Understanding the Danger
How Can We Defeat the Debt?
The solution is simple, but that doesn’t mean it’s easy. When you already owe a lot of money, the first step toward recovery is not borrowing more money. Every year we wait to address this problem, the debt grows larger and the solution gets more expensive.
If we spend less than we collect in taxes, the difference can go towards paying down the debt. In 1999 and 2000 we had a budget surplus of about $360 billion, but since then we have borrowed about $6 trillion, or $6,000 billion.
That ability to pay down debt came from increased tax revenues, which in turn were the result of an expanding economy. But the massive size of the new debt threatens to slow our economic growth and make repayment much more difficult..
A Bad Idea: The Value Added Tax
Politicians are exploring new sources of revenue to close the federal budget deficit. One policy under consideration is the Value Added Tax. Read more…