National Debt Solutions

The national debt imperils the future of the United States. Okay, so what are the national debt solutions we can implement to defeat this problem?

Historical Problems

I’ll be the first to admit that the amount our country owes to others is not exactly the most exciting of subjects. Well, that is until you look into history and realize what we are facing here. The single most common cause of the downfall of great civilizations has been the very thing we are facing – debt. There are experts and websites dedicated to avoiding this eventuality here in the information age, of course. The UK has lovemoney.com to refer to when unsure while we too have The Wall Street Journal for advice, but is it enough? Countries grow to a huge size and then suffer under the weight of their financial obligations If it happened to the Romans, it is certainly something we need to pay attention
to.

Raise Taxes

When it comes to national debt solutions, raising taxes has to be part of the solution. Those people who are suggesting we cut spending without raising taxes are living in a dream world, one that isn’t a solution for our debt problems. On this topic, the Republicans are simply wrong.

Cut Spending

We spend more on just Medicare, Social Security and the military than we take in via taxes each year. These three expenditures have to be dramatically modified or there simply is no hope of dealing with our debt. Medicare is going to have to be radically refined to cut out waste and eliminate some benefits. Social Security is going to involve a huge increase in the qualifying age, which will cut expenditures. The military is going to go under the knife as well. We currently spend more than 7 times as much as any other country on our armed forces. Cut this to three times as much and we will save $400 billion a year.

Politics

So, how likely are these solutions to be implemented?  The old cliché of a snow balls chance in hell come to mind. The problem is politics. Name me one politician who will run on raising taxes while cutting the military, social security and Medicare and I’ll show you a politician who lost a landslide vote. Sadly, it just isn’t politically possible.

Practical Solutions

Are there any real, practical solutions to the problem? Not really. One of two things will happen. The first is buyers will stop buying treasury notes. This would force the Federal Reserve to crank up the interest rates, which would effectively send us into a second Great Depression. Then politicians would be able to make the dramatic changes we need under cover of the crisis.

The second option is to devalue the dollar. Let’s say I owe you 10 white granite pebbles. They are fairly rare, so they have a solid value. Then suddenly someone discovers a mountain of white granite pebbles in a canyon in our city. Suddenly those pebbles are worth much less and I can just head over to the canyon to get what I owe you. This is exactly what the Federal Reserve is doing today.

The Fed is devaluing the dollar. Oh, it says it isn’t, but everyone knows exactly what is happening. By devaluing the dollar, it becomes easier to pay off the debt or at least maintain it. This is good for the government, but bad for us as individuals. Why? Everything becomes more expensive. In fact, you’ve probably noticed this being the case with food, clothing, gasoline and so on. This is also why you see prices on gold going through the roof.

Are we really in this serious of trouble? Sadly, the answer is we are. The only way to deal with this situation is to make your voice heard. Educate yourself on the subject by reading sites like this one.

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