[Authored by Joseph Ormont, MBA Candidate]
Yesterday Congress approved the President’s $3.6 trillion budget, paving the way for a $1.7 trillion deficit (as projected by the Congressional Budget Office) or 11.9% of Gross Domestic Product – the largest deficit as a percentage of GDP since 1945. What’s more is that this figure doesn’t take into account any of the other stimulus/recovery efforts or unfunded liabilities including:
•$787 billion American Recovery and Reinvestment Act passed in February.
•$700 billion Troubled Asset Relief Program (TARP) passed in 2008.
•Potentially billions more that could result from the Treasury’s and Federal Reserve’s plan to ‘clean up’ toxic assets on financial institution’s books through taxpayer-backed loans and private investment.
•Unfunded liabilities in Social Security and Medicare/Medicaid that some sources have quoted as being nearly $56 trillion.
I recently saw an author make the statement “Is it just me, or has a ‘trillion dollars’ lost much of its aura?” Well, definitely not from my perspective. It is very concerning the debt obligations that are being placed on my generation (Gen Y), and without a doubt, my children’s children’s generation.
While it is hard to argue that action needed and still needs to be taken to address the economic downturn, such actions consistently seem short-sighted. "Fixing the economy" won’t come from spending, but rather honestly discussing and addressing key issues and investing for the long term (especially in science and technology, which feeds entrepreneurship and job creation). While, of course, this is oversimplified, the fact remains that I love this country and believe strongly in the American "mind-set" – yet we must re-prioritize as a nation, otherwise we’ll be leaving it to our children and grandchildren to clean up.
Authored by Joseph Ormont, MBA Candidate