Why Young Voters Should Reconsider

From exit polls, it appears the voters 18-29 again went predominantly for President Obama, although by not as big a margin as they did in 2008.  It has been said that when you’re young if you are not a Liberal, you have no heart, but if when you’re old you’re still a Liberal, you have no head.  It has been common for young adults to vote primarily Democratic.  The left-leaning college environment where every department except for business is staffed primarily by Liberal professors is certainly also a factor.

Young voters may want to reexamine, however, whether voting for expanding government and more government “freebies” is really in their best interest.  Remember that the government does not have any money.  Anything they provide is paid for through taxes, and while high income earners may pay more individually, there just isn’t enough high income earners to pay for everything.  Most of the time it is the middle-class tax payers who pay for the majority of things.  The question is whether you really want to give you money to the government and then do what they require you to do to get your money back.

The most critical issue is the national debt and the deficit.  By the time that George Bush left office, we had a national debt of about $12 Trillion.  That debt has grown by another $4 Trillion under President Obama, and now sits at $16 Trillion.  Given another term, the debt is expected to grow by at least another $4T, and may grow by as much as $8 T as Obamacare kicks in.  If the debt gets up to about $20 Trillion, it will roughly equal the entire GDP of the nation.  This means that everything produced by the nation over a year will not be enough to pay off the debt.  The interest payments on the debt will become so burdensome that they will start to approach the levels of the entire Defense budget.  With such a huge debt burden, it will be difficult for the government to pay for anything else – you will be paying for yesterday’s roads and schools and state dinners and not have any money to pay for tomorrows roads and schools.  This means that you will be paying your taxes but be getting little for them.   Get ready to pay again for roads, national parks, and schools out of your pocket after you pay taxes.

Obamacare is also not advantageous for the young.  You will probably rarely need to go to the doctor before you are in your late forties or fifties.  I doubt that most people in their twenties and thirties spend more than a couple of hundred dollars per year for medical services.  The best healthcare plan for you would be to put savings into a medical savings account and then build up a big balance for when you start to need healthcare.  A major medical policy could be had for maybe a couple of thousand dollars per year that would cover the odd appendicitis or other unlikely hospitalization cost.  With Obamacare, however, you will be  spending ten thousand dollars a year or more on insurance no matter what since you will be paying for the healthcare of older individuals, and then need to hope that those who come after you will pick up your healthcare.  This will make it almost impossible for you to save up money yourself, meaning that you will need to take whatever the government provides.

The Democratic Party also likes to say that they are for the working person, and you may consider yourself a working person.  The trouble is that by the “working person,” they typically mean the unions.  When you are a member of a union, seniority means everything.  Most unions will gladly accept layoffs before they accept cuts to benefits.  Because the most junior people are laid off first, this means that the young are the most likely to lose their jobs.  While it is great to be in a union if you are the senior person, the low man on the totem pole gets the worst shifts, gets laid off first, and gets rehired last.  Also, because wages and benefits are higher, companies are usually not able to hire as many people.

So maybe you’ll start your own company.  As you know, the Democratic Party is big on regulations.  While this may sound great, since we all want to be protected and have clean food, many regulations are put in place by existing companies to prevent other people from entering their markets.  For example, recently a regulation was passed that everyone doing contractor work was required to have special lead paint remediation training.  While a big company can afford to send all of their employees for special lead paint removal certification classes, it is now very difficult for someone to start a contracting business since they don’t typically have the money for this type of certification.  As another example, there are regulations in some states that require hair stylists to take large numbers of classes and pay expensive fees for certifications.  Existing stylists were exempted.  This regulation keeps new people from entering the field.

Finally, efforts to privatize Social Security and Medicare have been successfully thwarted by the Democrats.  There is a huge number of individuals who are starting to retire and withdraw Social Security and Medicare benefits.  It is expected that these benefits, especially Medicare, will soon require funding in the tens of trillions of dollars.  Given that the voting block that will be receiving these benefits will greatly outnumber the number of younger, working voters, it is likely that you will see much higher taxes to pay for these benefits and not be able to do anything about it.  If Social Security and Medicare had been privatized and some of these individuals had been able to start to put some of their funds into private accounts, it would have lessened the amount that you will need to pick up in the future.  Note that the chances of anyone under fifty receiving any benefits from these programs is very low since they are expected to go bankrupt long before young people are eligible to receive benefits.

So, you are voting to rack up the debt further, pay huge amounts for other people’s healthcare, expand union power so that you will be the first ones to get laid off and the last ones rehired if you can find any jobs, create regulations that will keep you from starting a business, and become slaves to the elderly to fund their retirement and medical expenses.  Worst of all, you are voting to pay so much of your earnings in taxes (if you are able to get a job) that you will never have anything left over to save and invest for yourself.  Why exactly does this sound like a good idea to you?

Please contact me via vtsioriginal@yahoo.com or leave a comment.

Follow me on Twitter to get news about new articles and find out what I’m investing in.  @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

One comment

  1. Here in Canada, I kept asking people why they like Obama and they would say because they don’t like Romney. When I would follow up and ask them which of Obama’s monetary policies they liked, they would have no answer.

    It’s scary to think how many people out there probably vote without even knowing what the candidate stood for. The fact that almost 100% of minorities voted for Obama is a case in point. Do you really think 100% of minorities have the same political views, or are they just voting for the guy that reminds them most of themselves?

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