Social Security -- but for the young

Stephen Seufert, president of the Lower Bucks Young Democrats, has called for a social welfare program in the form of "Youth Social Security." (Paul Tong / Tribune Media Services / January 20, 2014)

The Times of Trenton recently published an op-ed by Stephen Seufert, president of the Lower Bucks Young Democrats, calling for “Youth Social Security.” The social welfare proposal is an interesting one, and as the public debate over rising income inequality lends feasibility to new forms of federal intervention into the economy, it’s worth discussing the merits of new ideas as they come along.

Seufert’s pitch:

“For example, say the United States instituted a minimum income of $2,500 every year from birth to 18 years of age. Much like Social Security, those children wouldn’t see the money until their 18th birthday, which, by that point, would amount to $45,000. (It would take approximately $200 billion for one year of funding). This ‘trust fund’ could then be spent on paying college tuition (student loan debt averaged $29,400 in 2012), buying a car (average cost for a new car was $32,769 in 2013), putting a down payment on a home, or one could defer spending for an unforeseen rainy day. Ultimately, the purchasing power of millennials would increase tenfold, thus bolstering America’s consumer-driven economy.”

He’s certainly got his sights set on a real problem. As the costs of basic necessities and opportunities for educational attainment rise dramatically, while expected income continues to stagnate or decline in a tough job market, it’s increasingly strange for us to focus our social safety net so lopsidedly on guaranteeing that the elderly don’t retire and die in crushing, pre-New Deal levels of poverty — especially when the viability of such a program depends on adults earning enough to pay into the program in the first place. Some earlier intervention seems warranted, and providing young adults with a lump-sum payout to start them on more stable economic footing would certainly have upsides.

The proposal reflects the broad moral vision of the ascendant populist left. It is fundamental to the progressive vision of society that government ought to correct for suffering brought on by circumstance beyond any citizen’s control. “Youth Social Security” (better called “a nest egg for everyone,” inasmuch as a lump-sum payment funded by, say, closing tax loopholes has essentially no resemblance to Social Security) seems, on the surface, to be an elegant manifestation of that vision. Giving every young person the opportunity to escape the crushing cycles of poverty has an almost irresistible appeal, and even if they don’t all use the money wisely, we could finally say that everyone, at least once, had a fair chance.

Unfortunately, problem sighting and broad moral vision are where the merits of this proposal end. While Seufert is right to point out that the $200 billion price tag is a bargain compared with something like a guaranteed minimum income (and, moreover, that the money could be raised through any number of long-proposed reforms to our tax code), it’s still quite a lot of money: more than the combined budgets of HUD, HHS and the Department of Education. Perhaps $200 billion a year is a reasonable price for increased economic justice and its attendant long-term prosperity, but we still ought to ensure such a large investment is being made in the best way possible.

And that’s where the “Youth Social Security” plan fails to meet the mark.

It’s a common misconception that the principle downside of growing up in poverty is the absence of money itself. If it were, then correcting the disadvantage at any point — be it 18, 21, 25 or 30 years old — would make sense. But not having money per se isn’t the issue. The real brutality of growing up poor is the cumulative consequence of not having the things money can buy for the first couple decades of your life. It’s growing up without livable shelter, without adequate nutrition or basic healthcare; it’s overworked and absent parents; no cash for instruments or books; and being denied access to the educational opportunities that correlate so strongly with later success. By 18 years old, the damage is mostly done. Sure, a sudden $45,000 might help you make a down payment on Harvard — but after nearly two decades of poverty, there isn’t much chance you’ve gotten into Harvard in the first place.

The real beneficiaries of “Youth Social Security” would be the middle and upper classes. Those we really want to help — the poor — would already be too far behind to catch up with their more privileged peers. If we’ve got $200 billion to meaningfully address the problem Seufert and other progressives are gunning for, we’ve got to intervene even younger.

So what else could we do with the money?

We could make Social Security-like payouts to young people, but start them much earlier. You can’t hand a check to an 8 year old, but you can certainly hand one to his parents. In the United States today, there are 16.7 million children growing up below the poverty line; if we assume the other kids will be fine and focus on this group, our budget buys us $12,000 a year per child in direct aid. By providing this money to families themselves, it could be spent on the idiosyncratic and changing needs of that family, helping them acquire the basic, life-shaping opportunities that their children otherwise would have gone without.

In a generation or two, it might even reduce overall welfare dependency, as the children who benefited from this program raised their own children in homes made possible by better lives — an idea that might even appeal to conservatives, if they weren’t fundamentally opposed to the state ever helping poor mothers feed their children with actual money.

Of course, such a plan would also have its complications. With such a large annual benefit, the incentive for parents not to cross the poverty line income threshold by a single dollar would be immense; moreover, ensuring the money was being spent in the broad interests of the child would become a vital new responsibility for protective services. But these concerns are not insurmountable, and no fully fleshed out version of this proposal would operate on such a binary benefit valve. Rather, benefits would have to be tapered progressively, with mechanisms like those in Richard Nixon’s Guaranteed Annual Income plan implemented to guarantee that income plus benefit always exceeded the larger benefit that would come with smaller incomes.

But again, these are details. Complex and vital ones no doubt, but before we can reach them, we need to recognize the real problem. Lump sums to teenagers won’t do it; nor will an increasingly unsustainable safety net for those permanently crippled by impoverished childhoods. We’ve got to start young. Once we can agree on that, we can figure out the best way to make it work.

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Emmett Rensin is an author, essayist and political activist in Chicago. His previous work has appeared in USA Today, Salon and the Los Angeles Review of Books. Follow him on Twitter @revemmettrensin.