Federal Debt and Deficit: the Solutions

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The historical federal spending of the government has already done significant damage to America; spending habits have increased the federal budget deficit at alarming rates adding $2.7 trillion to the national debt in two years, $1.4 trillion in the 2009 fiscal year and $1.3 trillion in 2010. (Montgomery) These deficits are largely caused by increases in spending rates. The current Obama Administration has used the recession in their favor to expand both the government and spending. America has not seen deficits of this nature since World War II with spending levels reaching 25% of the GDP and deficits reaching 10% of the GDP. And, even when this recession comes to an end, estimates show that annual deficits will continue to surpass…show more content…
The Obama Administration alone has added billions in new federal spending and though their aim was to improve the economy, their recessionary spending has done nothing but add to the deficit. In addition to cutting administration spending and enacting spending caps, programs like Medicare, Medicaid, and Social Security, which are responsible for a large dent in the deficit, need to be reformed. While still offering all of these programs, the government needs to find new ways to offer them without putting the country into even more debt on an annual basis; controlling entitlement programs would have a positive effect on the national deficit. Lastly, cutting military expenses and getting troops out of other countries. Solutions This section illustrates how a reduction in spending could eliminate the federal budget deficit over 10 years. It shows projections of revenues and spending as a share of GDP based on the March 2011 Congressional Budget Office estimates. My projections for revenues assume the extension of the 2001 and 2003 income tax cuts, extension of alternative minimum tax relief, and repeal of the tax increases
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