The Moment of the Truth in the USA - Essay Example

The Moment of Truth In the United s, it is about time that the government faced the alarming truth about the nation’s financial progress and its effects on the economy. The truth about America’s financial crisis is a subject that many, especially politicians, have sidelined and in a long time tried to escape from. They do it forgetting that America’s future is the fate of a nation in which their children will be living. For the sake of the generations to come, the economy of United States should be saved from its trend towards devastation. In spite of their different backgrounds and origins, leaders can all agree to the fact that the financial condition of the United States is critical and if it is not attended to with due concern, the condition may lead to collapse of the economy in the near future. If the relevant painful and hard decisions are not made therefore, right from the leadership body, the upcoming generation may suffer poverty nationwide. This urgency is clearly indicated by the fact that debts have been created almost worldwide, as they began from Greece and are rapidly spreading to Europe. This is why agony is predicted to befall the future inhabitants of America. Therefore, politician failure to acknowledge the failure is one of the reasons behind the debt crisis. The other reason as to why the United States is facing debt crisis include the fact that the government has increased its spending habits rapidly. The salaries for civil workers have been unnecessarily raised with incomplete projects still waiting, therefore raising the level of the government spending habits while the revenue is not changing. This leads to borrowing financial support across the world which is in turn offered in terms of debts. This leads to an economy that has a character of deficit in it. A huge gap, in the contemporary America, exists between the government’s revenue and the expenses required. Irresponsible financial policies have also contributed to the bringing up of this situation. Money has been released for projects without keen evaluation and investigations making a lot of money fall in the hands of some greedy individuals who happen to hog it all to themselves. This is a major problem that needs attention from the government’s fiscal offices. When money is lost in such a way, there is no profits or interests in return, making a huge drop in the government revenue. This drop is what brings about inadequacy of funds to carry out certain projects, then, the country goes ahead to borrow additional loans. Even after acquisition of the loans, the projects put up end up in the hands of the same grabbers who mismanage the funds and take away profits generated by the projects. These profits were initially purposed for paying back debts, but they end up in the pockets of hungry politicians. This consequently leads to lack repayment of debts. These are the issues that have been summing up and leading the nation to such an alarming situation. Such a case of embezzlement of funds is another reason as to why the country is facing the current debt crisis and should be taken care of. During World War II, spending was a larger part of the United States economy at a level of twenty four percent. During this period, tax revenue was at the worst level; around fifteen percent. There was creation of a gap therefore between the government revenue and spending. This gap was only to be filled by borrowed funds. This again contributed to the development of the debt crisis as the level of the nation’s federal debt rose from thirty three percent of the Gross Development Products to sixty two percent. Lack of sufficient funds across the country led to reduced number of investors that are willing and able to invest in the country. This means that the nation failed to attract foreign investment, which is another source of government revenue. Consequently, a dramatic decrease in revenue is experienced. The raised tax levels also contributed to scaring away business people. When people do not invest, level of unemployment increases and taxes are therefore not paid. This also explains how expenditure went down and borrowing of funds was left as the main option. Solutions to these problems need to be traced within the shortest period of time possible. Some of these required solutions have been recommended. One of these recommended measures is the order of strict discretionary spending cups. This will help in offering the budget limits in any meetings held by representatives as they make plans for the running and creation of projects. This will help in making and enforcing spending limits in both the security and non-security spending plans. It will be achieved by doing away with the products that are less prioritized and contouring the operations of the government economically. It would by far make changes for the better if it cuts over fifty billion dollars and offer two hundred billion dollars to the demonstrative savings for 2015. A comprehensive tax reform is also recommended so as to save the crushing economy of the United States. This can be achieved by largely reducing the rates of taxation, widening the base and making the taxation code easier than it is. So as to reduce the excess liabilities that out do the government assets, it may be appropriate to cut the act of spending through the tax code. To attract investments in the country, increasing the level of competition within the country would be the most effective way. This can be done by capping revenue to avoid excessive taxation which scares away the investors. Health Care Cost Policy should also be created to control the amount spent in the health sector. A lot of savings have been made for medical affairs but end up not being utilized in a long time. Such funds should instead be reversed for any other purpose at hand that would make a difference in the drowning economy. To reduce the spending rate in this field, the government should plan to carry out long term actions in projects that will not require any more funding sooner than expected. Sensible payment formula should also be applied for the medical officers to avoid excessive money paid for less labor input. This way a lot of revenue will be saved to pay attention to the critical issues. Savings should also be made when attending to the mandatory programs. These include the military and civilian retirement benefits, students’ loans, agricultural subsidies and many more. They are not predicted to greatly contribute to the downfall of the economy in future, but can help a lot in saving it from the predicted devastation state. In this mandatory spending, it is known that the government spends quite a lot of money unnecessarily. This therefore, as little as it is will play its part in saving the future for the upcoming generation. The finances set aside for social security happens to be excess too. Larger percentage of these funds happens to be going to the retired civil members and the diseased families from workers of the government. Some amount from this sector too would help in attending to the current situation. This is possible through the renewal of the promise in social security for the generation ahead. Since this promise was incorporated in to the law, some changes have occurred leading to the current increased spending. People currently live fourteen years longer and retire three years earlier than they used to during the years of this promise. Finally, it is advisable to make reforms on the budget processes. The objective of making these changes is to ensure that the debt path is kept straight without any unusual change that may cause the country setbacks. With these recommendations put into practice, there would be a move in the state of the country’s economy towards getting better. My opinion about these recommended solutions is that they would all work if keenly incorporated in the efforts towards solving the debt crisis in United States. This is because they consist of well thought plans that the government can implement to reduce the spending rate in different sectors. They all have this in common, which is the only solution for the predicated real downfall of the nation’s economy. If the trend of the debt path continues, the future generation, is likely to suffer a poorly economized country. This predicted trouble needs to be well taken care of by taking actions that will make quick required changes. The above solutions happen to be the best that the government can do for now. They evaluate the spending habit of the government in different sectors and identify opportunities for changes in any of them for the better. They will help in balancing the rate at which money is pouched out to carry out and run projects in the highlighted sectors, if well considered. In some cases, there will be improvement in products which will help in earning more profits to the government with lower spending. All this money that will be saved back is the required resource so as to reduce the borrowing rate in running of projects. If such ways of increasing revenue earned by the government through taxation are considered, there will be creation of an independent government in terms of financial support. This will reduce the rate at which the government borrows money making it possible to curb the current situation of debt crisis. Apart from saving the economy from this situation, these measures will make the economy of the United States immune to such kind of crisis in the near future. If controlled spending is offered due attention, America may never experience the debt crisis again. With this credible reason, I fully support all the solutions highlighted. In conclusion, it is about time that the government of the United States took part aggressively in implementation of any identified solution that would correct its state of debt crisis. It is evident enough that the economy’s success is at risk due to its situation of surviving under debts. When government projects cannot run without being boosted by external financial support, it is clear that the nation is not independent as far as its financial position is concerned. For such a nation, making developments becomes difficult and clearing of the debts may also become stressful. It is not usual for government projects to be successful in a way it will clear the debts and still earn the nation revenue. The most likely situation therefore when a country begins to take debts, is the makeup of a country that relies on debts for growth and development. Read More