The National Budget Deficit of the United States of America - Dissertation Example

One of the major problems that are currently being dealt with is a national budget deficit crisis that will not go away. Not only that but Republicans and Democrats—the two major parties in the U.S.—are divided as to how to go about cutting the national budget deficit. “With Congress stalemated over trimming a $1.6 trillion U.S. budget deficit, House Republicans [are pushing]…the ‘YouCut’ program[, which will] trim Congress’s expenses by printing fewer…bills [and] end[ing] taxpayer financing of presidential campaigns, at a 10-year savings of $520 million,…cancel[ing] a $1 billion loan fund…help[ing] unemployed homeowners avoid foreclosure”.

Although some progress has been made, unfortunately, that is outweighed by the fact that the United States is still going to be in a lot of debt for the next ten years. “Under [the] assumption [that current tax and spending laws remain], CBO estimates [a deficit totaling] $1.40 trillion in 2011—$81 billion less than…estimated in January. For the following 10 years (2012 to 2021), CBO now projects a cumulative deficit of $6.7 trillion—$234 billion less than [the previous baseline]” (“Preliminary Analysis of the President’s Budget For 2012,” 2011, pg. 3).One of the biggest problems of the United States is that it owes most of its money to foreign powers.

“Of the 14 trillion dollars of debt owed by the Federal government of the US in 2010, about 5 trillion dollars is owed to foreigners. The largest foreign lenders to the US are China, Japan, OPEC, Caribbean Bankers, Brazil, Britain, Russia, Taiwan, and Switzerland”.It is not a good sign that the budget deficit takes up a large portion of the United States’s production of goods, products, and services. “In the US, the budget deficit is already likely to reach 13% of GDP”.

The United States also has a trade deficit. However, the U.S. budget deficit has exceeded that of the trade deficit. “America's trade deficit has been exacerbated by its federal budget deficit”.