Don’t be a chicken
Letter to the Editor | Monday, March 26, 2018
One month ago, I donned Lewis Halls’ beloved shag-chicken suit and spent the better part of an afternoon hooking passersby into conversation with promises of free coffee, bad puns and a general understanding of how our federal government spends money on an annual basis. With my poultry attire as the attention grabber, I utilized the precious seconds to explain to strangers why they should care about government deficits, tax revenues and gross domestic product.
I am a member of UPtoND, a student-led campaign whose aims are to educate young people on fiscal responsibility and the national debt and encourage bipartisan collaboration towards finding solutions to fiscal problems.
Everybody who resides in the United States enjoys the benefits of government spending through three types of expenses. The first is mandatory spending, which includes obligatory expenses written into law — entitlement programs, such as Social Security, Medicare and Medicaid. The second expense category is discretionary spending, which refers to optional government expenses via appropriations bills. This includes defense spending as well as a variety of programs and policies that touch everything from education to the environment. The last category is interest payments, which enables the government to continue spending money by fulfilling interest on debt.
When the government spends more money than it raises through taxes in a given year, it is said to run a “deficit,” which it sustains by borrowing money from both public and private entities. In the same way that people take out auto-loans to pay for a car, mortgage loans to finance a house, or take out student loans for college tuition, Uncle Sam issues treasury bonds (financial IOU’s that require the government to pay back the principal plus a small amount of interest at a specified future date) to mostly domestic financial actors and institutions.
Over time, these yearly deficits accumulate into a pile of debt. When this debt pile becomes larger, and the growth of debt outpaces the growth of gross domestic product (and consequently, the government’s ability to pay for debt), interest payments soak up more of the government budget. While interest payments only account for about six percent of the current budget, they are projected to consume a larger portion — around 12% — within the next ten years.
Under these alarming projections, the government may be forced to spend relatively a smaller slice of the budgetary pie on precious programs and services that promote well-being. The “smaller slice” notion squeezes important discretionary spending programs which are already facing funding issues — from Pell Grants to the Environmental Protection Agency. Furthermore, the growing federal debt may also reduce the average family’s long-run income, and crowd out investment opportunities sought by American businesses because there is less commercial bank money to be loaned out to the public.
As young adults in 2018, we will be the ones inherit the fiscal challenge created by our current government.
So what can the average student do to help alleviate this future problem?
Proactively reach out to our representatives in Congress and let them know that the fiscal challenge is important to you, so it should be important to them as well.
Converse with friends, family and peers about why the national debt is a real problem that we ought to solve now.
No individual can solve the crisis alone, but together, we can keep the economy healthy and government spending effective. It’s up to us, Notre Dame.
The views expressed in this Letter to the Editor are those of the author and not necessarily those of The Observer.