Born Yesterday? Here’s a Glimpse of Your Future.

A new policy paper released by House Republicans late yesterday should create quite a stir among those Americans already concerned about whether or not they will be able to leave their children with a better standard of living than they themselves enjoyed.  I don’t know about you, but I’m barely scraping by.  I worry daily about how and when the lower cost of living here in the Lowcountry will finally allow us to catch up in the short term — when I think of my daughter and what awaits her as she grows and becomes a strong, independent woman, it keeps me up at night.

Truthfully, it’s 1:00 a.m. and I should be in bed already.  Having read yesterday’s work product from the House GOP, however, instead of counting sheep tonight I may need to shear the little buggers and sell the wool.  Let’s get to it, shall we?

First, they start with a choice quote from House Speaker Nancy Pelosi:

Addressing the challenge of our national debt requires bold leadership and tough choices from members of both parties.  Our children and grandchildren are counting on us to chart an effective course toward responsible stewardship of the public purse.

I know.  I had to read it twice, too.  As it turns out, Pelosi said those words on March 24 of this year, approximately two months after her Democrats voted to increase our national debt ceiling by $1.9 trillion to a maximum of $14.3 trillion, and about one year after President Barack Obama promised to “ban all earmarks” and then signed into law his very first spending bill — replete with nearly 9,000 earmarks totaling $7.7 billion in taxpayer money.

Next in the release, House Republicans cite a report from Sunday’s Wall Street Journal, detailing how the Democratic Party leadership in Congress has, in just nineteen short months, contributed an additional $4.4 trillion in deficits to the ten year budget projection put out by the Congressional Budget Office.  Despite claims of fiscal responsibility from the Democrats, they write, nothing changes.

The harmful effects of the Democrats’ runaway spending on growth and prosperity are vast.  Crowding out of private investment, growing interest payments, and dependence on foreign competitors are all consequences of the federal government’s profligate spending and debt.  Additionally, the debt explosion created to fuel Washington’s recklessness has a personal impact on every American: it is ultimately borne by every man, woman and child in the nation.  According to CBO and Census Bureau long-term estimates, the amount of debt placed on the backs of children born today is about to explode.  If nothing is done, our generation will have the sad legacy of being the first to lower the standard of living of the next generation.

Finally, they get to the reason my head may hit the pillow in a few minutes, but my mind will likely continue working until dawn.

A TIMELINE OF THE PERSONAL PUBLIC DEBT BURDEN FOR A CHILD BORN IN 2010

2010:  By the end of 2010, CBO predicts that the total U.S. debt held by the public (as opposed to the gross national debt which includes inter-governmental holdings) will be $9.05 trillion.  That means that children born in 2010 will start life with a personal share of the public debt equaling $29,178.

2020:  When children born today celebrate their tenth birthday, their share of the nation’s public debt will have already increased by 70 percent to reach $49,694 per child.

2023: By the time they are 13 years old, their share of public debt will have doubled to $58,971. This is also the first year that per capita Gross Domestic Product (GDP) will be surpassed by the per capita share of the public debt for every American.

2028: When those children born in 2010 reach their 18th birthdays, they will have inherited an individual debt responsibility of $80,650.

2032: As children born in 2010 begin to graduate from college and enter the work force, their public debt responsibility will have tripled.  As they begin their adult lives, the next generation will already be saddled with $103,826 of the government’s debt. And, unfortunately, as interest payments and entitlement spending increase more rapidly, their share of the nation’s debt will begin to grow at an accelerated rate.

2040: At the age of 30, their public debt responsibility will be approximately $166,500—an increase of 471 percent from the time that they were born.

2050: If government spending is not immediately restrained, our nation’s public debt is projected to increase from $9.1 trillion in 2010 to $122.8 trillion by 2050.  As a result, when children born today reach 40 years old, their share of the U.S. public debt will be $279,738—an increase of 859 percent above what it is today.  For a family of four, the total household debt share would be approximately $1.119 million.

THE OUTLOOK FOR THE NEXT GENERATION: DEBT EXPLODES AND PROSPERITY STAGNATES

  • According to estimates from CBO and the Census Bureau, per capita GDP in the U.S. is approximately $47,000 in 2010, which is $17,883 more than the current level of public debt per person ($29,178).  Reckless Washington spending will soon send the individual public debt burden skyrocketing past per capita GDP as spending and debt replace private economic growth.
  • In 2023, the amount of U.S. public debt shared by every man, woman, and child in the nation will exceed their share of our nation’s GDP as debt rapidly out paces growth.
  • While the individual public debt burden is projected to increase by $250,560 over the next 40 years, the GDP per American is only estimated to grow by $34,258.
  • Over the next 40 years, estimates predict that spending will cause the debt held by the public to increase by 859 percent for every U.S. citizen.  By comparison, per capita GDP is projected to grow by only 73 percent over the same period.
  • Unless drastic actions are taken to reduce spending now and in the future, debt will dwarf growth and future generations will be less prosperous than those that preceded them.

Inevitably, when confronted with reality, our friends on the other side of the political aisle will bring up congressional spending under former President George W. Bush.  In fact, President Obama himself laid blame at Bush’s feet back in January 2009 before he even took office, saying that “we’ve got trillion-dollar deficits for years to come, even with the economic recovery we’re working on.”

How prescient he was. Obama’s budget deficit for 2009 was $1.41 trillion, while in 2010 it exceeded $1.5 trillion.  In fact, according to a report released earlier this year by the CBO, during the dozen years in which the House was under GOP control the average budget deficit was roughly $104 billion. Since the Democrats regained control following the mid-terms in 2006, however, that average has jumped to a monstrous $1.1 trillion.

But wasn’t much of the GOP’s control during the Clinton years, your liberal friends and colleagues will likely ask? Weren’t the Democrats in control during Bush’s expensive second term? Absolutely, but remember — Article I of the U.S. Constitution specifically holds that all legislation begins in Congress. In other words, the president cannot spend anything not expressly authorized by Congress.

Folks, I’ve stood on the precipice of personal financial ruin, caused in part by extrinsic circumstances but also because of our own poor decision-making.  I also know that, across the country, there are families just like ours who likewise have their bills spread across the kitchen table, figuring out who needs to be paid now and who can wait.  For those families and for my own, the way to foment a financial recovery in our own homes is the same way it needs to be done inside the Beltway.

Here, on Main Street, we need to cut back on spending, excising frivolities from and ratcheting back our budget when and where we can.  We need to find a way to bring in more revenue, whether it be from taking that table-waiting job at Applebee’s at night or putting in a few extra hours at work.  And we need to do everything in our power to insulate ourselves from exterior uncertainty as well, rethinking perhaps what we’re doing with whatever money we’re able to put toward a meager savings.

In Washington, the answer is much the same.  Cut spending by eliminating earmarks and by implementing measures like Congressman Mike Pence’s Spending Limit Amendment.  Increase revenue by cutting taxes across the board, by making the United States of America a worldwide repository for business growth rather than a mere cost-prohibitive facilitator of growth overseas in places like India and China.  And, gosh darn it, we need to get serious about true energy independence, insulating us from the political and socio-economic tides encountered due to the energy trade.

About six hours from now, my daughter is going to walk into my room, lick her pinky finger, and place it into my ear while sing-songing the words “Daaaaaaaddy, wake up.”  She’s four years old.  And she’s already $30,000 in debt.

While I continue to be impressed by the work being done by the Pence-led House Republican Conference, they sure aren’t doing much for my sleeping habits.

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Comments

  1. No hope says:

    Whiskey Rebellion

  2. Chuck in San Diego says:

    Jeff,
    Minor typo:

    “How prescient he was. Obama’s budget deficit for 2009 was $1.41 trillion, while in 2010 it exceeded $1.5 billion.”

    Shouldn’t that last figure read a “trillion” ?

  3. Jeff Schreiber says:

    Chuck — thanks!

    It’s a sad thing when we automatically assume “trillion.”

    Jeff

  4. Wahhh says:

    This baby photo looks like me after the Republican primary 2008, and election night 2008. We were spanked.

  5. Non-denominational money says:

    9:12, it’s all just funny money now. No need to say billion, or trillion, just say “$1.5 funny money”.

  6. whats_up says:

    Jeff,

    Agree entirely, reckless spending by both parties must end. It simply must. Social Security will take care of itself over the course of the next twenty years. Everything else needs to be on the table, EVERYTHING.

  7. Gail B. says:

    Jeff said, “I also know that, across the country, there are families just like ours who likewise have their bills spread across the kitchen table, figuring out who needs to be paid now and who can wait.”

    When my computer crashed, I transferred $400 from my little CD to my checking acccount and bought a 500 GB tower. I am shut off from the world without my computer because I watch TV on it (Fox News). I KNEW who couldn’t wait: Gail!

    What I can’t figure out is why the liberal Democrats or Progressives would want to bring financial disaster to their own children and grandchildren!

  8. Pat in San Diego says:

    I just got my yearly Social Security statement in the mail yesterday, and noticed something quite disturbing on the front of the statement. I found this paragraph:

    “In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits. We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations.”

    So because congress can’t stop raiding the Social Security fund that they FORCE me to pay into rather than let me save on my own… I’m going to lose 24% of my Social Security check. I’m not making this up… check out http://www.socialsecurity.gov for yourself.

    And it should disturb everyone that all people keep talking about is the “deficit”. That is how much more we are spending every year than we are taking in. IT DOES NOTHING TO LOWER THE NATIONAL DEBT! To pay down the debt… you CAN’T keep having deficit spending every year! The focus should be on balancing the budget first… then you can start working on the debt.

    Here’s an idea, let’s pass new legislation: if Congress can’t balance the budget, we take THEIR pay and apply it to the deficit, until it IS balanced… If they can’t balance it… they don’t get paid!

  9. Anonymous says:

    12:27, too logical.

  10. John Buyon says:

    wow…
    any serious suggestions from the right wing to fix this
    details?

  11. Gail B. says:

    I think we’ve found the person to replace Geithner–

    Pat in San Diego!

  12. Jeff Schreiber says:

    Read Paul Ryan’s Roadmap, John.

  13. Dee says:

    As Jeff said, Paul Ryan has excellant ideas. The administration does not want to hear it or read it. I just read today that the Senator who helped write the healthcare bill never read it! What an amazing group we have in office. I think we should start all over again with all brand new faces. They can’t do any worse than what is happening now.

    On a bright note. I had dinner with my aunt and uncle last night. He is a union man and a Democrat through and through. He told us that he was sorry that he voted for BO and is anxious to get him out of office. He said that he did not vote for McCain because of his age and that he did not think Palin had enough experience. I pointed out that she had more government experience than BO but he believed what the media was saying about her. He did say that if Romney runs he will vote for him because he at least has business experience. Something that is truly lacking in this administration.

    I agree with 11:22. To me we are now playing with Monopoly money.

  14. Gail B. says:

    One of our many blessings is America’s Right. The rest of them are the people who comment here and say things that make sense.

    I’m running out of patience and filling up with curiosity about what Jeff has in mind that he mentioned in “Jeff’s Corner.”

  15. Vacations R Us says:

    Obama has faced some criticism for his latest vacation, his sixth since taking office. At a time when painful unemployment numbers continue to bear down on the tattered economy, many are frustrated that the nation’s leader is enjoying another luxurious trip. On CBS’ “The Late Show” Tuesday night, David Letterman took a jab at the president, saying: “He’ll have plenty of time for vacations after his one term is up.”

  16. Anonymous says:

    7:06, see he IS natural born…. a natural born vacationer.

  17. Dean says:

    I am not very bright when it comes to the nation’s finances and overall debt, but I know that my wife and I try our best to pay our bills each month and we do NOT spend more than we earn – excuse me, we don’t spend more than we have after taxes/savings/medicare/medicaid/social security/etc., etc., …”I truly believe that if the people of this nation fully understood what this Administration and Congress has done to them … they would march on Washington; they would not wait for an election … What has been done adds up to a preconceived plan to destroy the economic and social independence of these United States!” These are not my words but those of George Malone, a US Senator in 1957, but truer today than ever before.

  18. Anonymous says:
  19. HonestAmerican says:
  20. John Buyon says:

    interesting I have skimmed over Paul Ryan’s road-map, reasonable approaches, fresh ideas from the GOP took a while!
    it makes me less scared of a possible GOP sweep in November knowing that the Right at-least has a half-ass plan to run the nation.

    I’m not that ecstatic about their
    “eliminating taxes on interest, capital gains, dividends…. and the death tax ”

    I want an increase in the inheritance tax. Capital gains is at the laffer curve optimum already and it shouldn’t be raised or lowered.

    “Every American should have access to affordable health insurance, and the ability to acquire preventive health care and treatment – regardless of employment, health status, or income level. No one should face bankruptcy because of a catastrophic illness; no one should be denied health coverage ”

    finally the right wing admits this took them a looong loong time

    their new income tax plan is extremely good, but its insufficiently progressive to those making over say half a quarter million.

    critically his plan fails to respond to the increasing inequality in the US.

  21. Boston Blackie says:

    “those making over say half a quarter million”

    Really, how hard is it for you to say 125K, is it because half of a quarter million sounds like sooooooo much more!?! Trust me it is not.

  22. Boston Blackie says:

    sorry, I hit entry too soon..
    “the increasing inequality in the US”

    John, Welcome to reality – life is full of inequalities even if it is now politically incorrect, such as competitions having no losers and everyone gets a trophy. I worked my butt off for everything I have. I am not going to subsidize the lay abouts, if that’s the case then let’s all be lay abouts. But then who would subsidize us all.

  23. Anonymous says:

    John,
    Really? an increase in inheritance tax? I take it you mean more than the 2010 loophole. ;-)

    May I inquire as to why?

  24. Dee says:

    Paul Ryan had a plan for healthcare during the so called debate. BO listened with a smirk on his face and the middle finger salute resting on his cheek. This administration is not interested in what the other side has to say.

    John Buyon, what are your ideas to lessen the “inequality” in the US?

  25. Who wants be a 500,000aire, twice over? says:

    That’s the Canuckian numbering system, Boston Blackie.

  26. Boston Blackie says:

    Dee,
    WE ALL know that Paul Ryan had a healthcare plan but let’s not confuse John Boy with actual facts. That would probably burst his utopian bubble.

  27. Dee says:

    Boston Blackie, I wish you lived next door to me. My husband and I also worked very hard for everything we have and I am not willing to share it with those who are to lazy to either work for it, study hard to learn, or take advantage of all that is available to improve your lifestyle. I will share with the truly disadvantage but it will be my choice as to who they are. My parents were not wealthy at all but my father taught me to never depend on anyone else to take care of me other than myself.

    John Buyon, I hope you share all your wealth with those who don’t have the initiative to do for themselves. When I was in graduate school, there were students who were on scholarships who could not write a simple sentence. I was paying my own way. They wanted to copy my notes and see what I was writing for my papers. I refused to share. You have told us that you are a student. If you get an A in class, why don’t you tell the professor to give you a C and give the person who failed, also a C by sharing your grades. Let me know how that works out for you.

  28. Anonymous says:

    Dee, I didn’t see the canuck inviting any of us along on his vacation.

  29. Anonymous says:

    Jeff is gonna look like that baby if these hurricanes are SC bound. Thinking of y’all, Jeff.

  30. Boston Blackie says:

    Dee, I am sure John Boy would be more than willing to share his grades. Remember, C’s and D’s still get you a degree so what’s the problem. It’s just redistribution of grades to respond to the increasing inequality in GPA’s.

  31. Anonymous says:

    Although I am surprised that no one has brought this up yet…..

    but, what standard of living are we to set the bar?

    it is laughable to watch someone interviewed on the news pleading for the travesty that they are losing their under-qualified loaned home whilst standing with an open garage which contains a boat, motorcycles, lifted 4×4, and kids running around texting on their Iphones. Now, they have the unfortunate task of renting a nicer home with all of their assets in a nicer neighborhood.

    Don’t get me wrong, they are sad states of affairs, but everything is relative, isn’t it?

    Our Government and tax code has perpetuated entitlement so far that we can no longer recognize responsible financial stewardship. Thus, we end up with the communistic statement “increasing inequality,” as if it is the standard, with complete disregard for human nature, common sense, and financial risk.

  32. Stupid tax code, Thanks Charlie says:
  33. Dee says:

    Anonymous at 8:03 and 10:20 am. You’re right, John Buyon did not offer to share the wealth of his vacation with any of us! Common sense just does not seem to apply anymore. It would be interesting to see where they set the bar for equality. Maybe BO is upset that Bill Gates’ house is so much bigger than his Chicago home. Does he want his Hollywood friends to share their wealth or is it just the little people who go to work everyday, pay their taxes, and expect no government handouts?

  34. John Buyon says:

    sorry I hit entry too soon as well I meant to say quarter million. first and this isn’t pulled out of my ass this is from demographic studies show that those earning above 250k are only 1.5% of the US population, so don’t give me the crap about how YOUR taxes are gonna rise for illegal Mexicans or welfare queens, or any of these false right wing fairytale narratives.

    the upper 1.5% should be taxed much higher, because as a true capitalist and man of honor warren buffet says he pays less taxes as a % of his income than his secretary.

    where are these overtaxed millionaires that are pleading for help that republican corporate whores live to defend? the real working people need tax breaks not the class who moves pension money around loses it all then gets a bailout, and a tax cut. is this the just society that you supposed “classical liberals” libertarians want to build?

  35. John Buyon says:

    do you people even agree that economic inequality in the US has increased over the past 30 years?
    or is this is the status of the right wing today
    1.inequality is not a bad thing
    2.people who never asked for federal help deserve tax cuts/bailouts/wars to keep their businesses afloat.

    how would I solve inequality? not by your stupid bogeyman arguements of “sharing everything”
    many ways :
    1. a Liberal-socialist idea that was forgotten 70 years ago. Guaranteed minimum national income. look it up

    2. land tax/wealth tax look up the economic theories known as Georgism which has received praise by far left economist as well as Milton Friedman, and free market economists.

    3.more powerful labor union laws that would discourage workers from complaining about management (ie striking) and encourage them to set up co-ops as an alternative to working for bosses. look at the conservative party of Britain’s idea to let public sector workers create co-ops.

    absolute elimination of income tax for people making less than 75K
    nationalization of certain very profitable sectors ie. oil. and the distribution of those profits to the general population in a form of a minimum income.
    ( don’t give me the whole nationalization is radical BS. everyone knows that nationalization of oil is a better step. Bush recommended it to the Iraqis post Saddam Hussein and Sarah Palin engaged in REDISTRIBUTING the profits of the oil companies in the form of a $1500 a year cheque to every Alaskan adult.)

  36. Meow says:

    This is what happens when we keep putting paper Lions in the White House.

  37. All hail Obama says:

    8:01 said “absolute elimination of income tax for people making less than 75K”

    BS, everybody should pay, you take no pride in, or properly care for, something you don’t personally invest in…. ie public housing.

  38. Dee says:

    John Buyon, the guaranteed minimum national income is a government grant given each year to every individual with permanent residency in the country. Where do you propose that the government will get the money to give to everyone? As initially set up, everyone would get the grant. That means that you do not have to be working or even look for a job; your income does not matter. Friedman felt that it would work in regards to a Negative Income tax. Therefore, the rich would also get the grant
    .
    The land tax/wealth tax is very similar to our property tax and the real estate tax we pay when we buy a home. We also have periodic assessments which may either increase or decrease the amount of taxes you pay. We also have school taxes and local government taxes. This is a small list of what we have to pay.

    The wealthiest 1% of individuals in the US already contribute approximately 40% of income tax revenues. Those earning 200,000 – about 400,000 dollars contribute approximately 62% of income tax revenues. The lowest earners pay no income tax.

    When defining inequality don’t forget to add in programs such as food stamps, healthcare coverage through welfare programs or hospital charity programs, public housing and the other programs available to low income people.
    Have you read Britian’s proposal for public sector co-ops? They propose to build a “Big Society” buy cutting back on government bureaucracy and replacing government targets by giving the people a greater say so. They feel that the more government has taken over, the less effective they have become in solving social issues.

    In other words, they want less government involvement and more opportunities for the people to participate and take charge. I think that is what the tea partiers want.

    The one way they propose to do this is by adding 500 Community organizers to assist the co-ops! 500 BO’s! More government.

    Why the cut off at $75,000? Why not less, why not more? Shouldn’t those people contribute something to the government?

    I was aware of Bush’s recommendation to the Iraqi’s and of Palin’s program. I also understand that the Indians who run the casino’s in the US send checks to each of the members of their tribe.

    Sorry for the long post.

  39. Dee says:

    John Buyon,

    You cannot bring about prosperity by discouraging thrift.
    You cannot help small men by tearing down big men.
    You cannot strengthen the weak by weakening the strong.
    You cannot lift the wage-earner by pulling down the wage-payer.
    You cannot help the poor man by destroying the rich.
    You cannot keep out of trouble by spending more than your income.
    You cannot further the brotherhood of man by inciting class hatred.
    You cannot establish security on borrowed money.
    You cannot build character and courage by taking away men’s initiative
    and independence.
    You cannot help men permanently by doing for them what they could
    and should do for themselves.”

    by: William Boetcker
    (1873-1962) German-born Presbyterian clergyman
    Date: 1916

  40. John Buyon says:

    @ Dee
    first I know you might be confused at some of my positions, but I am what is called a neo or structural marxist… I want to use the power of the state to dismantle the state.

    “Where do you propose that the government will get the money to give to everyone? ”

    I have explained this 2 percent tax on net wealth every year levied on all persons above a certain amount…
    even Donald trump argued for this.
    as did Thomas Paine
    this national minimum income would render all other forms of welfare ( which are all more complicated and counterproductive) unnecessary.

    ” The wealthiest 1% of individuals in the US already contribute approximately 40% of income tax revenues ”
    I don’t care they should pay more… they own 42 % of all assets
    and the top 5% own 72% of wealth yet pay 62% of taxes

    without those aforementioned welfare services there would be an america filled with poverty despair and discontent, with revolts and riots frequent not rare. ever studied the great society programs, or the new deal?

    British public sector co-ops…
    once again I want to dismantle the state, co-ops are the exact thing Marx described would exist in his theoretical future society.

    Income tax cut off at 75K
    because the income tax is a profoundly unjust tax… the philosophy behind it is very radical and hostile to liberal ideas of individualism. The only reason it has any use is to equalize income and redistribute it. those above 75K are more able to pay an income tax and are not defined as middle class by demographers

  41. Dee says:

    John Buyon, so you propose that the government give the national minimum income grant to all, only to take it back from those earning a certain amount?

    I did study the great society and the new deal. I feel that the “Great Society” has created many of the problems we now have with entitlement programs and the welfare state. I wasn’t impressed with the New Deal either.

    If you read the proposal for the British public sector co-ops, you would have read that the government realizes that those working in the private sector are much happier and feel that they contribute more to the job and are more appreciated. I can only imagine what would happen here if each community were given free rein over deciding what police officers can and cannot do. We have seen it during certain arrests when the public feels that the police went overboard.

    Thanks for the discussion.

  42. John Buyon says:

    ” John Buyon, so you propose that the government give the national minimum income grant to all, only to take it back from those earning a certain amount? ”

    yes yes I do and the problem with that would be…?

    every citizen is entitled to a piece of the natural riches wealth of their nation, those who are wealthy have a duty to pay the majority of the upkeep for running the state.
    ever heard of the concept of nobless oblige? that was a conservative idea originally.

    ” I did study the great society and the new deal. I feel that the “Great Society” has created many of the problems we now have with entitlement programs and the welfare state. I wasn’t impressed with the New Deal either ”

    Oh yes how terrible to implement the new deal in the 1930′s when millions are unemployed starving rioting poverty filth but…. unemployment benefits how evil

    lifting millions out of poverty creating an america with 1 class of citizens not colored and white not rich and poor. aid to the most vulnerable of the society… despicable acts indeed

  43. Anonymous says:

    Is that John Buyon or John Lennon……. lets all just kick back, and Imagine

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