“What’s that?” my 10-year-old asked last night.
The National Debt Clock was ticking away on the Evening News… $14 trillion and counting, fast.
My wife and I broke the news to him: That’s what he and his generation will have to work to pay back.
“But why?” he asked.
I explained it this way to the kids…[ad#Google Adsense]”Which person would you vote for? Someone who promises to give you lollipops every day at school, even though he can’t afford them… or someone who says he needs to take your desks away for the year because we can’t afford them?”
“I’d vote for the lollipops guy!” my eight-year-old piped in.
“Well, that’s what’s been happening for decades…” I said. “People have been voting for the lollipops guy. But now we don’t have the money to buy any more lollipops. The government now owes $14 trillion.”
“Well, how do we fix that?” they asked.
“Here’s what I think should happen…” I said. “As a good person, you need to keep your promises. So if someone earned lollipops this year, they should get them. But if you don’t have any money to buy lollipops in the future, you have to stop promising to give away lollipops.”
“Well, why don’t they just do that?” my kids asked. “Why don’t they stop promising to give us lollipops?”
“We’re hoping they do…”
As he heads toward reelection, President Obama has a choice to make:
1. He can stop promising lollipops for everyone in the future.
2. He can act like decades of politicians before him looking to get reelected and promise “Lollipops for everyone, always!”
The choice should be easy. The credit card is maxed out. (You’d think a $14 trillion limit credit limit would have been enough.)
With all this government spending, we’ve strayed a long way from what our Founding Fathers laid out. Take a look:
This chart (from the excellent report “USA Inc.” by Mary Meeker) shows how government spending has soared in America… It has climbed from 3% of GDP in 1930 to 24% of GDP today. (The upward blips in spending in history were the major wars.)
Everyone knows what the problem is. It’s entitlements… future lollipops. Here’s another chart from Mary Meeker. You can see entitlement spending has grown eleven-fold in 45 years:
The trajectory is terrible.
If nothing is done, by 2025, entitlements (plus interest payments on the debt) will eat up all the government’s revenue. You can see it in this final chart:
In short, it’s time to get rid of the lollipops. Our credit card is maxed out anyway. We have no choice.
I’m certain my generation and my kids’ generation won’t miss what we never had anyway…