There are many other plausible theories but they are less realistic according to the way the Government works. In conclusion, The United States National Debt is trillions of dollars in “the hole”. America`s wealth is lacking as the debt is a growing problem. If we are unable to solve this rubix cube of a crisis, America may never regain its former splendor. This gigantic debt must be solved in order to restore wealth to the nation as a whole.
People who are entrenched in debt, however, should employ a strategy of cutting down variable spending and putting the extra money towards debt payments. Akin to the proposed balanced budget amendment, this ensures that they lose less and make more money. Debt is slowly pushing America’s economy into an unstable state. This will eventually result in a dramatic increase of taxes, which will subsequently decrease the overall budget of most Americans. National debt is increased even more when people abuse credit, accepting debt into their lives.
According to reports, since 1981, our national debt has grown faster than our economy has, which to me seems to be a problem. If this debt was to be spread out among the people it would be more than the average american would be able to pay. We therefore, need some sort of policy that wouldeventurally cut our national debt to some reasonable amount. A new policy would help by lowering the currentinterest rates, which in turn would allow for moreinvestment to occur. This would raise our real GNP of the economy.
In 2008, the investments lost values by 29 percent and Thomas DiNapoli New York State comptroller lost 40 billion during that year (Lowenstein, 2010). Some of the funds returned in prosperous market periods but they still lost a lot of funds (Lowenstein, 2010). Additionally, in Mary Williams and Katie Zezima (2010) article Small City, Big Debt Problems, we can see problems in accounting and management which is pushing the pension crisis further. In Central Falls, Rhode Island the city has landed in bankruptcy because of the pension problem (Walsh & Zezima, 2010). They are spending more than they can replenish according to... ... middle of paper ... ...ing law suits for cutting cost-of-living adjustments for existing workers’ pensions (Lowenstein, 2010).
Educating and providing awareness on the issue of national debt will help Americans understand and motivate them to help the government in finding a solution to this problem. The government needs to create a balance between expenditures and incomes before the deficits continue on growing. This country has so much to offer but at the same time it does not have the right tools to have a stable economy. The health reform ensuring a cut in excessive spending will not only provide health care to the uninsured children and adults but also help in eliminating the possibility of making America the largest debtor. To achieve this goal, the need of creating better public understanding of budget predicaments is vital.
When the government has a high amount of debt it reduces government spending and budgeting. The less the government spends, the more unemployment levels rise. When unemployment levels rise the government has to spend more on welfare which is money spent with no productive aspects. This is a vicious cycle that is often repeated in many countries around the world because their currencies are linked with the US dollar. A country accumulates debt when the government’s expenditures exceed its income during a financial year.
The government will be forced to spend more of their revenue on services for the elderly while their income decreases, forcing the United States into even greater debt. Three main factors und... ... middle of paper ... ... health care is compromised. With a larger number of older adults, greater health care needs must be met and this can take away from other services and programs. The economy is affected and could be forced into depression and debt. Our government is forced to spend more on services like pensions and health care while their income decreases because of decreased tax revenue.
Would our small, financially challenged country really be able to stand on its own feet against the bigger countries in the global market? For over 300 years we have been part of Great Britain’s success but now in a time of economic meltdown, people have a growing want for independence. To start, let’s take a look at why our country can’t afford (and will never be able to afford) independence. The credit crunch occurred when our banks were forced to cancel debts after them carelessly giving money to people who could not repay their loans. This forced the government to use public money, to keep the banks afloat and resulted in decreasing our budget by billions of pounds (also causing inflation levels to rise).
Employers and workers finance the program through payroll taxes. “Participation in the social security system is required for about 95 percent of all U.S. workers.” There are four main points why social security is going to fail and ruin it for the generation to come. A better way to measure the financial trouble facing Social Security is to compare the promised total future benefits to the program 's total future taxes on a present value basis. Unless policymakers cut Social Security and other programs, the fiscal and economic outlook for the nation looks grim. The large baby boomer generation is beginning to retire in droves and average life spans in the nation are continuing to rise.
93% of these are NON-MEANS-TESTED. Federal spending on the 65 and over age group is 11 times greater than on the 18 and under age group.^1 We must pay off the debt, but the current Republican plan should be votoed. First of all, it leaves welfare for the well-to-do, Social Security, and defense off the table. In fact, the current plan calls for a $34,000,000,000 increase in defense spending.^2 (Doesn't the military have the discipline to learn to be more cost-effective?) At the same time, the Republicans are calling for a $245,000,000,000 tax cut.