The Pros And Cons Of US Debt Spending

The growing national deficit is a looming problem in the United States now more than ever. The national debt is constantly increasing and government spending is out of control. If these issues are not solved then they could spell disaster for the nation’s economy when the infamous debt ceiling is finally reached. Currently the national policy on the debt is to continue raising the debt limit until a solution is found that is agreeable between both parties in Congress. The two main issues of over spending and the constant raising of the debts ceiling by Congress can both be resolved by government spending reform, balancing the federal budget and initiating pro-growth policies in order to increase the government’s tax revenue.

In 1917, the United States Congress applied the concept of a "debt ceiling". Prior to 1917, Congress had to directly authorize the amount of each borrowing. The debt ceiling was put in place to provide more flexibility to finance the US involvement in World War I. After the application of the debt ceiling, the United States Treasury could borrow any amount needed as long as it keeps the total at or below the authorized ceiling. I believe a debt ceiling is a very necessary component of American politics as long as it is used correctly; however, it has been abused by frequent increases, and should be monitored more effectively.

So basically the debt limit is like a boomerang for the Congress. With added terror for the whole World. A good for example of the potential consequences of the debt limit is if the US government builds a new federal building. If the US is at the debt limit then the company need its pay after the work, the government cannot pay out the wages. This can crumble the trust in the American economy. And since most of the world’s economy relies on the American economy being trust worthy, meddling with this trust can have catastrophic consequences.

            According to the article Congressional Budget Office in The Budget and Economic Outlook: Fiscal Years 2010 to 2020, the reason for this overwhelming increase in debt is because of three factors : the obvious difference between federal revenues and spending done even before the impact of recession caused this

“Number one, we should look for some significant structural plan to reduce government spending…The debt ceiling historically has been among the best leverage that Congress has to rein in the executive…So the president’s demand, jack up the country’s credit card with no limits

Many believe the country's dramatic decent into debt began with a choice, not a crisis. In January of 2001, with the budget balanced, the Congressional Budget Office (CBO) forecast that the nation would have over a $2 trillion dollar surplus by 2010, enough money to pay off the entire national debt. In the years following 2001 political leaders chose to cut taxes, increase spending, and wage two wars solely with borrowed funds (Montgomery, 2011). Today the national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.

Federal debt has been increasing for at least the past ten years. Currently, federal debt is $19,929,184,161,352.13 (Chantrill). The national debt has nearly doubled throughout Obama’s presidency and President elect Trump’s ideas do not look promising for change. It is estimated that Trump’s tax cuts will raise federal debt by $7.2 trillion within the next decade (Mauro). Many debt crises have occurred because of declines in growth. When

There are many issues with the U.S. economy that are up for debate and in need of corrections. Possibly the most alarming issue that is not garnering enough attention is the looming debt ceiling crisis the U.S. is currently facing. The debt ceiling is the amount the U.S. can borrow to pay its bills and avoid default. Congress has acted on the debt ceiling 78 separate times by raising, temporarily extending, or revising the definition of the debt limit since 1960 (Pianin, 2017). These actions are necessary to avoid the government facing default on its debt. The government must act to avoid default by raising the debt ceiling or abolish the debt ceiling.

The U.S. national debt is currently $18 trillion dollars and it is rising fast. The national debt today is the highest the U.S. has ever seen. In George Washington’s Farewell Address, he declared the U.S. should avoid going into debt. If the nation end up in a deficit, that the debtors were responsible for paying off the debt so that it doesn’t burden the future generations. Like the rest of this advice in his Farewell Address, the nation ignored it. The ideal goal right now should be to stop the debt from increasing anymore because it is impossible to stop the debt from increasing and expect to pay it off in this generation.

The federal budget is known as the notorious economic tank from which money is distributed to various programs. The money used every fiscal year, which begins October 1st and ends September 30th the next year, belongs to the people. The government raises this money through taxes and they spend it on national defense, Medicare, and social security. The federal budget is an exercise in making choices, and those options will certainly affect individuals living in the U.S. These choices cause debt to pile up on the government, who is struggling to make it disappear. The deficit and debt of a government gauges how well it is being run and how well it has been run in the past. According to The Economist the national debt is the total

In 2009 the debt was amounted to about $12 trillion , or 83.4 percent of the country’s GDP (“Budget of the United States Government: Historical Tables Fiscal Year 2011” table 7.1). Since 2003, the debt has been increasing by more than $500 billion annually. The increase in 2009 was $1.9 trillion. According to the Congressional Budgeting Office, this debt will keep increasing at least for the next decade (“The Budget and Economic Outlook : Fiscal Years 2010 to 2020” 21).

This debt problem that had a large impact on this shutdown didn’t just pop out of nowhere.

The United States is less than $300 billion away from our debt ceiling, what would another $1 trillion in debt do to our country? Experts predict “crippling” results. Even in the best case scenario, the value of U.S. bonds and currency would be destroyed. If the U.S. did default, markets around the world would see the effects (Sahadi). If the U.S. government is about to lose the ability to pay its own bills, why is the president trying to reform health-care knowing it will add to the already outstanding debt?

When a government’s spending exceeds its revenues causing or deepening a deficit it is called deficit spending. Deficit spending is only one of numerous tools used to help manage the economy. Deficit spending is presumed to stimulate consumer demand by helping the consumer to obtain more money to spend, in turn, the demand of product will rise. There are advantages and disadvantages to deficit spending that we will discuss further below.

For as long as Americans can remember there has always been a federal deficit. In fact, the only time in American history when there was no federal debt was under president Andrew Jackson, and it only lasted a single year(Wall Street Journal). The federal government never managed to pay off the debt again, although some administrations, like Coolidge’s and Clinton’s, have managed to run brief surpluses(Wall Street Journal). Yet today there seems to be no limit on the debt and deficit spending, and a key question has been pressed into the forefront of politics and fiscal policy, “is