May You Inherit the Debt

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“Blessed are the young for they shall inherit the national debt.” – Herbert Hoover

In these economically turbulent times, quoting President Hoover might not be the most popular move. I am by no means endorsing his fiscal policy. But he, better than most, understood the generational consequences of debt accumulation.

Rather than discuss generational equity right now, though, I’d like to introduce myself to the readers. I am the Policy Director of the Committee for a Responsible Federal Budget (CRFB), a DC-based budget group made up of former Congressmen and former directors of the Congressional Budget Office, Office of Management and Budget, and Government Accountability Office, along with notable budget experts. Essentially, we are bipartisan budget hawks who create regular releases on notable fiscal issues and run several side projects, including Stimulus Watch, which tracks nearly all government action on the current economic crisis through an interactive database.

I am also a Senior Policy Analyst at the New America Foundation think tank, a graduate student in economics at Johns Hopkins University, and a Visiting Scholar at UC Berkeley’s Institute of Governmental Studies.
 

The opinions I express in this blog, though, are mine and mine alone; they should not be attributed to any of the organization with which I am affiliated.

In the coming weeks and months, my posts will focus primarily on fiscal issues, especially those related to the current economic crisis, tax policy, the federal budget, and entitlement reform.

In particular, I hope to convince YPNation readers that debt and deficits matter – especially for younger generations. To be sure, not all deficits are bad – timing and purpose matter. But taken on the whole, deficit spending tends to slow long-term economic growth, inhibit future government action, and unfairly redistribute resources. (I will discuss the advantages and problems of deficit spending in future posts.)

Essentially, politicians have been putting the costs of recent tax cuts and spending increases on the national credit card, leaving our generation to pay the bill. Similarly, they have left future generations with a large implicit burden by overpromising for entitlement programs such as Social Security and Medicare.

The current economic crisis has temporarily thrust us into a world of trillion dollar deficits (and this may actually be desirable, since excess government spending can partially counteract insufficient private spending). But If we stay on our current budget path, these deficit levels will become the norm, and the result will be economic deterioration and, perhaps, even collapse.

To avoid this scenario, we are going to have to make some major changes. Changes which our political system, with its status-quo bias and aversion to pain, is not well suited for. Our tax, spending, and governing structures are all in many ways broken. I look forward to beginning the conversation about how we might fix them.