I have been lowering my personal debt ceiling partly because I'm afraid of what will happen when the Federal Reserve's quantitative easing bond buying program unravels. According to a recent article by CNBC, the Fed's "hidden agenda" behind QE is to keep interest rates low on the national debt. It's terrifying to think the national debt as of July 2013 was $16,738,158,460,368, according to The Concord Coalition. It's simply unacceptable to me that the government spends more money than it takes in. It seems to me the QE is letting the government "get away" with runaway spending because lower interest rates make the annual deficits more manageable. A Gen-Xer, I'm afraid of what will happen to my middle-class lifestyle when reality hits the debt ceiling fan. I'm even more concerned for my children.
Paying higher taxes
For years, politicians have insisted that they won't increase taxes. I don't mind paying some extra money in taxes to bring down the national debt. Most Americans won't be able to afford to pay the penalty for opting out of Obamacare or health care premiums as well as higher taxes. Something has to give. Each year, I set aside what I can in anticipation of higher taxes. If the government reformed antiquated tax codes, the average middle-class person like me wouldn't have to bear the brunt of the problem.
Rocking the real estate market
When QE finally ends, it will rock the real estate market. I won't buy a step-up home because I'd have to trade a low interest rate of 2.75 percent for something much higher. I'm worried my sons will have a hard time affording a mortgage. I think my fears are extremely realistic considering the Fed can't keep printing money forever.
Being swindled by elders
I will have to save more money for my retirement since the social security trust fund will most likely be in insolvent by the time I retire. Most retirees today didn't pay as much in taxes as they now receive in government benefits, according to The Can Kicks Back, a campaign to defeat the national debt led by Millennials. Benefits to seniors have doubled relative to economic growth. According to their "swindled" report, someone who is 65 today will receive $327,400 more in benefits than he or she paid in taxes. But a young worker will be left with a tax burden of 60 cents for every dollar he or she earns.
According to The Can Kicks Back, Americans need to make a "grand generational bargain," so that young people are not left to pay the tab for the baby boomers. Solving the national debt problem should be tackled like the emergency it is. Unfortunately, most of the politicians in office right now are baby boomers who don't care about the national debt because they aren't the ones who will have to pay it back down.
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