To many American Millennials, the national debt may seem like an abstract concern. But your generation actually has the most at stake when it comes to policy decisions about our country’s long-term fiscal and economic future. The decisions made by our leaders today will affect your economic opportunity, earning power, your ability to pay off student loans, buy a home or start a business. The millennial generation has an essential role to play in this debate.
Up to Us is an opportunity for students to educate their peers on these issues in a nonpartisan way, empowering their generation to have a voice in the conversation about how we address the long-term fiscal and economic challenges facing our nation.
U.S. debt is on an unsustainable path under many scenarios. Our federal government is running a deficit, annually spending more than it receives in revenue. To make up for this, the U.S. borrows money, adding to federal debt. The U.S. government’s debt held by the public is currently over $14 trillion, which is about 75 percent of GDP. The Congressional Budget Office projects that if current laws are maintained, federal debt held by the public will climb to 141 percent of GDP within 30 years – more than our country’s entire economic output. These are dangerously high levels of debt that threaten the economy you will inherit.
Federal revenues will rise from 18.2% of GDP in 2016 to 19.4% in 2046. Despite this, revenues are still not sufficient to keep pace with spending, which is projected to rise more rapidly due to two major factors: the aging of the population and the growth of healthcare costs per capita.
If we fail to address our long-term debt, the federal government will have a much harder time investing in priorities for economic growth, like education, research and development, and infrastructure. In addition, as the federal government issues more debt and diverts more capital from markets, the private sector has less access to capital and diminished private investment. As our long-term debt burden grows, the economy is left with less fuel for innovation, entrepreneurship, growth, and job creation. Furthermore, younger generations will be the ones that get stuck with most of the bill. After all, today’s students will be tomorrow’s workers and eventually, retirees. They will face the higher tax burdens needed to fund the government and its interest obligations. And if we have to make drastic changes to our retirement programs, future benefits may not be sufficient for future generations of retirees.
Through Up to Us, Millennials can get loud and get heard about how this issue affects them and what their generation can do to have a voice in raising awareness of our long-term fiscal and economic challenges.