"Addressing the challenge of our national debt requires bold leadership and tough choices from members of both parties. Our children and grandchildren are counting on us to chart an effective course toward responsible stewardship of the public purse." -Speaker Nancy Pelosi, March 24, 2010
As the Wall Street Journal recently reported, out-of-control spending by the Democrat controlled Congress has added an astounding $4.4 trillion in deficits to the Congressional Budget Office’s (CBO) ten year budget projection. And despite claims of fiscal responsibility from the Democrats, nothing changes. The harmful effects of the Democrats’ runaway spending on growth and prosperity are vast. Crowding out of private investment, growing interest payments, and dependence on foreign competitors are all consequences of the federal government’s profligate spending and debt. Additionally, the debt explosion created to fuel Washington’s recklessness has a personal impact on every American: it is ultimately borne by every man, woman and child in the nation. According to CBO and Census Bureau long-term estimates, the amount of debt placed on the backs of children born today is about to explode. If nothing is done, our generation will have the sad legacy of being the first to lower the standard of living of the next generation.
A TIMELINE OF THE PERSONAL PUBLIC DEBT BURDEN FOR A CHILD BORN IN 2010
2010: By the end of 2010, CBO predicts that the total U.S. debt held by the public (as opposed to the gross national debt which includes inter-governmental holdings) will be $9.05 trillion. That means that children born in 2010 will start life with a personal share of the public debt equaling $29,178.
2020: When children born today celebrate their tenth birthday, their share of the nation’s public debt will have already increased by 70 percent to reach $49,694 per child.
2023: By the time they are 13 years old, their share of public debt will have doubled to $58,971. This is also the first year that per capita Gross Domestic Product (GDP) will be surpassed by the per capita share of the public debt for every American.
2028: When those children born in 2010 reach their 18th birthdays, they will have inherited an individual debt responsibility of $80,650.
2032: As children born in 2010 begin to graduate from college and enter the work force, their public debt responsibility will have tripled. As they begin their adult lives, the next generation will already be saddled with $103,826 of the government’s debt. And, unfortunately, as interest payments and entitlement spending increase more rapidly, their share of the nation’s debt will begin to grow at an accelerated rate.
2040: At the age of 30, their public debt responsibility will be approximately $166,500—an increase of 471 percent from the time that they were born.
2050: If government spending is not immediately restrained, our nation’s public debt is projected to increase from $9.1 trillion in 2010 to $122.8 trillion by 2050. As a result, when children born today reach 40 years old, their share of the U.S. public debt will be $279,738—an increase of 859 percent above what it is today. For a family of four, the total household debt share would be approximately $1.119 million.
THE OUTLOOK FOR THE NEXT GENERATION: DEBT EXPLODES AND PROSPERITY STAGNATES
- According to estimates from CBO and the Census Bureau, per capita GDP in the U.S. is approximately $47,000 in 2010, which is $17,883 more than the current level of public debt per person ($29,178). Reckless Washington spending will soon send the individual public debt burden skyrocketing past per capita GDP as spending and debt replace private economic growth.
- In 2023, the amount of U.S. public debt shared by every man, woman, and child in the nation will exceed their share of our nation’s GDP as debt rapidly out paces growth.
- While the individual public debt burden is projected to increase by $250,560 over the next 40 years, the GDP per American is only estimated to grow by $34,258.
- Over the next 40 years, estimates predict that spending will cause the debt held by the public to increase by 859 percent for every U.S. citizen. By comparison, per capita GDP is projected to grow by only 73 percent over the same period.
- Unless drastic actions are taken to reduce spending now and in the future, debt will dwarf growth and future generations will be less prosperous than those that preceded them.