The Moment Of Truth

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The Moment Of Truth
Introduction
The debt denial era is over and there is no possibility of turning back for America. It is therefore the era of facing the truth about the fiscal debts and lay out the plan to help get off the debt burdens off our back (The National Commission on Fiscal Responsibility and Reform p. 5). This is for the benefit of thee future generations and the citizens of the nation. It is the time to replace the old ideas with new and better plans. Therefore, president and the two chambers found it worthy for the National Commission on Fiscal Responsibility and Reform to come up with a plan that would help in solving the problem of fiscal debts once and for all. The American people expect the leaders to pull things together and not apart. For the sake of the nation the leaders should put politics aside and consider what the government can do without and what needs first priority (The National Commission on Fiscal Responsibility and Reform p. 5). This will surely help many Americans who struggle in the kitchen tables trying to figure out what their families can live without. This is because of the hardship caused by the nation’s fiscal debts. Therefore, here in is the examination of the general reasons for the debt crisis, the over view of the proposed solution to the problem and the argument on the efficiency of the proposed solutions.
Reasons for fiscal deficit
The fiscal deficits may arise because of various attributing factors. The nation is trending on unstable fiscal path (The National Commission on Fiscal Responsibility and Reform p. 11). This is mainly caused by the rise in expenditure and declining revenues. This pushes the government towards borrowing huge amounts of money annually in efforts to make up the difference. There have been staggering deficits from year to year. For example, between year 2001 and 2010 the federal debt had dramatically moved from thirty-three percent (33%) of the gross domestic product (GDP) to sixty-two percent (62%) of GDP.
One of the major reasons for the increased fiscal deficits is falling revenues. The government’s revenues through the taxes have been going down all through. This makes it difficult for the government’s budget to balance. From the example mentioned above, the escalation was because of the country’s involvement in two wars. Further, it was because of fiscally irresponsible policies. When people and businesses are not safe, the business goes down hence affecting the contribution of taxes into the government’s revenues.
The other reason is the government expenditures. The government expenditures are governed by poor fiscal policies (The National Commission on Fiscal Responsibility and Reform p. 18). Most important aspects are not prioritized. This leads to spending of revenues in the areas that do not benefit the economy. This lowers or rather affects economy and the country’s revenue...