Point • Counter-point: America’s Debt Crisis

Point: Focus on cutting social programs first. Consider military cuts and tax increases only after spending cuts.

Faced with the prospect of a government shutdown come Aug. 2, members of the United States congress, along with President Barack Obama, have scrambled to reach an agreement over the impending debt crisis. Compromising on the debt ceiling has been difficult, particularly with the upcoming 2012 elections on the minds of many in Congress. The reality, however, is that across the board budget cuts are needed to get the American financial situation under control.

One of the more prominent proposals is supported by President Obama. That proposal would see a deficit reduction of $4.3 trillion over the course of ten years.

Under his plan, this is to be accomplished through a combination of reduced spending and tax hikes.

Obama’s plan certainly has some merit to it. It at least represents a realistic formula to solving the debt crisis. In the United States, the only realistic way to solve the budget deficit is with a mixed plan favouring spending cuts but including some temporary tax increases.

The financial situation in the United States is dire. With interest rates expected to rise significantly away from their artificially low levels within the next five years, the amount the United States will be paying in interest will be going up. Projections are already suggesting that by 2021, the United States will be paying $928 billion each year on interest, a far cry from this year’s $385 billion. Yet, with an aging population and legally required federal commitments to Medicare and social security there is only so much government spending the United States can cut.

Although any spending that isn’t legally required should be considered for cuts, the four priority areas should be Medicare, social security, Medicaid and security spending. In 2010, the United States spent over $1.4 trillion between Medicaid, Medicare, and social security. They also spent $1.3 trillion on “discretionary” programs, including $815 billion on the military and numerous security agencies.

All together, these four spending
areas represent just under 63 per cent
of their entire budget. Although both
parties have found reasons to not cut
each of one of these programs, the
financial situation is such that none
of them can be immune from cuts.

Although none of the mainstream spending cut proposals include military spending cuts, it is an area that has to be considered. Part of that will involve avoiding involvement in future wars, as demonstrated by the trillion dollars spent on the wars in Afghanistan, Pakistan and Iraq. Whoever is elected in 2012 should consider closing down at least ten percent of the 771 military sites the United States is currently operating around the globe. They should also consider selling off domestic military bases and hospitals as well as pulling troops out of Italy, South Korea and Japan. The old hawkish approach to foreign policy is not going to help solve the debt crisis, it will only exacerbate it.

The fact of the matter is that in the last 30 years only four budgets have run surpluses. If the United States wants to remain competitive against other countries, this is going to have to change. With such low levels of projected economic growth, the only realistic means of doing this is going to be deep spending cuts across the board.

– Keith Marshall

Counter-point: Reduce debt with deep cuts to military spending and tax increases on corporations and wealthy Americans

The past few weeks have brought one of America’s biggest problems to the forefront. Since the death of President Roosevelt, numerous imperialist presidents have played a major role in forcing the American deficit to all time highs. From Korea and Vietnam to Afghanistan and Iraq, and every conflict in between, primarily Republican presidents have been attempting to spread “democracy” to the uncivilized nations, while ingraining unsustainable military spending. After years of imperialist Republicanism, a Democrat has been blamed for the problems and is being forced to clean up the mess.

Raising the debt ceiling has been a routine vote for some time in America. With record deficits, however, the current debt crisis in America is something which everyone has seen coming for years. Even though Republicans in the past have raised the debt ceiling and, in some cases, contributed more to the debt than Democratic presidents, the Republicans seem content on blaming President Obama and his current attempts at finding common ground while protecting social programs.

The “fiscally responsible” Republicans
have proposed a plan, which I will
simplify to keep this article short.
Cut Obama’s healthcare plan and a few
other social programs and the debt
crisis will be solved. Basically, it’s
a typical Republican plan where they
punish those who can afford it least
and hope the rest will magically solve
itself.

Meanwhile, they largely ignore the biggest drain on the American economy: the military. With a proposed budget of over one trillion dollars for the next year, it is no wonder that America is drowning in debt and interest payments.
Democratic Senate Majority Leader Harry Reid’s latest plan details one trillion dollars in military cuts alone. Republican Speaker John Boehner refuses to make the same kind of necessary concessions. And, forget about the Tea Party Caucus even mentioning anything about military cuts.

This leaves President Obama with two areas to tackle spending, both of which would help solve the debt crisis, as well as mend America’s reputation on an international level.

Firstly, raise taxes on businesses and the wealthy. For years, Republican governments have been giving tax breaks to oil companies and numerous other corporations. The time has come for the Democrats to stop this free ride of corporate America. Environmentally destructive corporations such as Exxon Mobil, and more recently, British Petroleum (BP), should be taxed severely. The days of million dollar bonuses needs to end and Obama needs to stop it. Additionally, those who make in excess of $500,000 annually should be taxed at a rate of 50 per cent, or higher, as opposed to the current 35 per cent.

Secondly, and most importantly, America needs to end the era of imperialism. For decades, the American military has been the best in the world. However, all of this technology has come at an enormous price. Trillions of dollars have been spent on defence – a price which is now reflected in the current debt crisis. While President Obama has removed troops from Iraq, troop drawdown in Afghanistan is more gradual. In addition to the removal of troops, American needs to begin downsizing its military. Military spending at these rates is not only unsustainable but also locks America into a military-based economy that prohibits any kind of progressive growth.

The sooner Republicans accept this fact, the sooner President Obama and the Democratic Party will be able to make inroads in the debt and put America on a track toward true fiscal responsibility.

The debt crisis is simple politics: the Republicans hold most of the blame for the debt and now they have blamed the Democrats for the whole thing – even when the Republicans are the ones who delaying the resolution. Republicans need to accept the fact that age of American imperialism has come to an end. They need to admit and recognize the role they play in debt and stop pointing the finger. As soon as they do, the Democrats can actually get to work fixing the country, instead of running around the world with American military might.

– Alex Reinhart