Specific Actions To Reduce The National Debt

Essay, Research Paper

. Introduction

Did you know that the last time the United States of America spent within their budget was 1969. Since then, our country has spent more money each year than it has collected in revenues. The difference, the money that must be borrowed to bridge this gap annually, is called the budget deficit. The amount of money over the use over the years to finance our deficit is know as the National Debt. The National Debt increases by approximately one billion dollars every working day. Our debt currently stands at approximately $6 trillion. That tremendous figure breaks down to roughly $50,000 of debt per American family and over $20,000 of debt for every man, woman, and child in the United States.

What will it take to get rid of this debt. Through out the years many different proposals have been suggested. Some have been radical while others have been more conservative. It is no surprise that most people do not even blink when they hear these tremendous debt figures. Most Americans have simply closed their eyes and ears when hearing and reading about this problem. However, learning more about the debt and the deficit is to our benefit because it will affect how we live our lives today and in the future. This term paper will examine what changes the government can do to reduce the national debt and deficit and the consequences that will result if the problem is not addressed.

II. Body

The causes of the debt

A. The national debt is like a credit card bill

When I think of the national debt dilemma in the United States I get reminded of a young person who gets a credit card. This person gets really excited and starts spending money everywhere. He does not care what he buys, he goes put shopping buys everything he wants and even treats all of his friends. After all he can pay for it later, right. Well, soon after he gets his credit card the bill arrives. And he can not believe the amount. However, he notices a little note at the bottom noting that the minimum amount due is $20. The kid gets really happy and tells himself he knew he did not need to worry. However he did not read the part that said there was 25% monthly interest charge and a $15 monthly finance charge. Paying with just the minimum balance would take years to pay off the debt not to mention all the added cost he would have to pay in interest. . That persons frivolous use of the credit card has led him to financial disaster. That crazy teenager with a credit card can be seen as the United States who went all out at the beginning of his credit history and ended having to pay a tremendous amount of money.

B. Wars

The roots of the National Debt can be traced back to the United States involvement in warfare. Throughout the history of the United States we have been involved in more then a handful of wars. The United States also acted as a big brother and aided countries with both military help and financial help. Where did the United States get money to help all these countries. They borrowed money, of course. They increased our National debt.

C. Governments poor social programs and lavish lifestyle

Various spending policies have contributed to our current deficit and debt problems. For example much of the waste that the United States is accounted for comes in the form of subsidies and lop sided financial agreements. The government spends billions subsidizing farmers by forgiving billions in loans, buying hundreds of millions of pounds of honey to prop up commercial bee keepers, paying the electrical bills for casinos in Las Vegas, manufacturing fertilizer, producing helium for military purposes, buying land at well over the markets value, selling off huge office complexes it seized as par of the S& L bailout at discount prices, and irrigating the farm land of multimillionaires in Central California. Were you also aware that the “welfare program costs taxpayers $300 billion dollars a year, but if the government wrote annual checks of $14,700 to all 7.7 million poor families in the United States, it would cost only 113 billion dollars a year.”

Another area of waste in the government is its lavish lifestyle. The average American would show disgust if they knew about the private airplanes, limousines, health clubs, and especially retirement benefits that Washington officials have access to. The list of unreasonable expenditures that the United States government is endless. Take for instance the fact that “the government has spent over $3 billion in some years in decorations” is truly outrageous. The government also uses millions of dollars every year to pay for parties! These are just a sample of the things that government uses our tax dollars to pay for. There are many other expenditures that our government quite simply can do without. However, they choose to just add it on to our national debt.

D. Consequences of being in deficit

There are some consequences of having a deficit. The most obvious would be that it increases the national debt. Higher debt causes higher interest expenses, making it much harder to balance the budget the next year. Higher debt whether we like it or not ultimately forces higher taxes, cutbacks in federal spending or both. Higher debt causes bigger drains on the American economy to pay interest to people and institutions in other countries. Defects t