So just how seriously is the United States taking this whole thing about debt, deficit and unchecked spending? Consider the following.
A quip left in the comments section of a blog leads many in the U.S. government to consider minting a trillion-dollar coin. This platinum coin would, the reasoning goes, enable the country to avoid the debt ceiling and get back to the real work of economic recovery and growth.
A comprehensive report by the Government Accountability Office (GAO) details how the U.S. is on an "unsustainable" fiscal path. Calculating per-capita entitlement spending upon demographic projections, the GAO concludes that the U.S.'s spending is fully untenable.
The trillion-dollar coin, of course, triggered a virtual sensation. The beef between John Stewart and Paul Krugman was one for the ages. The coin also got its own Twitter hashtag (#trilliondollarcoin) and a handful of Facebook pages. Yet the GAO report, predictably, got little press pick-up other than Bill O'Reilly and it failed to "trend" in any social outlets.
Regardless of whether one finds the trillion-dollar coin sensible or insane it must surely be recognized that the U.S.'s shaky balance sheet requires a better solution than a magical, arbitrary coin. As the GAO report contends, the U.S.'s 21st-century demographic structure is driving 20th-century habits of entitlement spending through the roof. Trillion-dollar coin or not, this mismatch won't go away, and the U.S. can't get back on its feet and talk about economic growth until this problem gets solved. Recall the peril of this path was clear and loud in the 2010 S&P Report, which said at the time that population aging was the seminal issue of our time in light of 20th century fiscal, economic, health and social policies.
But now, the GAO report spells out this mismatch in no uncertain terms: Due to the number of baby boomers qualifying for Social Security and Medicare, spending "will increase in coming decades as more members of the baby-boom generation become eligible for benefits and the health care cost for each enrollee increases. Over the long term, the structural imbalance between spending and revenue will lead to continued growth of debt held by the public as a share of GDP; this means the current structure of the federal budget is unsustainable."
Such arguments have been made before, to be sure, but it is vitally significant that the GAO has joined the choir. As the so-called "congressional watchdog," the GAO can have significant influence on how the federal government spends taxpayer dollars.
So, will the GAO report mark a watershed moment in the debate over demographic change in the U.S.? Will it trigger a sea change in how we think about federal spending? The antiquated notions that one should spend their post-60 years retired and idle are beginning to fade. Even the military -- long known for its generous pension packages -- has begun to question whether it can extend 20th century financial obligations into the 21st century.
In President Obama's second inaugural address, he proclaimed that the United States was "not a nation of takers," arguing that the U.S.'s entitlement system doesn't compromise the U.S.'s strength but reinforce it. The President's rhetoric -- borrowed in part from his former challenger, Mitt Romney -- has, unfortunately, become one of the key takeaways from the speech used to frame the debate about entitlement spending.
This is unfortunate. The "takers" metaphor conceptualizes the issue incorrectly. The question we face today with our "unsustainable" spending isn't whether or not we are takers. The question -- given the monumental advances in health, medicine and technology -- is how we can maintain health, activity and productivity later into life. It's not whether we are "takers" when we reach a certain age, but how long we can continue to contribute to the economy and remain independent, vital producers. How do we achieve growth in an era of aging society? This is just as important for the national economy as it is for the personal and familial economy.
It's not only the U.S. that finds itself in this situation. Europe and much of Asia are struggling with the same issues -- of moving away from the "takers" paradigm before it resorts to minting a trillion dollar coin. Though the GAO report lacks that indelible resonance of "trillion dollar coin," its insights and assessments are far more important to economic recovery and growth.
How about a hashtag for that?