America’s fiscal path is unsustainable!
Last year the national debt reached nearly $15,000,000,000,000 (trillion) and the government ran one its largest budget deficits on record at $1,290,000,000,000. If you include all the governments’ obligations such as Social Security, Medicare, and Medicaid the real tab is over $76,000,000,000,000.
In 2010 over 60% of the nation’s budget was consumed by Medicare, Medicaid, Defense and Social Security. All these programs are growing at unsustainable rates. On our current path federal revenues will be completely consumed by Social Security, Medicare, Medicaid and interest on our debt, which will rise from its current level of 6% of the budget to around 20%. This will happen somewhere around 2025. Leaving us to either drastically cut all these programs or borrow for everything else.
Congress has been very good at spending your money over the years and they would like you to believe that they have been very responsible in their spending. The truth is that they have not. The government has no idea how it’s going to pay back all the money it has borrowed and owes to its citizens. They’re expecting you to pick up the tab for them. Young Americans between the ages of 19-33, also known as the Millennial generation, are going to be confronted with a mountain of debt created by their parents and grandparents. If Congress does not act now by restricting spending and putting in place a plan to deal with the money it already owes you can expect see a number of things in the future.
- Income Taxes 50% or more – Already we are starting to see concern from some of America’s largest creditors about the mounting debt in the US. As their concern grows so too will the interest rate the US has to offer on its bonds in order to get countries to buy our debt. In addition they will be less willing to buy such large amounts of our debt. The government will have to make up the difference somewhere. Their place of choice… Your wallet! Hope you don’t want a new car or house because when you reach your parents’ age half your paycheck will go the federal government.
- Loss of Social Programs – If you support social programs and think the government should do more, get ready for big cuts. As more Americans retire and draw on Social Security and Medicare the ability of the government to spend on discretionary programs will greatly decrease. Add to that large increases in the amount of interest we have to pay on our debt and you will be left with almost nothing for discretionary programs.
- Loss of American Power - A good portion of the power of America comes from its position as an economic leader in the world. For now, the dollar is the world reserve currency and the world still sees out debt as a good, low-risk investment. However, as our debt increases they will start to lose their confidence. In fact, it’s already happening! There have been pushes in recent month by countries like China to move away from the dollar as the reserve currency.
- Decreased Future Opportunity – With so much of the future budget going to interest, Social Security and Medicare the ability of the federal government to create jobs or fight off a recession will be greatly diminished. They just won’t have the money, nor will they be able to borrow it.
These are just some of the consequences associated with the overwhelming tab left by generations before us. Some studies conclude that we will lead a quality of life that is 1/3 lower then our parents.
It’s time that we band together and tell Congress that we will not stand for them spending away our future. Please join this us in demanding that Congress begin to confront the situation at hand and put in place a plan to deal with the wall of debt facing our generation.Print