First, you should apologize to your children.
You should apologize to them because, if you’re my age, you came into the world when the national debt was about $100 billion. That was a lot of money back then, more than any generation had ever owed. But when your children came into the world, they inherited a national debt of around $3 trillion. That’s 30 times more, and it happened on your watch.
So the least you could do is apologize.
And it’s only getting worse. Democrats recently approved raising the debt ceiling yet again, to more than $12 trillion. It’s a burden future generations will shoulder for decades.
Your descendants may have had plans for their money that didn’t involve paying off Chinese and Japanese investors in US government securities, but too bad. They just had the rotten luck to be born after a few decades of unconscionable budgetary recklessness by their elders. Hey, nobody said life was fair.
How did this happen? Good parents know the risks of debt. They work hard to send their children into the adult world free and clear of financial obligations.
No one wants their son or daughter to start out in life deep in debt. And yet, that’s what’s happened.
Part of the problem is the difference between private debt, incurred between consenting adults, and public debt, incurred through the political process. We use the same word to describe them, but they are as different as night from day.
When a private citizen goes into debt, the money must come from someone else. Terms must be agreed upon, along with the “discount rate”: The premium required because a dollar today is worth more than a promised dollar tomorrow. People who loan money may also ask for something in temporary exchange, to guard against the risk they won’t be paid back. That’s called “collateral”, and it serves the important purpose of reducing the possibility that people will borrow more than they can afford.
None of this happens in public debt. There is no agreement between consenting adults, no discussion of terms, no collateral to guard against risk. Instead, there are simply people who enjoy the benefits (those of us who are alive now), and people who will pay the costs (those who will be alive later).
It doesn’t have to be this way. Our borrowing is driven by mandatory entitlement spending. But laws of man aren’t laws of nature. What man has made, man can undo. We just have to let political candidates know that they can win if they make cutting spending and cutting the debt an issue in their campaign. To do this, they will have to go for the sacred cows of federal spending: Social Security, Medicare, Veteran’s Benefits, and pretty much every other area currently off limits in the federal budget.
For all our talk of children being America’s future, we sure don’t walk the walk. The tragedy of public debt is its ultimate demonstration of what economists call “rent seeking”: The transfer of wealth from the politically weak to the politically powerful. In this case, those who benefit are the most politically organized class in America: Voters. Public debt bestows benefits on people who are privileged with voting rights, at the expense of those too young to wield them. It may not be exactly like child abuse, but it’s darn close.
If this bothers you, and you’ve got kids, go apologize to them now.
We taught them to clean up their messes, while making an awful mess of things ourselves. But if you want to do more than apologize, write your elected officials. Tell them that you’re willing to accept cuts in your favorite entitlement programs, even ones that benefit you directly, if it will help reduce the crushing debt on your kids.
Tell them you’ll vote them out of office if they don’t.
Then show your kids the letter. That way, after you’ve gone, they’ll know you tried. And maybe, instead of perpetuating the debt burden on the next generation, they’ll take the problem a little more seriously than you did and leave your grandchildren with a little less debt than you left them. That’d be even better than an apology.
Dr. Fagin is a Research Associate at the Independence Institute; his column is published every other Thursday. Dr. Fagin’s views are his alone. Readers may contact him at email@example.com