Rolling in debt
In September 2017, the U.S.’s national debt reached an impressive milestone: the national debt exceeded $20 trillion for the first time ever. The “bipartisan” effort to cross that memorable threshold passed both houses of the U.S. Congress by a ratio of over 3-to-1: 80-17 in the U.S. Senate and 316-90 in the U.S. House of Representatives.
Democrat-Republican borrowing remains in high gear, and, less than a year later, the accumulated national debt now exceeds $21 trillion. On a per-person basis, that number puts the U.S. in the top five most indebted OECD countries, with each individual’s share of the debt being more than US $60,000. (As an aside, an interesting tool for viewing other ways to break down the national debt can be found at the U.S. debt clock site.)
“No end in sight”
The recent Congressional Budget Office report projects that the “[d]ebt held by the public, which has doubled in the past 10 years as a percentage of gross domestic product (GDP), [will approach] 100 percent of GDP by 2028.” Another $750 billion in borrowing to pay expenses is expected for the rest of 2018, and deficit spending is expected to exceed $1 trillion next year.
There is, in short, “no end in sight” to the Democrat-Republicans’ hunger for debt.
Put it on the millennials’ tab: inter-generational exploitation
Two of the most useful concepts in economics are those of an “externality” and a “moral hazard.” An externality occurs when the consequences of a person’s behavior—its “costs and benefits”—get imposed upon or enjoyed by someone other than the person engaged in the behavior. A moral hazard occurs when a decision-maker doesn’t fully bear the risk of his or her decisions and will, therefore, tend to discount or completely ignore that risk.
These two dynamics are fundamental drivers of the Democrat-Republicans’ credit-card mentality. Leading Democrat-Republicans, such as their top three candidates in the most recent Presidential elections, have little financial incentive to worry about paying back the national debt or making the mounting interest payments on that debt: Hillary Clinton is 70; Donald Trump is 72; and Bernie Sanders (an “independent” Senator who ran for Democrat Party nomination and ultimately endorsed Clinton) is 76 years old. These individuals, like influential members of Congress (for instance, Senate “majority leader” Mitch McConnell (76) and House “minority leader” Nancy Pelosi (78)), will be out of the workforce when the full brunt of the national debt is felt.
But these individuals do have an immediate political incentive to avoid raising taxes or cutting spending, because fiscal responsibility would involve hard choices that would hurt their popularity—and thus hurt their chances to get elected or re-elected. To use econo-speak, the actual cost of government debt is largely an “externality” to the older generation, and this generation is, accordingly, in a classic “moral hazard” situation with regard to government spending: this generation can get the benefit or reward without the cost or risk.
Politically, in short, it’s more expedient for Democrat-Republicans to say “it’s someone else’s problem” than to make the hard choices.
But those hard choices will eventually have to be made, and the “millennial” generation—now saddled for life with a debt that they never willingly incurred—is that “someone else” to whom the problem has been left. Today’s young people will be the ones who have to make those hard choices. Millennials, and generations of Americans who have not yet been born, have been left holding the bag of unchecked Democrat-Republican profligacy.
Unfortunately, a legacy of government debt is not the only bag millennials have been left holding. Young people now entering their most productive working years are already facing high student loan debt and increasing national and global economic inequality. At the same time, accelerating climate change and environmental degradation will increasingly constrain younger and unborn generations’ economic options over the coming decades, as millennials will be forced to remedy or cope with the environmental consequences of prior generations’ choices. Natural resources, such as uncontaminated groundwater, are increasingly scarce, while the global human population has exploded to several times what it was when Democrat-Republican hegemony was established in the U.S.
This combination of factors makes inter-generational exploitation—let’s be frank and simply acknowledge that that’s exactly what’s going on here—even more severe. The burdens on young people and future generations are increasing at the same that the resources, space, and flexibility needed to carry those burdens are decreasing.
The U.S.’s ruling bloc could, if it wished, buck up and pay its own way. That’s what adults are generally expected to do. Thomas Paine analogized such a situation to parenthood: a bad parent says, “give me peace in my day,” thereby leaving trouble to the children. By contrast, a good parent says, “if there must be trouble, let it be in my day, that my child may have peace. And this single reflection, well applied, is sufficient to awaken every [person] to duty.” [emphasis added] Meanwhile, as for the bad parent, the “blood of [the] children will curse [the] cowardice [of one] who shrinks back at a time when a little might have saved the whole.”
A politician in the model of Paine’s good parent recognizes that costs can be cut, processes streamlined, and, if needed, taxes raised. Fiscal responsibility—at a minimum, merely living within one’s own means and paying one’s own expenses—is not literally impossible, even for Democrat-Republicans.
But paying one’s own way requires difficult—politically difficult—choices to be made, and the Democrat-Republican bloc would prefer to kick it down the road. For young people, however, there is no “down the road.” Millennials and the yet-to-be-born generations will have no choice but to deal with the problems intentionally bequeathed to them.