Never Ending Debt

Our nation's debt is skyrocketing. I doubt that is news to anyone. What can be done to solve the impending crisis? Let's look at two types of thinking when it comes to a solution to the debt and perhaps a third which is a combination of the two. Camp One wants to raise revenue, usually in conjunction with lowering taxes to promote growth. Their thought is that the lower taxes will put people to work, with working people spending money on consumer goods. This spending means getting businesses into gear making vast amounts of money and therefore paying higher taxes. 


As you can see in the graph below, just stabilizing the debt using the increased revenue model will take a 46% increase in revenue to close the debt - not decrease it mind you - just stop it from expanding. Of course, that percentage does not take into account the tax cuts used to promote growth in the first place.

What about Camp Two you ask? They can fight the debt by cutting costs. Trimming the fat from the budget will allow us to stop any new debt from being added to the ever growing total. Looking at the graph you can see that we would need to trim 31% from the budget just to break even - let alone work off the current debt faster than interest only. Cuts that deep would affect every program you could imagine - Medicare, Medicaid, Social Security, Unemployment Insurance, highway bills, national defense and much more.

Graph courtesy of pgpf.org