Since the early 1970’s, Americans have had trouble controlling a huge money issue. The United States government has engaged in deficit spending. This occurs when spending exceeds the amount of income taken in (“Budget”). American politics have been trying to come up with ideas that the government can implement to fix our current deficit issue. Some strategies that the government may use are spending less, collecting more taxes, and balancing trade (“Atkins”). The federal deficit has become a big issue and Americans must try everything to reduce the debt. We must come up with a plan that will strive for a balanced budget. One way the government can reduce the deficit is by spending less. Americans are known for spending. Whether it is on necessities or just simple wants, money is thrown out. Most of the time, we spend more money than what we really have. When you spend more than ones income, it causes a big problem. This is the main cause of the federal deficit. America has been spending more than its actual income. Every year, nearly $200 billion are thrown away through fraud, waste, and mismanagement. A lot of money is spent on unnecessary programs such as NASA etc. The set budget for the year of 2014 is $17.6 billion (Congress approved). This is money that can be spent on better options such as education or simply paying off the budget. In order to reduce the amount of money owed, the US must spend less. Spending less will allow the economy to recover and possibly pay off its debt. The US government income is earned through the collection of taxes and revenue (“Budget”). When this amount is surpassed, the country goes into debt. A major cause of the federal deficit is the insufficient amount of money available to pay off these debts. Personal income taxes are the largest portion of total tax revenues. Just in 2011, $1,091.5 billion were made. The second largest sources are Social Security and Medicare making the total tax revenue a total of $2.3 trillion (2011). The amount of tax revenues earned in a year is enough to pay off the U.S deficit. Due to the mismanagement of money, this isn’t possible. If the government implemented higher taxes, they might be able to slowly reduce the deficit. Although many Americans might not like this idea, it’s necessary in order to get the country out of this issue.
Allowing market participants to begin putting their resources back to work in areas they’d be most beneficial. President Obama’s fiscal responsibility summit last February indicated that he understood the urgent need for fiscal discipline. Congress’s enactment of the American Recovery and Reinvestment Act and President’s proposed budget makes the goals of a sustainable budget and addressing nations longer term fiscal priorities, such as entitlement liabilities, even more elusive. The administrations recently released midsession reviews from the office of management and budget that over the next 10 years the accumulated deficits will total $9 trillion which means that the debt held by public will be a staggering 77% of GDP in 2019. If the debt level continues to grow faster than our economy, the US will owe more than it makes.
we have is in three basic steps to cut $10 billion from the federal deficit
The US has been in and out of debt countless times throughout history, going as far back as the Civil War. However, debt did not become a truly relevant problem until much later, in the 1980s (Budget Deficits). Up to that point, large budget deficits were generally only allowed during wartime, but this pattern ended after the Great Depression. Roosevelt’s New Deal meant that the government spent much more than it previously did, even after the economy improved (Budget De...
On average the United States spends $529 billion on foreign affairs that will never be able to return the money to the US government. Thus, it falls into the lost money category. If the government were to stop sending meaningless money in outlying areas that have no capital to return, the debt will be greatly reduced. Many of the solutions stated above are possible, but it is our recommendation that the U.S. government stop spending money overseas first. The country may still need to look into other solutions afterwards, but we believe this is a crucial first step to reducing the national deficit.
However, in the long-term there is a huge risk of deficit spending hindering economic growth. Economics is a balancing act, I think that if deficit spending is applied in specific areas that are of the greatest need for a very limited period then it is beneficial. I think currently the best reason to increase deficit spending it would be in infrastructure. We hear all the time that our bridges are crumbling, and are far past their life expectancy. We also could use some significant upgrades to our power grid, as well as our internet networks, although those are both controlled solely by private firms. I think in the long-term there needs to be some control to how much deficit is
This deficit has to do with having responsible leader who are willing to increase awareness and make beneficial changes in the nation. In my opinion, the federal debt is a serious threat to the US that must be politically address whenever possible. I believe that the candidates of the 2016 presidential election should make this issue one of the top priorities to discuss and to dictate a considerable amount of work to fix it. That is because the worse the federal debt is, the worse the future would be to the nation. Also, voters must be well educated about this issue in order to shape their decision in voting for the candidate that seems most powerful and confident about this problem. Solving this problem may be difficult and would take time and so much effort. Therefore, the changes and solution must be on both a national and individual levels as
Government spending is a controversial topic. Even though the government has a set budget each year that Congress and the President of the United States collaborate on, the United States continues to fall deeper in debt. According to U.S. National Debt, the U.S debt has been larger than our total annual gross domestic product since 2012. In other words, our debt is larger than the value of all the goods and services produced in the country within a twelve month period. “It is said that the U.S is currently $19.2 trillion dollars in debt (U.S. National Debt).” As long as Congress and the President continue to run yearly budget deficits, the U.S debt will continue to rise.
The U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.
Alexander Hamilton once said, “a national debt, if not excessive, will be to us a national blessing.” The debt of the United States of America is by far excessive. As of April 27th 2014, at 7:45PM GMT, the estimated apparent debt is $17, 444, 8555, 980, 176.09; which makes each of the 318, 108, 108 citizens owe a portion of $54, 839.39 and demonstrates the daily increase in debt of $2.40 billion. Evidently, such a crisis did not arise over night. Numbers have steadily soared with the occasional dip and fluctuation. As for the deficit, the U.S. continues to spend more than it receives in revenue, adding to the cumulative debt. If the government continues expenditures in such increased amounts, the country will never eliminate its trillions upon trillions of debt.
Thomas Jefferson once stated, "I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt" (Bussing-Burks, 7). A lot has changed since Jefferson was President two hundred years ago, but the need to be financially solvent is something that will always be necessary for the United States to maintain its leadership position in the world. The United States of America currently owes $16.7 trillion in debt primarily as a result of the government’s spending practices during the last ten years. Two wars, several fiscal collapses, the bursting of the bubble in the housing market, looming medical care costs from an expanded healthcare access law, and a recession may be the scapegoats, but the real issue is fiscal irresponsibility by the parties in power (Hiber, 76). One idea that has been discussed not only in Congress, but also on prime time news networks is the passage of a Balanced Budget Amendment, which would require that Congress balances the country’s budget every fiscal year (American Government, 1). A Balanced Budget Amendment could provide an exception for times of war, national emergency, or recession, or allow the legislature to suspend the rule by a supermajority vote (Lee, 2). A balanced budget is critical because budget deficits can only be funded by additional increases in the level of the national debt, which can place an undue burden on future generations to repay such debt, create annual interest costs that consume an increasing portion of tax revenues and crowd out spending on current programs, and result in potential reliance on other countries in order to make financial ends meet.
We the People of the United State’s need to find ways to get rid of the debt of $19.8 trillion and it is still increasing.
Deficits and debt can encourage economic growth. It is tricky, and sometimes seems untrue, but this result evidently depends on how the U.S. Government spends their money. World War II is a good example of when America ran up high amounts of national debt and a large deficit. Looking back we can clearly see that our nation has recovered in comparison to todays national debt and deficit in the sense that the GDP during the World War II era was hiking up to twice of what our nations debt is today. A sustainable economy comes and goes, with the showcase of scientific and technological studies post war era that provided us with a twenty-five year post economic boom (). Spending our way into a deficit would not have triggered this push to revival. There are advantages and disadvantages to ever decision made and in the economic world, spending makes sense.
According to askheritage.org the Washington Post reported that the national debt is no longer unsustainable. It seems like national debt is not government’s high priority anymore. However, there are plenty of reason why reducing the national debt should be the most urgent problem that the president and congress should address in 2017. The effect that the national debt can have on the economy is tremendously impactful. Cost of living will rise because the government will find a way to collect money by putting higher interest rate on anything from credit card from house mortgage. There will be a generational inequality because by not being responsible for the current generation’s debt, people are giving burden of reducing debt to our next generation which will threaten their standard of living and retirement plan. It cause slower wage growth. Instead of making productive investments, money goes to buying government debt. The debt have huge impacts on fiscal policy. Economicshelp.org defines fiscal policy as a policy involves the government changing the levels of taxation and government spending in order to influence Aggregate Demand (AD) and the level of economic activity. The federal debt cause reduction of fiscal flexibility. Between 2008 and 2013 the GDP increased from 35 percent to 70 percent due to the Great Recession. Because of high debt, our government is not
The current debt trend as it is has the United States gaining about $1 trillion in debt yearly (http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm ). America’s GDP as of 2010 to the present is $17.914 trillion yearly. The current total national debt as of 2015 is estimated at $18 trillion, with the majority being held by foreign countries at $6.013 trillion. The second largest holders of total national debt are Social Services and Federal Disability Insurance Trust Fund at $2.783 trillion. Another cause of the increase of national debt is spending deficits, at $439 billion over Federal yearly receipt; this number is projected to exceed
I will first share my ideas on lowering government spending. First and foremost I believe we must lower defense spending and downsize our military. We have the most powerful military in the world and can afford some budget cuts without risking national security or global standing. We must also cut spending on the home front. I believe we should lower welfare payments and encourage people to find jobs instead of relying on the government. We should also give tax incentive to wealthy citizens to give up their U.S Bonds therefore lowering the Federal Debt. Also the wealthy should be eliminated from the Social Security System.