(4) Hometown Hard News

Hometown Hard News

Last Friday, the U.S. national debt made a major milestone, reaching a new record of $33 trillion. This is a trillion more than the $32 trillion it was at on June 15, taking more than three months to collect the additional amount (magnoliareporter).

Since 2001, the U.S. national debt has been increasing steadily due to the government spending more than its revenues from taxes and other sources. With a higher national debt, the government would have to spend more to pay the debt, therefore limiting its ability to respond to future recessions (investopedia).

According to Magnolia Reporters, some of the consequences of the current high debt are the following: The Highway Trust Fund (funded by the gasoline tax) will be bankrupt by 2028, Medicare Hospital Insurance Trust Fund will be drained by 2031, and Social Security's retirement fund will be depleted by 2033.

Once the money is spent, the government is only legally allowed to use the money that it is currently bringing in. If no solution is identified, which could mean taking on additional debt, essential programs such as highway spending would be reduced by 50%, Medicare's hospital spending decreased by 11%, and Social Security benefits would be cut by 23%.

In the upcoming presidential term, the U.S. national debt is estimated to hit a level that was reached in the Second World War as the same ratio of the economy - the highest on record.

Therefore, what can be done? The Committee for a Responsible Federal Budget (CRFB) and other organizations have proposed in a letter to congressional leaders to form a bipartisan committee. Here, opposing political forces can come to an agreement through compromise. It would disclose everything, such as cutting costs and raising taxes.

The CRFB reported that if taxes are not raised and defense and Social Security are excluded, then there would be a 44% cut in funding for all other government services. Also, if Medicare and the Veterans Administration are not funded, then all other spending would have to be lowered by 76%.

A bipartisan solution will not entirely resolve the debt problem, it will draw awareness to it, setting up a platform for discussion. The committee will discuss tough topics that legislators have not covered out of fear of losing the upcoming election.