Food For Thought For Young Americans
Guest column submitted by U.S. Senator Mike Crapo
Often, I hear young Americans questioning the relevance of national elections to their lives. However, today's policy choices have significant effects on their lives, whether it is obvious, like looming tax and student loan interest rate increases, or seemingly distant, like entitlement program solvency, purchasing a home and how the growing national debt is addressed.
Many are struggling to find employment or enough employment to repay student loans. While recent action averted a doubling of student loan interest rates on July 1, this fix is temporary. If action is not taken, students will face another increase on July 1, 2013. This is exacerbated by a financial crisis contributing to the high unemployment rate, including the unemployment of nearly two million college graduates and data showing young workers have a significantly higher unemployment rate than other workers.
Young Americans have a stake in our getting on a path to prosperity and job growth. A down economy enables fewer choices and young workers often take lower-wage jobs, just to get their foot in the door. In a more robust economy, the opposite occurs. Each scenario can have a dramatic effect on future earnings and an immediate effect on savings.
The Congressional Budget Office (CBO) projects that, at the end of September 2011, federal gross debt totaled nearly 99 percentof gross domestic product and this is, in part, causedby higher federal spending and policies enacted during the past few years. CBO also found that large deficits and growing debt would reduce national savings, leading to higher interest rates, more borrowing from abroad and less domestic investment, which in turn would lower income growth. This is not the projection of a sound future. The young have a vested interest in curtailing out-of-control deficit spending and the comprehensive fiscal reform measures needed to get out of this financial hole.
The young and their families are directly affected by their level of taxation. Hundreds of billions of dollars in tax increases on every single American are scheduled to hit if Congress and the President do not act by the end of this year. This includes an increase in all income tax rates, and, for investors of all ages, an increase in tax rates on capital gains and dividends. A tax increase will impact jobs, investment, and even families seeking to save for higher education. Pro-growth tax reform that will generate investment, capital formation and job creation is critical to reversing the sluggishness in our economy.
The per-citizen share of our nearly $16 trillion national debt surpasses $50,000, up $5,000 from approximately one year ago. Young Americans face a ridiculously high burden they did not create, but will limit their choices and opportunities for prosperity. Greater debt results in higher interest payments on that debt, which eventually requires higher taxes and/or a reduction in government benefits and services. The nonpartisan Social Security Trustees reported that the Social Security program will be insolvent in 2033, three years sooner than previously projected, and as many parents of those in their twenties become eligible for benefits. The Medicare program is also on track to be insolvent in 2024, if action is not taken. Reforms must be enacted to ensure the programs' continued solvency and availability to current and future recipients.
These are just a few of the reasons young Americans cannot afford to be apathetic about the course of our federal government. Younger generations of Americans are the future of our nation, and it is these generations who will experience the full impacts-good and bad-of today's policy decisions.
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