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Could You Do Me A Favor and Reassure Me That My Generation Won't Be Screwed?
TPMGary had a post earlier that reassured me a bit about the budget for next year and the massive deficits we'll soon have, but I gotta say that I'm still worried. A lot. I still feel a bit hypocritical for complaining about Bush's deficits, even though we are at least spending somewhat more wisely.
But seriously, 1.75 TRILLION dollars? How can Obama be so sure that he can cut this deficit in half without raising taxes on the middle class? How much can he save in cutting unnecessary programs/defense spending? And how much of this debt am I going to have to pay back in the future? I understand that this is something that we inherited, but I feel like the scale could easily tip for the worse. And inflation could go up if the Fed winds up printing too much money.
Don't get me wrong though--I'm still supporting Obama all the way with this. It's been awhile since we've had a president this ambitious. For the first time in decades, we're going to tackle all of our problems at once, from healthcare to education to our relationships with other nations.
I think I'm just scared, that's all. And the Republican Party is scared because they know that they are done for at least the next ten years if Obama's plan works, so they go all around on the media spreading this fear (which some like me are probably buying). And the magnitude of our problems is probably scaring us too--causing us to not want to solve them and stick to that old "tax cuts stimulate the economy" idea.
What our country is doing now is sorta like what everyone goes through in life--you have to work hard to reap the rewards. A couple of years ago, I was really struggling in college. I thought about changing my major, but I realized that I just didn't want to challenge myself. I became happy with just being average. I, like Wall Street, went out on weekends and got drunk only to deal with a hangover (usually in the form of a test the next week that I probably didn't study for). After retaking some classes to boost my GPA and deciding to stick it out with my major, I'm graduating in 3 months and I have a job lined up despite the current economic turmoil. Had I continued my old habits, things wouldn't be so peachy now.
What we're doing seems quite scary--but no matter which way I look at the issue and no matter how apprehensive I am about what could happen--I feel like this is the right thing to do.
I really don't know what the point of this post is. But even though I just came up with an analogy for what our nation must do, I guess you can still give me an e-hug and tell me everything's gonna work out.
But seriously, 1.75 TRILLION dollars? How can Obama be so sure that he can cut this deficit in half without raising taxes on the middle class? How much can he save in cutting unnecessary programs/defense spending? And how much of this debt am I going to have to pay back in the future? I understand that this is something that we inherited, but I feel like the scale could easily tip for the worse. And inflation could go up if the Fed winds up printing too much money.
Don't get me wrong though--I'm still supporting Obama all the way with this. It's been awhile since we've had a president this ambitious. For the first time in decades, we're going to tackle all of our problems at once, from healthcare to education to our relationships with other nations.
I think I'm just scared, that's all. And the Republican Party is scared because they know that they are done for at least the next ten years if Obama's plan works, so they go all around on the media spreading this fear (which some like me are probably buying). And the magnitude of our problems is probably scaring us too--causing us to not want to solve them and stick to that old "tax cuts stimulate the economy" idea.
What our country is doing now is sorta like what everyone goes through in life--you have to work hard to reap the rewards. A couple of years ago, I was really struggling in college. I thought about changing my major, but I realized that I just didn't want to challenge myself. I became happy with just being average. I, like Wall Street, went out on weekends and got drunk only to deal with a hangover (usually in the form of a test the next week that I probably didn't study for). After retaking some classes to boost my GPA and deciding to stick it out with my major, I'm graduating in 3 months and I have a job lined up despite the current economic turmoil. Had I continued my old habits, things wouldn't be so peachy now.
What we're doing seems quite scary--but no matter which way I look at the issue and no matter how apprehensive I am about what could happen--I feel like this is the right thing to do.
I really don't know what the point of this post is. But even though I just came up with an analogy for what our nation must do, I guess you can still give me an e-hug and tell me everything's gonna work out.
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Don't be scared, be prepared...
You are getting your education, that is good. You are just getting your start in life, do it right. Stay out of debt (unless you have to borrow for your education.) If you are not married, don't get your girlfriend knocked up. Live simply. If you don't have a high rollin' lifestyle, you'll get through the rough times better. ALWAYS live below your means...When you start working, start saving with that VERY FIRST paycheck. You'll never miss what you don't have. Even if it is just $20.00 per paycheck, put something away, then with each raise/promotion put some of it in the budget, but a lot (if not most)of it into savings. I could go on and on, but I'll spare you the full motherly lecture! This advice, taken by my children got them both off on the right foot when they left the nest, and both are doing well financially now...
But, most importantly, here's your {{{hug!!!}}}
Everything will be fine...have faith!
February 26, 2009 7:14 PM | Reply | Permalink
Have faith? Faith in what? Everybody's taxes will be going up to pay for what Obama's going to spend.
So why work hard? Why try to get a better paying job? The government is going to raise your marginal rate and create no incentive to work harder.
http://online.wsj.com/article/SB123561551065378405.html?mod=todays_us_opinion
February 26, 2009 8:31 PM | Reply | Permalink
Grow up!
http://tpmcafe.talkingpointsmemo.com/talk/blogs/stillidealistic/2009/02/poking-sticks-in-an-anthill.php
February 26, 2009 8:37 PM | Reply | Permalink
MCB. You gotta throw out the old economic arguments, the old political lines. We've just seen the greatest destruction of so-called "wealth" in human history. (And it occurred on the watch of the cut marginal taxes crowd, as a secondary note.) My point is that there are, and always were, more important things to worry about - and we got 'em wrong, because we focussed on dumb stuff. (Mostly on the Right, but also on the Left, ok?)
Thought experiment. Imagine if Obama had proposed a 100% tax on the profits of the financial sector, or a 30% surtax on all housing sales/transfers. That's about what it would have taken to produce the level of economic destruction we've seen today. Except he didn't, and yet it occurred, so something a lot lot bigger came into the equation.
In short, the whole economic frame we were using just got blown out a porthole. What we need to do to FIX that may not mesh with the old rules. I'm not convinced we've got it right, but I can tell you for fair damn sure, a marginal increase in tax rates is no more likely to keep the ship down, than would a marginal decrease in tax rates flip it upright. Anyway. Just IMHO.
February 26, 2009 8:54 PM | Reply | Permalink
Maybe I was being too sarcastic. I just don't like Obama to say he's not going to raise taxes on 95% of the country when there's no way he can pay for all his new spending without raising taxes on everybody.
February 27, 2009 7:16 AM | Reply | Permalink
I donno your age Teemunney, but here's my read.
1. You're gonna leave school & hit the worst damn economy in 70 years.
2. Yes, those deficits will likely have to be repaid.
3. But. In the absence of action, the economy could well be stuck at an unbelievably low ebb, for many years. And a decade-long Depression, with GDP down 10%, would mean the loss of at least $1.4 trillion in economic activity each year. So if running this deficit now can help avoid that, then it's money well spent. For you.
4. If the spending doesn't pull us out, then yes, the deficit is bad news, but the further steps which will likely be taken - writing off debts, downrated dollar etc., will likely be even more traumatic.
* In short, if it works = it's worth it. If it doesn't = we'll have bigger problems. *
5. Best news is if you're not 55-65. Imagine your pension melting to nothing, no time to refill it, health getting worse, etc. There's a lot of people in that boat. Or if you're 45 with kids, not educated, working in construction or retail. That's an ugly place to be as well.
6. If you're young, the main thing you'd want to see is that this shit get sorted out, and put on a more sustainable, solid, fairer footing. If that happens, and you get 2-3-4 good decades, during which you can save for retirement, get a house, raise kids, or whatever... then life is good. This is the crisis that can potentially lay the right foundation for the generations to come. So my main thing is... Let's get it right.
February 26, 2009 8:44 PM | Reply | Permalink
SI, I agree with everything you said--I hear it all the time from my folks too!
As for my age quinn, I just turned 22, so I guess I'm a pretty young guy. So hopefully some years from now, Obama will have laid down a great foundation. What I'm also a bit scared of too is Republicans (or irresponsible people in general) taking over and making stuff go to hell again.
But if spending doesn't work, what else could? Something interesting I found is that government spending as a percentage of GDP is considerably higher now than during the 1930s: http://www.nytimes.com/2009/01/27/business/economy/27fdr.html?_r=1&em=&pagewanted=all
So maybe I don't have anything to worry about. I'm just scared of big numbers and big changes that naysayers think will screw things up. But hey, we have to try something different.
February 26, 2009 9:03 PM | Reply | Permalink
If you're asking whether your generation will enjoy more material wealth than your parents, your're screwed.
Due to a variety of factors, such as increasing global competitiveness and the profligacy of your elders, your generation will have to work harder and live more frugally. Consider that the 'boomers' were born when the US had the only intact industrial base of any major country in the world. All the gold in the world was in Fort Knox.
But there is a clear choice for your generation. On the one hand, all can pull together and do their best to have a good life for all at a reduced level of consumption. On the other hand, part of your generation can grab for an even higher level of wealth at the expense of growing disparity between socioeconomic levels.
February 26, 2009 9:12 PM | Reply | Permalink
I agree w/ Merrill that your generation's material wealth may not be quite what ours has been, but don't let that scare you..all that STUFF doesn't bring happiness.
There is a sort of freedom in having less. Reduced need for space to keep it all in, less to insure it all, less lost sleep in trying to figure out how to keep it all...depending on each other for entertainment instead of the myriad of electronic "toys" we need now...
When did we get to the point where we needed a t.v., dvd player and dvr in the living room and every bedroom and each of the kids needs a cell phone and their own entertainment system and their own computer? Why can't we just be happy renting a boat a couple of times a year instead of having to have our own that we use a few times a year?
Your generation will have to opportunity to redefine what is important in life, and I hope you'll do a better job of it than my generation did. I think, because we were born poor, we did a better job than most of appreciating what we had and didn't feel the need to have a bunch of toys to prove our worth. For you, keeping up w/ the Jones' may not be as big an issue...that will be a good thing!
February 27, 2009 1:01 AM | Reply | Permalink