Monthly Archives: February 2011

A Millennial Solution

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Right now the deficit debate in Washington is hotter than ever.  If you’re like most Americans you’re already turned off by the partisan politics that have come along with it.  So out of habit you’ll tune out what is being said and hope it goes away.  After all Baseball starts in April and Football will hopefully pick up again in September, but as a Young American you should be paying particular attention to what is being said right now.  Currently politicians are forming opinions and taking stances that will affect the rest of your life.

Just the other week Paul Ryan (R-WI), Chairman of the House Budget Committee released $35 billion in proposed cuts to the budget.  Those cuts included about $5 billion from the Department of Energy, $12 billion from transportation and $13 billion from defense.  Then later in the week the House Appropriations Committee Chairman Harold Rogers (R-KY), released more specific cuts.  That included $899 million from the Office of Energy Efficiency and Renewables, $1.1 billion of the Office of Science, $2 billion from job training programs and $74 million from the FBI.  This all lead to the house passing cuts that would total $60 billion this year.  Among the cuts are an end to funding the Corporation for Public Broadcasting (PBS), a 15% cut to college Pell Grants, an end to funding for AmeriCorps and a 40% cut to programs that fight AIDS, malaria and hunger.

Are these the right cuts to be making?  Maybe or maybe not, but at any rate Millennials need to come to the table and start joining the conversation.  Making the wrong cuts could put our generation at a serious competitive disadvantage in the future.  You should also be aware that Congress is only currently looking at non-defense discretionary programs that amount to about 14% of the budget.  To understand how small that really is consider that the combination of defense and Medicare make up about 42%.

So what is the right plan?  Well some excellent proposals have been put on the table.  A few of the most talked about include The President’s Fiscal Commission, Paul Ryan’s Roadmap for America and Domenici-Rivlin plan.  There are a lot of great ideas in all these plans and any one of them would be better then inaction, but a Millennial solution needs to go further.  As a generation growing up in a world where we will be competing with countries like China, India and Brazil we will need a plan that is pro-growth – And not just through tax reform.  A plan where the government makes strategic investments, cuts waste, tackles entitlements and overall becomes more efficient.  We need a plan that paints a picture of where America wants to be in 5, 10, 20 years and lays out a map with turn-by-turn directions that shows us how to get there.  A plan that gives Millennials the opportunity that we grew up hearing about, the same opportunity our parents had.

Young Americans need to be weary of politicians that cut blindly to satisfy their base, or one’s who refuse to cut to satisfy theirs.  Millennials are coming of age in a different world.  We will be facing issues and competition like this country has never seen and we have to make sure we are prepared.  There is no way that we will have the tax base to support older generations and pay down our $14 trillion-plus debt if we don’t have the growth and innovation that has made this country what it is today.

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Debt Limit? WTF is That?

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The nation’s debt limit, sometimes called the debt ceiling is very similar to the limit on your credit card.  Only about $16 trillion more then yours.  It’s the max amount that the US can borrow on its card, the United States of American Express.  Unlike you however, when America maxes out its card it just calls up congress and asks for an increase in the limit.

For a brief bit of history on the debt limit we have to go back to last summer when our so called elected “leaders” brought us within a day of defaulting on our obligations.  Had they defaulted, it would have been the first time in our nation’s history and very bad for all of us.  In the end after numerous press conferences and name calling from both sides Congress voted to raise the debt ceiling in the Budget Control Act of 2011.  This time it was between $2.1 and $2.4 trillion bringing the total limit to between $16.4 and $16.7 trillion.

The silver lining in this deal was that it included $1.5 trillion in deficit reduction.  It also established what was dubbed the “Supercommittee,” which was supposed to find where to make the cuts and many hoped they would find even more.  All said and done the Supercommittee failed to agree on any cuts and automatic cuts will start to kick in beginning in 2013.  That is unless Congress makes another law that bypassed this one.  Something they have done when faced with cuts in the past.  Prior to last summer Congress voted to raise the debt ceiling by $2 trillion in January of 2010.  That’s right they blew through $2 trillion that fast!

By now you might be saying to yourself “Why raise the debt ceiling at all? Can’t we just live on tax revenue?  If the government doesn’t raise the debt ceiling then that will stop us from going further into debt?”  That might work down the road but not for the immediate future. Something to note about the debt limit is that it’s for commitments we have already made.  It is like you using your credit card to pay for something you have already committed to.  Say the rent you pay for the year long lease you have signed or your 20 year home loan.

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