Abrams Unmasks the Intergenerational Theft
On Nov. 20, 2013, Delaware University Economics professor Dr. Burton Abrams visited JMU to present on the current debt and deficit landscape in the United States economy.
Abrams began his presentation with a quiz for students: What is the gross public debt per taxpayer in the United States? The answer: $149,600.
Abrams warns that these numbers could have dire implications for future generations, particularly those at college-age right now.
In America, there is a large amount of debt relative to our salary—“our spending outweighs our revenue,” explains Abrams. One of the major causes of this deficit, Abrams explained, are the entitlements provided by the government, such as Medicare, Medicaid, and Social Security. According to Abrams, “We will not be able to pay for certain entitlements without increasing taxpayer burden. And we will not prosper until our debt decreases because a large amount of debt triggers a slow amount of growth.”
And the future looks bleak. According to Abrams, Social Security is another major problem for the U.S. economy. Since funding for Social Security is not supplied by a full reserve through Congress, a cycle of debt occurs—creating a situation in which current generations, and even future generations, must pay for the costs of those living on Social Security today.
Abrams advice to students? Save your money privately. Abrams says, “The government has greatly reduced the need to privately save money for retirement thanks to programs like Social Security, Medicare, and Medicaid. But that is a major cause of U.S. debt. Societies become wealthy because people save privately and gradually accrue wealth, then there is no longer a need for giant government entitlements.”
At the close of this presentation, Abrams points out that if the U.S. economy continues on its current path, the younger generation consisting of college-age adults will bear the brunt of the debt created by previous generations, or as Abrams calls it, “The Intergenerational Theft.”