A More Inconvenient Truth

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You are bankrupting your children

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Via Mankiw’s blog, a piece in the NY Times by Mankiw himself, entitled “My Birthday Wish: Not Burdening Our Children.” He talks about America’s long-term economic future, hitting on several important points that are (somewhat surprisingly) politically neutral:

  1. Social Security, FDR’s “compact among the generations” has grown well beyond its original and intended scope.
  2. 4.5 percent to 15.3 percent and the current level of taxation is not sustainable.
  3. Healthcare has advanced at a rapid pace, bringing higher costs and benefits.
  4. Something needs to be done and the national debate is not up to the task currently.

He sums up my attitude about the current correction a/k/a “recession”:

My birthday wish is for all of us to stop asking what the government can do for us today. Instead, we should focus on what we can do together to prepare the economy for our children and grandchildren. That means getting ready to care more for ourselves in old age, perhaps by retiring later, perhaps by saving more. I hope that when I celebrate my 100th birthday in 2058, my descendants won’t look upon Grandpa and his generation as the biggest economic problem of their time.

One step in the right direction is acknowledging the unfunded liability on the government’s balance sheet, something I talked about before. As a young American, newly in the workforce, each paycheck causes me to shake my head. I see money I need, money I earned, going to a program I will likely never benefit from.

FDR’s “compact among the generations” was not a compact with my generation. It was passed on to us without our consent. And we are forced to abide to it–in my case, on a bi-weekly basis.

Written by WithConfidence

February 4, 2008 at 11:51 pm