Houston, we have a (bigger) problem.
Although it received little attention, total federal debt will soon surpass an incredible $20 trillion. To put that in perspective, that's larger than the entire economies of China, Japan, and Germany combined. With President Trump's first federal budget expected soon, this should be a call to action to recognize our national debt for the threat it is.
Getting our debt under control will require policymakers to address the primary drivers of it: Social Security, Medicare, and Medicaid. Collectively, these programs consume 71 percent of our entire federal budget, with interest on our debt now costing an estimated $223 billion per year. These programs largely account for the near-quadrupling of our national debt over the last two decades.
Spending within our means is a simple concept, but the policy has proven difficult to enact. Both Republicans and Democrats have shown no commitment to curb overspending over the last 20 years, with nominal spending levels rising under every single presidential administration, regardless of party, dating back to President Calvin Coolidge in the 1920s.
The nonchalance many policymakers have toward our national debt has many millennials thinking, "Why should I care?" After all, spending decisions from Washington can seem intangible and meaningless for what matters most to young Americans.
But failing to act and leaving future generations with the bill, particularly for millennials—the single largest and most diverse generation of Americans—will have severe negative effects. If not addressed, the debt and Washington's culture of spending threatens to harm all of us, limiting economic opportunity, earning power, and the ability to repay student loans, buy a home, or start a new business. If we don't put Medicare and Social Security on a sustainable path, they'll be bankrupt long before we reach retiring age.
We're already seeing some of these harms in our lives today. By almost every economic indicator, millennials are struggling when compared to our older counterparts.
Young adults face persistently higher than average youth unemployment rates, along with wages that haven't risen in nearly a decade. While millennials have a strong desire to start businesses, only 3.6 percent of Americans under the age of 30 own or have a stake in a private business—just one-third the rate of business ownership when many of us were born in 1989.
Due to this lack of economic opportunity, we also experience higher levels of poverty than at prior similar points in our lives. For early boomers in 1979, only 8 percent were living in poverty; for millennials in 2013, the percentage of those living in poverty doubled to 16 percent.
Big-spending policies in education have also mired many of us in affordable debt. Since 1985, college tuition has grown by more than 500 percent, rising significantly faster than healthcare, gas, shelter and food. Nearly 70 percent of the class of 2014 graduated with student loan debt, with an average of nearly $30,000 per borrower. Too many of these graduates are still defaulting on their loans as the student loan default rate is close to 12 percent.
The start of any new presidential administration presents a crossroads to the direction or our country. Elected leaders in Washington can help to reverse these trends and make the tough choices to control spending and pay down the national debt, or they can continue leaving future generations with crippling debt that is not of their own making.
It shouldn't be a hard decision. Failure to address our federal spending addiction will hamstring the economy and harm the American people for future generations to come. Policymakers of all parties should seize this opportunity and provide solutions that will address the economic challenges facing millennials.
Correction: A previous version of this article said the total federal debt had already passed $20 trillion. According to the Treasury Department, as of Feb. 24 it was at $19.93 trillion.
Patrice Lee Onwuka (@PatricePinkFile) is the communications director at Generation Opportunity.
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