Saturday, April 25, 2009

Those Who Will Pay Off the Debt Approve of It

The Pew Research Center finds that the majority of Americans age 18 to 49 approve of the way President Obama is handling the budget deficit.

18 to 29 year olds
59% approve
25% disapprove

30 to 49 year olds
51% approve
39% disapprove

This should give comfort to World War II and Baby Boomer generation Americans who may feel a little guilty about saddling the younger generation with debt.

50 to 64 year olds
45% approve
48% disapprove

44% approve
39% disapprove

Generations X and Y (under 50) may not understand the implications of debt on their own future spending. Every citizen’s share of the national debt is now over $36,500 (or $73,000 per couple).

As with credit card debt, interest payments on the national debt--not to mention actually retiring the debt--will squeeze future national spending and personal/household spending either through higher taxes or inflation.

Since Baby Boomers have not had to shoulder the burden of debt run up under their watch, perhaps Generations X and Y figure they can handle four times* the growth in debt without having to pay a personal price either.

Or Generations X and Y may be willing to live a life with significantly less personal prosperity than World War II and Baby Boom generations. (As will be the case with social security.)
*The 1983 national debt figure was about $2.1 trillion in adjusted dollars or $8,900 per person ($17,800 per couple).