Much of the justification for various federal programs amounts to a notion of fairness. Understandably, people look to the government and its seemingly endless cash flow, and pitch their various ideas to politicians. Naturally, given the revolving door habits of DC, some things get funded for political reasons – but it’s true that others might receive money based on actual merits.

Perhaps some of these programs are helping people in a measurable way. And of course, many may be well-intentioned, yet yielding unintended negative consequences. But gauging the metrics of various federal initiatives is a task for a different time. What’s being delved into here is the irony of the “fairness” concept as it relates to federal spending – particularly deficit spending.

No matter how compelling the case for a certain amount of federal spending on any project may be, it’s important to consider the result of said spending in the aggregate. As former Congressman Hal Daub of Nebraska and college senior Dae Hemphill of The Can Kicks Back recently wrote at the Omaha World-Herald:

“Our $17 trillion-and-growing national debt is devastating the country’s ability to provide for our next generation. If our leaders fail to address our fiscal dysfunction, future generations face an uncertain economic outlook, with the potential of higher taxes, higher unemployment and a lower standard of living.“

As a 26 year old, it concerns me greatly that my generation is being treated like debtors for decisions we largely weren’t even around to make. Given the current trajectory of federal spending, we will be responsible for a national debt accrued allegedly in the name of “fairness” – but at what cost to millennials?

As Nick Gillespie and Veronique de Rugy pointed out at Reason Magazine:

“There’s a new generation gap opening up, one that threatens to tear apart the country every bit as much as past confrontations over war, free love, drugs, and sitar music. This fight is about old-age entitlements and whether the Me Generation will do what’s right for the country and stop sucking up more and more money from their children and grandchildren.

Social Security and Medicare, which provide retirement and health insurance benefits for senior Americans, generally without regard to need, are funded by taxes on the relatively meager wages of younger Americans who will never enjoy anything close to the same benefits. From any serious fiscal or moral viewpoint, and particularly for the sake of helping those truly in need, Social Security and Medicare should be ended. 

The demographic math is irrefutable: Entitlements are killing the safety net.”

Further delving into the problem, Gillespie and de Rugy note:

“Because it is on automatic pilot, spending on entitlements can grow without political consequence or fiscal conscience. Between 1975 and 2000, spending on all entitlements grew at an average annual rate of 3.96 percent, while annual GDP growth was 3.27 percent. Then the ratio really started to deteriorate: Between 2000 and 2010, entitlement spending grew 5.3 percent a year while the economy managed just 1.81 percent. The Great Recession has added a bit to that disparity (Medicaid rolls tend to swell during downturns), but it’s far from the whole story. The aging of the population and the expansion of Medicare to include prescription drug coverage—at a cost of $338 billion from 2006 through the end of 2011—are the major reasons entitlements grow faster than the economy. And given that the oldest baby boomers are turning just 66 this year, we haven’t seen anything yet.”

Unfortunately, the issue of government spending, particularly as it relates to demographic differences, isn’t limited to the United States. Take what’s happening with youth unemployment on a worldwide basis. Data reported via the International Labour Organization, a United Nations agency, shows that for young people, future prospects look bleak. As reported by the Canadian newspaper The Globe and Mail:

“Global youth unemployment is set to continue growing over the next five years, putting a generation at risk of lasting damage to their earnings potential and job prospects throughout their lives, the International Labour Organization has warned.

The UN agency said in a report released on Wednesday that it expected the worldwide youth jobless rate to increase from 12.4 per cent last year to 12.8 per cent by 2018.

The jobless rate for young people – defined as those aged between 15 and 24 – has risen from 11.5 per cent of the work force in that age group in 2007 as the economic downturn took its toll.

The ILO said the youth jobs crisis was worse than the data suggested because long-term unemployment was growing, along with part-time, temporary and insecure jobs. Young people are almost three times as likely as their older peers to be out of work, and many are giving up on the search for employment.”

While the youth unemployment problem looks worse for many European countries than it does the United States, it stands to reason that continuing to follow the same reckless spending policies that led these countries into crisis will yield the same results.

Ultimately, despite the rhetoric from politicians and their beneficiaries, there’s nothing fair about the generational warfare that Washington DC is waging for its own benefit at the expense of rising Americans  – many of whom are not yet born. Until we come to our senses and accept that the politically easy route of deficit spending with abandon is also an economically devastating one, young Americans of several generations will continue to suffer the consequences.

While Pentagon spending remains as ever, a sacred cow, new evidence emerges that suggests perhaps it is time to rethink this approach.

A recent report by the Mercatus Center‘s senior research fellow Veronique de Rugy and Harvard University professor of economics Robert Barro suggests some surprising conclusions.

The existing studies found that a dollar increase in federal defense spending results in a less-than-a-dollar increase in GDP when the spending increase is deficit financed. Combining this with a tax multiplier that is negative and greater than one, the authors estimate that over five years each $1 in federal defense-spending cuts will increase private spending by roughly $1.30. [emphasis added]

Yes, you read that right: the report suggests that decreasing Pentagon spending is shown to increase private spending. The ultimate GDP effects are positive. We encourage you to read the summary or the rest of the study, which offers an exciting new perspective to the old assumption that spending on the defense industry automatically helps the economy.

Conservatives hearken back to the crowding-out effect argument in many areas. This study shows that there is reason to believe this phenomenon exists in the military realm as well.

Over the years, Pentagon spending has risen relatively consistently. Even so-called “devastating” sequester cuts reduce this spending to barely under Cold-War levels.

And as the chart below shows, US military spending is fantastically large compared to the rest of the world, more than that of the next 14 countries combined.

Of course, the various rationales for this level of spending are up for debate. A sizable majority of the American public and political class of both parties are committed to the idea of the US as military superpower. And this is a conversation worth having. But beyond that commitment lies reality.

And the reality is, that all the noble aims in the world cannot escape the inherent unsustainability of the US budget trajectory. As Chairman of the Joint Chiefs of Staff Admiral Mike Mullen recently said, “the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat.”

And now, with this report, there is strong evidence that there is not only national security but also economic value to be gained by refocusing the nation’s longtime approach to Pentagon spending.

Recently, as we’ve reported, an overwhelming number of candidates from across the aisle in South Carolina’s first congressional district have signed the Reject the Debt spending pledge. This simple promise to vote against spending that isn’t offset and to reject budgets that don’t include a path to balance is a sign of a candidate’s willingness to address the financial crisis head-on.

Mark Sanford signed this pledge, advancing to the runoff on the Republican side and ultimately to the general election.

Elizabeth-Colbert Busch declined to sign.

The pledge is not a partisan one; in fact, it’s specifically designed not to be partisan. In this very election, Colbert-Busch’s Democratic challenger signed. Politicians from various parties can and have recognized the need for a sane fiscal approach.

But Colbert-Busch? Her recent comments seem to reflect a determination to carry on policies that now threaten to send the country into inescapable debt.

In their recent debate, Sanford referenced signing Reject the Debt (around 50:00 in the video), noting that, “it should come as no surprise” that he would sign such a pledge. Colbert-Busch responded by saying that she will pledge only to the people of South Carolina, perhaps forgetting that SC-1 more than most districts, seeks fiscal responsibility. Not to mention that Reject the Debt explicitly states that it is a pledge I “to the citizens of my state and to the American people.”

The true telling moment, though, came later in the debate, when Sanford argued his fiscal credentials would be useful in what he described as a “tipping point in civilization.” Colbert-Busch smiled and responded, “The sky is not falling, Henny Penny. As a matter of fact, our best days are ahead of us.”

With respect, this type of mocking dismissal is what has led to many financial crises in recent memory. And if a situation in which debt is approaching 200% of GDP, interest payments might soon top $1 trillion annually, and the most “devastating” cuts the government can muster result in spending 10 years from now that will be $2 trillion higher instead of $2.1 trillion higher, does not count as a defining moment, what does?

Colbert-Busch’s comments are concerning because they show little indication that she understands the true source of the fiscal crisis, or that she is willing to take it seriously.

Instead, while the American people face down the looming fiscal crisis and leaders in Washington compete to see who can spend more, Colbert-Busch mocks such concerns.

The sky is not falling, Henny Penny.

Perhaps it’s not. But isn’t it time for a level-headed appreciation of the gravity of economic reality, rather than mocking as the economy falls?

This week at National Review, Michael Tanner of the Cato Institute published an interesting commentary entitled, “How Serious Are Republicans?” in which he chronicles how the alleged party of fiscal responsibility is falling short in several ways, even with a big spending Democratic President in office that they’re constantly seeking to oppose. However, as Tanner explains, blind partisan reflexes are often part of the problem.

For example, Tanner points out opposition to some of the President’s proposals such as Medicare cuts and the chained CPI reform. Of course, there may be reasons to oppose these measures – particularly chained CPI, because although it could be construed as a step in the right direction there’s an argument to be made that it’s a tax increase. But as Tanner goes on to chronicle, the problem goes beyond some Republicans acting in reactionary partisan ways. The fact is, too many elected officials in the GOP are just as tied to special interests as their bigger-spending congressional colleagues.

As Tanner states,

“Recall that during last year’s presidential campaign, Mitt Romney’s big complaint about Obamacare was that it cut $716 billion from Medicare over ten years. Medicare is facing a minimum of $42 trillion in future red ink. Perhaps someone should be praised for cutting it. It would have made sense to criticize the president for spending those savings on other aspects of Obamacare. One could certainly question whether the president’s proposed cuts were the best way to reduce Medicare spending, or even whether they would be effective. But Governor Romney focused his criticism on the idea of the cuts themselves.

Elsewhere, Republicans continue to resist any efforts to reduce defense spending. Modest defense cuts were included in the sequester of course — over the strenuous objections of GOP hawks such as John McCain, Lindsey Graham, and Representative Buck McKeon. But advocates of increased defense spending have hardly given up the fight — expect continued efforts this fall to undo the sequester’s effects on the Pentagon.

There is also some parochialism: attempting to funnel federal money to one’s district at the expense of the broader public purse. Thus Representative Steve Stockman of Texas opposes cuts to NASA (invoking the specter of an asteroid crashing into Earth), and Representative Jim Jordan pushes the army to buy Abrams tanks, built in his home state of Ohio, it says it doesn’t need. Republican senators from farm states are among the biggest defenders of farm subsidies. Representatives from the northeast demanded federal assistance after Hurricane Sandy. And so on.”

This speaks to the fundamental problem with the incentives that elected officials face in DC. When a basic role federal politicians are expected to undertake is bringing back the bacon not only to their districts but to lobbyists, nothing will change. That’s why at the Coalition to Reduce Spending we believe reform must start at home. When politicians are actively amidst their constituents, making what often turn out to be false promises, inserting an accountability mechanism into that process is key.

This speaks to the power of our Reject the Debt pledge, which can be effectively used as a leverage point, especially in primary contests between candidates. Getting a candidate to sign his name to a spending reduction commitment through pressure from his potential or current constituents is a great way to hold his feet to the fire in the event that he does in fact find himself either back in Washington, or there for the first time.

Amidst nearly $17 trillion in debt with $120 trillion in unfunded liabilities, the time for vague promises is over. As Michael Tanner so aptly explained, the problem is a bipartisan one. Thus, it must be answered with a non-partisan, constituent centered solution. If a candidate can’t put pen to paper on his campaign promises, why utter the words in the first place?

The US financial situation continues to grow more dire with every passing day. At nearly every turn, spending rises, the debt continues to grow, and leaders glibly continue to cater to special interests and spending incentives with little accountability to the mess they make of our finances.

As the above chart shows, the US’s finances are stuck in an unfortunate trend that shows no signs of improving. As it stands, the US debt limit has been one small measure of accountability, one moment of pause, over the years. Raised, temporarily extended, or redefined 78 separate times since 1960, the debt limit is essentially formulated to be a line in the sand. As the US Treasury said recently,

Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations

The Treasury goes on to warn of drastic financial consequences that would result from failing to raise the debt limit, including “another financial crisis, threatening “jobs and savings of everyday Americans,” and “putting the United States right back in a deep economic hole.”

And in a sense, these warnings are right. Nearly no one wants default. Importantly, though, many of  us also object to continuing the policies that lead to default in the first place and simply kicking the can of eventual consequences down the road to next generations.

If you’ve been paying off each credit card with successive new ones, cutting off that process is difficult, and someone will get hurt. Someone will have debts unpaid. We are not suggesting otherwise or even that the debt limit formula is the ideal approach. The simple fact is that perhaps taking a step back from all the spending is a more reasonable attempting to delay indefinitely what is, in reality, inevitable.

As we reported, in January, Congress took the unprecedented step of choosing to avoid this question entirely, instead delaying the issue until May 18. And now, there are hints of a further delay on the horizon, as Roll Call’s Paul M. Krawzak reported recently, based on expectations that Fannie Mae will make a sizable dividend payment to the Treasury and dependent on other actions the Treasury might take.

Of course, this newest development is not as troublesome as the first. Avoiding getting to the point of a debt ceiling standoff is a goal worth pursuing. But now more than ever, Congress needs accountability for its actions, and delays can unfortunately remove accountability from the equation.

Whether the vote happens next month or in the fall or next year, it is crucial that elected officials be held responsible for the financial impact of their decisions. For that reason, it is imperative that Americans who care about spending stay focused on this issue and do not let it, like so many other fiscal issues, slip into the realm of endless delay in the face of unavoidable eventual crisis.