At least once a day I hear about how bad the economy is or how large the debt is. Whether it comes from my parents, my piers, newspapers, or television, there is always a piece of information on the subject. Our great country faces an economic recession that can be broken up into four main deficits: the budget deficit, trade deficit, savings deficit, and leadership deficit. As of now, our debt is at more than fourteen trillion dollars and rising everyday. Our main internal factors that can be attributed to this enormous debt include Social Security, Medicare, and Medicaid. If we continue to avoid the biggest issue that our country could possibly face, and let this monster grow more and more powerful, not only will the next generation be doomed but also every generation in America for the rest of time.
As of 2008, the Budget Deficit was about $459 billion dollars—that’s a lot. This number is the difference from the $2.9 trillion dollars in spending and the $2.5 trillion dollars in revenue generated by the U.S. The $2.9 trillion is the sum of the many government liabilities and promises that the government provides to U.S. citizens. The break down is as follows; Social Security $610 billion, military funding $607 billion, Medicare $330 billion, interest on the debt $244 billion, Medicaid $204 billion, and everything else $936 billion.
Many of these government programs such as Social Security have flaws that allow people to cheat the system and therefore corrupt the program. Now, many people from the “Baby Boomer” generation are reaching retirement age and preparing to collect even more from this already depleted program that continues to help enlarge the debt. Many experts say that although the next generation will also have to pay a Social Security tax, they will never bring in the benefits because the program will no longer exist, it has already been depleted and should not even exist today. The U.S. Budget deficit reached a record $1.4 trillion in 2009—that is nearly triple that of the year previous.
Hypothetically if every citizen—that is every man, woman, and child—held an equal share of the debt in 2009, in order to pay it completely off each person would have to pay $4,500 dollars. Over the last thirty-five years, the government has had only five surpluses and the only time that America did not have a federal debt was in 1835. World War II generated the largest debt that the U.S. ever accumulated. The U.S. owed $200 billion, which was equivalent to 122% of the GDP (Gross Domestic Product). Experts say that if our current trends continue, by the year 2040 America will owe the equivalent of two times the debt owed after World War II, which amounts to a massive 244% of the GDP.
A Trade Deficit is a result of country buying more than it sells. In 2007, China was the leader in Trade Surplus while the U.S. was the leader in Trade Deficit. China’s surplus amounted to a massive $315.7 billion, while America’s deficit was a pitiful $816 billion. At this time, the top five holders of American debt were China, oil exporting countries, Canada, Mexico, and Japan, in that order. Last June the U.S. Trade Deficit reached a whopping $50 billion and as of January the deficit was more than $46 billion. In January, our imports totaled $214.1 billion dollars while exports were $167.7 billion dollars.
Much of the talk on news networks such as FOX and CNN is about the Savings Deficit which is a product of spending money you don’t have. Many members of Congress embrace conservatism which is the practice of conserving; this means that if you want something first, you have to save, or conserve, your money in order to purchase it. Simple enough right? Well if it’s so simple, then how did our government fall into such a deep hole, you may ask. It all goes back to the liabilities and promises that the government is financially unable to fulfill so it has to spend money that it doesn’t have. This does not sound possible but there are two ways that the government does this. One, it prints money which causes inflation that in turn inflates the debt. The other way is by borrowing money from other countries which puts it in debt with the countries it borrows from. Currently China owns most of our debt along with Japan. China is by far the biggest threat with its economy practically doubling each year and ours is continually decreasing. The Savings Deficit is also affected by the trade rate because if we make less than what we need to produce then we have to spend more than we can sell to get the goods that we need to survive.
According to the documentary “I.O.U.S.A. “, the fourth and final major deficit that our country faces is not exactly monetary. However it is the main source for the government’s financial problems. I’m referring to the leadership deficit. It is the lack of a person that wants to take charge and grab a hold of the situation to save our country. When people look at the presidency of George W. Bush and they point out all the bad decisions that he made, they overlook the fact that he actually made decisions. Any decision is better than no decision because no decision is always a bad decision. I’m not saying that we need someone that just throws out thousands of ideas and hopes something works, but we need someone that actually tries an idea that has research with a proven success rate, like saving money to spend money. This is what our tremendous country desperately needs and deserves.
Now I have mentioned Social Security, but I would like to elaborate on it because it is a tremendous contributor to our debt. This program was one of many established by Franklin Delano Roosevelt during the Great Depression to establish protection for the elderly, impoverished, fatherless, widows, and unemployed. At the time, the program was a success, however that was then and this is now. The program helped America out of the Great Depression and that’s great but after America recovered, Social Security remained in place and continued to grow and require more and more unnecessary funding. Not all of the fault falls in the lap of the government though, because many people find ways to cheat the system. There is absolutely no way to stop this, it is like saying that someone has created software that will never receive a virus. No matter what changes are made, people will always come upon a way to corrupt and cheat the system—that’s just how people are. The most obvious way to fix this is to disband the system altogether; however, this may cause other unknown problems.
Medicare and Medicaid are other main contributors to our enormous debt. Medicare is government funded insurance plans for the elderly, age 65+. Medicaid is similar in that it provides protection for people, not solely citizens, with low income in the United States. These programs are also cheated by not only U.S. citizens, but also illegal aliens. My opinion remains consistent on these programs, that they had there time, thirty years ago, but now they are too big and need drastic reduction or total elimination in order to save America. What is ironic about our current situation is that originally all these programs were enacted to save the country and they did but now they are only hurting it.
Many past presidents have believed in the trickledown effect. This is the theory that if government invests in higher level income citizens, then their prosperity will “trickledown” and eventually benefits the less fortunate. However this requires people to be unselfish, which is impossible because America is based on greed.
Today we are fighting a war against terror in the Middle East. When we say fighting we are not necessarily going toe to toe with the enemy but rather trying to clean up the mess that the terrorists left in their home countries. Currently we have roughly 50,000 troops in Afghanistan helping to rebuild the country. Now this is a vast number of troops fighting for the cause but in Germany we have 50,000 plus troops, and for what? The only reason these troops are in Germany is to maintain a base on that side of globe in case of a crisis in the area. This is a good idea but the numbers are unnecessary. Also we have around 30,000 troops in Japan, this was before the earthquake, and many more troops spread out around the globe. Most of the countries that we have troops stationed in can defend themselves with their army. It is not America’s job to protect the whole world. The U.S. spends about $515 billion years on its military. This is more than China, Russia, Britain, France, Japan, Germany, Saudi Arabia, South Korea, India Brazil, Italy, Australia, Canada, Indonesia, and the Netherlands combined. Plus we have troops in almost all of these countries.
Our country is not doomed but it is on the verge of chaos. Corruption has infiltrated our government; we removed it once in the Progressive Era and it is time to do it again. A great man named Ronald Reagan once said, “We must act today in order to save tomorrow”.
