The Growth of U.S. Government Debt

U.S. government debt has grown since the 1980s due to a simultaneous tax reduction during the Regan administration and the increase in military spending during the last years of the Cold War. Regan believed that less intervention of the government would boost the economy, because people would have more incentives for developing as entrepreneurs. These beliefs were referred by George H. W. Bush as “voodoo economics.” Under these policies, and the different circumstances that lead to the increase in spending, America saw the largest annual deficits in history.

Consequently, if no spending and tax reforms are implemented in the next 20 to 30 years, it is expected that the welfare plans provided by the government will be seriously affected, especially in the areas of health services and social security, as there would not be enough money for their maintenance. In order to preserve these programs, I think that the best way to halt the effects of the government debt is to limit the number of people who receive the programs, only covering the people who really need them. In the case of the social security, I would opt for establishing a maximum income level, so that the upper-income retirees are no longer eligible for benefits. Considering that the wealthiest were the ones who benefited the most by Regan’s policies, and that this resulted in greater wage inequality among social classes (along with higher requirements of education for better-paid jobs), I think that it is fair that social security is changed from a universal program to one aimed at people who cannot afford paying for their retirement.