If you were in your early 20s, just starting your career, would you want your parents to toss you a debt bomb? Would you want to pay the tab of your parents’ spending spree?
And yet, on the level of macro-economics, that is what my generation is doing to millennials.
As the graphs below demonstrate, my generation's addiction to debt is severe and non-partisan. The top graph shows the total gross debt trend (dark line) since 1940 to today. Starting in the early 1980s, Americans have almost constantly increased the national debt. Prior to 1980, debt levels declined slightly or stayed flat.
The second graph shows the U.S. debt in relation to Gross Domestic Product (GDP). This is how much we over-spend in relation to how much we earn. We see that the debt-to-GDP ratio is getting close to what it was during the height of World War II. Importantly, the high debt-to-GDP ratio in the mid-1940s was caused by a major global war. You can understand why the debt went up so much during that era. But is there a moral purpose to explain the debt addiction of 1980 to today?
Also notice that the debt-to-GDP ratio fell almost without fail—regardless of which political party was in power—from the post-war period to the end of Jimmy Carter’s presidency in 1980 (the year I graduated from high school). This indicates that the generation of my parents and grandparents had significant self-restraint. They sought to provide a better fiscal future for their children and grandchildren.
And what has my generation done with this sacrificial gift? Notice that from 1980 to the present day—regardless of which political party was and is currently in power—the debt-to-GDP ratio has skyrocketed, with the exception of a brief reduction in the late 1990s.
The numbers tell a moral story. As a nation, my generation (boomer and Gen-X) has given little consideration to the future well-being of our children and grandchildren. We’re spending now and forcing them to pay the bill.
It’s no use blaming “the other party” for this. The problem runs through every political party.
Love your neighbor as yourself. In national economics, as at home, that moral standard will unavoidably require sacrifice—a spirit of selflessness. Unless we restore in economics a selfless ethos, our children and grandchildren will bear the consequences of our moral failures.