The issue of the US national debt is a very compelling one. It has been debated for a long time; however, it seems that the government is not successful in finding an optimal solution to this problem. In 2004, the US national debt amounted 7,3 trillion USD (Patton). Since then it has been consistently growing at a fast pace. In 2015, the value of the US national debt is 18.2 trillion, which constitutes 102.6 percent of the country’s GDP (Patton). The complexity and importance of the issue call for immediate action. Thus, in this paper, I will analyze strategies to solve the national debt problem.
Cut Spending and Change Taxes. David Walker advocates an approach of facing the reality and taking immediate action. He stresses an importance of leaving ideological beliefs that it is possible to ‘grow’ out of the structural debt problem (Knagenhjelm).
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This strategy aims at living according to one’s means, instead of believing that growth, not sustainability is a correct approach. This method is likely to have the following implications.
First, decrease of government spending. Currently, the government spends more than the economy produces, as indicated by the debt-to-GDP ratio (Patton); thus, the society can enjoy a better life than it affords.
Second, the increase of taxes. Since the US economy is currently running at a deficit, it might be necessary for the society to pay additional taxes to ensure that the government does not have to borrow more funds. It is a short-term measure only. This approach, in combination with the decrease in government spending, can change the trend completely and achieve a sufficient debt-to-GDP ratio in a relatively short period.
It is a very solid approach since it affects society’s mentality and produces timely, visible results. The issue of the US national debt is everyone’s problem; thus, it is rational that every member of society must take some action to solve it.
It is a very good solution, which does not have many structural disadvantages; however, it would be an unpopular policy. Thus, it is likely that policy-makers avoid initiating this approach because it will have a negative impact on their popularity and is likely to cause a lot of protests.
Cut Defense Spending. It is a less ‘painful’ version of the previous strategy, advocated by Colin Powell (US News & World Report). He believes that defense spending is one of the primary causes and, thus, solutions to the deficit issue.
According to Skye Gould and Jeremy Bender, the US has a defense budget of 601 billion USD. They stress that this amount is more than expenditures of the next seven highest defense spending countries combined (Gould and Bender). Thus, the government could obviously decrease a substantial amount of spending and make a first step towards solving the issue of the US national debt.
The achievement of this approach is that it does not change society’s lifestyle. Also, it does not affect the US position on the global arena. Even if it decreases a substantial amount of the US defense budget, the country will still be able to remain the state with the largest military expenditures.
The reason that this approach is not yet applied is the increasing amount of conflict in the world. Thus, the fact that the country becomes relatively weaker when the whole world is getting involved in conflicts is one of the vulnerabilities of this strategy.
In conclusion, I enjoyed working on this assignment, as it made me study the issue of the US national debt and provide strategies to solve this problem. In my opinion, the way out lies in people’s ability to face the situation and make unpleasant, but necessary changes.
- Gould, Skye, and Jeremy Bender. ‘Here’s How The US Military Spends Its Billions’. Business Insider. N.p., 2015. Web. 18 Nov. 2015.
- Knagenhjelm, Ruth. ‘David Walker Speaks Up About The National Debt’. The Seattle Times 2013. Web. 18 Nov. 2015.
- Patton, Mike. ‘National Debt Tops $18 Trillion: Guess How Much You Owe?’. Forbes 2015. Web. 18 Nov. 2015.
- US News & World Report,. ‘Colin Powell: Cut Military Spending To Reduce Deficit’. N.p., 2011. Web. 18 Nov. 2015.
