Facing Up: Opinion Columnist

            America is indeed being faced by a looming fiscal crisis; there is no way around it and it could have potentially catastrophic fallout. Something needs to be done and the only way to figure anything out is to first break it down piece by piece and to look at the problems. In doing so, it can easily be seen that we are facing a number of various different problems. The main focus of this essay will be on just a pair of these major problems that can obviously be seen as contributors to the problem.

            First, our Social Security and U.S. Treasury organizations are facing a catastrophic situation that if not resolved, could be a final and dominant piece of the U.S. free market economy collapsing and finally falling into depression. This problem is due in majority to the baby boomer generation that will soon be retiring; many of these citizens have do funds invested in U.S. Treasury bonds (trust funds). This should be a good thing for the government to have its own citizens investing freely into it. Most citizens take a feeling of comfort by knowing their money is in the government and they can count on their assets there. The problem with this is that the government is liable for every dollar invested in these trust funds and has not been able to fulfill this responsibility to the fullest extent and honor the money they are responsible for. This is not just a minor difference between the funds liable and the amount of money that isn’t there; our current best estimates show more than a $13 trillion dollar contradiction between the two. The system will be held responsible in redeeming this deficit in the near future, which could mean a few things for today’s’ workforce. This is a problem considering that researchers have said we will be the ones paying more in tax benefits over the next 10 years to accommodate for these unseen funds than the total tax revenue itself in that time period. U.S. Federal Reserve Chairman Bernanke agrees, it is imperative we take “early and meaningful action” (in response to challenges we now face.) He spoke this opinion to the Senate Budget Committee, he also added (if we don’t respond soon); “the economy could be seriously weakened…with future generations bearing much of the cost.”

            If our financial crisis at home is not taken care of, it could have extremely detrimental aftermath. This would be in worse case scenario, if our market fails, economies all around the world would also take huge hits. So, this could become a nightmare for the global economy very quickly if we don’t do something before its too late. A Professor at the Centre for Economic Studies and Planning at India, Prabaht Patnaik, said the cause of our problem was a general defect in our free market system. The problem and point he acknowledged is that our system is “…dominated by speculators not interested in the long term yield assets but only in the short term appreciation in asset values.”

            However, to begin turning things around, I believe we first need to make a few major reforms. First, temporarily raising taxes seems plausible to repay our Treasury debt. Instead of doing so, we should make an attempt to devise a more permanent plan; one would most likely think this is obviously the best option to do so. One more long term option would make American workers capable of avoiding worrying about a congress that spends too much and wonder if they should invest money into the government by making it available to individually open and fund personal retirement accounts. That way the money is virtually guaranteed and would be more personally profitable in this type of account. This according to freedomworks.org; although the interest rate and benefits of these personal accounts are modest, it has been shown they would indeed pay better off in the long run than accounts and trust funds invested in or controlled by our government.

            Another reform one would benefit from would be in association with and draw attention to the biggest looming crisis that also has a direct effect on the problems faced by the U.S.; the global economy. If a global financial institution were established, it would create a little bit of a global stabilizer in each economy. This could be very suitable for the U.S. and the global economies as a whole, as would any other positive effect right now. Perhaps; this would be the small beginning of that turn around for the U.S. This could also begin to show other ways to start relieving the pressure to fix other pieces of our largely looming fiscal crisis.