Budget hawks and free-marketeers very badly need to retool their rhetoric on the dangers of government borrowing and America’s ever-deepening national debt — last clocked at $17.4 trillion.
“How dare we pass along our bills to our children and grandchildren . . . yadda, yadda, yadda . . . ZZZZZZZZZZZZZZZZzzzzzzzzzzzzzzzzzz . . . ”
Among those age 50+ in 2009, the Census Bureau’s most recent Survey of Income and Program Participation found that 7,354,970 (17.03 percent) of men and 7,558,026 (15.06 percent) of women never had reproduced. These 14.9 million Americans — nearly enough to inhabit three Colorados — have been childless for at least five decades and likely will remain so.
Thus, any given speech about “the children paying our debts” may stir parents and grandparents, but it will fall on at least 140 million deaf or disengaged ears.
(For further details on America’s childless-adult population, click here.)
Even worse, arguing that the national debt will menace “the children” drains this issue of any sense of urgency. Don’t curb spending now, liberals believe, although they rarely state the following: Let the little ones grow up and cut government.
Meanwhile, as Obama proposed on February 26, let’s splash around in a brand-new, $302 billion infrastructure budget. In an instantly gratified culture, where expectorating 140 characters masquerades as political discourse, it grows harder to rally people against statist extravagance.
Most important, calling the national debt tomorrow’s headache masks the enormous socio-economic damage of government red ink today. The national debt is not just bad news for the next generation. It crushes the dreams of American adults right now.
Economists with Encima Global in New York use Federal Reserve data to illustrate this phenomenon. From December 31, 2008 through New Year’s Eve 2013 (Q4 2008 through Q4 2013), Encima compared the total debt owed by four major economic sectors: households, small businesses, corporations outside the financial services, and government. During those five full years:
Outstanding loans to households fell from $13.8 trillion to $13.1 trillion — a decline of 5 percent.
Small or non-corporate businesses saw their borrowing crawl on its belly from $4.1 trillion to $4.2 trillion — an increase of just 2.2 percent.
Credit to non-finance corporations grew from $7.6 trillion to $9.4 trillion — a boost of 24.7 percent.
Meanwhile, publicly traded debt to local, state, and federal government soared from $9.2 trillion to $15.3 trillion — an increase of 65.9 percent.
This final, enormous figure includes only marketable debt. Blending in the money that government owes itself for Medicare, Social Security, and similar obligations pushes this figure toward $17.4 trillion — the national-debt figure that exhausted American taxpayers recognize.
Thus, loans to individuals and families have sunk while credit to small companies has been as flat as a flounder. Beyond Wall Street, major corporations have borrowed plenty. But government wins again: It hogs the smorgasbord, gobbles everything in sight, and leaves only table scraps for everyone else.
“It’s no coincidence that median incomes and small businesses have done poorly as federal spending surged and the Federal Reserve added $3 trillion in its own debt,” David Malpass tells me. The former Reagan-administration Treasury official now runs Encima Global, where he and fellow economist Wing Chow think deeply about markets, ideas, and policy.
“The government is crowding out the private sector, making itself bigger at the expense of growth and jobs,” Malpass continues. “Rather than a debt crisis in the future, the tragedy is the last five years of economic decline — millions of people who should have gotten jobs and small businesses that should have launched but couldn’t because the government was in their way, borrowing crazily for itself.”
This government-driven destruction is highly tragic, yet equally invisible. As Malpass laments, “The lost activity — small businesses not started, workers not trained, equipment not bought — sets us back many years.”
— Deroy Murdock is a Manhattan-based Fox News contributor and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.