I watched last weekend’s March for Our Lives with mixed feelings. After all, there’s something great about seeing folks of any age get involved in the political process. But as far as dangers go, today’s teenagers have bigger and more permanent issues than periodic high-profile shootings.
In fact, while media coverage of shootings has gotten more intense, it’s still a safer time to go to school than back in the 1990’s. While today’s media coverage of such events found its crucible in shootings like the one in Columbine, America’s view on firearms has only improved since then. Most folks seem to recognize that rights are rights. And that a gun is a tool. It’s not good or evil on its own. It’s a function of the person using it.
That’s why today’s teens face a bigger challenge— and so does just about anyone under 50 at this point. That’s because there are more dangerous issues at stake. They all center around the role of government. And whatever happens with gun rights on the individual level, governments can only do what they do with the use of threat of force.
Consider our federal budget. Last week’s omnibus was a $1.3 trillion monstrosity. But even if it was a stellar example of relatively limited government, government is still on the path to passively grow. In fact, you could cut the entire military budget to zero, cancel education, energy, and infrastructure spending. Government spending would still rise.
That’s because the lion’s share of government spending is in transfer programs. That’s a nice way of saying the government has a regular scheme in place to rob Peter to pay Paul. Most of the spending there is on Social Security and Medicare, so chances are, the older you are, the more likely you’ve been on both sides of that Peter and Paul equation.
It’s going to be a little different the younger you are, and a lot different for today’s teens. That’s because Social Security is already getting close to going from a decades-long surplus to running near break-even. It won’t be long before it starts hitting deficits. And with demographics gradually aging the country, we’ve already gone from having one beneficiary for every seven workers to three, and it’s fast closing in on two.
That’s just a broad look at the federal level of government. State and local governments add their own complications too. For instance, the city of San Francisco is now running a $10 billion budget deficit. While that’s chump change compared to Washington, there’s no end in sight.
Consider this fact: the city’s population is only up about 15 percent in the past three decades but city employees are up nearly triple, it’s going to get worse. Cities like San Francisco offer generous pensions to their employees, with benefits that tend to be based on salaries earned in their final year of employment, among other benefits.
So the city’s budget gap is going to be blow wide before it gets better. That’s no surprise. What’s most surprising is that the city’s population continues to increase, as it’s the taxpayers who will have to face either reduced services or higher taxes to cover the budget shortfall.
What’s true with San Francisco’s budget is true of most other big cities as well. And with many suburban cities starting to push for higher taxes and services in a bid to become more attractive to city folk, you’d have to move far into the country to get a reprieve from this growing source of economic conflict.
There are no simple solutions to these problems. Sure, there are simplistic solutions to problems, like gradually raising taxes and gradually reducing benefits. For programs that rely on cost-of-living adjustments, simply fixing their maximum rate of growth at, say, half that of the overall economy would particularly stretch things out.
But just as we gripe about these programs as taxpayers, we love them as beneficiaries. There’s a reason the government likes to cite Social Security as its most popular program. Of course it’s popular: how often do you get your money back from the government?
If you’re already at or near retirement, this might just sound like no big deal. And chances are if the economy can continue to grow, some of the pressure will be eased. But just as no single snowflake can start an avalanche, it’s also true that no single dollar in a government’s budget is going to tip things from a concern to a crisis.
Chances are it will become a crisis. The question is when. I’d put it at 5-10 years off, but it could come sooner, and it might even be the reason for the next major panic in the stock market. That’s part of the reason why I’ve been warning to reduce your stock market exposure in ways that can still keep you invested profitably. After all, the private sector can thrive even with a lot of market interference by government. There’s still a good chance that we’ll make the necessary changes without a series of major panics.
So, again, if today’s kids were smart, they’d be marching for their economic lives. They might have a future dominated with far higher taxes and far fewer government services than they have today. And if law enforcement’s role in utterly failing to follow up on warning signs about the most recent school shooting is any indication, it’s time to rethink the size of government at all levels, not just federal.
And, yes, it’s fine for adults to join in as well… even if they’re finally getting the money back they were required to pay into government transfer programs in the first place. Your economic future is too important to be left in the hands of the government.
Andrew Packer is a Senior Financial Editor with Newsmax Media. He currently writes the Insider Hotline investment advisory, serves as investment director for the Financial Braintrust, and writes the monthly newsletter Crisis Point Investor.
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