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One Trillion and Climbing
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Essay by:Jenna Fugate
Emporia State University
During our current recession, the federal government’s huge deficit has increasingly been under a microscope; however, the deficit should not be the most important concern. In my opinion, the increase in the deficit is to be expected and it is appropriate because of the actions the government has taken to try to turn around the economy. The state of our weak economy is the main concern along with the immediate action we need to come out of the recession. It will take many years to get out from under this debt.
The high deficits that have continued for long periods of time will do damage; it should be common sense that trillion dollar deficits are a problem. Our government’s continuous borrowing of large amounts can produce inflation, decrease housing investment, lower future incomes, and raise interest rates. As we have seen before, these can harm the economy and the people. As worker’s wages cannot keep up with rising costs, it is difficult or impossible to afford many things including the purchase of a home. However, it is just as difficult for the government to pass any sort of necessary public programs when there are such large deficits and debt hovering over the budget process.
The Congressional Budget Office and the Office of Management and Budget both project high deficits through 2019. Many people think the budget can be reduced through spending cuts alone. I do not agree. We would have to slash spending everywhere dramatically to see any changes. However, we cannot slash spending alone. We also have to raise taxes given the size of these problems.
I do not believe it is realistic to think we can cut spending in all areas. Some areas would have to be spared, which obviously means that the cuts in the other areas would have to be deeper than others. For example, one option to help cut spending from the budget is to cut or eliminate Social Security for future generations; I hope for our sake there is a similar plan to take its place if this occurs. Similarly, cutting or eliminating funds for health care could be considered in the United States if we plan to reform. If we take Medicare out of the picture along with Social Security, the projected deficits and national debt would diminish; however the consequences are almost unimaginable.
Another main thing we need to consider is the impact of the wars in Afghanistan and Iraq. Bringing the troops home and pulling funds out of defense spending would begin saving a substantial amount of money. I’m afraid the rest of the budget cuts in schools, health clinics, highways, food safety and regulations, and other important things like that would be devastating especially if slashing spending is the only road we take to reduce the debt.
We have to raise revenue to balancing the budget. “I don’t think there’s an economist in the United States that thinks when you’re trying to get out of a recession and to create jobs, you ought to raise taxes,” said a Mississippi Governor Haley Barbour, a Republican. I know many have that same reaction when raising revenue is considered, but if we do increase taxes on those who have the extra income, it seems like the only other way we can accomplish a balanced budget.
The federal government would have to collect a very large amount of money from taxing everyone to make even a dent in the deficit. I believe if we have moderate spending cuts along with an increase in taxes to families making more than $500,000 a year we could eventually reduce the debt problem in the United States.
Regardless of whether or not the solutions I have proposed in this essay would actually create a change in the economy or not, unnecessary government spending is going to affect everyone in the United States for many years to come. The choices the government makes to take on this problem will have an impact on students, families, and the elderly. Solving this problem will in no way be easy, but the longer we wait without any change, the worse it will get. It is important that we use care in this balanced approach so that the solution will not make the problem worse. The sooner we recognize this, the sooner we will be on the path to a solution. Acting as if it is not essential to solve this problem, or that it is too big and difficult, will not get us where we need to be.
»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.