- Right now, the U.S. economy seems to be in shambles, and most Americans want the government to play some role in helping us get through this. But government's ability to help out is severely hampered by its own dire economic condition.
- For 31 out of the last 38 years, the U.S. government has spent more on programs than it has collected in taxes. This year, the red ink (that’s the deficit) could be close to half a trillion dollars. And the government projects further deficits for the next several years.
- When the government spends more money than it collects, it borrows to cover the cost. Over time, the U.S. government has accumulated a staggering $9.5 trillion federal debt. Right now, we spend more money each year on interest on that debt than we spend on the war in Iraq.
- There’s simply no way the government can cut taxes, or even keep them at current levels, and still afford all the programs people say they want. Something’s got to give.
The U. S. has been living beyond its means – way beyond its means. We’ve been running the government on credit and racking up a huge amount of debt. What’s more, we have some very big expenses ahead: the 78 million baby boomers who have been paying into Social Security and Medicare are beginning to start pulling money out. These facts have led experts inside and outside of government -- both conservatives and liberals -- to warn of an approaching "fiscal train wreck" unless we take measures to address the problem.
There are many ideas about how to fix the federal budget – and frankly it’s going to take a while to really make sense of the situation and fix all the problems Americans complain about. Here are three different directions a lot of politicians talk about - directions in which the country might move.
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Here’s a sampling of what some influential people have said about the problem and some of the solutions that have been proposed.
"The longer we wait, the more severe, the more draconian, the more difficult the adjustment is going to be. I think the right time to start is about ten years ago.”
"By the time the financial markets tell us we've gone too far, it will be too late to fix this in any rational way. We are the toad in boiling water, where it's getting hotter and hotter and nobody's really noticing."
“The Social Security trust fund is what I call a fiscal oxymoron. It shouldn't be trusted, and it's not funded.“
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