- Posted October 9, 2011 by
The Debt Ceiling
The United States dropped to fifth place this year in the ranking of most competitive economies (Boston Globe). Our country’s ranking dropped due to the accumulation of debt and the decreasing public faith in our government. These rankings were created by the World Economic Forum. This non-profit foundation brings together top business leaders and international political leaders to discuss the most pressing issues facing the world. Our ranking signifies how our government is having issues with our economy and the increasing amount of debt. The government should lower the debt ceiling and create laws that will establish better money-saving habits. The steps that must be taken in order to improve our economy includes: the removal or reduction of debt, lowering the debt ceiling and creating new laws that could help our country save money. The removal of our country’s debt is one of the most important steps in the recovery of our economy.
Debt is a weakness for our country that must be removed or reduced in order to maintain a functioning government in the years to come. Our country’s debt limit has now reached $14.29 trillion and this limit has been increased 16 times since 1993. The beginning of U.S. debt occurred before this country was officially established. Our founding fathers borrowed money from France and the Netherlands to help fund the American Revolutionary War. During this time period, debt was essential to help jumpstart our country. The first Secretary of the U.S. Treasury, Alexander Hamilton said, “A national debt, if it is not excessive, will be to us a national blessing” (The Treasury Department). I believe that there may be some truth contained in this statement. Debt was important in the creation of our country; it allowed us to fund our wars and build our cities. However, as our country matured the debt has increased to an excessive amount, turning our national blessing into a national problem. The increasing amount of debt almost led to the default of our federal government in August. This debt must be reduced by lowering our country’s debt ceiling.
Lowering the debt ceiling will reduce the amount of debt by controlling the amount of money our country borrows. The law allows the government to borrow a specific amount of money in order to pay for programs that have been passed by congress. The debt limit or debt ceiling has been raised as the national debt has grown. In 2011, the debt ceiling of $14.29 trillion had been reached. President Obama raised the debt limit in July in order to prevent the default of our federal government that could have occurred in August. The debt ceiling increased $2.4 trillion and a plan was created to cut down the deficit in 10 years through spending cuts (The New York Times: “The Federal Debt Ceiling”). This plan was called the Budget Control Act of 2011 and it requires the government spending to be less than $917 billion over the next decade. As a product of this bill, a joint select committee will be created with the responsibility of reducing our deficit by $1.5 trillion over the next 10 years. This committee is composed of six democrats and six republicans and these people can decide whether to use tax increases or spending cuts to help remove our debt. This committee takes away some of Congress’ power because if seven lawmakers of this group agree on a plan to cut the deficit, then it would be sent to congress to vote on and any changes recommended would be prohibited. If congress refuses to accept their plans, it would result in spending cuts of $1.2 trillion in both military and non-military programs. This committee lessens the power of congress by giving responsibilities to a committee that could be plagued with indecision. This plan was a desperate attempt to remove the debt and lower the ceiling. I believe that in order to remove our deficit, congress should be the one responsible for creating new laws that could save us money (The New York Times: “Hiding behind the Budget Act”).
Money saving habits can be initiated by enacting new laws and bills, such as a health care reform plan or a balanced budget amendment. This balanced budget bill should not only focus on tax increases and spending cuts but also on an official spending constraint. A limitation on the amount of spending should not be changed every year but should instead become stricter in order to prevent an increase in the debt ceiling. A balanced budget amendment will be a fundamental step in the removal of our debt. This constitutional amendment would require a balanced budget every year. The budget would be balanced by having spending cuts on certain government programs and through tax increases. Some citizens of the U.S. argue that this amendment could force spending cuts in vital programs or services, such as education, our national defense and infrastructure. However, spending cuts in these vital programs would not be necessary in removing our country’s debt; there are many programs that contain unnecessary spending, such as in healthcare, research programs, and with certain grants (Denver Post). We need a leader who will look at the budget and make hard decisions about what is necessary for the health, safety and prosperity of our country and its citizens. For example, I believe that this amendment needs to be placed in our constitution in order to bounce back our economy and to promote the growth of our business sector.
I believe that the government can use the previous points in this speech, such as the reduction of debt, lowering the debt ceiling and money saving habits to help revive our economy. The Budget Control Act of 2011 should be replaced with a balanced budget amendment in order to sufficiently decrease our country’s debt. The reduction of our country’s debt is an important issue that must be solved by lowering the debt ceiling and by creating laws that could help in the recovery of our nation’s economy. The government will discover the errors produced in their recent laws and will remove and revise these laws, ultimately forming a balanced budget.