“Blessed are the young, for they shall inherit the national debt.” -Herbert Hoover
Imagine your friend makes $28,000 a year, but he or she is spending $38,000 a year, taking up loans and racking up credit card debt to the tune of $167,000. They don’t have a plan to get a better job, a retirement plan, nor any way to pay the bills. You would say your friend is being irresponsible, right? They have a problem, and a big one.
That’s exactly what our federal government is doing, with our money.
Over the past 12 years, the United States national debt has increased from under $6 trillion to over $16 trillion. If you break that down by taxpayer, it’s almost $150,000 per taxpayer. Over the past few years, the government has spent $1 trillion more than it has collected in taxes, each year.
Don’t forget, we pay interest on that debt. By 2020, we will owe $900 billion every year in interest payments alone. This is our money that is being wasted, because the government refuses to cut back a bloated budget. This is the earnings of the Millennial generation, my generation, and the children of my generation’s money.
It’s not fair to me, it’s not fair to my children. It’s immoral that our government would refuse to be responsible with our money and place an unfair burden on the future generations. The laws of economics provide that debt spent at this rate will inevitably lead to hyperinflation, devaluing of the currency, and economic instability. The government is supposed to be protecting our money, not wasting it.
Recent studies have also said that the government is squandering hundreds of billions in repetitive or wasteful programs, but the biggest budget items are entitlements. Social Security and Medicare. These programs are important and necessary for America, both today and in the future, but how are they going to be affected?
In 2010 the Congressional Budget Office estimated that unfunded obligations for Medicare and Social Security are $25 trillion and $21.4 trillion respectively. Both programs are economically unviable.
The Peter G. Peterson Foundation of the 2011 Social Security Trustees’ financial report found that: “Social Security is now operating with a permanent, annual cash flow deficit. Within seven years, the Trustees estimate that Social Security will not be able to pay full disability benefits scheduled under current law. Its trust fund will be exhausted in 2018. ”
Meanwhile, the chief actuary for Medicare, Richard S. Foster, state that the shortfalls facing Medicare are even worse than reported by Medicare trustees. The trustees reported that Medicare will be unable to meet its obligations starting in 2024.
If we don’t reform these programs, inflation and economic peril will threaten the civil society. A government cannot keep spending money it doesn’t have indefinitely without the laws of economics having the last word.
So what can be done?
First of all, we must cut away the waste. There are several repetitive and unnecessary programs that can easily be eliminated. Future administrations must also work to return authority to the states.
Secondly, in order to save Social Security and Medicare, they must be reformed. Gradually shifting to private sector choices and more of a needs-based format, over time, should be infinitely preferable to a sudden and destabilizing decrease in payments.
Ideally, a balanced budget amendment that limited government spending at about 20% of GDP would gradually eliminate the debt. Current political trends indicate that Congress would be unwilling to pursue a constitutional amendment that would put such limits on its political power. A state convention to propose constitutional amendments may be more realistic.
Lastly, and most importantly, we must implement policies that grow the economy. More jobs means that more tax revenue is going to the government so that we can pay off our debt. To do that, job-killing government regulations and high income taxes must be cut back.
If we do these things, we can ensure that the American people remain free from both an overbearing government and burdensome debt.
Follow Garrett Humbertson on Twitter @G_Humbertson.