The Debate over the National Debt is an issue that came to a head this summer as the Federal Government approached the debt ceiling. Many wonder if the debt is growing too large and who will be paying back the trillions of dollars owed by the government.
Below are a few websites that might provide insight into the two sides of the issue.
http://welkerswikinomics.com/blog/2011/02/22/the-u-s-national-debt-how-bad-is-the-problem/
http://www.globalissues.org/article/29/causes-of-the-debt-crisis
http://money.cnn.com/2011/01/03/news/economy/debt_ceiling_faqs/index.htm
http://www.slate.com/articles/news_and_politics/politics/2009/09/bill_us_later.html
http://money.usnews.com/money/personal-finance/articles/2011/03/31/how-the-national-debt-affects-you
Be sure to check out all of the sites before responding to the following questions:
- Exactly who or what is responsible for the growing U.S. National Debt?
- Is the debt a problem that we need to address immediately or is the debt a natural occurrence in our economic system.
- Would it be a good idea to pass a law that forces the federal government to maintain a balanced budget? Why or why not?
41 comments:
1. The national debt has been incurred by simply existing as a country. We've had to fund two wars and stave off two recessions, neither of which come cheaply. That along with the growth of social security and other expensive government programs, has driven us into a rather large (but perhaps only in number) debt.
2. The debt is a problem, but perhaps it is an over-hyped one. In time, if our debt continues to expand as it has been, paying it back may become a very serious problem that will hurt our economy. Higher taxes and a smaller government may be necessary. Inflation, as well as higher interest rates may come of the debt if it is not maintained. That being said, if we maintain the debt and slow its growth, allowing it to slowly become a smaller portion of our GDP over time, then we should be economically fine as a country. Some debt is often a good thing, but too much can definitely become a problem.
3. I feel that forcing the government to maintain a balanced budget would be cause more problems than it would solve. While a rapidly growing debt is not a good thing, a debt that is growing is not exactly bad. So long as our GDP growth outpaces it, then we should be in good economic standing later on. Also, preventing our government from deficit spending in a down economy will only further the poor economic times we face. If our government can spend money at a time when businesses won't, then the economy will not be hit as hard. A government needs to be able to deficit spend, but I do believe that the debt needs to be watched carefully and maintained properly.
Lauren K
After reading the articles I believe that the US government is to blame for the US National Debt because their deficit spending on our military and in other areas as well. However, this has been done for a reason, because over the last 10 years the US has been involved in 2 wars and 2 recessions, so how could the government not spend an excess amount of money, especially with 2 political parties with opposing views on how to deal with the wars and recessions.
Furthermore, on whether or not the national debt should be addressed immediately I don't think it should be. The national debt isn't at an all time high, and this amount of debt tends to be the trend whenever a country has gone to war. For example, after WWII the US had a national debt that was close to what it is today. So, the current national debt is going through a natural phase and will be able to come back done.
As for where there should be a federal law making it mandatory for the US to maintain a balanced budget, I think no there shouldn't be. I think the US government should be able to borrow money because it works for US citizens; borrowing money, or using that future paycheck, to improve their standard of living. If there were such a law that existed today and perhaps another war started and the US needed to supply more weapons and troops, where would that extra money come from if already all the money was spent? Would other departments have to suffer, when the answer could have been to borrow money? So, no there should be no law on maintained balanced budget.
Thomas T.
1. The growing national debt is primarily the cause of our government appealing to the needs of our citizens, while at the same time dealing with issues like energy, national defense and the energy crisis as well as various government programs.
2. Our current debt is an over exaggerated problem. It is the speed that this debt grew, coupled with the continued fast increase of that debt that is the real problem. If the debt continues to grow in the future we could face a government bankruptcy and paying back this debt with become a bigger and bigger problem. However it is not yet a very serious problem and slowing the rate of our debt and letting it fall to a smaller percentage of our GDP will help fix any problems. The government can help fix this debt problem by increasing taxation and ending subsidies such as farm subsidies. Cutting things like the department of defense, while raising the age requirement for social security and medicare will also slow down the rate of debt as well as lower it to an acceptable level.
3. In theory passing a law that forces the federal government to maintain a balanced budget might seem like a good idea, however it is not. A law like this could severely limit the federal governments power, and cause more harm than good. limiting our governments spending and forcing them to maintain a balanced budget will lower our GDP growth and make it more difficult for our government to keep all our current government programs. I do not believe that limiting our federal governments power in this way will do good for our economy or for the well being of us as citizens, and passing a law like this would therefore not be a good idea.
1. The United States government is to blame here. We spend so much money that we don't have. Social security keeps costing the United States more and more every year. It seems as if both political parties are unable to come into agreement over how to spend our money. Additionally, over the decade the United States has been involved in numerous wars, and with wars there is more debt.
2. Prior to reading some of the articles I thought that the debt should be addressed as soon as possible, but after reading Welkerswikinomics I think the debt should not be addressed now. This website said, "The United States’ current level of national debt is still affordable and consistent with several other nations." It was also stated that debt is good for an economy too.
3. I think that it is a dumb idea to make it a law for their to be a balanced budget. My reasoning for this is that basically every article I read said that debt can help economies, and that our debt is manageable now. It seemed that our debt will be a problem in upcoming years if it continues to increase the way it is now.
1) The growing national debt is mainly the cause of the government spending more than it collects in taxes. This debt has grown to currently around 14.1 trillion dollars further because of the war in the Middle-East, recession, the exorbitant amount of government programs, and failure to make the rising debt a major priority by the political parties.
2) Debt isn't a huge problem but the rate at which the U.S. is attaining debt is. 14 trillion dollars may seem like a huge number, but as of now it is affordable and on par with most other countries. However, I think that in the future that whatever the U.S.'s debt may be, it will not be affordable. Especially detrimental are going to be the baby boomers that are soon going to go into retirement age and require Social Security and Medicare benefits. But this problem could be solved by slowing down the rate at which the U.S. attains debt, increasing the retirement age for Social Security and Medicare, cutting some money on the department of defense, implementing more taxes such as a carbon tax, and bringing more troops back.
3) I think that balancing the budget would do more harm then good. Even though debt may sound bad, it still helps the typical American achieve a higher standard of living than most other people. Balancing the budget decreases GDP growth and can prevent the government from doing anything about an economic crisis if it were to occur. In 2008 the government gave a huge bailout to major bank corporations in order to prevent the investments of the people from disappearing and the economy from plummeting. If the money for this bailout was over the balanced budget, our economy probably would have suffered a great deal. So it is best we not have a balanced budget.
Jenna P.
1) There are multiple reasons for the US National Debt. One reason is that Americans rely heavily on benefits, (for example, low interest payments), but are not willing to pay for them. The government is paying 20 cents of each dollar to keep this economy going and soon enough, they will not be able to afford that. Another reason for the debt in our country is foreign loans. Because other countries’ economies are in bad condition, they cannot afford to repay the loans that the United States had granted them. Thus, the US is losing money from that.
2) At first, I thought the debt should be addressed immediately but after reading some of the articles, I realized that it is affordable compared to other countries that are in far worse debt than the United States. Although the government cannot string the debt out for much longer, according to Welkerswikinomics, larger amounts of debt can come after the wars that the United States has been involved with.
3) Although at first thought, it seems like a good idea to make a law that states the government maintain a balanced budget; however, it is not. According to some of the articles I have read, debt, as long as it is managed wisely, can be beneficial to an economy. Limiting the government spending will not be helping anyone.
Kelly W.
1. I believe that the United States Government caused the growing national debt due to their deficit spending. Recently, the government has spent more money than it has gained from tax revenues in order to help fix two recessions as well as fund wars and government programs, such as Social Security.
2. After reading the articles, I think that the national debt does not need to be addressed immediately. Although $14 trillion may seem like a large amount of money, the United States' debt is low compared to the debt of other countries. In addition, the national debt has allowed for an improved economy and higher standard of living.
3. I do not think that it would be a good idea to pass a law that forces the federal government to maintain a balanced budget because it would limit the power of the government as well as potentially hurt the economy by reducing GDP growth. As long as debt is monitored and managed carefully, it can be useful for the economy.
1) In 1965, Milton Friedman coined a phrase that would eventually become associated with President Nixon. "We are all Keynesians now" echoed the prevailing idea at the time (among members of both political parties) that the federal government should have a more pronounced role in the economy. This active involvement in the market on the part of the government has led to skyrocketing expenditures and record deficits. Medicare, welfare, and other entitlement programs established during the Kennedy and Johnson administrations in the 1960s have expanded the national debt as their expenditures have outpaced their revenues. Hundreds of billions of dollars are spent each year on these programs, often inefficiently and unwisely. Recent examples of similarly-expensive government action include the $700 billion bailouts of 2008 and the $600 billion quantitative easing program implemented by the Federal Reserve in 2010. The wars in Iraq and Afghanistan are estimated to have cost more than a trillion dollars over the course of the past decade, with little-to-no return on investment. Many smaller-scale expenditures contribute to Washington's wasteful spending of its citizens' money as well. Just last month, Barry Bonds was sentenced to 30 days' house arrest at an estimated cost of approximately $75 MM to taxpayers. Whenever the government spends far more than it collects in taxes, it expands the deficit--currently at a rate of nearly two trillion dollars a year. Both political parties are responsible for the debt, as the Democrats are to blame for most of the entitlement spending while Republicans have spent extreme sums on the military, especially over the decade since 9/11.
2) The debt is a serious problem, both for our country's economic position and for our political position abroad. An ever-increasing national debt could lead to a collapse of the US dollar from its position as the world's reserve currency, and the recent downgrade of the American credit rating by Standard & Poor's is a possible signal of this concern's validity. It's unlikely that we will ever actually be able to pay off the entire debt (although we were very close just 14 years ago when Clinton balanced the budget in 1998 and proposed a plan to fully eliminate the national debt). However, it is not unreasonable to hope that we can somehow reduce the massive debts we've incurred as a nation. To an extent deficits may be necessary in some circumstances, but on the whole, extreme long-term debts are reckless and even dangerous.
3) If we have any hope of trying to pay down the debt, we cannot possibly implement a true "balanced budget" plan. In order to pay off a debt, one has to earn a net profit to pay towards it annually. If the government were only able to break even every year, it could never pay even $1 towards the $15.2 trillion current national debt. This reason alone, without factoring in the multiplier effect achieved by the outpacing of tax revenues by government investment expenditures, should be enough to dissuade the typically financially-conservative proponents of balanced budget amendments. Ideally, after reducing the debt to a more manageable figure (primarily by reducing expenditures significantly), we can fully adjust to the realities of a smaller government impact on the economy.
/Libertarian rant
1. The national debt is caused by the government participating in deficit spending, or the country spending more than it takes in via tax revenues. This deficit has been caused by a variety of things, including cutting taxes too much, fighting two unsustainable wars, the growth of social and entitlement programs, and a decrease in tax revenue caused by the recession.
2. While I do think the debt is a natural occurrence, it should not be as high as it is now. The deficit should be small, if not nonexistent. Any time the Debt exceeds the GDP (It is at 96% today), it is usually bad news for the country. This growth is not sustainable at all and it should be slowed. More debt means that we have to print more money, which leads to more inflation that can hurt the families as well as the economy. If we wait for the debt to get even bigger, we may have to tackle the problem all at once, causing even more painful cuts. By starting to cut the deficit and debt now, we can save us trouble down the line, and the cost will be less to the tax payer and the country.
3. It would not be a good idea to pass a law that forces the federal government to maintain a balanced budget. Flexibility is very important while running a government. It allows our country to adapt to unforeseen circumstances. If we pass a balanced budget amendment, we would not be able to wage war, and would be forced to cut spending or raise taxes at inopportune times. For example, if tax revenues falls because of a recession, we would be forced to cut spending. This may lead to welfare programs begin cut, which would hurt the economy even more. Also, the jump from deficit spending to a balanced budget should be a gradual one. If we cut too much at once to achieve it, it would destroy our economy, which is in dire straits as is. Overall, forcing the government to maintain a balanced budget would hurt the government and the economy by forcing them to cut spending or raise taxes without regard for outside factors and could leave our country in ruin if it is balanced poorly.
1. Over the past years, the United States has been in two wars and two recessions, all of which were very costly. This, in combination with the cost of necessary social programs, pushed up the debt too quickly for the GDP to compensate. Once things settle and funds that were previously used to fuel the wars and pull businesses from the brink of bankruptcy are allocated, the United States can begin to significantly decrease their debt.
2. Although debt does occur naturally, the debt we currently own is unnaturally high. The economy has had no time to recover. The housing market crash pulled the U.S. into a recession while we were fighting wars in the Middle East. The enormous costs we are incurring have to paid off as soon as possible so that eventually a smaller percentage of GDP will go to paying the debt, which would help alleviate some of the burden of the economic downturn.
3. Although the United States has had problems with staying on budget, forcing the federal government to maintain a balanced budget will most likely starve many programs of funding. Deficit spending is often necessary to preserve social programs that help maintain people's standard of living. If the average American isn't expected to not incur any debt, we can't expect a multifaceted, complex government to be able to without cutting many essential programs.
1. Our country has been facing national debt due to the spending patterns of our government. The government usually spends more than its tax revenues int times of war, which we are not unfamiliar with. Our country has also faced a rather impressive number of recessions. The government must deficit spend during these times in order to lessen the burden faced by the public. When the government spends too much, they need to borrow which only leads to more debt as other countries are waiting for us to pay them back.
2.I think it is in our best interest to deal with our debt problem as soon as possible. I don't think we need to automatically make our debt $0, but it is a good idea to make sure that it won't keep increasing at a high rate. We want to keep our debt from becoming too large a fraction of our GDP.
3.Enacting a law that forces our government to stay on a balanced budget spending plan could easily make our financial situation worse. If our government is forced to spend a certain amount, then they won't be able to properly act if there is a sudden crash in the economy. They won't be able to deficit spend in order to reduce fluctuation and the result could be devastating. I think that its better to allow the government to spend based on changing conditions instead of a fixed plan.
Kelly F
1) The national debt was caused by our government due to the fact that US government must borrow when it’s spending exceeds the country’s tax revenue. After all, between the two wars and the recessions the debt has not been something the government has been focusing on. All countries need to borrow money, however it is important for the government to be fiscally responsible and not let a national debt turn into a national crisis.
2) I think that debt is naturally occurring in the economy. From the start of our country our government has needed to borrow money. A debt can actually be beneficial to the economy because it enables the country to equalize the income and expenditures over time. However, our national debt has become unmanageable and we need to start making immediate changes. We are already seeing the immediate effects of this large debt. A large national debt results in higher interest rates and higher taxes implemented by the government. If interest rates go up a greater portion of the government budget will go towards these payments instead of stimulating the economy. Without stimulating the economy there will be a lower GDP level which will lead to higher levels of unemployment, not to mention inflation is simultaneously increasing. Stagflation is something that is difficult to fix in our economy. Also, we need to start planning for the future as the “baby boomer” generation begins to retire and collect social security and Medicare. This results in the trillions of dollars of obligations that the government must tend to in addition to paying back other debts. This appears to be a difficult task and action needs to be taken now.
3) I don’t think that the government should implement a balanced budget. The multiplier of a balanced budget is 1. So the government is not necessarily making a large profit by having a balanced budget. The current debt problem is caused by too much spending, not too little taxation. By the time a balanced budget is put into place we may have a Congress favoring raising taxes rather than reducing spending to meet a balanced budget. In our current economy, the government can spend into the economy, injecting money to compensate for the saving by the private sector. If a balanced budget amendment were to pass, the government would not be able to do this. Ultimately government flexibility is lost which can amount to numerous problems in the future especially if we face future wars, depressions, or other crises.
Who is "you-know-who?" This is a terrible name that wreaks of irony.
1. The national debt is because of government deficit spending. In order to run a country at war while trying to help the unemployed and the other citizens struggling in the recession, the government has to spend money.
2. The debt is a problem that is natural in an economic cycle, but I do think that there are ways to help and address this problem to make it easier for us to repay ini the future. For example, if we can cut spending on certain programs and if we could even freeze the debt ceiling where it is, that's a good start. I don't think it's a good thing for a country to be in this much debt, regardless of the fact that it's natural. We'll have to wait for our economy to mend a little so that we can make these changes as soon as possible. But i don't think we should raise the debt ceiling any more.
3. I don't think it'll be a good idea for a law to force the government to maintain a balanced budget because there are times that call for some splurges. There are times that we will go to war or suffer some natural disasters that may call for financial help from the government. However, the government should be able to successfully borrow money AND be able to give it back.
Matt M.
1. The growing U.S. national debt is has been caused by deficit spending by our government. The United States is spinding more money than the amount of taxes that they are reciving. The government is spending money that they do not have on expensive programs and conflicts over seas which is forcing the government to borrow more and more money, which is accumulating more debt.
2. I think the debt issue should be addressed as soon as possible. Although the amount of debt (about $14 trillion)is managable, the rate at which it is growing is not as managable. If the debt ceiling just keeps getting moved up whats the point of it? Yes the debt ceiling should get moved, but when debt starts to get accumulated at such high rates then the government should start reducing the debt, not just waiting until the last minute and then just end up raising it again.
3. Passing a law that would force the government to maintain a balanced budget is not a good idea. The governemnt needs to have flexibility if unforseeable events occur that would demand more government spending. To have a balanced budget people in the United States would have to pau much more in taxes to keep up with the governments spending. The other side of that arguement would be that the government would become too frugle with their money and would be providing more detraments than benefits to the people.
1. I think that the government's over spending (whether it's necessary or not) is chiefly responsible for our country's rapidly growing debt. Deficit should only be used during fiscal emergencies, but should not be used to supplement tax revenue to run government programs.
2. I think that our current debt situation is one that should be acted on as soon as possible. While national debt is natural, the scale of our debt combined with an anemic economy is likely to carry us into the point of no return.
3. I think that passing balanced budget laws and taking away the "pressure release valve" that it was intended to act as would be a mistake. I do believe that legislation should be passed that limits the amount of money we can borrow in a period of time.
1)The United States Government is greatly responsible for the growing national debt. Between increasing Social Security costs due to baby boomers and other mandatory government payouts such as unemployment, the national debt is quickly growing out of control with an average of $58,000 gained debt every second.
2)The debt is not a problem that needs to be addressed immediately because the United States does not have the highest national debt/GDP percentage. Currently the United States is at 96% national debt/GDP percentage which is approaching the high of 121% in 1945 to finance World War II. The debt now will be made up in the future through higher taxes during a time of greater prosperity. It is said the “today’s debt is tomorrows tax,” which essentially explains that the United States will not commit to any extreme debt that it knows it cannot create a tax for later. If we could rebound from a 121% national debt/GDP percentage in 1945 I believe we could do the same with only a 96% national debt/GDP percentage.
3)No, the reason the United States runs up a debt is to increase federal spending during periods of recessions and to increase taxes during periods of prosperity. This keeps the economy at more of a balance and acts as a stabilizer to the economy. Also, not all debt is “bad” debt because there are some good forms of debt. The United States government sometimes has to act “quickly” sometimes and can sometimes not wait until it has collected enough taxes to generate the program. For instance, if a family’s car finally broke down after serving the family for about ten years, the family will now need to go and buy a new car or else the parents will not be able to get to work in the morning. The family could pick out a new car that they knew they could afford but do not necessarily have the money for it now. The family would be considered in debt, but it would be a “good” debt not a “bad” debt. The same concept is applied to the United States government’s need to act on a moment’s notice to fix problems as quickly as possible and not have to wait until proper funding.
1. The growing national debt is largely the fault of the government. With two extremely polar political parties unable to compromise over anything, it seems as though the debt will only grow larger. Over the last ten years, with two recessions to fix and two wars to fight, it is inevitable that the government spends more than it can collect in taxes; however, there needs to be a limit as to how much we can spend. The amount of people eligible to collect social security is growing rapidly, and soon there will be too many people able to collect. This will drive the deficit even higher. Without an extreme increase in taxes or a dramatic cut in federal spending, the US government continues to place the people and the country in a fiscal position that will not be easy to overcome. Both political parties are to blame, and neither one seems to be in favor of a compromise to resolve the issue we all face.
2. With the above comments being said about how it is the fault of the federal government that the country is in the state that it is in, it is obvious that other countries have a much worse debt than we do. Using the microcosmic example of the average American family to represent the government as a whole, there are certain debts that are unavoidable, such as mortgages, car payments, and new appliances. Most of the families, however, are able to control their debts and eventually pay them pay. The government is on the verge of surpassing the ability to pay back the debts from defense spending and social programs, and it really is time to get the spending under control. While some debt is understandable, the government needs to at least start paying back its debts, so that we are not forced to pay them back all at once in the long run, which could cause even more damage to the programs the government has.
3. I do not think that the government should pass a balanced budget amendment. The government has obviously proven thus far that it cannot operate on the amount that it collects in taxes because of the vast amount of programs it operates. If a balanced budget amendment was passed, in times of unexpected crises, it would leave the government essentially powerless. They would not be able to increase defense spending in the case of a war without a major increase taxes. Additionally, it might cause government programs to be cut completely, which would be unfavorable to many people who benefit from those programs. I think by forcing the government to spend within its means it would leave the government unable to act in times that require drastic action, and in doing so, the people would suffer more from that than an unbalanced budget in the future.
1) The national debt cannot be pinned on one specific person or event. The United States is a country that has a reputation of helping other countries to rebuild and protect them in times of war. This dates back to the times of the Truman Doctrine and the Marshall Plan. Recently, the United States has been through a series of wars and hard economic times. As a result of this deadly combination and of the expansionary policy our government has been following for the last few years, there is no way to prevent this growing debt.
2) When viewing the national debt quickly, you notice that this number (14.1 Trillion) is close to the value of our debt after World War II - with respect to inflation. This debt was able to be reduced in the Clinton Administration so, if this debt is simply following a pattern, then we should not fear this high national debt. However, when we further examine the problem, we notice that there is more to it. The debt is increasing at $58,000 per second which is a much faster rate than any time in our history. The debt is also close to exceeding the GDP. Lastly, this debt just continues to compound on itself. As the debt builds, so does the interest rate. This means that the longer this last, the harder it will be to escape and fix the situation. This is why I believe that national debt is passing the level that would make it a natural occurrence.
3) I do not believe that it would be a good idea to pass a law to maintain a balanced budget. First of all, balancing the budget would not actually help to bring down the debt. The government needs to have a surplus to pay down the debt. If the budget is balanced, the debt will simply keep rising as interest needs to be paid on the debt (unless the budget includes that spending every year). Secondly, a law restricting the budget could lead to problems in the future. If the United States suffers an attack and there is no more money to be put into defense, then we will have much bigger problems than the national debt. This limit would also be very hard to set with a constantly changing economy and altering inflation. Lastly, with our current economy, any cap that limits the government’s ability to help our currently suffering economy may cause a slide back into a recession.
Amanda C
1) The government is at fault for the national debt. Over the past ten years, government spending has exceeded the tax revenue. The government incurred much of the debt through running government funded programs, defending the country in wars and merely escaping two recessions.
2) Since the national debt is not at an all time high, the issue does not need to be solve immediately. The debt is still considered affordable, and is much less than that of other countries. If debt is used correctly it could actually be beneficial. The government should begin to make an effort to try and decrease the amount of debt the country has, but nothing drastic has to be done at this time. Over time, however, more drastic changes such as raising the age for Medicare will need to take place.
3)I don't think that it would be a good idea to mandate the government to have a balanced budget. If the budget has to be balanced then the government would be spending as much money on programs that they are taking in through taxes. This balanced budget would not solve the debt crisis because there is no extra money. The money being taken in is simply being spent.
1. The debt is caused by the government putting the budget on the backburner, so to speak. With the recent war on terror reaching a peak in the last decade, it is understandable that such issues were not the main focus. In fact, it has actually forced us to increase our national debt to its current level.
2. Debt is only natural in a capitalism economy. Whether it be an individual, a firm or even a country, debt is an entirely natural occurrence. However, when we have let it grow as our as control as we have, it does pose a problem. Our government already faces enough problems trying to balance the budget, let alone run a net profit so we can actually begin to decrease our debt. For now, our primary focus should be to decrease spending one step at a time.
3. A balanced budget is not something that will come over night. Such a large goal for our country will need to be taken one step at a time. Our current debt jeopardizes our political standing in the globe, and should definitely be prioritized.
Caitlin S.
1.The national debt is the fault of the national government. It continues to borrow money from both the Fed and the citizens of it's country. The only way to fix the debt problem is to balance the budget and to get rid of it the government would have to make significant cuts in spending.
2. The national debt has only continued to grow and grow. There is a possibility that it is part of our economic system however, if it is than the debt will continue increasing until the economy fixes itself. I truly doubt that this is just a normal happening due to our economic system. Along with creating a balanced budget, the government needs to cut it's spending back in areas such as military and foreign aid. As well as raising taxes for citizens with higher incomes. These two things will be necessary evils to avoid economic ruin for the country.
3. I think it would be a very good idea to pass a law requiring congress to have a balanced budget because this way the debt will not increase and eventually the US government will not have anymore debt and will be able to focus on domestic issues instead of the global problems it enjoys taking on today.
Nick H
1. Contrary to the views of Steve Latter, I find no comfort of the beneficiality of debt. Granted, occurring debt allows our government to equalize incomes and improve the general standard of living; However, there has never been no set way to "control debt," resulting in our recent downgrade to AA+ by S&P rating agency. So when assessing blame, I will boil it down to one verdict, thus reveling my true identity. For example, our debt ceiling would be no where near as high if it weren't for the countless politicians acting for their own special interest. Voters do not want to hear in rural areas that Candidate A is going to slash superfluous farm subsidies, even if that would save our country a great deal of money. (http://www.downsizinggovernment .org/agriculture/subsidies) Therefore, Candidate A will appease his voting body to ensure whats best for his political career and not, sadly, American People.
2. Adding to what I stated above, the current debt ceiling is a problem that needs to be addressed now! Never since its genesis has Sterling and Poors downgraded our credit rating, which will in tern, deter foreign investors in profitable involvement in our markets.
3. While I am for a decrease in government spending, I do believe that enacting specialized laws for budgeting the nations money would cause future ineffectiveness and a lack of elasticity for adapting to future endeavors.
*Work 3-9 Mr. Karmin...I'm not THAT much of a procrastinator.
Anthony A
1. Convention shows us that with government comes a national debt. It's considered a sign that there is spending going on to improve the quality of life in the country. As this spending exceeds tax revenue, a deficit builds. As this deficit becomes larger, governments often turn to bonds as another source of revenue both within its own borders and abroad. In modern times, countries have become interdependent on each other for financial support, and the debt of each country increases as a result.
2. While debt is almost considered the norm for a country, it has its bounds of acceptability. The rapidly increasing debt in the United States is getting towards these limits. Interest can build up very quickly, and when considering a federal budget, that could mean billions of dollars every year lost to interest. It's true that most, if not all, countries incur such debt, but the quality of life in those countries suffers from the massive amounts of money being thrown away to interest. All of that interest paid never finds its way back into the economy and can contribute to a further plunge into debt that has the potential to bankrupt the country if not controlled.
3. A balanced budget wouldn't help to solve any problems as they pertain to the growing national debt. In fact, it isn't going far enough. The only way out of debt is frugality and smart investments. This country needs financial advisement to tighten the clamps on wasteful spending and allocate resources more efficiently to ensure a surplus each year without diminishing the quality of life in the country. It is definitely possible to do this; to say that our government is the paragon of wise spending would be incredibly ignorant. Things can be cut, and they should be. Tax structure should change as well to maintain the luxuries citizens receive, for cuts alone can't compensate for the amount of debt the United States incurs every single year. With changes like these, this country can shatter the longstanding conventions of the past and become the new economic paradigm for prosperity backed by smart spending.
1. The Federal Government is responsible for the growing US debt. The inability of the government to make important cuts to spending for entitlement and social programs will compound over time, necessitating some sort of future budget cuts/tax increases.
2. The debt is a program that we need to begin to address today, but need not rush into solving. The debt is a looming problem, which will grown more problematic as we move towards the future, but will also take a significant amount of time to solve.
3. It would be a horrible idea to pass a law that requires a balanced budget. The multiplier effect that we rely upon to increase GDP, and thus also keep debt under some control, would be crippled. If federal spending were equal to taxes, the multiplier would be reduced to 1, which would mean massive federal spending would be required to increase GDP, coupled with just as massive tax increases. That said, the government should not simply ignore budget deficits, and needs to be certain that the funds taken on credit are being invested into some sort of project that will have a return exceeding its cost.
1. The United States government is to blame for the growing national debt. Due to deficit spending, the government spending more than it makes in tax revenue, the debt is currently over fourteen trillion dollars. However, this increase in government spending was necessary because the government had to fund two wars and two recessions.
2. The national debt is not a big enough problem that we have to address right away. Although being fourteen trillion dollars in debt seems like a huge issue, it has been much worse. The national debt/GDP percentage is currently 96% which is above average, but in the past it has been as high as 121%. Although at the rate that the debt is increasing the problem will have to be addressed.
3. Passing a law that forces the federal government to maintain a balanced budget seems like it would be a good idea, but according the the articles debt isn't necessarily a bad thing as long as it does not get too high. Enforcing a law like this could potentially hurt the economy by reducing GDP and limit the power of the federal government.
Craig M.
1.) The National Debt has been brought on by our Governments over spending. Though our government isnt directly to blame for this, they've had to finance two wars and withstand two recessions, along with the power struggle between two political parties to fix this rising debt problem, has been a cause for our 14.1 Trillion dollar debt.
2.) The debt is an issue that doesn't need to be immediately fixed. Yes our debt is rising at great rates but our countries debt isnt as high as countries like Japan or Italy. As long as our debt isnt growing at a too fast of a rate its currently affordarable for our counrty to keep. Debt is part of our countries cycles and it doesnt need to be immediately fixed. Debt can be viewed as a postive if its not increasing at a rapid rate.
3.)It would not be a good idea to pass a law that forces the federal government to maintain a balanced budget. As seen with Debt ceilings, that anytime the debt was close to the current ceiling, lawmakers would raise the ceiling to solve the problem. A law like this would limit the power of our federal government. If our counrty was only allowed to spend a certain amount of money, then there would be no prospierty or growth. The government would start cutting more programs to meet the forced budget and that will cause more harm then good in our economy. Therefore there should not be a law forcing our federal government to maintain a balanced budget.
1. The National Debt is caused by the government increasing spending without a corresponding increase in tax revenue. The government has been forced to pay for programs that take up a large amount of the budget such as Social Security, Medicare, and Medicaid. These along with paying for two wars increased the amount of money needed beyond what was collected. This was also combined with a populace that would not accept an increase in taxes to make up the difference
2. According to Steve Latter the debt is sustainable but it cannot be allowed to increase further. Debt occurs regularly as is even encouraged for countries, but it shouldn’t reach an amount that is greater than the GDP.
3. It would not be a good idea to make the government maintain a balanced budget, because it would have to pay for unforeseen increases and pay for necessary services that may be more then tax revenue. It would be better to have a law that would make the government make a plan to erase the deficit before it boroughs money.
Jeff Four
1. The National Debt has been caused by the government's deficit spending. Deficit spending means that the government is spending more money in taxes then it collects, this is being done in order to keep economic stability during the recession our country is in.
2. National Debt is no problem that should be left unchecked, however, it is not a problem that cannot be fixed. This is not even the highest level of debt/GDP percentage. Our economy had similar levels of debt after financing WWII. The current economic situation of the US is meerely just at the bottom of the business cycle after peaking.
3. I do not think it would be a good idea to pass a law that made congress maintain a budget. As shown in the articles Debt ceilings has a not too powerful effect. If the government has to spend money it has to spend money.
Justin L.
1) The growing U.S national debt is caused by government over spending on certain programs. Why is the U.S giving money away to other countries when it's own country is struggling too. Also the growth of social security and defense spending has cause the U.S to go under trillions of dollars.
2)The growing U.S debt is a problem but it is a natural occurrence. In the economy, it is almost impossible to get rid of all the debt. As said in a previous article, debt enables us to level out income and expenditures over time. This allows Americans to increase spending and improve there previous battered lives. Overall debt is something to be looked at but it is not our first priority unless it is outrageously high.
3) No it is not good to create a law to balance the budget of the U.S. In turn this will actually hurt the U.S rather then help it. This is because it will lessen everybody's spending money and it will restrict their ways of living.
Understanding that the U.S is in debt may be difficult for many and many choose not to accept it, so what are the chances that the government canteach everyone how to budget.
1) The growing U.S national debt is caused by government over spending on certain programs. Why is the U.S giving money away to other countries when it's own country is struggling too. Also the growth of social security and defense spending has cause the U.S to go under trillions of dollars.
2)The growing U.S debt is a problem but it is a natural occurrence. In the economy, it is almost impossible to get rid of all the debt. As said in a previous article, debt enables us to level out income and expenditures over time. This allows Americans to increase spending and improve there previous battered lives. Overall debt is something to be looked at but it is not our first priority unless it is outrageously high.
3) No it is not good to create a law to balance the budget of the U.S. In turn this will actually hurt the U.S rather then help it. This is because it will lessen everybody's spending money and it will restrict their ways of living.
Understanding that the U.S is in debt may be difficult for many and many choose not to accept it, so what are the chances that the government canteach everyone how to budget.
Mike K
1. The blame for our growing debt can be placed on a number of things. Since the Reagan Administration, the federal government has been cutting taxes while increasing spending. Common sense would say that this policy would obviously only result in increasing the national debt, however, little has changed since then. This spending included the economic stimulus package, the 2008 government bailouts, and the substantial amount of money spent on the military every year. Deficit spending also didn’t help.
2. As of right now, despite the seemingly overwhelming size of the debt, it is currently affordable and not unusual when looking at other countries. Our current debt as a percentage in relation to GDP isn’t even the worst its ever been. However, when looking at the last 10 years and how quickly our debt has grown, if it continues to grow at that rate it will need to be addressed more aggressively. The debt we have right now can be considered a natural occurrence, especially considering that we have been funding a war for the last decade.
3. Passing a balanced budget law or amendment would not have a positive effect on the economy. There are situations, like the one we are in now with the war on terror, where the government must be allowed to go into debt in order to protect its country and fund certain programs. All this law would do is raise taxes to an unreasonable level in order to pay off the debt. After all, the money has to come from somewhere. Enacting a law like this now would both taxes and unemployment because government spending would have to decrease too rapidly.
Erik H
1. The national debt has been a result of the government's excessive deficit spending and inability to create a balanced budget to prevent its growth, as well as indecision over a proper taxation plan to help pay it off. To place the blame upon one person or group is very difficult (as well as controversial), but I believe that the national debt is simply a result of the inability of elected officials to accept responsibility to help solve a problem they may or may not have helped create. Their refusal to meet at a middle ground simply pushes the solution farther away from their grasp.
2. This debt is not something that will simply go away in time; it will continue to grow at a large rate until we can no longer create money out of thin air or borrow it. But until the point of absolute exhaustion, people think it's still okay to have an unbalanced budget. I don't think that any debt that reaches the TRILLIONS can be simply put off to be solved another day. What has to be done is that we need to figure something out NOW. Every day we waste is a day closer to financial ruin.
3. While a law that forces the government to have a balanced budget may indeed be effective in helping reduce the national debt, it will never be put into effect. There is simply no way that a congressman, in his or her right mind, would willingly subject themselves to the personal turmoil of actually compromising with someone who isn't exactly like them. My political cynicism aside, I do think that the only way to cease deficit spending is to eliminate the means of doing so. Nothing will be accomplished unless we genuinely force officials to make hard decisions that they might not like.
Really, the world of Fallout is looking more and more possible....
1) The national debt the United States has been recurring is not one sole person's or group's fault. From simply existing as a country based on freedom we are subject to a growing national debt. We lent out too much money to other countries as well as citizens who could not return it, causing us to turn to others to borrow more money. People's demands for lower taxes while continuing government assistance programs leaves little room for choice besides incurring debt. A capitalistic country with government aid is bound to end up in debt.
2) Debt is a natural occurrence in an economic system, but the magnitude of our debt poses a problem if it continues to grow at it's current rate. A cut to tax breaks and government programs or tax increases are necessary to begin an economic movement away from gaining any more debt. If the debt is not managed, higher interest rates and inflation are sure to occur and bring about a real crisis. Slight changes to government programs such as raising the age for a person to start collecting social security could be raised or cutting back on the amount of troops stationed around the world. Overall, the debt crisis we are facing is hyped up by the media without always relaying real statistics and the seriousness of the issue.
3) If the federal government passed a law to require a balanced budget, we would be facing astronomically high taxes as well as severe government spending cutbacks. Once we repay all our debts, maintaining a balanced budget might be more realistic but as of now it would only cause greater problems for our economy. In addition, to put that kind of a law through would too closely resemble socialism and many American's would be outraged with government intervention into the economy on that level. The debt needs to be monitored and maintained but a balanced budget isn't the answer.
The responsible party is, like in all situations, the general population--even the politicians who we credit for making mistakes are elected by the people. In general, the population has allotted itself increased benefits and higher standards of living that may be above its means. The people have in turn voted for government programs and safety net programs that it may not have been able to afford.
2)This country has to prepare for the eventuality that it will very likely experience a decrease in its standard of living in the future, and should prepare for it immediately. Government spending toward current issues should be suspended and current taxpayer money should instead be spent toward a newly created social safety net storage program--the money will be activated for usage in the future if the Recession reaches a predetermined critical level. This money could be used to cushion the effects of the recession in the future and could be used to rebound the economy in the far future.
3) If balanced budget means a government without a manageable debt, then no. However, it is not unreasonable to hold the Federal government to an increased level of responsibility over how much debt it is in as a relation to how long it will take in the foreseeable future to pay off the proposed increase in debt. If the level is over ten years, the plan should be rejected. A debt is necessary, however, to kickstart the economy when it is in a period of recession.
Allison B.
1.) After Reading the articles, as well as covering the recent raising of the US debt ceiling for my AP Government summer assignment, I believe that the US government is to blame for such debt. The government has been over spending on unnecessary programs such as nuclear arsenal and space spending at a rate much higher than the rate they collect taxes. Also, although a large percentage of the debt was brought on by the wars in the Middle East, the government still could have raised revenue to an amount that could at least help manage the rising debt.
2.)By way of government bonds, loans, and other forms of borrowing, debt is natural for any country, prosperous or not. However, although being indebted is normal for our country, the rate at which it is increasing, as well as its current balance of 14 trillion dollars, is becoming a great issue. In the article “The U.S. National Debt: How Bad is the Problem?” Steve Latter brings up the idea that foreign debt will eventually be paid back by interest. A large amount of our debt however, is due to foreign banks. Therefore, every time the United States’ debt increases, interest builds on it increasing our foreign debt. If the debt continues to increase at this rate, the United States may be following the path of Italy in eventually declaring bankruptcy and defaulting on its loans.
3.)No, debt is a natural occurrence that is a part of every nation and should not be tampered with. If there was to be a law forcing the federal government to maintain a balanced budget it would drastically bring down GDP over time as well as making it extremely difficult for the federal government to fix the economic crisis that would follow the drop.
Geries Abbassi
1. Exactly who or what is responsible for the growing U.S. National Debt?
The US debt has been derived from a variety of sources including Medicare ($386 billion = 13%), defense ($687 billion), as well as social security at $761 billion for the 2012 fiscal year. So, as it can be seen from the above information, our mandatory government funded programs that most of the public is so reliant on, has cost the nation a substantial amount of money in relation to our entire financial budget. With these costs increasing every year without a tax increase, we have allowed our US debt to reach such a substantial amount as well as having our budget for the 2012 fiscal year lead us to having a federal deficit over $1 trillion dollars
2. Is the debt a problem that we need to address immediately or is the debt a natural occurrence in our economic system.
The capital system we have today is no foreigner to debt. In my opinion, I feel that we have to immediately address this debt because it is one of the largest debt's we've had in proportion to our GDP. But overall, I feel as though debt in its entirety is part of the natural occurrences in our economy and therefore, doesn’t need to be addressed immediately as opposed to believing that the invisible hand will take its own part and being everything back to equilibrium without the intended government intervention.
3. Would it be a good idea to pass a law that forces the federal government to maintain a balanced budget? Why or why not?
In my opinion, this would be a detrimental decision. If we did pass this type of legislation, and (for sake of argument) enter another world war, we wouldn't be able to properly fund the war to our current stature, while also having a balanced federal budget. Furthermore, if we were to pass such legislation, we may look potentially open to an attack by a foreign power due to our financial vulnerability and inability to take on such a financial burden while maintaining the same amount of internal expectations from our government in terms of Social Security, Medicare, Medicaid, etc.
1) The growing US National Debt is due to the US government. By consistently running a deficit in the annual budget, the amount of debt the US owes has consequently been expanding at a rapid rate that many speculate the US government will eventually lose control over.
2) The debt is a natural occurrence in our economic system, especially as our economy wants to maintain growth. Debt is a key factor in this by way of allowing access to capital that normally would be unreachable, which in turn gives enterprise an opportunity to produce more and in the end increase GDP. However, that being said, debt is not a free pass to easy prosperity. The whole concept of debt is that an entity is investing capital into another entity on the premise that the latter will be successful and return the capital plus an extra repayment (interest) for making the capital available. If minimal payments are made on, say, the $14 trillion that the US owes while recovering from an economic downturn, the interest will still constantly compound and the debt is won’t diminish. Simply stated, in the short run, the debt is benign. In the long run, problems will most definitely arise from the debt if action is not taken.
3) It would not be a good idea to simply establish a law forcing a balanced budget upon the federal government. As stated in question #2, debt is fundamental in the growth and expansion of an economy. Knowing this, if a budget was balanced, debt would decrease dramatically and eventually cease to be a part of government function, thus inadvertently prohibiting the degree of growth the economy would have otherwise been able to reach. In place of a law forcing a balanced budget constantly, a different solution could be that of legislation that provides provisions for more restrictive borrowing in times of great debt and more lax regulations when the debt is not as pertinent. If such a law came in to existence, the debt burden could have a possibility to much more manageable and maybe even a more effective tool for the government in its role within our economic system.
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