I have four young grandchildren, and lately I’ve been thinking a lot about the country I want them to inherit. Each generation must confront unique challenges, and while we don’t know exactly what the future holds, we do have a choice about what type of problems we leave for future generations.
Right now our national debt is $13.6 trillion and rising fast. Every American owes nearly $44,000. According to President Obama’s budget, by the end of 2020 the debt as a percentage of GDP could climb to 90 percent.
That level of debt will have a decidedly negative effect on the economy. The nation’s credit rating could decline, leading to increased interest payments consuming a great percentage of the federal budget.
These deficits are the result of both the economic downturn and structural problems with the federal budget. According to Congressional Budget Office projections, even when the economy makes a full recovery, the federal government will still be running deficits upwards of $500 billion a year.
Our current federal obligations are unsustainable, and fixing them will require either limiting the role of government or seeking out new and exotic ways to bring in more tax revenue.
I’m concerned that some in government, including Speaker Pelosi, are looking for new ways to tax American businesses. Most European countries have instituted a value-added tax, or VAT. This hidden sales tax usually starts small, but then grows larger as governments realize that it is an efficient way to raise revenue.
While it may be an easy way to raise taxes, it slows private sector job growth. The VAT is just one of many reasons why U.S. job growth more than tripled that of European countries over the past three decades.
If we choose to confront our debt problem with new and repressive taxes, we will limit the job opportunities for the next generation. Already we are making government jobs more appealing than private sector jobs.
Federal jobs used to be looked at as “public service.” There were rewards to a federal job apart from pay and benefits—building a stronger country and serving your fellow citizens. Now, federal employees on average make more than their counterparts in the private sector.
Many of these jobs are important to the health of our nation, but we have to remember that they are only supported by private sector growth. Over the past two years, federal government employment has grown by 10 percent while private sector employment has declined by 6.8 percent. We can’t keep going on like this. We are growing government at the expense of the private sector.
We need bright, hard-working young people for government service. However, we need even more young people creating new industries and innovative businesses that move our country forward. The reality is that we encourage this energy and innovation when individuals have the opportunity to profit because of their hard work. Without the opportunity to profit, there is little incentive to undertake the risk of starting a business.
Over the coming years, we will face important choices about what we will leave our children and grandchildren. Will we leave them a government in ruin that is consuming more and more of their income? Will we leave them with a national debt that makes it harder for American businesses to grow and create jobs?
How we decide to confront these problems will affect whether our nation remains a land of individual opportunity or one where individuals are dependent on government-directed solutions. I believe that if our government works within its historical, constitutional limitations, our society and economy will flourish.
Americans want to leave a better world for their children, and I believe that we will confront these problems. It will require honesty, bipartisanship and trust. Restoring sense to the federal budget will restore confidence in government and confidence to the free market.
I don’t want to leave my grandchildren with a debt that they can never hope to pay off and government programs that eat away at their earnings. I want to leave them the same land of opportunity that my parents and grandparents worked to build.
Rep. Joe Pitts represents Pennsylvania’s Sixteenth Congressional District.