America’s Math Problem

by
” The budget will increase federal spending by close to $300 billion over the course of the next two years, with military spending set to increase by $165 billion and non-defense spending by $130 billion. This is bad news for Americans, in particular young Americans who will have to foot the bill for the future costs of these decisions.” Photo Credit: Committee for a Responsible Budget

Last Friday, the U.S. Senate passed a two-year budget deal in the early hours of the morning, which was subsequently signed by President Donald Trump. The budget will increase federal spending by close to $300 billion over the course of the next two years, with military spending set to increase by $165 billion and non-defense spending by $130 billion. This is bad news for Americans, in particular young Americans who will have to foot the bill for the future costs of these decisions. Unfortunately, it is also young Americans who pay the least attention to these sorts of issues. Here’s why it matters.
In the simplest terms, we spend more than we have the money to pay for. Many believe that the Federal deficit—the amount by which our government’s expenditures exceed its tax revenues—does not matter. The argument is that we can just make up for this deficit by borrowing money; generally speaking we do not have an issue borrowing at favorable rates because we are trusted to pay back our debts. We have the largest economy in the world, so this is not a crazy assumption. I generally agree that it is okay to run a deficit, but within reason. We start running into problems when the deficit-to-GDP ratio gets too high, or the trend continues in the wrong direction. This is exactly what will happen when we combine this spending deal with the latest round of Republican tax cuts. As things stand, by 2021, we will be facing budget shortfalls above 1 trillion dollars. With entitlement—Social Security, Medicare, Medicaid—reform unlikely in this political climate and being as close to the midterm elections as we are, this means there is very little hope of reigning in federal spending any time soon. While we may not face the worst consequences in the near term, we are extending an already dangerous standard for fiscal irresponsibility.
Don’t worry, it’s not just the federal government. Many state governments are coming to the realization that they are on the hook to pay for things they can’t afford either. Connecticut’s most recent state budget positions the state to run a deficit of $3.5 billion over the next two fiscal years. New Jersey has a debt per capita of $4,937, nearly three times the national average. Illinois and Kentucky are in the same boat. There are two huge problems for these fiscally imploding states that the federal government does not deal with: they cannot print money, and their richest residents and businesses—the ones that states raise crucial revenue from in the form of tax dollars—can just move if taxes get too high. They are beginning to do so.
If we continue on this track, relatively soon we are going to have a Federal government in fiscal crisis and state governments, already struggling to fund their liabilities, that will receive less state aid. This is a math problem, and it is a problem for all of us — Republicans, Democrats, people of all ideological affiliations and walks of life. It will be our responsibility to pay for this, just as soon as we’re done paying our student loans. If you think Bernie Sanders is going to relieve us of our college and healthcare payments, that’s fine, just stack it on top of the national debt. We’ll pay for it eventually.
The only way out is if we start electing politicians who are fiscally responsible. I suppose the reason that this problem doesn’t have more purchase amongst our age cohort or even the general U.S. electorate is because it’s not directly related to the culture wars. Whatever your stance on all of these issues we love to debate, you should put them to the side for a second, or at least also demand fiscal responsibility from your elected officials—regardless of whether it says (R) or (D) next to their name. If young voters do not begin to care about spending issues and turnout on election day, this problem will get worse. Elected officials will continue to appease the aging generations ahead of us and pass the burden right on down.

Drew Phillips is a Political Science / Economics double major and a member of the Goucher men's soccer team. He writes for the Q in an attempt to provide as reasonable a perspective as possible in regards to issues that affect the Goucher Community.

Leave a Reply

Your email address will not be published.

*