This and my next post are on the American tax structure. The material draws heavily from The Second Estate, a superb book by Ray Madoff, a law professor at Boston College. I highly recommend it if the topic interests you. It is short and a surprisingly easy read. Her discussion covers much more than the items I am highlighting.
Payroll Taxes
Today’s post focuses on payroll taxes, specifically Social Security and Medicare. I chose to start here because the problems of the income tax system often overshadow the issues around payroll taxes. To be honest, I had never given the matter more than a passing thought before reading her observations on the topic. I was surprised, for instance, that 67% of taxpayers pay more in payroll taxes than income taxes. All told, payroll taxes are the second largest source of federal revenue, comprising more than a third of federal revenue.
In a relatively recent post, I suggested that if Democrats won a majority in both houses in November, it might be possible to pass a bi-partisan immigration agreement. The Trumplicans have so badly overplayed their hand that the time might be ripe.
However, as I tried to sort through what such a deal might actually look like, I realized how many pockets of interest benefited from the ambiguity that had existed before Trump launched his crusade. His lizard brain could only see the electoral advantages. He didn’t recognize–or didn’t care–that upsetting this ambiguity would spin into a chaos of unanticipated consequences. (You would think he would have a better feel for the issue, since as a businessman, he benefited from hiring illegal workers. Of course, no one ever accused Trump of an overabundance of self-awareness.)
I’ve written before about how I think the American voting systems are deeply flawed. Current events provide new data to strengthen the case.
The Illinois Primary
The Illinois primary election was held last month. In two of the Representative races that I was watching, the winners had 24 percent and 29 percent respectively. As it happened, my preferred candidate won each, but still the results were not entirely satisfying. These are both districts with overwhelmingly Democratic majorities, so these two candidates are virtually assured of going to Congress. As much as I was happy it was these two, I am uncomfortable with the idea that someone can get elected with less than thirty percent of the primary voters of one party, particularly given that primary participation is lower than in the general election.
This happened because there were large numbers of candidates in both districts. There was a candidate with roughly any shade of nuance a voter might want. The rub is that if a preferred candidate lost, any “information” carried in that vote was also lost. Thus, voters had to consider whether a vote for their favored position opened the door to someone they really didn’t want. A run-off election among the top two finishers would probably be an improvement, but this is extra expense and, in all likelihood, have an even smaller turnout.
The California Quandary
This same dynamic is playing out in California in a different, and possibly even more distorting, way.
In my last blog, I argued that people voted for Donald Trump because they despaired the mainstream of either party were effectively addressing the devolving life situation of the bottom two-thirds of the economy.
There is no surprise about the traditional Republican Party. For the last century or so, it has made the primacy of capital as its raison d’etre. Trump disguised that with populist talk that sounded different from traditional Republicans and tapped into the voter resentment about both economic and cultural issues. Democrats, on the other hand, have talked more about looking out for the middle class and have passed some useful measures, but they have been unable to project a coherent and sustained strategy for changing the fundamentals of the economic structure. Wealth has continued to concentrate and big corporations are running roughshod over the bottom two-thirds of the economy.
The Path Forward
I believe Democrats can break through the fog of division created by the Trumplicans and solidify for themselves the kind of mandate that FDR created with a concerted strategy that unapologetically commits to reining in excesses by corporations and billionaires and to promoting the welfare of the entire economy, not just the 1% on whom the Republicans are currently showering give-aways.
It’s hardly a newsflash that Donald Trump is so singularly focused on his own interests that anything, or anyone, outside those exists only as a potential obstacle.
This is not normal. I can think of no religion or system of philosophy that doesn’t recognize that humans have something in common, have some universal decency and have certain responsibilities to one another. Donald Trump reflects not a shred of these. He over and over reminds us his world is irreconcilably divided between people who are of use to him and people who are “trash.”
At no point in the history of this country has a man so devoid of common decency—or at least so unwilling to even pretend– been elected to the presidency. Maybe it’s worth spending a minute or so thinking about what it tells us about our society.
It’s a well-known legal adage that hard cases make bad law. The current situation of Iran is a classic case.
The existing regime in Iran is a bad actor. Very bad. They are a menace to their own people—never on fuller display than killing thousands of Iranians in the last few weeks—and are a major destabilizing force in the Middle East. It is hard to imagine the world wouldn’t be improved by their removal from power.
On the other side of the equation is the idea that one country should not interfere in the affairs of another country. This idea has much more currency if there is evidence that the affairs of the country reflect some version of the common will. The evidence in Iran runs counter.
So how should we feel about the intervention in Iran?
My answer: potentially favorable consequences aside, this is a bad thing.
While the mid-term elections are ten months off, and ten months is a political eternity, polling suggests it is very likely Democrats will gain a majority in the House and might even eke out a tiny Senate margin. Inshallah.
One hopes this would allow the Democrats to serve as a somewhat greater brake on Donald Trump’s worst impulses. The degree to which that will happen is unclear since so much of what he does is, to be generous, extra-legal. Thus, the ability to slow him will play out in real time when we get there.
Still, having a plan might be good. Here are a broad set of strategies that Democrats might use as a framework for the following two years—if they are willing and able to do so. I think the difficulty of following these strategies will be less a function of Trumplican opposition and more a function of the party’s internal workings, which, by the way, are not unique to Dems but are inherent in the way we allowed our pollical and cultural environments to evolve.
This is the third, and for the moment, final post in my series on how we are failing to prepare the next generation for a fulfilling life. The first two posts focused on broad, but tangible issues, the economy facing young people and the confusion of post-secondary education. Today’s post is about something more diffuse but arguably more important—failing to create a sense of a robust future in young people.
Brief History of the Future
The idea of “the future” is a relatively new idea in history. All the ancient religions had some sense of the magic and mystical beyond day to day, mundane life. And all had a broad notion that fate served some people better than others. To create some degree of protection against the fickle fingers of fate, they conjured rituals and rules. But this was not “future” as we think of it; it was simply the awareness of the random distribution of events from a relatively limited set of possibilities.
This is the second in a series of posts on how we are bungling the preparation of young people for their lives. Today’s post considers post-secondary education. As noted in the previous post, college student debt is one of the most salient features of young adult society in 2026 America. While this is fueled by the precipitous rise in the cost of college, the bigger problem is that as a society we have misunderstood the economic relationship between college and a good life. This is part of a much bigger problem—what gets taught in college and how—but those are for a different day.
How We Got Here
The problem starts with the fact that historically there was a significant “wage premium” (to use economic jargon) for graduating from college. In the great economic expansion following WWII college graduates did much better economically…and were less likely to wind up in Vietnam.
At the same time, the official US, locked in a geopolitical struggle with Russia, began to worry about the efficacy of American scientific and technical training and engaged in many programs to increase the number of people going to college. It was also a period of starting to address historical divisions in society and one of the politically safest ways to do something was to promote increased educational opportunities as a way of equalizing major income discrepancies.
Then, starting during the Reagan administration, income differentials in the US started to take off. This was due to a series of policy decisions that facilitated exactly such differentials. These policies followed from a set of assumptions about the primacy of capital over labor that led to a significant reconceptualization of how corporations should behave in our society. There should have been a much greater fight over the resulting policy changes since they did not necessarily speak to the well-being of the whole society. Unfortunately, the Democratic Party, the logical–indeed only–group capable of forcing such a reconsideration, itself flirted so heavily with that ideology that no effective opposition was raised.
The question of what one generation owes to the next is a complicated one, but I am struggling to find any register on which American society is doing a good job of giving young people what they need to have good and fulfilling lives.
This and subsequent posts will look at three important areas where as a society we seem to be doing a particularly poor job facilitating the next generation’s route to good lives. Today’s post will focus on young people in the economy. The next two will consider how we are treating post-secondary education, and, finally but more broadly, what view of the future we are giving to the people who will live it.
Widespread Problems Have Disparate Impacts
Many—perhaps most—of the problems in our economy apply to many age groups, not just young people. But, as I will try to show, the damage to young people is particular, mostly because of the way it shapes their outlooks and their life-long trajectories.
Which, of course, has led to a serious divergence in income growth among various cohorts of the economy, with after-inflation growth of the top tiers seriously outpacing the rest of society.
Again, while this impacts everyone in the bottom 80% of the income distribution, the impacts on young are magnified. They have no resources on which to fall back. They are seeking for the first time many of the things all adults want to have–their own car, have their own place, be able to imagine starting a family.
One consequence of these immediate difficulties is that a great number of young people can’t understand how they are going to make their way in life. This is a major change in the social framework of our society. From the end of World War II until, somewhat arbitrarily, the 2008 recession, there seemed to be multiple life paths. Not that they were equal and their real-life availability varied across the population. And cracks started showing well before 2008. Still, most people coming of age over that period could readily imagine a track to a good life—professional, white collar, gray collar, or blue collar. All of these tracks, in varying degrees, promised employment at a wage that afforded a house, a car, and a vacation. It was simply assumed that these jobs would offer health insurance and pension. In that context, marriage and kids made sense. The gradual accretion of women into the labor force helped ice the economic cake, even if it created other issues
By contrast, most of today’s young people are deeply skeptical these pathways will be available to them. For many, they are already facing serious headwinds. In a poll of young people by the Harvard Institute of Politics 43% of people in their sample reported struggling or getting by with limited financial security— and this strain is especially pronounced among Black and Hispanic young people and those without a college degree. In another study of young people, nearly 40 percent of survey participants said they were taking on additional jobs to make ends meet.
Bad Job Market
One of the biggest problems for young people is that the job market is inhospitable. Even those who have graduated from college can find the sledding difficult.
The three-month moving average unemployment rate for recent U.S. grads sits around 5.3% versus 4.2% for the overall workforce; on some measures for degree-holders it pushes ~6–7%. This is being driven by a number of factors. In some cases, it is in fact AI, or, more likely, the expectation of AI. It also reflects the economy of not hiring people who will take a while to ramp up their skills. Both of these have become problematic for today’s cohort because it is looking increasingly likely that during the economic “bounce back” from the pandemic many companies over hired on the assumption their growth would continue at that pace. It hasn’t. With insufficient demand, companies would have to lay off workers to make new hires. They don’t want to. And the problem is amplified because consumer confidence is in the toilet and people are unwilling to leave the jobs they already have. When there are fewer voluntary movers, the number of job openings decreases. All of this generates a longer-term problem because when young people don’t get starting jobs, they are blocked from the opportunity of on-the-job learning and run the risk of permanently lower income and skill levels.
The problems for those who would otherwise head into blue collar jobs are different in particulars, but similar in outcome. On balance, manufacturing jobs in the US have declined as a part of the workforce. This has been going on for years but has recently accelerated dramatically, falling by almost 25% since 2020. This is driven by both automation and trade policies. When total jobs in a field disappear, there are inevitably fewer job openings, which of course is disproportionately felt by young people, setting in motion a chain of problems that stretch over a lifetime.
Student Debt
I have heard many adults dismiss the issue of student debt as some version of “entitled young people”. I am not sure they understand the magnitude of the issue. One in four adults under the age of 40 have student loan debt. This totals to about $1.8 trillion held by 42 million different people, most of them between the ages of 20 and 40. In 2025, the average amount of the loan debt is $50,000, And while there are some people in this mix for whom the student loan was the ticket to a very well-off life style, there are many more for whom this was a marginal investment, or, worse yet, yielded no tangible economic advantage.
To be sure, what’s going on with student debt is intractably related to the cost of college and, further, its role in our society. I will return to these in the next post, but here I am simply pointing out that student debt is a major economic fact in the lives of young people. There is evidence that by itself it reduces home ownership and negatively impacts family formation. It can materially impair credit scores, which leads to higher rates for everything from credit cards to mortgages.
It is hard to put these policies into a global perspective because so many aspects of American post-secondary education are unique. But other countries have chosen different approaches that result in little to none of the anxiety that we have created in America. For all the heat the discussion has attracted, neither party has put forth an agenda remotely commensurate with the problem. Impact of recent changes as part of the Trump administration is still being sorted out—and may include some very modestly useful reforms. But the decision to renew garnishing salaries for delinquent student loans will certainly cause some real hardships.
Housing
The increase in housing costs is well discussed as a problem afflicting all portions of the population. Inflation-adjusted housing costs, rent and purchase, have increased almost 25% more than median wages in the last five years. The result is that the entire bottom range of the income distribution is facing increasing difficulties in affording housing.
But, again, the impact on young people is particularly stark. Median age of first time home ownership, for instance, reached 40 this year, an all-time high according to the National Association of Realtors. The following chart is a poster for the problem.
Darren Walker, President of the Ford Foundation, said “Hope is the oxygen of democracy.” But it’s not at all clear that the current economic situation is generating hope in young people. Rather, it is raising concerns as to whether they will find jobs that pay enough for a comfortable life, be able to own their own home, be confident they will have health insurance, be able to afford children or retire at a reasonable age. And while all young people have some degree of apprehension, it would be inexcusable to overlook the greater pessimism about having a good life among those who start out with few advantages. It is no wonder so many feel the game is rigged.
Rather than generating hope, then, I am worried the current situation is generating fear in young people. That is a very bad thing. As Yoda says: “Fear is the path to the dark side. Fear leads to anger. Anger leads to hate.”
And hate, as we have seen, is a threat to democracy.
