It might not be front-page news in the mainstream media, but according to a new poll, a large majority of Americans are alarmed at the prospect of U.S. debt continuing to grow past its already astronomical $14.3 trillion limit. They’re right to be worried, as America’s out-of-control spending takes the country down a road to decline. America is on an unsustainable fiscal path, and that’s why The Heritage Foundation has released a plan to tackle the problem: “Saving the American Dream: Heritage’s Plan to Fix the Debt, Cut Spending, and Restore Prosperity.”
Heritage released its plan as part of the Peter G. Peterson Foundation’s 2011 Fiscal Summit, in which six research organizations from across the political spectrum provided long-term fiscal plans to solve America’s spending crisis. Of all the plans, Heritage’s proposal reduces the national debt held by the public the most and keeps federal spending and taxes at the lowest levels.
Heritage today also launched a new website, www.savingthedream.org, to highlight how its fiscal plan would reshape the federal government to better serve young adults, seniors, families, entrepreneurs and low-income workers. Read the full “Saving the American Dream” report here.
Stuart Butler, a co-editor of Heritage’s plan and director of Heritage’s Center for Policy Innovation, explains the key behind “Saving the American Dream”:
The Heritage plan quickly brings the federal budget in balance, keeps it permanently balanced, and starts paying down the debt—all without increasing taxes. Instead, we solve our spending and debt crises by immediately getting entitlements under control, reshaping the role of government, and creating a simple, growth-oriented tax system with greater savings incentives for all Americans.
We also preserve and strengthen our nation’s safety-net programs without imposing massive tax hikes on future generations to do so, which would rob them of the American Dream.
Heritage’s plan stands apart from those of the other five organizations by achieving the lowest debt level by 2035: 30 percent of Gross Domestic Product, which is less than half of the current debt-to-GDP ratio. Getting debt under control is vital. Without fiscal reform, the national debt is projected to reach 91.5 percent of GDP by 2035, according to the baseline adopted by the Peterson Foundation.
The Heritage plan also lowers federal spending—the real cause of the nation’s fiscal woes—to 17.7 percent of GDP, falling from expected spending of 28.3 percent by 2035. And it rejects tax increases as a solution to the nation’s spending problem, keeping federal tax levels at 18.5 percent of GDP—the lowest among the plans.
By comparison, all the other plans reduced the federal debt and reduced spending, but none went as far as Heritage’s plan—and none of them did it without relying on tax increases or at the cost of our national defense. Notably, the Center for American Progress, a liberal organization, did not offer any specifics on how they achieved debt and spending reductions.
Heritage recognizes that America is on the verge of becoming a country in decline. Mounting debt, strangling regulations and an expanding federal bureaucracy are leading to economic stagnation, all on the backs of future generations. But there is time to save the American dream and alter the course of our future. By getting spending under control, balancing the budget and shrinking debt, Heritage’s “Saving the American Dream” plan offers real solutions to get America back on a fiscally sustainable path.
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