Essay about National Debt

1342 Words Sep 15th, 2008 6 Pages
National Debt: It is Not Just a Number, It is Our Future

Miranda Rosenbaum
Professor C. Simkonis
April 29, 2008

Rosenbaum 1

As a nation, America has accumulated a tremendous amount of debt which will affect not only the lives of the current citizens, but generations thereafter. Currently, the United States public debt is approximately $9.5 trillion, in long form, that’s $9,500,000,000,000. This ridiculous amount of money is a historical accumulation of misappropriated surpluses and exacerbated deficits. It is important for American citizens to not only understand the national debt concept, but also understand the causes and effects that lead to this
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To begin, they must prepare themselves for an extreme recession. The recession will not only be caused by the worth of the dollar bill, but also the much needed increase in taxes. The taxes will allow the government to stop servicing the debt by only paying the interest and begin applying funds to the principal. President Bill Clinton did this in the early 1990’s even though America was against it and the economy experienced some of the best economic times in the last five decades. The worth of the dollar bill will increase and the mortgage rates will begin to stabilize. As a whole, the economy will initially experience severe slump but it will climb its way back to stability. Since the money supply is reduced when the U.S. Government pays down the debt, the unintended result of a government surplus could be a deflationary recession. The government can avoid this by consequence by instead focusing Rosenbaum 5 on expanding its Gross Domestic Product, GDP, and thereby reducing the percentage of GDP that debt can represents. Some argue to increase government spending through the use of stimulus plans which will allow consumers to spend money and increase the economy. However, those who argue that an expansion of the money supply is necessary to expand the economy need to explain the colossal failure of Japan’s Central Bank. In last attempt to follow Keynesian economics and spend itself out of a recession, Japan’s

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