At PolicyMic, a look at why, if the government is like a family, now is the perfect time to be going into debt:
People take out mortgages to purchase homes, starter loans and venture capital when they start businesses, and student loans when their children go to college or graduate school. A society where every family balanced its budget on an annual basis would look very different from the one we live in today.
Opponents of government spending like to portray it as a wasteful indulgence, but while it can “crowd out” private investment when the economy is booming, often that is not what is happening. American households are de-leveraging and spending less money, resulting in a drop in consumer spending and less demand for goods and services. Companies, seeing little reason to expand in a market where demand is weak, have been stockpiling excess cash instead of expanding.
The youngest members of the work-force have faced the brunt of the downturn: The unemployment level among Americans aged 20-24 is 16.6%, significantly higher than the rest of the population. While Washington has been consumed with the long-term deficit, the real crisis in this country is the growing number of long-term unemployed.
To return to the household analogy, the current push towards austerity measures is akin to a family's deciding not to send their kid to college because one of the parents gets laid off. While it might save money in the short-term, the real problem lies down the road: Who is going to pay for mom's and dad’s retirement if the kids never get the chance to start careers?