The pin-striped men of morning
Are coming for to dance
Forty million dollars
The kids don’t stand a chance
— Vampire Weekend
Make that $14 trillion instead of $40 million and Vampire Weekend has the American debt-ceiling situation nailed. While the pin-striped men in Washington fiddle with the trimmings on spending extravaganzas only government could call “budgets,” the kids will eventually get stuck with the bill.
And the kids are increasingly not okay with that prospect.
When not discussing current events in light of indie rock lyrics, I work as director of communications for Young Americans for Liberty (YAL), one of the fastest-growing nonpartisan college political organizations in the country. At the beginning of April, 78 YAL chapters in 32 states joined in a national activism event called “Visualize the Debt.” Each chapter constructed a 40-foot-long national debt clock and placed it in their campus quad, affording plenty of opportunity to discuss the debt with fellow students.
I should pause to note that YAL does activism on a lot of topics. We raise awareness about the Bill of Rights, protest the TSA (you may have seen our Pedobear flyer), collect petitions to end the wars and more. None of our activism has been met with the near-unanimous response the Visualize the Debt project received: Students agreed that spending must be reduced to get the national debt under control, and that nothing — including military spending and entitlements, sacred cows of the right and left respectively — should be off the table for cuts.
This isn’t scientific data, of course, but as one of the kids myself (I’m 23), I entirely agree — and so, it seems, do many Americans across the political spectrum. According to a recent Gallup poll, 51% of adults are more worried about raising the debt ceiling “without plans for major cuts in future spending” than they are about the financial crisis that could result from a default. Given the apocalyptic language used to describe what would happen if the government defaulted, this preference indicates a strong political will for significant reform of our spending habits.
“Blessed are the young, for they shall inherit the national debt,” said Herbert Hoover, and the young are increasingly aware of what a backhanded blessing it is. Yet spending isn’t the only problem. Also at issue is the recklessness evident in the monetary policy of the Federal Reserve.
Since the dollar was taken off the gold standard in 1971, the national debt has begun a steep, unprecedented climb upward. Backed by only the “full faith and credit of the U.S. government,” new dollars can be created with a click of a button. Though a new round of quantitative easing is currently on hold, this third inflationary event in the last five years is likely to follow in the footsteps of its bipartisan forebears, as Fed Chair Ben Bernanke has indicated that he will consider it until the markets are trending toward full employment, which they currently aren’t.
Whenever it happens, QE3 will certainly stimulate some parts of the economy — primarily the big banks on Wall Street whose former employees populate the Fed’s hallowed halls — but it will do so at the expense of the money in your pocket, continuing a century-long trend of the dollar’s decline into near-worthlessness.