The most famous quote of the most influential economist of the 20th century, John Maynard Keynes, was “In the long run, we are all dead.” To Keynes, what was important was what is happening now — not what occurred either in the past or in the future. Keynesian reasoning has been increasingly embraced by American opinion and policy makers over the 103 years since Keynes issued his fatwa. For example, today’s federal government frequently (most notably during the pandemic) feels the need to stimulate the economy to reduce economic downturns by massive spending financed by large borrowing (budget deficits). Let others worry about the negative long-term consequences of that borrowing on future generations of Americans.
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Keynesian-style thinking means we are the Now Generation, ignoring both our past and our future. In our public schools, we often have reduced teaching our kids a lot about the past, things such as the American founding and the development of Western civilization, critical to understanding how the world has changed dramatically over time and how our historically determined institutional setting has become critical to current economic and geopolitical success. As a byproduct of this historical neglect, many young Americans believe their generation is smart, wise, and morally upright, unlike their less enlightened ancestors with whom they have sparse acquaintance. (RELATED: The West Is a Superior Civilization (And I Don’t Care If That Offends You))
Similarly, Keynesian reasoning leads us to pay little attention to what is going to happen even a few years from now. We ignore, for example, that radical reductions in payments in our largest public pension and health care systems, Social Security and Medicare, will happen in under a decade unless big policy changes are implemented now. And the high demographic likelihood of a staggering burden on working-age Americans within a generation reflecting rising life expectancy, falling birth rates, and possibly declining immigration is ignored by national leaders. The median-aged American today is 39 years old, and life expectancy is about 79 and rising over time with medical advances. Therefore, the median-aged American, in the prime of his/her working life, can be expected to live conservatively over 40 years, probably expecting to spend 10-15 years of that in retirement after a lifetime of work. Yet as the ratio of older Americans to those of working ages starts to rise dramatically, achieving that expectation becomes increasingly problematic.
Other examples of the Now Generation’s lack of concern for the future: If we were truly strongly concerned, would we tolerate compelling evidence of declining learning amongst our children? Wouldn’t we be in revolt against mediocre test scores in reading and math or low scores on international tests relative to kids in other countries? Wouldn’t the welfare of our children and thus future generations take priority or at least parity in addressing the current demands of self-serving teacher union leaders? (RELATED: Ignorance Is Not Bliss: The Dumbing Down of America)
Similarly, wouldn’t we be in revolt against the very likelihood that a bourgeoning national debt will pose dramatic economic hardships on our children and grandchildren?
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Few months go by without new examples of putting short-term goals ahead of the nation’s long-term success. My favorite lately relates to a tradition in the U.S. Senate, where the threat of a filibuster implicitly means important legislation requires a supermajority (60 votes) to pass. President Trump wants the filibuster ended so he can get desired legislation passed, such as his SAVE Act on electoral integrity. Similarly, leading Democrats like Chuck Schumer say that when they gain control (perhaps in just five months), they too will end the filibuster so they can pack the Supreme Court with left-wing justices who view the Constitution as an historical artifact changeable as needed to meet political objectives. The filibuster is a vital although imperfect protection from hasty decisions by a numeric majority that ultimately hurt the nation. We therefore wisely currently adopt legislation only with supermajority support in the Senate.
Similarly, the federal system that our Founders gave us confers advantages that we should continue to use aggressively, such as the promotion of interstate governmental competition in the provision of public services, constraining monopoly decision-making in Washington and allowing the states to act, in Justice Brandeis’s memorable words, “as laboratories of democracy.” Americans for generations have voted with their feet, migrating in massive numbers to states perceived to offer better futures, notably ones with low taxation and regulation, allowing markets to work. Additionally, with a constitutional amendment that has nearly advanced in the past, we could promote responsible federal finance (by largely ending budget deficits) that would reduce threats to future generations.
READ MORE from Richard K. Vedder:
Ignorance Is Not Bliss: The Dumbing Down of America
America’s War on Men
The DEI Dividend — In Reverse
Richard Vedder is distinguished professor of economics emeritus at Ohio University and senior fellow at Unleash Prosperity and the Independent Institute.
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