I believe the government of the United States can be a mechanism for good.
Despite all its faults, the US government provides food and health care for the poor, funds groundbreaking medical research, gives money to local and state governments for education, protects our civil rights, keeps our country safe, and provides countless other services and benefits for the American people.
These services, however, are at risk because of the ever expanding federal debt. If we do not act soon to reduce the deficit and start paying down our national debt, the government won't be able to provide these vital services to its citizens.
About the federal budget and the national debt
The national debt held by the public has ballooned recently to over $14 Trillion and is projected to continue to grow rapidly over the coming years. The level of the national debt is gravely important to the health of the United States’ economy. As debt increases, the amount of money the United States must pay on interest every year increases, causing an increase in annual expenditures without any tangible benefit. Furthermore, an increase in the national debt can become a self-enforcing cycle: as the national debt increases, it appears less likely the United States will be able to pay off its debt without defaulting, which causes creditors to charge higher interest rates, which results in making unpaid debt even more expensive to pay off, which results in beliefs that it is not likely the United States will be able to pay off its debt, and the cycle begins again.
Economists are not exactly sure at what debt-to-GDP ratio this cycle begins, but many economists put this “danger zone” somewhere in the 80-90% area of debt-to-GDP ratios. Currently, the United States’ total public debt is over 100% of its GDP and is only expected to continue growing. In other words, the United States is well past the “danger zone” of debt-to-GDP ratios and without decisive action will continue pushing further toward a potentially irreversible cycle of fiscal delinquency.
The net amount of national debt owed by the United States is affected by the annual revenues and expenditures the federal government administers. When the revenues collected by the government are less than the expenditures of the government, the government runs an annual budget deficit. However, because the government must pay for its expenditures, it borrows money in order to do so, increasing the national debt.
The only way to begin to tackle the dangerous level of the United States’ national debt is to work to reduce the deficit. Reducing the deficit can come in the form of increasing taxes, cutting spending, or both. The manner in which we reduce the deficit is hotly debate, but what shouldn’t be debated is the dire need to reduce our deficit and start chipping away at the national debt before the United States becomes fiscally unsustainable.
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