Before I left home for college, my folks laid down a few ground rules: Work hard, call home at least once a week and don't get a credit card. This last item of parental wisdom has since then only been reinforced by Capital One ads that portray interest rates as barbarian hordes and late-night infomercials as equally bloodthirsty bankruptcy attorneys.
Congress, it seems, needs to talk to my parents, because it refuses to put away its credit card.
To be clear, I'm not referring to the deficit, which is the annual difference between what the government spends and what it takes in. No, the deficit only adds each year to what I'm talking about -- the federal debt.
On Nov. 19, Congress rather unceremoniously raised the federal debt ceiling, the amount of money that Congress allows the Federal Treasury to borrow, by $800 billion, meaning that the government can now go up to $8.18 trillion in debt. Unceremoniously, because our government had already breached its previous limit and was taking money out of pension accounts to keep the government running, not something the Republican majority was keen to highlight.
The Republican stewardship of our treasury has been far from responsible over the past four years. At President Bush's first inauguration, our federal debt stood at about $5.6 trillion. Thanks to budget surpluses caused by the boom years of the 1990s and President Clinton's dedicated deficit reduction effort, this debt was decreasing.
Since Bush took office, however, our debt has increased by about 30 percent.
This trend amounts to a major policy realignment between the parties. While the Republicans were once the party of fiscal restraint, this is no longer the case. For example, in the legislation to increase the debt limit, the Republican majority blocked a Democratic attempt to restore the "pay-as-you-go" rules. That rule requires the budgeters to match each new spending increase or tax cut with a spending cut or a tax increase elsewhere in the budget, and thus restricts the deficit -- that is, the rate we add to our debt.
There are many reasons that a burgeoning debt is bad for America. For one, in the fiscal year that ended in September, our government paid $321 billion in interest payments. A recent Washington Post editorial estimated that at the current pace, "interest costs will account for almost 10 percent of federal spending in the next decade." Ideology aside, we can all find better use for that money.
A growing debt also slows economic growth by soaking up money that could be invested in our economy. It adds to the current account deficit (broadly speaking, the trade deficit) because, according to that same Washington Post editorial, the percent of our debt held by foreign interests has gone from 30 percent to 43 percent, with 90 percent of our new debt being bought by overseas investors. It also weakens the U.S. dollar.
But while these are each important in their own right, our generation has a special reason to care about this topic: Our parents will be passing this debt on to us.
The defining economic policy of the Bush administration has been not tax cuts, but tax shifts. Bush's policies have shifted taxes to the states, to the poor and to our generation. At a time that state budgets were being written in red, the Bush tax cuts added burdens by reducing federal grants, requiring many state and local governments to increase taxes. Many of these local taxes (for example, sales taxes or user fees), disproportionately burden the poor because the less you earn, the more of your income is paid in taxes. Put this together with the massive tax cuts the wealthiest Americans received under the Bush tax plan and the picture becomes clear: The Bush fiscal policy increases taxes on those who can least afford to pay them.
Perhaps most troubling, however, is the tax shift to our generation. A permanently growing debt is just not sustainable, and if this generation of political leaders does not tackle the problem, ours will be forced to do so. My liberal friends say we need to roll back Bush's tax cuts; my conservative friends say that we need to roll back congressional spending. Frankly, we may have to do both.
This is not a question of being fiscally liberal or fiscally conservative. It's a question of being fiscally responsible. Sadly, the idea that government ought to behave responsibly and protect our nation's public trust for the next generation -- whether that trust be our financial stability, our global alliances or our natural heritage -- has gone out of fashion at both ends of Pennsylvania Avenue.
When I came to college, my parents made clear that if I did get into credit card trouble, it would be my responsibility and that they would not bail me out. However, the way that their generation in Congress is behaving, we are the ones who will be left holding their credit card bill, and with Republicans controlling the White House and Congress, we know who is to blame.
It's time for our generation to start holding them accountable for their accounting.Kevin Collins is a junior Political Science major from Milwaukee. ...And Justice For All appears on Tuesdays.
