As the United States’ debt grows, so too do concerns about it. The issue of the debt is an interesting one. On the one hand, of course, it is an important debate that needs to be had. We can’t continue to spend willy-nilly without a plan to one day pay it back. I’m not a huge fan of putting it off, necessitating massive tax hikes for my generation.
But in reality, it isn’t the biggest issue we face. By far.
Yes, the United States has the largest debt of any nation. Fourteen trillion dollars is a large and scary number, and it’s increasing all the time. But there are other, perhaps better, measures of the debt.
For example, as a percentage of our GDP, it’s only at 58.9 percent as of 2010, which ranks 36th in the world. For a little comparison, Japan has the largest debt to GDP ratio at 225.8 percent. The debt to GDP ratio is a good measure of just how large the debt is, because it quantifies the otherwise imposing figure of our debt against the income of our country. The debt is large, but we are an incredibly wealthy country.
Again, this isn’t to say our debt is not an issue. But it does mean the doomsday forecasts of a financial collapse are farfetched, to say the least. It also means that we need to be cautious with regard to the proposed budget coming out of Congress, spearheaded by the GOP.
Chairman of the House Budget Committee Paul Ryan, a Republican representative from Wisconsin, plans to tackle the U.S. debt by cutting government spending. The main recipients of said cutting will be Medicare and Medicaid.
Medicare and Medicaid are two huge portions of yearly U.S. deficits, and, as a result, they are two important contributors to the debt. In 2010, the federal government spent just over 20 percent on these two programs alone. Thus, cutting back on these programs would help ease the debt burden.
That being said, there is another program that Republicans appear hesitant to cut back on, which by itself accounted for nearly 20 percent of the federal government’s spending in 2010. That would be everyone’s favorite Ponzi scheme: Social Security.
Though it is true that making cuts to Medicare will likely anger some senior citizens, it is important to note that Republicans appear hesitant to cut back on Social Security, which single-handedly adds nearly as much to the debt every year as Medicare and Medicaid combined. But you can rest assured Republicans are aware senior citizens vote the most, and they are also traditionally more likely to vote Republican.
Questionable cuts notwithstanding, the proposed budget will help lower the debt. Whether the cuts they are going to make will be most effective is clearly an issue deserving further examination. Citizens, as well as elected officials, need to keep in mind that while the debt is large, our fears about it seem to have grown slightly out of proportion. This has given Republicans nearly free rein in determining just how to tackle the debt issue. Their suggested course of action is predictable. But Republicans need to look at the whole picture, and if they can’t or won’t, Democrats need to force them.
If an individual is in debt, there are two possible courses of action to regain solvency. First, you can cut back on your spending. Second, if possible, you can increase your source of income. The quickest way to get out of debt is to use these two methods simultaneously. Though instantly increasing one’s income is difficult for individuals, a country can do it relatively easily by simply increasing taxes.
Republicans in the House are correct in their approach with trimming spending. What they refuse to come to terms with is the other half of the equation.
Nowhere in the proposed budget do Republicans call for tax increases. As a matter of fact, the budget will cut corporate taxes and seek to permanently extend the Bush-era tax cuts.
This is the area in which Democrats need to do their job.
Cutting taxes for the wealthiest Americans and increasing the burden on the middle class by cutting government services that help them has proved ineffective in the long term. At the very least, the burden should fall equally on the wealthy and the middle class, and it probably should be heavier for those who have the greatest ability to pay it.
This issue, of course, has been one of the largest points of debate between the two parties for a long period of time. Democrats can’t give into the irrational fears about the debt and give Republicans a free pass.
Republicans need to see the issue from both sides of the equation if the debt is to be solved in the quickest possible way.
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