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How To Stop Piling Up Deficits & DebtGet Email Alerts
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Somewhere along the line our country has fallen into a pattern in which running large budget deficits has become our normal operating procedure. This means that most years in recent memory we’ve spent much more in government programs than we are willing to raise in tax revenues. We’ve then borrowed money to cover the balance. The result is a mammoth and growing federal debt that is now approaching $12 trillion — growing even more rapidly because of our nation’s current economic difficulties, rapid health care cost growth and tens of millions of baby boomers on the verge of retirement. (Find out more about our "Choicework" discussion guides, or download the PDF version of this choicework guide). Choice 1: Establish a Zero-Tolerance for Deficit SpendingFrom this perspective, any debt is bad debt and the nation should never borrow money to cover government expenditures. We should live within our means, and simply make deficits illegal. Most state governments do this in some form or other, and the federal government should do likewise. Choice 2: Limit Deficit Spending to Responding to Dire Emergencies OnlyWe can’t be too rigid: The government should certainly have the power to borrow to deal with serious emergencies, such as natural disasters, terrorist attacks and wars. But emergencies aside, we should have a balanced budget. Moreover, we should put mechanisms in place that make it hard for politicians to call anything they want an emergency and fall back into old habits of deficit spending. Choice 3: Permit Responsible and Limited Borrowing to Make Critical National InvestmentsThere can be good reasons for the government to borrow, just as there are good reasons for those who can truly afford to pay a mortgage to buy a house. The nation should, for instance, be able to make investments in things like maintaining roads and bridges, preventing and preparing for disasters, education, and researching preventive medicine and new technologies vital to our economic competitiveness. The point is to control irresponsible and excessive debt while permitting a reasonable amount of responsible borrowing that serves the nation well. |
Changing Expectations
»A new report finds the main problem in getting the public to deal with our fiscal problems isn't opposition to tax increases or spending cuts -- it's their lack of trust in the government to spend their money wisely. |