Debt Explosion In The US!

There’s a great set of new articles on the Center For Budget Priorities.  This is a US think-tank that deals with both Federal and Municipal finance issues.  One of the articles that I read this morning made a shocking revelation: They suggest that to STABILIZE the debt in our economy at 2009 levels, it would required a 24% increase in tax revenues or an immediate 20% reduction in expenditures for ALL Federal programs.

Congrats to the Center for an excellent job on highlighting the extent of the problems and framing the issues.  The USA needs more of this.  Our Government fails to make the cuts and the tough choices necessary to solve the problems.  The Government should cut all programs across the board 20% as a start;  we cannot continue on this path of a Federal Government sprawling out of control.  20% across the board cuts will help to identify areas that we need to focus on as a nation.  It’s unfortunate but our Government has gotten too large and out of control.  It’s time to start reigning in the spending at the Federal level.  If we cannot begin to do this as a nation, then our nation may cease to exist as we have known it.

Preventing a debt explosion will require difficult choices. The “fiscal gap” - or the average amount of program reductions or revenue increases that would be needed over the next four decades to stabilize the debt at its 2009 level, as a share of the economy - equals 4.2 percent of projected GDP. Eliminating that gap would require the equivalent of an immediate and permanent 24 percent increase in tax revenues or an immediate and permanent 20 percent reduction in expenditures for all federal programs. Given the size of the fiscal gap, some combination of revenue increases and program cuts will be needed.

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