Running the Government without Debt Essay Example | Topics and Well Written Essays - 2250 words

Running the Government without Debt - Essay ExampleHowever, what is equally disturbing is that the US government moved away from surplus budgets during the latter period and never even gave it a rethink. There has been a marked tendency to succumb to populist agendas and vested interests which marked the post-surplus era in the US economy. In most cases, ordinary sentiment is except a facade for narrow political gains. This era has seen a marked increase in spending, not only for new ventures but also for cutting down unnecessary and wasteful expenditure. While running a government without debt is likened to running a caller-out, we conveniently forget that a company does so out of a lack of choice. No company skunk afford or receive the luxury of unlimited credit and ultimately should handle its profits back into the system. Only in the rarest of rare cases can a company expect a bailout package. However, such measures are time bound and be intimate at a price. Hence, a balanc ed or surplus deficit is the only way out for a sound financial system. 1. Curtailing Big consumption The three battlefields that can directly impact federal spending are defense, social security, health care and interest on debt. Striking at these taxation guzzlers will eliminate the need for deficit budgets. As the saying goes, a penny saved is a penny earned. Defense seems to be one country of spending where the only way is the way up. After the end of the cold war era, the need for maintaining massive armaments has become irrelevant. The US, with its relative isolation from Europe, Asia and Africa does not have increased spending in arms either in the long or short term. Intervention in foreign countries should be brought down to the barest minimum. rather of unilateral incursions into certain democracys, the US should focus on diplomatic initiatives as a measure to reform them. This would keep public anger at cross out by reducing losses and reverses suffered by the mi litary abroad. The use of the armed forces should be restricted to peace keeping and for ensuring that humanitarian aid reaches the intended target. The nations nuclear arsenal should be used only as a deterrent and not to encourage an arms race among states. Social pledge is another area where reforms are called for. The ceiling on payroll tax should be removed so that income over the threshold limit can be brought under the tax net. Gradually raising this rate can cover the shortfall in this area over the course of time. With a graying population, one should stock a serious note of the loneliness age. This should be gradually and progressively raised to 75 to compensate for the additional expense incurred by maintaining the present retirement age. Likewise, we need to identify the extent of retirees who are affluent enough to either be taxed or have their benefits curtailed. Health Care is the third area which can do with cost cuts. As Cox (April 5, 2011) reports in CNBC, there is a need to shift the burden on Medicare and Medicaid spending from the patients, and thereby the state to the providers of health care i.e. hospitals. As in the case of social security, the age for eligibility to Medicare can also be increased from the present 65 to reduce costs. Debt Interest is the area that could seriously affect the debt levels over time. With more public debt owned by foreigners, interest payments leave the country rather than circulate within the nation if US citizens received the interest on debt. 2. Increasing the Revenue Directly increasing the revenue by