The US Government Debt: Consequences, Causes, and Solutions

Abstract

This article discusses the three major issues of budget deficits and debt—burdens, causes, and solutions-- from the creation of the US federal government. Today federal government spending exceeds 20 percent of Gross Domestic Product (GDP), compared to the historical average of about 9 percent, fueling debt of historical levels. The only effective way to reduce debt level is to cut entitle programs and then set a tax rate sufficient, over the course of a business cycle, to fund government spending.