Druckenmiller and Canada on the Next Generation’s Growing Debt Burden

In light of this month’s budget and debt ceiling fiascos, a recent event hosted by Brown’s Common Sense Action (and co-sponsored by yours truly, BPR) seems all the more relevant. Entitled Breaking Promises: the Young’s Declining Share of the Economic Pie, Tuesday’s talk brought together two men from opposing sides of the aisle; Stanley Druckenmiller, former president and chairman of Duquesne Capital and lead portfolio manager for George Soros’ Quantum Fund, and Geoffrey Canada, a renowned educator and social activist and founder of the Harlem Children’s Zone.

Both men are united in their belief that the most pressing challenge facing future generations is a rising and seemingly insurmountable national debt. They first posed this dilemma in a Wall Street Journal op-ed last February, writing that “the growing debt burden threatens to crush the next generation of Americans.” Druckenmiller, Canada, and Kevin Warsh, a former Fed governor with whom the article was written, argue three main points. The first is that America’s current system of entitlement programs, particularly Social Security, will be entirely unsustainable in the future. The second is that America’s growing debt is a decidedly bipartisan problem, with neither party (or particularly the majority party) willing to take the risks necessary to alleviate spending levels. The third is that policy makers seem intent on representing a few moneyed interests at the expense of the majority of America (something I find nearly impossible to disagree with).

Druckenmiller and Canada focused largely on the first issue during their talk at Brown — my live blog of the event broke down the detailed issues and figures discussed. It was an engaging call to action on an issue that has become wholly politicized, and was certainly not to be mistaken for an affirmation of austerity. Those on the right have a tendency to immediately turn talks of debt reduction into diatribes against government transfers of any kind, while those on the left often refuse to accept the idea that many government programs, perhaps Social Security most of all, are in dire need of restructuring.  Theirs was an argument not for austerity but for efficiency, and this issue is certainly going to loom large, perhaps in 2016, as an entire generation of Baby Boomer Americans enters into retirement.