A Debt Burden for Future Generations

One of the life lessons I continually strive to teach my children is this – don’t get into debt. A modest home mortgage is usually acceptable, but I urge them never to make a credit card charge that they can’t pay off at the end of the month, and not to take on student debt loans which will saddle them with debt precisely at a time when they can’t afford it.

Something even worse than taking on excess debt would be to take it on with no intent to pay it back – but instead, to pass the debt burden on to my kids. What kind of parent would do something like that? Hopefully no one you know.

But this is precisely what the government is doing with yet another spending measure. Oh, they will tell you that the Congressional Budget Office claims that the bill will reduce the deficit. But did you know that the House can send the CBO’s study back to them as many times as they need to – and change the assumptions used until the “facts” fit the story they want? It’s true. And you will note that the CBO’s report was due out last week, but the release kept getting delayed until it was finally produced yesterday, with numbers that Nancy Pelosi said she “loved”? What I want to know is this – what did the CBO come back with the first time? This is no different than hiring a crooked accountant to cook the books for a company until it looks profitable – except that the Congress-CBO game is perfectly legal. Such is the system we live in – but no one will talk about this rule.

The graph above shows that we cannot afford the government programs that we already have in place past the year 2035, and this is only taking into account Medicare, Medicaid, and Social Security - three government programs which have been run with poor financial discretion to date (can you say “bankrupt”?). I'm fairly certain that Medicare wasn't sold to the people as a deficit-producing program - but that is exactly what it has become. Add to this the certain deficit that bailout bills and healthcare will accrete, and the conclusion that I draw is that our children will be born into debt slavery. It’s not fair to them – they never had a choice.

Thomas Jefferson suggested a unique approach to the issue of taking on debt. Jefferson believed strongly that any new government debt should be paid off by current taxpayers, so as not to burden the next generation. He favored limiting any government debt terms to nineteen years – precisely to keep the repayment in the generation which enjoyed the benefits. What a brilliant idea! If only we had adhered to that concept after Jefferson proposed it!

Current-generation debt, not next-generation debt…I could live with that. As long as the CBO is obliged to tell the truth.