The Growth of U.S. Debt

As of April 2008, the U.S. federal debt is approximately $9.5 trillion. This is $31, 100 for every U.S. resident. Especially since the 1980s, the U.S government has been spending more than their yearly budget every year. To cover the deficit, the U.S. government issues a new debt. Current debt of $9.5 trillion is the all-time high and is 9 times more compared to 1980s.

George W. Bush administration in 2002 projected $1.288 trillion surplus in U.S. budget in a period between 2001 and 2004. Even though it would have been able to pay a great sum of U.S. national debt, certain circumstances lead to further deficit again. The government in reality ran $850 billion deficit. Such deficit is mainly due to tax relief in 2001 and 2003 and other enacted legislation on war in Iraq and war on terrorism. Moreover, $300 million has to paid annually for the U.S. debt.

Unfortunately, none of it mentions the real danger in coming years which is the growing problem with Social Security Program and Medicare system. The U.S. government is running a large deficit every year as it is when a generation of baby boomers enters the retirement community. It will cause a breakdown of the system if no tax reform or cut in spending is implemented. Currently, 46 million people benefit from the Social Security fund. However, starting from 2008, an early generation of baby boomers retires and retirees will come to 80 million in recent years. Eventually, twice as many people will be drawing from the fund.

Moreover, nation’s Medicare program is in real danger of breaking down as well. Simple explanation would be the outcome of more beneficiaries of the system for longer time. Not only do baby boomers bring serious challenge to the medical program intended to help retired U.S residents, but also does the growing change in demography of the population. More and more people are living longer and benefitting from the Medicare and Social Security program for the longer period of time. This will lead into serious challenge as fewer people contribute to the fund while more people are taking out from the program.

I feel that taking some action regarding the growing federal debt is an issue our generation has to decide on. As citizens of the nation, obviously it is our duty to pay off the debt and try to minimize the negative effect it will have on our current generation as well as our children and next generation. As an individual, it is our responsibility to secure our future financially when we retire. Unfortunately, current phase of government spending and challenges we are facing now are far from working toward our favor. Therefore, we have to realize the potential causes and consequences it has on our generation.

Projections show that there will be only 2 workers for every retiree by 2030. Unless the U.S. government finds a way to solve such growing problem, the negative impact it will have on the current generation is enormous. If no shift in national policy is implemented, the current generation will have to pay off the debt while providing sufficient funds for the growing beneficiaries of the Social Security fund. Such trend will take up a massive part of our salaries when our future retiree fund is still at stake. For the current trend, the Trust fund will be exhausted by 2040. So unless we want to sacrifice ourselves for the nation and the elders while leaving ourselves with no future security, it is important for us to find implementations.

However hard this choice might be, it is no longer possible to postpone such decision. We have to have the vision for the future, something that our older generation might have lacked knowing that baby boom generation will bring problems in the future.