The American generation prone to acquiring the most debt is about to acquire a lot more – from the government.
The federal debt held by the public is higher than it’s been in more than 60 years, $16.5 trillion, according to a Congressional Budget Office report on Tuesday.
The debt is projected to grow, at a slower rate, for the next 10 years as well. This is the debt Generation Y, including those of us in college now, will inherit.
This generation has proved to embrace the get-it-now, pay-for-it-later mentality every time Apple releases a new device for checking Facebook. According to a USA Today report, 43 percent of this generation, also known as the Millennials, has collected too much credit card debt already.
And now we come to the debt ceiling, which had been raised to $16.4 trillion. We reached that last month, so the Senate suspended the limit until May 19. Now the government can borrow more money for three more months, because that’s how you get out of debt.
This isn’t the first time the nation has gone through this problem. After World War II, the federal budget deficit grew to around 110 percent of gross domestic product, higher than it is now. The GDP shrank over the years until the 1970s, slowly grew, and rose sharply again in 2008.
Republicans and Democrats haven’t been able to agree on how to reduce the debt. Some are disagreeing on how to raise the ceiling. Only in Congress would this be a realistic discussion. If the sewers on your street flood and fill your home with sewage, do you raise your home’s ceiling or clean out the waste?
President Obama’s administration has reduced the rate at which the country has been accumulating the debt, according to the CBO report. Unemployment rates are expected to drop to 5.2 percent in 10 years. So there is some good news in the country’s finances.
But the Millenials, who were born between 1980-2000, must remember the “Do as I say, not as I do,” mindset of the different governments that have gotten us to where we are now.
Our spending habits don’t bode well. But our history gives us hope. We tightened our belts before, we can do it again.