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Because pop sociology dictates it, we Millennials must have some overarching concept that defines us all. We won’t be the jaded Gen-Xers or the self-absorbed Baby Boomers before us. What is it that binds all of us — born roughly between 1976 and 1996 — together? Some say it will be a sense of civic and political duty, a la the election of Barack Obama or the events of Sept. 11. I don’t put much stock into this generational mumbo-jumbo, and it will probably take a few more years before we discover that metaphysical adhesive that is so important to identify.
In the meantime, real trouble brews for Millennials in the way of a sinking and flailing economy. Massive government spending, irresponsible legislation and a toxic tax code are creating a monster of an economic problem that the generations currently in charge are graciously plopping into our laps. It’s important first to see what has happened in the last few years to get us into our current predicament.
A housing bubble, predicated on bad speculation, popped, crippling our financial sector. Bad government policy encouraged citizens to purchase homes they could not afford. Legislation like the Community Reinvestment Act of the Carter administration and President George W. Bush’s “ownership society” policies encouraged banks and lending houses to make bad loans to people who would never pay them back. Housing prices continued to skyrocket on the bad faith that people would continue building homes. We soon had more homes than homeowners, and those new homeowners were beginning to default on their loans. Prices dropped quickly, and there were lots of assets that couldn’t be sold.
Banks collapsed under the complex financial products intoxicated with the bad loans. People lost incredible amounts of money on their investments as banks scrambled to find cash.
As recession loomed, the federal government committed its worst act yet by choosing to “bail out” some large banks while letting others fail. The inconsistency, coupled with a bad investment environment, caused a virtual freeze on financial activity. Lenders didn’t know the rules of the game, since the government seemed to be making them up with each new bailout. Tax money, earmarked for buying up toxic assets, wasn’t spent that way. Corporations weren’t willing to invest in capital or capital development. Without investment, industry couldn’t grow, and so we sit in the poor economic climate with record unemployment rates.
As we look at the current situation, we are five months out from the much-heralded “stimulus.” This increase in spending deepens the already abysmal federal budget deficit. The deficit means the government will have to either continue borrowing money from abroad, which increases the national debt, or they will need to raise tax revenue. Either way, taxpayers will end up paying more in the end.
As the economy worsens, fewer people are earning taxable income to pay for it all. The result is a big addition to what the next generation — the Millennials — will have to deal with.
The Millennials must realize we cannot live beyond our means. We can’t encourage our fellow citizens to buy what they cannot afford. We can’t legislate massive government spending increases that give taxpayers the bill. We can’t continue borrowing money with the intention of letting the next generation pay it back. It’s morally irresponsible and it goes against fiscal common sense.
With expensive health care and climate change bills on the cusp of becoming law, there are two courses of action. Do we restrict liberty to preserve our spending, or do we restrict our spending to preserve liberty?
If the Millennials believe government programs and a government-controlled economy are more important than individual freedom, we’ll see tax increases across the board in order to pay for it.
I’m hoping for a different response. If the Millennials really want to distinguish ourselves, we will reject the conventional wisdom that more government can create a better life for all Americans. We will look at the failed social engineering and its exorbitant costs and opt for more independence. We will ask for smaller, balanced budgets that can allow us lower taxes and more freedom and choice in our lives. We will see a bold set of political leaders stand up to the special interest groups that pressure to keep expanding our expensive government.
What will happen in the next several years? This partly depends on how events unfold, including the fate of government-run health care. That is, if the government enacts such a far-reaching program, the feds may be so entrenched in our lives that personal liberty may be thereafter a lost cause.
Still, if Millennials take stock in recent economic history, America may yet see the first generation in many to say “no” to fiscal irresponsibility and “yes” to prudence in business and government.
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