United States Public Debt and Free Government Program

The film follows Bixby and Walker who describe systematically four serious deficits shaping the U. S. economy: budget, savings, the balance of payments, and leadership. As of the early 2008 release of the film they had created a national debt of over $9. 6 trillion, $30,000 for each American. [3][4][5] •The budget deficit section highlights the 53 trillion dollars in unfunded benefits (medicare, medicaid and social security) that will come due and can only be paid by tripling taxes or cutting all government spending except for that to those programs.

•The savings deficit is created by individuals living beyond their means and accumulating personal debt instead of savings. •The balance of payments problem is the trade deficit caused by the U. S. importing more than it exports, especially from China, draining money and goods from its economy. China has the greatest trade surplus in the world while the USA has the largest trade deficit in the world. •The leadership deficit is the lack of civic or political leaders willing to make it clear Americans must cut government spending, pay more taxes, save more of their personal income and use less imported materials.

•The Federal Budget Deficit: The U. S. federal government has been living beyond its means, spending more on public goods and services than it collects in tax revenues-the difference being the budget deficit. Although fiscal discipline coupled with a strong economy brought a return to surpluses in the late 1990s, since 2001 the fiscal outlook has deteriorated dramatically, and the federal debt-the cumulative sum of annual deficits since the start of our government-has increased by trillions of dollars.

While the recent budget deficits are the result of a combination of extravagant tax cuts, a costly war, lack of effective budget controls, and a relatively weaker economy, the much larger budget deficits projected in the decades ahead are largely explained by a growth in entitlement spending that will outpace the natural growth in tax revenues, due to demographic changes (a swelling in the numbers of older Americans relative to younger Americans) coupled with rising per-capita health costs.

Budget deficits are like the government’s “credit card”. They threaten future standards of living because the borrowed money must eventually be repaid, with interest, in the form of higher taxes or reduced government services-there is no such thing as a free tax cut or a free government program. In the meantime, today’s budget deficits represent negative public saving that directly subtracts from our national saving-and hence the size and strength of the U. S. economy going forward.