Amid the exhausting disagreement in Washington, one fact is not in dispute: The nation's fiscal trajectory is unsustainable. Although the soaring debt dominates recent policy discussions, no long-term reform is in sight. The debt the government accrues by overspending today has to be paid eventually, and that crushing burden will fall on our nation's young. If the reckless spending is not imminently curbed, our children's futures will be less secure, less prosperous and less happy.
The problem, and the math, is straightforward: Our government spends too much money. The national debt is currently $16 trillion. If you spent $1 every second around the clock, it would take you 31,688 years to spend $1 trillion. During the current presidency, the debt has increased by $6.4 trillion, two-thirds of its 2008 amount, the largest debt explosion in our nation's history.
The spending problem that exponentially outweighs all others is mandatory entitlements. Medicare, Medicaid and Social Security account for 62 percent of the federal budget and rising. We could eliminate every other government expense except for entitlements and paying debt interest, and still, our government could not pay even for that. We cannot seriously fix our debt and secure our children's futures unless Washington dramatically and precipitously reforms mandatory entitlements.
One significant reason for this mess is that our population is aging and retiring. Meanwhile, our work force is declining due to the struggling economy, declining birthrates and childbearing delays. The changing population means that for the next two decades, a smaller work force, today's young, will financially support a growing retired population.
We cannot fix this problem with increased revenue. It is a mathematical impossibility. Federal revenue comes from income and payroll tax. If fewer people are working, there is less tax to collect. Raising taxes on those earning $250,000-plus annually, or even taxes across the board, will not solve our problems. Even with the president's tax proposals, the national debt will rise by $7.7 trillion in 10 years under the president's budget.
Why does this debt threaten the young? Massive debt reduces national savings and wealth accumulation. Less money translates into cuts to programs that provide critical support for the poor and elderly, education and infrastructure. Debt also threatens national security. In 2010, the Joint Chiefs of Staff chairman told the president that our biggest national-security threat is our debt. Liability to investors abroad compromises our freedom, power and credibility. Without emergency reserves, we will be unprepared to defend against increasing global threats and natural disasters. Financial uncertainty hampers investment. If creditors are concerned about the dollar's value, they will not loan or will charge higher interest rates to reflect increased risk.
The young will pay the price. With less money in our pockets, we will have more difficulty saving and investing. The standard of living for everyone will erode, as there will be no funds available to help those truly in need of assistance. With no money to invest in job creation and education, younger Americans will have fewer opportunities to find well-paying and fulfilling work. The increased need for wealth distribution will fuel resentment and disincentivize work.
Fortunately, there are reforms we can implement now. We can raise the retirement age, aggressively fight entitlement fraud and reduce subsidies to upper-income beneficiaries. Over time, but starting now, we must move toward a system that ensures against poverty and is not an across-the-board, big-government subsidy.
If this strikes you as unfair because you paid into these programs, you're probably right. But it's also not fair to mortgage our children's futures by continuing to fund programs we simply can't afford. The younger generation also is paying the price. No generation has suffered more from the current fiscal situation than the young. Median net worth of people younger than 35, according to the U.S. Census, fell 37 percent between 2005 and 2010; those older than 65 took a 13 percent hit. The wealth gap between younger and older Americans is now the widest on record. The median net worth of younger-age households is down 68 percent from 25 years ago.
When discussing ways out of this fiscal mess, the president talks about "fairness." A fair budget is one that accounts for the interests of the nation's young. This is only possible with spending reductions by way of swift and serious entitlement reform. Undoubtedly, it will be painful for everyone. But none of us can genuinely talk about fairness and concern for our children and grandchildren if, when the time comes to make tough choices, we choose to leave today's debts to be paid by them tomorrow. The money will not magically appear.
It's up to us to make reforms now so that our children, like those Americans before them, will have opportunities to achieve their American dreams.