Deficit spending and sprawling national debt leave a problem for young Americans
Posted on April 21, 2008
Thomas Jefferson once wrote that, above all other things, “the public debt is the greatest of the dangers to be feared.” Unfortunately, our elected officials in Congress don’t seem to share Mr. Jefferson’s concern. For years, our government has been spending money way beyond its means and as a result, we’ve built up almost $9.5 trillion of debt, which continually increases at a rate of about $20,000 per second. In addition, our government is committed to pay $40 trillion in Social Security and Medicare benefits to baby boomers when they retire, putting the bill near $50 trillion.
To better understand the nature of this huge economic problem, it’s important to look at two interrelated causes: the deficit and the debt itself. America’s short-term problem is that we frequently run a budget deficit — the government spends more money than it takes in — which leads to the much bigger problem of national debt. Every time there is a deficit, the government must borrow money to cover all of its expenses, often from foreign banks and governments, which then adds to the national debt.
Over the last several years, America has been running up record deficits and, as a result, our government has been borrowing money at an unprecedented rate that is unsustainable over a long period of time. This makes our national debt a ticking time bomb that could trigger a major economic crisis this country hasn’t seen in a very long time.
But none of this is new information. Our leaders have known about the danger that our economy is in, yet they have chosen to do nothing about it. Today, it is rarely mentioned by politicians or the mainstream media.
Why?
Well first off, it’s an issue that’s difficult for most people to wrap their minds around. It’s tough for the average American to relate to really big numbers that go into the billions and trillions. Instead, to understand just how large these numbers are, try this: a million seconds is 13 days, a billion seconds is 31 years and a trillion seconds is 31,688 years.
The other reason it’s not covered is that the effects of the coming crisis will not become visible for about another 10 years.
According to the latest Social Security and Medicare Trustees Report, Medicare costs will begin soaring over the next few years and it will officially go broke in 2019. Social Security is in better shape overall, but the government will begin paying out more benefits than it collects in taxes in 2018, with the system going broke entirely in 2042.
When the report was released, Secretary of the Treasury Henry Paulson told reporters at a news conference that “without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America’s future prosperity.” In other words, if nothing changes then every single tax dollar collected by the federal government will be used to pay for only those two programs, with no money left over for anything else.
This should be the most important issue for all of the young people of this country. It is not our parents, but us who will suffer if changes are not made soon. Under the status quo, balancing the budget in 2040 would require either a 60 percent cut in federal spending or an increase in federal taxes to twice today’s rate.
Ultimately it will be up to us, JMU students, and the rest of our generation to figure out how to save our government’s financial future as our current leaders have proved unwilling to change the way they spend money and make promises. It doesn’t look too good right now. As it stands, we will be spending the rest of our lives paying off our parents’ debt — and who knows if Social Security and Medicare will even be available to us when we get old.
What makes this country so great is that whenever it faces a challenge, America always finds a way to overcome it. As we face a looming disaster that could threaten our comfortable way of life, there is no reason to believe that we can’t overcome this one too.
Tony Spadaccia is a freshman political science and business management major.
