Julia Z, Dani W, Madeline W, Mike R Project Paper

Posted: June 8, 2011 in Papers/ Analysis

Julia Z, Dani W, Madeline W, Mike R
Dr. Halla
AP Government, Pd. 3
30 May 2011
Project Paper

Creating a Budget to Meet America’s Needs

America is experiencing a debt crisis. The debt towers at a mind-boggling $14.36 trillion and grows by almost 4 billion daily (Hall). America does not have the financial resources to sustain such spending for much longer, considering that already the debt almost equals the country’s Gross Domestic Product, which stands at 14,660.4 billion (“Current Dollar”).  America needs a revised budget to fit its needs, one that will not send the country spiraling down into bankruptcy.

Thanks to modern medicine, people are living for longer than they did when social security was first designed. Also, all the baby boomers are at the age of retiring, further increasing the number of elderly in the country relying on social security. This has increased the cost of social security to become roughly twenty percent of the current budget (“Policy Basics”). To accommodate for the longevity in the elderly, the age for social security benefits should be moved up to 70 years of age in order to decrease costs. This saves the government money while still keeping the program alive. This is more of a long term policy because those who are reaching the current age of 65 deserve their money when it was promised to them. Social security should also be scaled to save money so that affluent elders, who can rely on their own savings in their old age, get less money than those who have so little money that they rely solely on social security money. This would help the government spread its limited funds to reach more of the elderly without running out of money. One way to encourage the elderly to have more money in their bank accounts is to grant income tax breaks for those who work after the retirement age.

In order to maintain control over the national debt in the future, the debt ceiling should be lowered by 50 billion every ten years as the government annually pays off as much as reasonably possible of the debt. The government should also mandate states to create programs to teach children the basics of finance  in school. Adult programs at local public centers on how to manage their household finances will help people become more responsible consumers, thus improving the country’s economy.

Defense spending is another twenty percent of the budget (“Policy Basics”) and cuts to this portion of the budget will free money for the government to pay off debt. Military research and development could be cut by 10% to save money.  The military could also sell stuff that they are phasing out of operation. They need to check the backgrounds of who they are selling to; however, to make sure that the buyer is not a threat to the country’s security. Programs such as Xe, nuclear defense, and railgun development could also be cut to minimize costs.

Healthcare, consisting of Children’s Health Improvement Program, Medicare and Medicaid, account for the largest portion of the budget and grow in cost annually. To minimize some of the cost of medicare, the age for eligibility should be raised to 70. Aid should also be scaled based on income in order to make the program more manageable. Healthcare should be reformed and streamlined to make spending more efficient within the programs. Medical malpractice reforms would cut the cost of what the government programs pay to individuals on an as-needed basis. These measures are necessary to keep the programs alive without having them consuming the budget.

The federal government spends about three percent of its budget on education (“Policy Basics”). The education system should be streamlined by cutting overhead positions and unnecessary spending. Eliminating charter school would also decrease costs. However, education is an investment in the country’s future and therefore cuts to this area of spending should be avoided.

The Environmental Protection Agency is the federal government’s environmental program. The EPA should be reformed and broken into smaller, more focused sub-programs that tackle individual problems to make the program more efficient and cost effective. A measure to incentivize environmentally friendly actions and methods could be to strengthen environment tax credits and promote ways to make recycled fuel cheaper. This would keep the government from having to spend a lot more money on the environment while still making progress toward a cleaner America.

The money for our budget comes from taxes. Loopholes for corporate statutory tax can be removed to increase the money the government gets from the business sector of America. The government can also pass policies to incentivize small business that will create new job opportunities and provide the government with more income tax revenue.  Income taxes should be reformed to be graduated, with the heaviest taxes going to the richest with incomes over $200,000 per year. Taxes should also tax net worth, including assets along with the traditional property taxes. Cutting the Bush tax cuts will also provide the government with more revenue. All money coming in from these changes would go directly to paying off the debt in order to eliminate it.

The budget includes money set aside for transportation, which deals mostly with America’s infrastructure. To save money, the US should levy a use tax on companies who will be the heaviest users of the proposed roads. In order to create more jobs, the government should sponsor programs to build more ports and revamp dams. Costs of construction can be cut by using prisoners to build the roads. Quality control could be ensured by lessening the prisoner’s sentence based on work.

If America does not change its spending habits, the economic downturn will cause instability all across the country and in the government. Action must be taken before such an economic collapse, or generations of Americans will have to suffer the consequences.

Works Cited

“Current Dollar and ‘Real’ GDP.” U.S. Bureau of Economic Accounts. U.S. Dept. of Commerce, 26 May 2011. Web. 5 June 2011. <http://www.bea.gov/​national/​index.htm#gdp&gt;.

Hall, Ed. “U.S. National Debt Clock.” U.S. National Debt Clock. N.p., 2 June 2011. Web. 5 June 2011. <http://www.brillig.com/​debt_clock/&gt;.

“Policy Basics: Where Do Our Federal Tax Dollars Go?” Center on Budget and Policy Priorities. Matrix Croup International, 15 Apr. 2011. Web. 5 June 2011. <http://www.cbpp.org/​cms/​index.cfm?fa=view&id=1258&gt;

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