How and why has the U.S. government debt grown since the 1980s and is projected to grow so rapidly in the next 20-30 years, if no spending and tax reforms are implemented?
The short answer is that the United States government has no restraints on spending of any form. The longer answer must trace its routes back to the Reagan administration of the 1980s. Despite preaching fiscal responsibility the Reagan administration was one of the worst in recent memory in regards to deficit spending. Reagan was responsible for massive military buildups while continually cutting taxes to the upper and middle class[1] [0]. This makes little sense economically and seems counter to conservative values of limited government. Hodgson writes “[h]is ‘supply-side’ belief that lower taxes would bring in more revenues was plain wrong.[2] [0]” It is inarguable that America needs a strong defense and military spending is undoubtedly important. Reagan, however, took this idea to preposterous, unnecessary levels and spent tax payer money on completely superfluous and worthless programs such as the “Star Wars” missile defense system. These policies of lower taxation and higher government spending are the obvious causes of growing national debt, and are continued hallmarks of the Republican Party. What’s more is that they have continued under both Bush presidencies, and indeed gotten worse as they have initiated multiple conflicts in Iraq which have cost hundreds of billions of dollars. Continued spending in Iraq and Afghanistan, combined with the Reagan ideal of lowered taxes will continue to drain resources and increase the national debt.
How do you feel about growing federal debt, its causes, and its potential consequences on you and your generation?
Hamilton argued that national debt is not necessarily the worst thing for any nation. He believed, especially at the birth of the nation, national debt would create a collective problem or goal that all Americans could identify with and rally together on. Federal debt is not necessarily a bad thing. The government needs the ability to engage in deficit spending; some programs are just too important to cut funding to even without the money on hand to support them. The problem, then, is the unchecked nature of government spending. I do not feel that government spending is bad; I feel that unregulated or unchecked spending is terrible for the economy and the nation as a whole. Without some way to rein in spending there is no way to stop the growing debt. At some point the government must be willing to submit a balanced budget or even a surplus oriented budget in order to deal with the rising costs. The argument made at the discussion that this generation must take responsibility for this growing problem is probably true: if the issue is not addressed within our lifetimes it is probable that the national debt will become completely unmanageable.
What are some reforms of U.S. Finances that you would support implementing in order to reduce debt and restore a healthier economic future for the US and for Americans living in the 21st century?
The most basic reform would be curtailing military spending in Iraq and Afghanistan. The hundreds of billions of dollars spent on these military engagements have taken a huge chunk of the budget away from more worthy programs or even paying the national debt. I would also suggest rolling back recent tax cuts and shifting the tax burden to the upper class and upper-middle class where it belongs. These are basic reforms that would not be hard to initiate and maintain and would at least slow the growing debt. It is time to become more serious about the growing predicament of the national debt. Setting aside more of the national budget to pay for the debt would also help the problem.
[1] [0] Major Problems in American History page 351
[2] [0] More equal than others, 42