We need to balance the budget. This is not a political opinion, it is a mathematical fact. Once our debt gets too high our interest payments will become so high that we won't be able to pay for anything else. At that point our credit rating will be so bad that no one will be willing to lend us money no matter what interest rate we offer. Once this happens we will not be able to borrow money at all and our budget will become balanced by force, meaning we will only spend what we bring in because we have no other choice. This is the situation Greece is in right now. It is called bankruptcy and there is a high chance of the entire Greek government collapsing under this problem. Currently Greece has over 21% unemployment, and their economy is shrinking even more. If we don't want this to happen to us we have to avoid bankruptcy.
Our primary problem is that all of the incentives to our elected government are in the wrong direction. They get praised for spending money and lowering taxes, but there is nothing but attacks against anyone that wants to cut ANY spending. We need to reverse the incentives if we want to have any chance of having fiscal responsibility. This the debt limit law we already have doesn't work. It requires congress to balance the budget if our debt passes a certain limit, but since there is still no one willing to suggest cuts congress just changes the debt limit every time they pass it. To change this dynamic we need to make the budget cutters the heroes, and the spenders the villains. To do this I recommend a law or constitutional amendment to force a balanced budget. We cannot simply require CONGRESS to balance the budget. Instead the law must specify an automatic mechanism for cutting from the budget if their spending goes over their revenue. The simplest way is to cut ALL budget items by the percent that you are over budget. This means that if someone votes to spend money on something but doesn't find a way to fund it, everything else will take a cut including congressional salaries, medicaid, medicare and more. This makes the spenders unpopular, while people cutting useless spending can now be heroes for SAVING all the other programs.
I've seen predictions by economists that the USA has no more than three years at our current spending rate before we are bankrupt and end up like Greece. Those of you who don't want to cut spending because of all the programs you think you need just think what WILL INEVITABLY happen to those programs if we continue to ignore reality until we are bankrupt as Greece has done. Those programs you love so much won't be reduced in a controlled manner in that case, they will simply cease to exist. Millions of people who now depend on welfare, social security, medicare and medicaid will suddenly be without ANY benefits in the face of the nations inability to pay for anything. Those people will be out on the streets and starving. Some or even many of them may die. This is not an exaggeration or a joke. The sudden collapse in our federal government that would occur as a result of bankruptcy will also likely trigger another recession, possibly even worse than 2008. The federal government makes up more than a quarter of our gross domestic product after all.
Everything I've seen out of our congressmen both democrat and republican is ideas of how to put off balancing the budget until another year. The idea here is to convince people they are doing something when actually they haven't made any real progress in balancing the budget. They argue endlessly over spending cuts in the range of 50 billion, when our deficit is 1300 billion. All we end up with is promises that some time in the future they will make big spending cuts, with no details about where those cuts will come from. This is so the current politicians can pretend to do something while not risking the unpopularity of actually proposing to cut spending on some specific program.
Our current nation debt is 21 Trillion, our current federal budget is 3.6 Trillion per Year, and our current budget deficit is 730 billion per Year. Interest paid on our debt per year is 287 Billion and is one of the largest items in our budget. As a comparison our total defense budget is 650 Billion. See http://www.usdebtclock.org/ for a very detailed view of the US debt.
Here are some simple and common sense steps we can take to fix our debt crisis.
First get rid of earmarks:
This is one of President Obama's best campaign promises. Unfortunately he changed his mind about it after he was elected and he realized he could buy peoples votes for his programs by including earmarks for that persons state.
I've seen studies that suggest that up to 30% of government spending is waste, largely caused by pork barrel and earmarks.
If that is true then we could reduce our spending by up to 1.09 Trillion dollars simply by eliminating this 30% waste. This would not require the elimination of any programs or spending that actually helps anyone, it only means getting rid of wasted money.