Spending or Saving?

My high school class recently was given the opportunity to meet with our current county executive. She spoke to us about our local, state and national governments. A big problem that came up in all three was debt. Debt plays a large role on the national level because this is what the state and local governments feed off. This problem of national debt is increasing in size by the day. American officials cannot seem to keep their hands out of debt. Our country is currently in over $12 trillion in debt from borrowing large sums of money and we are unable to pay them back because of the very high interest rates.

The Great Depression could be described as the starting point for our nation’s debt. Throughout that time period, Roosevelt tried to diminish the government's spending. This plan worked for a short while, but he eventually stopped around 1937. This is when the economy nose-dived for the second time and all of our money went out the door. When all of our money was gone, we did not stop borrowing, we kept borrowing. Our country's economy is still running on debt to this day, and has to be paid back over decades. Many presidents after Roosevelt had numerous attempts to reform the debt, but only small dents were made. President Obama recently issued the economic stimulus package that was designed to create jobs, and decrease our debt. For instance, one part of the package is that businesses will get "bonus" depreciation for investing in new plants and new equipment. This plan itself is $125 billion bigger than the controversial bailout for the financial-services industry and has some positive and negative effects.

Yes, Obama’s plans may work in the future, but in order to restore our economy we have to stop spending first. A plan that we could use is that every other year, the government could implement around a 40% reduction in our total budget and use it for priorities only. During this time period, it will give our economy time to tackle interest rates, and begin to decrease our debt.

I do agree with parts of Obama's plan for the most part, because in order to crack the national debt, we need an unemployment rate at its lowest ever. If unemployment is at a low, consumer spending will increase, which will also stabilize local businesses. Stable businesses will be followed by more stable banks. This will relieve stress off the economy because families and businesses will have higher incomes; making them much more self-sufficient.

In conclusion, everyone knows about our country and its debt, but no one seems to want to do anything about it. Because most of the time we have to pay back borrowed money all at once, interest rates drag our economy down. By lowering unemployment rates, and if every other year for a set amount of years we reduce our spending, a lot can be done. Once we are almost “out of the red,” then it should be a good time for Obama’s plans that involve spending.