Sunday, July 8, 2012

Legacy and Debt - Won't Somebody Think of the Children?

We're talking about equality of Opportunity,
not equality of OUTCOME
A huge amount of the conversation around governance hinges on the question of "our children".  Questions of education, of fiscal policy, of investment and trade, of resource management and environmental policy, virtually every contentious issue in our ongoing public policy discourse ultimately gets around to what we are doing for, or to, the generations to come.  Will they be better off than us?  Or, perhaps, for the first time in modern memory, worse?  What will they have in the way of resources, of wealth, of culture and most importantly, of opportunity?  I believe that this great over-emphasis on the effects of today's policy choices on generations to come obfuscates critical questions about near-term risks and opportunities, but, as is so often the case, no one asked me, so we remain immersed in this particular rhetorical tar pit.

But what do you know?  When you examine it, most of the assumptions inherent in the discussions of what we are leaving to the next generation are wrong, and many of them are intentionally wrong, presented for political advantage with outright lies or manipulative half-truths.  Take for example the most commonly used right-wing economic construct, that all this debt (which, it is constantly overlooked, has virtually ALL been created by Republican governments, but that's, as they say, another show) that the US is accumulating will be passed on to our children, a vast, choking albatross around their neck, leaving them the inheritors of a crippled economy with no way to dig themselves out.  But is this an accurate representation of what the US National debt is, and who must pay it?  Shouldn't we consider, just as importantly, who we must pay it TO?

AHA!  You'll shout.  Yes, that's right, and we owe it all to foreigners!  We have to give them all our money, leaving none for ourselves!  How do we know this?  Why, the Republicans told us!  Well, this doesn't seem so challenging - lets just look at the actual numbers:

Wow.  It looks like, in reality, very little of the US National debt is owed to "foreigners"  So who do we owe all the rest to?  Why, our CHILDREN!  Yes, upcoming generations will have to pay the debt - but they will be paying it to other Americans!  This isn't a situation where American wealth flows into the coffers of other nations, this is purely a domestic distributional question.  And THAT is problematic, in that most of those who hold the debt are wealthy, and will leave those portfolios to their heirs, but it is simply untrue that America "will go broke".  Which is an interesting concept in it's own right - nobody ever explains how a sovereign nation with it's own currency, mint and printing presses could ever "run out of money".  But that's also a discussion for another time.  As Paul Krugman explains it succinctly:

That’s not to say that high debt can’t cause problems — it certainly can. But these are problems of distribution and incentives, not the burden of debt as is commonly understood. And as Dean (Baker) says, talking about leaving a burden to our children is especially nonsensical; what we are leaving behind is promises that some of our children will pay money to other children, which is a very different kettle of fish.

Oddly, the Republicans are actually right when they cry out in anguish that we are leaving a bleak and dystopian future for those to come, because there is absolutely no doubt that we are.  It is, however, policies cherished by the American Political Right that is creating this legacy of sickness and misery for the generations yet unborn.

Think about education.  K-12 schools are a patchwork quilt of reduced funding, good ideas poorly implemented and terrible ideas embraced.  College is, if anything, in even worse shape.  In a functional market, higher prices reflect scarcity, but in our market for higher education we have enough capacity to serve those who wish to participate, but the prices just keep rising, putting college out of reach for all but the children of the wealthy, reducing opportunities for most of the upcoming generations.  Then there's infrastructure.  In order for the US economy to remain viable and competitive in the 21st century, there has to be a basic underlying platform of communication, transportation and services to support that economy.  It seems that all rising nations realize this, and work diligently to put appropriate public resources into a modern infrastructure.  But in the US, any hope of investment must compete with an ideologically driven demand to cut tax revenues, primarily for the wealthiest.  Until the US can agree on a desired set of government services and the revenues required to perform them, we will see continued deterioration - a legacy of obsolete, fragile, inefficient and even dangerous infrastructure left to our children.

But interestingly, problems like this are easily solvable.  At any point, the US could realize that we are crippling our future, reverse course and commit massive resources into a concerted "catch-up" effort.  That would solve a host of economic and social problems, and will continue to be a viable option.  But there are other disastrous legacies we are creating that are much worse, as they come with an expiration date.  Increasingly, problems of pollution, climate change and resource exhaustion point the way to a darker and much more desperate future than has been imagined.

When will the fisheries collapse?  What crops will still grow?  What great cities will be inundated?  We don't know, because this is our very first large scale experiment to discover what it takes to destroy a planet's ability to sustain life.  We're going to find out when it happens.  We hear talk of 'mitigation', but we haven't started yet, and for all we know it could already be too late.  And still the Republicans stand up and tell us that we must cut programs such as Social Security and Medicare in order to secure a better future for our children.  It's important to recognize this for the self-serving, manipulative, destructive lie that it is - if they had ANY interest in the legacy we are leaving generations to come, it would be obvious in their agenda, not in their platitudes and pandering.  If you are a young person in America today, if you plan on living into the second half of the 21st century, if you are even considering having children, you need to get very active and involved right now.  Nobody can promise you that you aren't already doomed, but without a massive change of course, I can promise you that you will be.


  1. We ought to be SPENDING on big national projects, like high speed rail.

    (See Artois, for example.)

  2. Especially considering we can borrow the funds for projects like that at NEGATIVE interest rates, we're actually squandering a very rare opportunity for investment. Because one party insists a better use for those funds is reducing the tax rate paid by folks like Willard...

  3. Neither I nor my children would forgive me for reproducing, if I had reproduced.