Furchtgott-Roth to Moneynews: Obama's War on Youth Is Biggest Scandal in Washington

Wednesday, 29 May 2013 06:54 AM

By Dan Weil and John Bachman

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What's the largest scandal in this country — the IRS targeting of conservative groups? The Obama administration's handling of the Benghazi attack? The Justice Department's seizure of Associated Press reporters' phone records?

None of the above, says Diane Furchtgott-Roth, a senior fellow at the Manhattan Institute — it's the war on youth.

"It's a bigger scandal because it has more long-term consequences," she tells Newsmax TV in an exclusive interview. "These young people who can't get jobs today, they're going to have trouble in the future. Their entire earning path might be lower. They're going to have trouble funding their retirement account."

Watch our exclusive video. Story continues below.



The unemployment rate is about 13.1 percent for people aged 20 to 24, and over the past year only 230,000 jobs have been created for that group, Furchtgott-Roth explains.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

"Plus the age group on average has a lot of student loan debt, and here they are graduating, stuck with the debt and unable to get jobs. We need to do something about it."

Surprisingly enough, the majority of jobs are actually going to people 55 and older, Furchtgott-Roth notes. The labor force participation rate for that group is rising steadily, while the rate is stable or declining for younger age groups.

Moreover, many of these older people already have jobs. "Many of them are deciding they are going to work longer because of the uncertainty in the economy, the state of their retirement accounts," Furchtgott-Roth maintains.

"Also, their life spans are getting longer. So if you're going to live to about 85 or 90, you don't want to be retiring at 57."

Moreover, women are playing a more prominent role in the work force. "There are many women who have invested in human capital, getting law degrees, medical degrees," Furchtgott-Roth states.

"They want to continue to work also. So because of this, we don't have the same number of people dropping out of the labor force as we did before."

The solution is to focus on total job creation, she says. And how to do that?

"We need to think about lowering the corporate tax rate, which is now the highest in the OECD [the Organization of Economic Cooperation and Development], to attract capital back into the United States," Furchtgott-Roth explains.

"The same week we were hearing about these IRS shenanigans, we also heard from Apple, which said that because of the high rate here in the United States, they had a lot of capital offshore. Well, what we want is that capital to come back."

U.S. companies have $1.7 trillion in cash stashed overseas they could repatriate and then invest here at home, Furchtgott-Roth notes. "That would help create jobs."

Another way to boost employment would be for President Obama to approve the Keystone XL oil pipeline and avoid government restrictions on high-growth hydro-fracturing for oil and gas, Furchtgott-Roth adds. The states should take care of it, she says.

"If you look at North Dakota, it has a substantial amount of hydro-fracturing. The unemployment rate is the lowest in the country — a little over 3 percent.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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