The Democrat deficit reduction plan
This plan by the democrats is intended at realizing roughly $4.4 trillion in deficit cutback. This will alternatively lead to the payment of the cost for the American Jobs Act that adds up to a total of $447 billion. In summary, the Democratic Party aims at reducing the U.S deficit and cutting down fiscal spending by the federal government. It seeks to do so by first and foremost, cutting expenditure as in the Budget Control act by $1.2 trillion. Secondly, it aims to trimming expenditure on mandatory programs as follows:
- Reducing overpayments in Medicare which adds up to $248 billion in savings and an extra $72 billion in similar health care programs.
- Expenditure cuts from agricultural subsidies adding to a total of #33 billion.
- Expenditure cuts from federal employee programs which are inclusive of retired military personnel. This is approximately, $42.5 billion.
- Fiscal austerity within the federal government will lead to savings of about $77.6 billion.
In addition, the Democratic administration aims at saving $1.1 trillion by withdrawing troops from Afghanistan and Iraq. Fourthly, tax reforms as a result of the termination of the Bush Tax cuts will lead the realization of an extra $1.5 trillion. Furthermore, $430 billion will be realized from interest savings resulting from payment of the federal debt. As a result of all these measures, a total of $4.81 trillion will be achieved so as to cover the deficit reduction program.
Viability of the Democrats’ Plan
In order to attain economic growth and have the capacity to sustain it, a given economy should be able to get rid of its debt and reverse its deficit (Samans et al., 2007). The above summary by the Democrats shows that America can live by its own means and therefore, should not be dependent on foreign reserves it has stored in other economies.
As a result, the nation will be able to spend on long-term and necessary investments such as education that will be affordable to all, health care that is accessible to all and excellent infrastructure. Therefore, to get rid of the $14.3 trillion debt within the U.S economy, the prescribed measures and steps given by the Democratic Party are the remedies. Though accumulated over many years and held by various countries such as China and Japan, the federal reserve system, the public and other trust funds within the U.S, the national debt can be resolved if the idea of the democrats sees the light of day before congress (Kelly, 2008).
Kelly, R. E. (2008). The national debt of the United States, 1941 to 2008 (2nd ed.). Jefferson, N.C.: McFarland & Co..
Obama, B. (2011). Living within our means and investing in the future the President's plan for economic growth and deficit reduction.. Washington, D.C.: Executive Office of the President, Office of Management and Budget.
Samans, R., Uzan, M., & Claros, A. (2007). The international monetary system, the IMF, and the G-20: a great transformation in the making?. Basingstoke: Palgrave Macmillan.