The National Debt is one of the most pressing issues of our time, and one of the least discussed. As of this month, the national debt is over $20.6 trillion and is reaching levels (in terms of debt to Gross Domestic Product) that we haven’t seen since the end of World War II. Paying off this massive amount of debt will greatly affect every United States citizen, especially young Americans.
In 2016, the federal government spent $269 billion dollars on interest on the debt alone. These costs will only rise over the next decade as interest rates inevitably increase, and by 2027 net interest will total $5.6 trillion (Peter G. Peterson Foundation). Interest costs will then be the government’s third largest spending category, behind healthcare and defense. If this problem isn’t addressed soon, the millennial generation will be faced with higher taxes, decaying infrastructure, and a troubled economy.
Through irresponsible spending and policies dating back to the 1980s, the federal government has gravely endangered the futures and livelihoods of its citizens. As more money is shifted to interest payments, various important government programs will see large cuts.
In only twenty years, the government is projected to spend more on interest than research and development, infrastructure, and education combined. Additionally, the Congressional Budget Office predicts that the debt will reduce family incomes by $16,000 by 2047. These interest payments and lower earnings will result in higher interest rates on homes and student loans, as well as negative effects on infrastructure.
Robert Whaples, a professor in the economics department, agrees on the significance of the issue. “Research by economists like Carmen Reinhardt and Kenneth Rogoff suggests that economic growth slows noticeably when an economy’s debt-to-GDP ratio climbs above 90%. The U.S. is already above this level and is projected to rise because government spending as a share of the economy is likely to rise” Whaples said. “This should concern everyone, but particularly younger people, because a high debt makes higher future taxes or lower government spending inevitable — especially when interest rates climb from their current low level and payments on the debt balloon. If the rising debt-to-GDP level isn’t reversed and political gridlock on the topic persists, the U.S. government could eventually face bankruptcy, so this issue is extremely serious.”
The Peter G. Peterson Foundation, along with Net Impact and the Clinton Global Initiative University, has sponsored the “Up to Us “college competition at Wake Forest this semester to address the national debt issue. Up to Us is a rapidly growing, nonpartisan movement of young people who are passionate about raising awareness on the debt. Since its inception in 2011, Up to Us has engaged nearly 150,000 people through over 400 college teams.
This semester, teams from over sixty universities nationwide will be hosting events to educate young people on the economic impacts that the national debt brings. In the past, teams have hosted trivia nights, documentary screenings, and debates to bring awareness to the issue.
The Wake Forest Up to Us team will be competing this semester to collect pledge signatures that ask our representatives to be more fiscally responsible and consider the economic consequences of the debt. Each team has a chance to receive cash prizes, meet with key policy leaders, travel to Washington D.C., and attend other top-tier national conferences.
Although solving our nation’s fiscal woes will be extremely challenging, the issue will not go away unless we deal with it now. The longer we wait and refuse to pressure our politicians to become more fiscally responsible, the more difficult it will be to make real change.
On February 9th, I traveled to Oakland, California to represent the Wake Forest team at the Up to Us student leadership conference. Over fifty team leaders from across the country came to the conference to discuss the national debt and their plans for the competition. The weekend included speeches from recent Up to Us alumni, including George Batah, who made headlines in 2015 when he wrote a petition to increase the number of Syrian refugees allowed in the United States.
The petition garnered over 300,000 signatures and enacted important policy change. Batah spoke on how Up to Us gave him critical leadership and team management skills that have granted him success in his career at Deloitte.
Over the weekend, I also got the chance to discuss the issue with a diverse group of people. Teams hailed from Fordham, Notre Dame, University of California Irvine, and others. Shawna Tuli, a sophomore Computer Science major, spoke to me on why she joined the movement: “Understanding the big picture of the long-term national debt and its influence on our everyday lives as not just students, but also Americans, is what I believe to be the starting point for millennials to have better personal finance. In the realm of politics and changing government, financial literacy is a necessity every person should be equipped with.”
Up to Us is a unique opportunity for students to learn more about our nation’s economic and fiscal future.
In fact, Up to Us is the only nationwide campus-based campaign focused on the issue. The program is committed to a nonpartisan approach to ensure that students from every political background can get involved.
The competition stresses a factual, unbiased approach that looks to unite young people under a common goal. The national debt is a key issue that is often ignored because of its political implications. Lowering the debt will mean increasing taxes, lowering government spending, or both. Up to Us believes that the only way to solve the issue is to generate enough awareness so voters elect officials who will tackle the debt.
Although solving our nation’s fiscal woes will be extremely challenging, the issue will not go away unless we deal with it now. The longer we wait and refuse to pressure our politicians to become more fiscally responsible, the more difficult it will be to make real change. The national debt is a unique issue because it is a bipartisan priority for all Americans. In this increasingly hostile and divisive political climate, we must rally behind this issue to ensure a healthy economy for our future.
The Republicans are Bankrupting the country.
You’ve heard the scary statistics about government spending. You have heard it from the Congressional Budget office or Congressional Research Service or you’ve heard it from House Speaker Paul Ryan or Office of Management and
Budget Director Mick Mulvaney.
There are no shortage of professionals sounding the alarm, including the conservative Heritage Foundation. The Republican Congress and Trump are bankrupting the country and robbing future generations of Americans. It’s dangerous. A debt crisis, and all the terrible economic effects of that, are looming.
How did this happen? It follows a familiar script.
Republican Reagan gave us the largest tax cuts in history (by % GDP), and tripled the US debt. Somehow in a country already with high inflation the Republicans thought a tax cut stimulus would be a good idea; meanwhile the Federal Reserve was trying to put on the breaks.
Republicans George W Bush inherited a balanced budget from Democrat Clinton and decided to cut taxes and fight two wars on the US credit card. He handed Obama a trillion dollar deficit and the great recession.
Trump follows the script and has more tax cuts – guaranteeing never before seen deficits and thus increasing the debt “bigly”.
Who has this helped? Since Reagan in 1981 the income of the top 1%
and 10% has exploded while the median family income in the US has hardly keptup with inflation. Meanwhile the wealth of the Forbes 400 has almost tripled in inflation adjusted dollars. The profits and capitalization of the
Fortune 500 have never been so high. The economy has finally fully recovered from the Bush/Cheney great recession, and unemployment at the end of the Obama administration was 4.7%. Why tax cuts now, and stimulate the economy? What conservative economic philosophy is this? Not Freedman, not Hayek, not Smith. It is not even Keynes.
The US military already outspends Russia and China combine more than 2 times over, with the next ten countries allies of the US. Unlike the other
departments of government, the Pentagon has not been able to conduct an audit of its spending for two decades. The Pentagon cannot say where they are spending hundreds of billions of dollars. Recently the Pentagon has buried an internal study that exposed $125 billion in administrative waste. Pentagon leaders had requested the study to help make their enormous back-office bureaucracy more efficient and reinvest any savings in combat power. But after the project documented far more wasteful spending than expected, senior defense officials moved swiftly to kill it by discrediting and suppressing the results
What is the goal of the Republican congress? Will the Ryan and the
Republicans now demand cuts to Social Security, Medicare and Medicaid and
others to “balance” the budget” they threw even more out of balance? In what world is this rational? At what point will American capitalism
and democracy collapse? I feel sorry for anyone now in school.
The Republicans would not support a stimulus in 2008-10 when the economy was in the Bush-Cheney great recession and unemployment was near 10%. Now with unemployment below 5% the Republicans have passed two bills that stimulate the economy, a tax bill with will a built in deficit of well over a trillion dollars and a budget that will drive the debit up another trillion plus dollars. It would be interesting if additional Business faculty would comment on this from their perspective.