Debt
Introduction: The United States Debt is a significant problem.
Research claims that the United States has always had a significant outstanding debt. The United States Budget is over spent every fiscal year. Because the budget is over spent, the government borrows money to pay for administration fees such as health care, social security, and military expenditures. When the government borrows money, it owes money. Owing too much money could potentially ruin the government’s credit with creditors.
I. Origin
Research shows that United States debt originated from wars. The Revolutionary war began the United States debt in 1790. By 1919, World War I had increased the national debt to $27 billion. World War I increased the national debt to $6 billion. When the Great Depression began, unemployment rose. After World War II, the national debt rose to $258 billion. And ever since the Revolutionary War, the United States has been in debt. The problem is now that the debt has increased above its means of being reduced, it cannot be as quickly cleared as its previous debts once were.
A. The national debt began in 1790.
According to Davidson and the Library of Congress Congressional Research, the National Debt began in 1790. The Revolutionary War incurred $75 million in debt. According to Davidson, in 1835 President Jackson paid the $75 million total of the United States national debt. According to Davidson, The national debt was reduced close to a zero balance. Library of Congress Congressional Research states that the national debt has only been free in the years of 1834 and 1835.
The beginning of the Great Depression
B. World War I incurred 6 billion dollars in debt.
According to Davidson, the national debt grew from $6 billion in 1916 to $27 billion in 1919. Davidson states that tax receipts over exceeded government spending. According to Davidson, in 1929 the nation’s debt was reduced to $16.9 billion.
Soup Line
C. The Great Depression began, and unemployment rose.
According to Davidson, Tax revenues fell from $4 billion to $2 billion. Davidson states that when President Roosevelt took office in 1933, the national debt was almost $20 billion. In 1936 the national debt increased to $33.7 billion. In1937, Roosevelt cut government spending.
D. World War II began after the Great Depression.
According to Davidson, in 1938 government returned to significant deficit spending, and the economy quickly recovered. According to Davidson, in 1940 the economy grew and the national debt rose to $43 billion. According to Davidson, from 1941 to 1945 gross domestic product increased by half of its original state while the national debt grew more than 500 percent. Davidson states that in 1945 the national debt increased to $258 billion.
E. The United States has been at war ever since it was declared a country.
Throughout the history of the United States there was the Revolutionary War, the Civil War, World War I, World War II, the Cold War, Vietnam War and in Iraq. Every war that occurred cost the United States millions of dollars. And these millions were borrowed, because research proved that even the first war was paid off in 1835 by President Jackson. According to Davidson, President Jackson freed the country of d ebt. Research shows that although debt has been a part of the United States history, national debt sky rocketed
after 9-1-1.
II. Budget
The federal budget is over exceeded by many contributing factors. Research shows that the budget is exceeded and over drawn by both the government and its economy. The economy suffers from high unemployment rates, while the government over spends and borrows to pay for Social Security, healthcare, and military expenditures.
A. Budget Reform
In Federalist Nos. 12 and 30-36, Posner depicts the benefits of a national financial
organization with economic incomes. Posner’s dissertation examines the fiscal plan process of inflation. According to Penner, historical evidence proves that many governments have tried to inflate their way out of fiscal difficulties, and it works. Penner claims that through the process of inflation, the real value of the national debt is reduced which reforms the budget.
B. Bipartisan and Congress cooperation
Penner depicts main drivers of this situation as Social Security and health care programs,
where growth is amplified by an aging population and increasing medical costs. Congress is dysfunctional because it fails to perform the way the economy expects it to. Congress also fails the economy because of its disinclination to tackle the increasing problem of Social Security and medical programs.
C. Congress is dysfunctional.
According to Posner, Congress’s attention is focused more on elections. Posner claims that members of Congress support their on nominations and elections. Posner argues that Congress had incentives to reach excessively large-scale and emblematic fiscal aims that were difficult to keep and implement. According to Penner, Congress also allowed the estate tax to expire in 2010 because they were not able to decide if they wanted to keep Bush’s tax cuts.
D. Budget Problems
Bipartisan Policy Center’s Debt Reduction Task Force have generated thoughtful and coherent plans for debt reduction but have yielded little political linkage. Averseness to come to adheres to the United States federal deficit has escalated the stakes of a superior debt calamity, and this editorial spells out potential reactions, should there be any. Assumed the obstacles associated with the prevalent refurbishment of fiscal policy, it is challenging to see how it will be circumvented.
III. Deficit
The United States deficit is steady accumulating, while the plan to reduce it is to keep
spending. According to Commonweal, Americans have ruined their credit and left their children responsible for their accumulated debt. Commonweal claims that the debt had been incurred through the government finance of military expenditures in Iraq, heath care, and social security. According to Commonweal, state governors mandated by law have taken action to reduce the deficits. Roven claims that the deficit is a big problem America will have to face. According to Roven, the United States government exceeds its budget which creates the deficit. When the government creates these deficits, it is a big problem because the government creates debt. Deficits are debts that the economy pays back through tax revenues and gross domestic product. When a deficit is accumulated, tax revenues and gross domestic product in take is less than what the government spends in administration securities. Because the government is obliged to finance administration securities, deficits are accumulated when monies allocated exceed its budget.
A. Exceeding the budget is a big problem.
Roven refers to legal documents that list the spendings of each fiscal year from 1999 to
2002. Roven discusses the monies allocated to other administration programs funded by the government. Roven argues that the monies allocated exceed the federal fiscal policy. According to Posner, the “Great Recession” prompted deficits to increase over %10 percent of the economy.
B. The national debt deficit is at a manageable level, but it is causing frustration in its process.
According to the Editors of Commonweal, David Broder of the Washington Post explained that President Bush’s pledge to reduce budget deficits added $683 billion to the national debt, and $600 billion more each year that he was in office. According to former Treasury secretary Robert E. Rubin, projected a ten year federal deficit of $5 trillion. According to The Wall Street Journal, United States household spending increased by %30, and its income increased %11. Posner claims that deficits are arranged to return to modest levels, if the Bush and Obama tax cuts expires by 2012.
IV. Warning
According to Penner, the United States national debt is on a path to reach 185 percent of
gross domestic product by 2035 unless there is a major change in federal fiscal policy.
Penner claims that Congress is dysfunctional because Congress fails to perform the way America expects it to and lacks the inclination that is needed to tackle the increasing problems of Social Security and medical programs. According to Thomas E. Woods Jr., America must face that the national debt must be reduced. Thomas claims that the economy expects too much of the government. Thomas argues that only the combination of fiscal and monetary stimulus can save the economy.
A. Aging of the population versus
According to Penner, the average age of the economy is rising. There are fewer younger
people than before. Because there is more of the aging population, a lot of them are retirees. They are either receiving government assistance through Social Security or health care. Those receiving these benefits benefit from the tax revenues of the working economy and tax payers.
B. Social Security and Health Care
According to Penner, Congress in unwilling to tackle the burden of Social Security and m
medical programs. Penner argues that Social Security alone mandates half of the fiscal budget. According to Penner, Social Security and health programs has risen dramatically since the 1990s. Penner Tragedy of US Dolllar and economy claims Social Security and Medicare accounts for the bulk of health spending.
C. Hiring versus Unemployment rates
According to Davidson, household suffer from high unemployment. Davidson claims that entrepreneurs are unlikely to invest in new facilities, workers, and equipment while the market demands are declining. Davidson also claims that with falling property and sales tax revenues, governments are reducing spending on public programs. According to Penner, growth of the work force slowing down implied the slowing growth of tax revenues. Penner claims that the slowing down of employment will cause a long term budget problem.
D. Decrease in Market Values , Large Credit Debt, and Shrinking Pension Funds
According to Davidson, decreasing market values also decreased the values of homes. High unemployment rates also produced large credit card debt. According to Davidson, firms will hire more employees when the market demands increase. Shrinking pension funds helped decreased the incoming of gross domestic products.
The Money We Spend
E. Financing Government Spending
Fifty percent of the federal spendings of the Congressional Budget Office was directed towards Social Security, according to Penner. Penner claims that eventually the cost of the debt will begin to take over the federal budget and end government as we know it. Penner also claims that in the fiscal year of 2012, the Federal Reserve will be buying about $600 billion of the debt.
V. Conclusion
To conclude, research claims that the United States has always had a significant outstanding debt. The United States Budget is over spent every fiscal year. Because the budget is over spent, the government borrows money to pay for administration fees such as health care, social security, and military expenditures. When the government borrows money, it owes money. Owing too much money could potentially ruin the government’s credit with creditors
A. Origin
Research shows that United States debt originated from wars. The Revolutionary war began the United States debt in 1790. By 1919, World War I had increased the national debt to $27 billion. World War I increased the national debt to $6 billion. When the Great Depression began, unemployment rose. After World War II, the national debt rose to $258 billion. And ever since the Revolutionary War, the United States has been in debt. The problem is now that the debt has increased above its means of being reduced, it cannot be as quickly cleared as its previous debts once were.
B. Budget
The federal budget is over exceeded by many contributing factors. Research shows that the budget is exceeded and over drawn by both the government and its economy. The economy suffers from high unemployment rates, while the government over spends and borrows to pay for Social Security, healthcare, and military expenditures
C. Deficit
The United States deficit is steady accumulating, while the plan to reduce it is to keep
spending. According to Commonweal, Americans have ruined their credit and left their children responsible for their accumulated debt. Commonweal claims that the debt had been incurred through the government finance of military expenditures in Iraq, heath care, and social security.
D. Warning
According to Thomas E. Woods Jr., America must face that the national debt must be reduced. Thomas claims that the economy expects too much of the government. Thomas argues that only the combination of fiscal and monetary stimulus can save the economy.
