The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.
"It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally," said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.
President Barack Obama's administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.
As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression
The national debt has risen above 50 percent of GDP (gross domestic product) from 40 percent two years ago, and within 20 years will blow past a previous record above 100 percent of GDP set after World War Two without stern official steps.
If the government doesn't stop their spending or raise taxes the dollar will slowly lose it's value. As debt keeps rising and the dollar loses face, what will happen to the markets as people won't want to get involved? What do you think the government should do, raise taxes on the wealthy or cut gov spending in certain areas?
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I think the government should both decrease their own spending and tax the wealthy. Obama campaigned that he would raise taxes for only the wealthiest Americans, so it's not like it should come as a big surprise to anyone when he finally does it. I think it would also serve as a great example of solidarity to the rest of the nation if the government was to try to decrease spending as much as possible. The average citizen shouldn't be the only one who has to "tighten the belt".
ReplyDeleteI agree that the government should tax the wealthy. While cutting government spending would also help the deficeit (and hopefully slow down inflation), a lot of consideration must be put into what funding is going to be cut. Certain things, like education, should be left alone; while cuts in those areas may help short-term, in the long term it would be disasterous.
ReplyDeleteI am not sure which of them the government should get money from to clears the country's debt because they both have their pros and cons. The United States is a democracy with a capitalist market, individual effort determines individual success. If the govt taxes only the wealthy, it discourages wealthy individuals from working hard and getting wealthy; it would seem partial to these persons. Not only that its biased and maybe be discouraging but the average families will inevitably be affected. Putting the burden of taxes on the wealthy will result in the wealthy putting more pressure on their employees, laying off and even producing less outputs. On the other hand, if the govt. decides to reduce its spending, what will be the criteria for deciding which area to reduce spending, how much money should they cut the spending by and how many people will be affected. Apparently, it doesnt matter how the govt decides to get this well needed money because the average will be affected in some way or the other.
ReplyDeleteThe government should stop spending money in areas where it’s unnecessary and also raise taxes for the wealthy. If people begin to lose interest in the market they will be less willing to invest in it meaning that the market will have a downfall. The government is currently spending money in areas where it not necessary and others where a decrease on money will not make a difference.
ReplyDeleteI think that the government has plenty of room to cut spending and increase efficiency. First off, we are occupying two countries and that is costing us billions of dollars. Also government should cut back on it's employment. All other companies have had to do it and so should the government. Their are a lot of incompitent people on government saleries. Another way to cut spending is to lower the wages of government employees. Why should they be exempt from the conditions that effect other employees of indepted companies.
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I disagree that the government should tax the wealthy. The income tax system already causes the wealthy to pay more. It's not as though they get off the hook or it's a simple flat rate system. Why tax the wealthy unnecessarily. Perhaps the government should stop unnecessary spending as Dulce said. The bailout could've been handled a lot better in my mind as well. I look back to the New Deal by FDR and he didn't just hand over checks to bankrupt companies; people had to work to overcome their hardships. Stop depending on the government and do something about it.
ReplyDeleteFDR didn't bail out companies, and people slept in parks because the nation had over thirty percent unemployment. Trickle down economics do not work, and neither to tax cuts to the point where massive debts rise. Taxes were higher in the Clinton years than now, so it is about time to raise them, and grab the reins of the american economy.
ReplyDeleteI think that government funding in programs and policies that aren't yielding much success should be eliminated. Why waste money in areas that are not fulfilling its purpose.The rich also should still be taxed as well. In order for the U.S. to come out of its financial debt, there will need to be cuts and taxes. There is a sacrifice that has be made on both ends of the spectrum in order for progression to be made.
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