Heritage Foundation economist Bill Beach explores how federal policies are undermining the American Dream in a presentation to the Naples Committee for Heritage on February 17, 2010.
Text of Undermining The American Dream
1. Will Growing Government Debt Undermine the American Dream? The Implications of Mounting Federal Debt for the Debt Paying Generation Presentation by William Beach Director, Center for Data Analysis The Heritage Foundation February, 2010
2. The Obligations of the Debt Paying Generation
Total debt expected to grow from $7.5 trillion in 2009 to over $15 trillion by 2020.
That is from 53% of GDP in 2008 to 67% of GDP in 2019. In 2008, debt equaled 41% of GDP
Tsunami of debt from Social Security, Medicare and Medicaid will push total debt to 320% of GDP in 2050 and 750% in 2083
3. How Much is One Trillion Dollars?
$1,000,000,000,000 (thats 12 zeros)
At $42 million per year, LaBron James would need to work 23,809 years.
Average life in the U.S. lasts 2.4 billion seconds
One billion seconds ago = 1977
One trillion seconds ago = 30,870 BC
One trillion seconds from now = 34,890 AD
9. Debt Always has to be Paid
Payment can be made by
Lowering future spending
Inflation or dollar devaluation (debt repricing)
10. Unfortunately, we have very big debts to come, and our incomes wont grow as fast as our spending
15. Lets Get Personal: Repaying this Debt Will Down Size the American Dream
If you are in your early 20s, the economic stimulus debt alone will cost you $280 per month for the rest of your life = buy and trash an iPod a month.
Your generations average tax rate will double and your children will pay three times as much. That probably means:
First home purchase later in life.
Marriage later in life and later to start to families.
Longer time to pay off student loan debts.
Slower earnings growth over your lifetime.
Less savings for education, health care, and retirement.
Smaller wealth transfers to your children and grandchildren.