Hello New Revenues, Goodbye Debt Crisis
For the past few years, the United States has been running on a budget deficit of historic proportions. By spending more than it is earning in tax revenues. To fund this deficit, the United States has to go into more debt, making Congress impose a limitation on how much the government can borrow. When the United States elected Barrack Obama, the nation thought the deficit would soon be reduced. Obama had vowed to cut the deficit in half by early 2009, but since then, he has continuously cut taxes and increased spending, which in return increases the amount of debt for the nation. Since the United States is still unable to find a way to increase its revenues, the nation’s super committee will soon have to make a decision on how to achieve its reduction goal of 1.2 trillion dollars.
Republican and Democratic politicians have been going back and forth for years on what the best strategy is to raise revenues for the United States. Most of the earlier acts in the 1980s and 1990s relied heavily on tax increases to do most of the work for the deficit reduction. On the contrary, by the year 1997, tax increases were entirely ruled out as a source of deficit reduction. Each political party’s view on deficit reduction plans tends to be opposites. Many politicians are arguing that Congress will never come to a decision on what path to take to reduce the nation’s debt. Both political parties have strong beliefs on what is the best way to overcome this deficit. Democrats see no other means of increasing new revenue besides increasing tax rates. However, the Republican Party has become known for the no-new tax pledge that was signed by nearly 270 members of Congress promising never to vote to raise taxes (Fox News). Moreover, Grover Norquist, the leader of the Tax Reform, has stated that the reason Republicans are sticking with the no-new