earns or even more when overtime is factored in.
There is more truth than fiction in the old joke of the bank president who complains on looking at the plumber's bill, "I don't earn that much per hour," to which the plumber replies, "Neither did I when I was a bank president."
Being Spread Around
So the answer to why the new generation can't expect to do as well as their parents is really that overall the new generation is doing as well as ours or even better. It is just that the benefits are being spread around more widely.
Those whose parents were at the top of the ladder may cry that they can not climb as high as their parents did. But for many many others, their chances of moving partly up the ladder are far greater than ever before.
Or as the opening song of the old TV series, "The Jeffersons" concludes, "We finally got a piece of the pie."
