• Large Future Deficits
• Demographics
• Future Costs
• Macroeconomic Problems
• Slow Economic Growth
• Generational Accounting
• Increased Interest on Debt
• Capital Flight
• Economic Solutions
• Social Security
• Medicare
• Discretionary Spending
• Taxes
• Political Limitations
• Ideological Difference
• Partisan Politics
• Public Awareness
• Deficit Politics
• Entitlement Spending
• Policy Recommendations
• Complete Recommendation


• Full Printable Document

"Since the future is further out for students, they should ask [older generations] to do the right thing"

                 - Catherine Mann

The United States is facing a government deficit crisis.  Experts agree that large future deficits will create serious negative economic repercussions. Deficits will slow economic growth, increase indebtedness to foreigners, and require a growing portion of federal revenues to go towards payment of interest on national debt, reducing our ability to pay for the programs we care about most.  More importantly, current deficit spending is being put on the tab of today’s college generation and future generations.  Economist Lawrence J. Kotlikoff describes current economic policy as “fiscal child abuse.”[i]  When our nation understands and acknowledges this generational burden, politicians will feel more pressure to address the issue of the federal deficit.

Our deficit problem mainly stems from the promises that our government has made to future Social Security, Medicare, and Medicaid beneficiaries.  We have promised more than we can deliver.  By 2020, these entitlement programs will require 18.5% of the income of the nation’s working population, up from a current 8%.[ii]  The problem is the government will collect less in tax revenue than it has promised to pay in benefits because of the looming wave of baby boom generation retirees.  The fiscal shortfall is projected to drastically worsen because of the growing demographic imbalance.

Economic solutions to the problem exist.  However, politics complicates economic approaches to the deficit problem because of conflicting interests and increasing political gridlock.  In spite of these complications, deficit reduction needs to become a priority now.  As CBO director Douglas Holtz-Eakin says, “If we wait until the baby boomers retire to fix the deficit, the costs are baked in the cake.”[iii]  Project 2030’s goal is to sound the alarm on deficit issues.