Essay on U.S. National Debt

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U.S. National Debt

The U.S. national debt has reached an alarming proportion. As it steadily increases, it's effect may not be felt now, but it will be in the future. Paul Gregory and Roy ruffin, in their book entitled Economics, linked deficits with inflation in the long run (251). Demand-side inflation of this type fails to increase the GDP, but instead just increases prices. Continuous increases in prices do not benefit the country or future generations. Also entitlements, such as Social
Secriuty and Medicaid, now engulf a large percent of the deficit.
Figures from the article "The Entitlement Quaqmire" (http://www.europa.com/~blugene/deficit/entitlements.html) concluded that Social Secruity was the largest
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Sure, the Keynesian approach did prove valuable during the Great Depression; however, even Keynes had a limits on this type of spending. Keynes said that during productive time surpluses should be run to balance out the deficits. However, with lags in the use of fiscal policy and the fact that the government has many incentives to spend then cut, deficits are ths majority. In Gregory and Ruffin's book, they site that since the 1960's there has only been three!instances
(small ones at that) of surpluses in the total government (180).
Right now these deficits are not a problem because the rate in the growth of the income is greater than the rate at which the debt increases, but there is no guarentee this will continue so the growth of the debt must be in check now.

A balanced budget plan must be inacted to restrict the governmental bias toward spending to generate a few more surpluses that eventually will balance the deficits incurred.
The terms of the balanced budget must cover a range of years, not a yearly proposal, so that an expansionary fiscal policy in the face of a severe recession can be used. Cuts must be made in the budget, but more important the choices for where the money will go must be
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