The European Debt Crisis: A Preview of U.S. Woes?
Audrey Jones /
Similar issues are confronting both the U.S. and Europe today. As the Grecian debt tragedy unfolds, the underlying fear is that it may be a prequel to what will happen here.
The nation’s spending and debt situation is dire and our course must change. Washington is coming closer to the debt ceiling deadline; terse negotiations have led several in Congress to pull out of the talks reportedly over some insisting on tax increases that would harm a fragile economy. While Americans have clearly expressed their desire for bold action on our nation’s spending problem, some in Washington simply have not come to grips with the situation.
Calls for budget cuts proposed by some in Congress will likely be blocked by those who fear the very reforms that would save the programs they so strongly support. Conservative lawmakers are right to stand firm against any tax increase, especially as unemployment has been persistently high and our economy continues to falter.
The debt ceiling negotiations have broken down over whether tax increases, which are always harmful to our economy, should be on the table. The spending crisis is rooted in our nation’s entitlement programs. Mandatory spending—which includes the funding for programs such as Social Security, Medicare, and Medicaid—has increased more than five times the rate of discretionary spending. As spending increases, the net interest on the debt is expected to more than triple over the next decade. Paying for these entitlement programs, as they are currently constructed, would require more than doubling tax rates, making the U.S. even less competitive internationally and driving unemployment higher.
The Heritage Foundation has outlined a plan that would balance the budget in 10 years and stabilize the debt. Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity does all this without raising taxes. Most importantly, it would redesign Social Security and Medicare to make them sustainable and capable of performing the role for which they were initially intended.
Americans clearly understand the gravity of the spending and debt situation in the U.S., and Heritage has provided a plan that would solve this crisis. It remains to be seen if Washington grasps the gravity of the spending situation that, if left unresolved, will ultimately propel the U.S. on the same trajectory as many of the struggling European countries.