COMMENTARY | This generation of politicians has killed fiscal responsibility–but millennials and Gen Zers will be the ones who pay the price – By Robert Hormats (Fortune) / Sept 21, 2023
America’s fixation on short-term fiscal policy is shortsighted–and it has serious generational consequences. For several decades, one of the most glaring defects in American fiscal policy has been its narrow focus on what is politically popular at the moment. We too often ignore the long-term effects of measures that may be politically attractive in the short term, but harmful in the future, such as the long-term costs of how much our government spends on non-vital programs or big tax cuts that serve no major national purpose other than satisfying powerful interest groups. We need to shift gears–and Australia’s intergenerational approach may be a good model of long-term thinking.
Legislative and political debates pay little attention to how much and in what ways the rapidly rising debt from spending and tax cuts will burden our government and society in the future. Tough decisions on how to put our nation’s finances and key federal programs on a fiscally sustainable footing over future decades are largely avoided.
If there is an overall policy at all, it seems to be one of kicking the can down the road. In so doing, it leaves even tougher decisions to future presidents and Congresses. It shifts the repayment and interest burden to successor generations: our children and grandchildren, who will inherit enormous financial obligations. They will have to repay these huge burdens–or shoulder astronomical interest costs.
