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Although the Emperor currently wears no clothes, his naked children are the ones who stand to suffer most. The New York Times reports:
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
These interest payments directly substitute for money otherwise spent on real goods and services to benefit our society. Worse, they are future commitments that will harm young people and future generations. This is a complete betrayal of the American dream.
I am 32-years old. I have been told that if I work hard and follow the rules I should earn enough capital to pay for my current expenses (food, shelter, water, healthcare, transportation, etc.) and have enough money to fund my childrens’ college education as well as my retirement. Along the way I will pay taxes toward my social security benefits and other programs which should benefit me as my contributions vest.
This theory is a storyline for the real life version of Punk’d. With boomers about to overwhelm the system and the aforementioned debts requiring higher future taxes along with the skyrocketing cost of healthcare, energy, and college education, there is no rational way my generation can save enough to properly retire (assuming you are not in the top tier of wage earners).
Over the past few hundred years, many hard working people immigrated to the US so they could escape a socioeconomic trap. Today I am sad to say the same trap has now been set right here in the land of opportunity. And no matter how much BS politicians and think tanks spew, once young people see their shackles a certain group of smart ones will decide not to play the fool for past misdeeds and greed.
So, as I look in the mirror and see the Emperor’s children also have no clothes, I wonder how much time will pass before we witness a brain drain. I already hear low level murmurs from bright people who are exploring foreign jobs and living opportunities. Is this the first swell of a tsunami or simply vented anger?
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No matter what anyone says, this country still is the safest and most free land of any country on the planet. Recessions breed motivation to create new ideas, like yourself. Keep the engines moving!
Absolutely right. I am one of those “top income earners” who employs many people. I am paying 50% in taxes. Meanwhile utilizing the same or more likely less government resources then those paying no taxes or receiving cash back in the form of tax credits. Long before this recession began I have seen federal, state and local bureaucracies suck the life out anyone aspiring towards the american dream of improving their situtation.
I will not allow my children to be strapped with such financial mismanagement of this government. I have already begun the process to leave this country. Oh, also take my businesses and jobs with me.
Brian, where are you headed? I wish you the best. You deserve to be rewarded for your efforts, not penalized.
I love how everyone in the media and politicians say “our children and grandchildren.” Let me be a contrarian and say that Id rather be in their place than ours.
It is the current generation of retirees and middle aged parents that are in big trouble. The first phase will be loss of wealth due to massive inflation. After that, interest rates will rise and so will taxes. But eventually things will turn around. Taxes will be cut. The government will have to renig on some entitlement promises. A new bull market and positive economic cycle will begin in the 2020s. Gov will cut taxes, savings will be bigger from high rates- and the economy will be leaner and meaner. Certainly, the outlook for this coming decade is not good economically, politically and socially.
And you cant blame a business person for wanting to move. If you are bringing in some real coin, then going somewhere else can save you a ton of money. Say you are making 1mil, and you save 30% in taxes….thats 300K!!!
But I feel that the USA is far ahead of most of the world in culture and morality. I think there is a worldwide decline in these areas, but just go to some places and see how they are very prejudiced, biased, sexist and close minded. Some cultures are quite primitive even in the 21st century. Singapore and the UAE may seem like intriguing places but they treat laborers there like absolute crap. There is basically slavery in UAE. In Singapore and Hong Kong the well to do abuse their maids and home workers- and obviously the legal systems only protect the wealthy and elite.
Most important, during/after crisis’ nations revert to their traditions. I think that can give us a lot of hope.
Just my thoughts…I agree with both Larry & Brian.