From the second chapter of a worthwhile new book titled "Comeback America" by former head of the General Accounting Office David Walker and now president of the Peterson Foundation.
"Let's say our government continues to take in about the same level of historical revenues, but we hold discretionary spending to 2008 levels as a percentage of the economy, and we don't expand health care or other entitlements any further. That sounds pretty benign, but it's actually a disaster …. Our interest payments would become the largest single expenditure in the federal budget in about 12 years. …
The bigger the bill we pass on to our children, the bleaker the future we will bequeath to them. …
Right now, on average, Americans pay about 21 percent of their income in federal taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es and another 10 percent to state and local governments. By 2030, to pay our rising bills, that amount could be at least 45 percent–higher even than the average 42 percent that most Europeans pay. …
With reductions in disposable income like that, the children born in 2000 will inherit a much different kind of America in 2030. So much of their money will be devoted to keeping the government afloat that they'll have relatively little for everything else in life. Their homes will be smaller and drabber. There will have less to spend for cars, vacations, dinners out, and big TV sets. …
Maybe it's a good idea for American to become less materialistic–but the idea should be to give our children that choice, not to impoverish them.
This alarming forecast is not overblown. Even if the federal government doesn't creat a new, fantastically expensive health entitlement in the next few weeks, promising to send out big federal checks for health insurance to working-age, middle-income and even upper-middle income families, the nation's budget is overgrown and needs pruning in a serious way.
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