Americas Buy now pay later attitude has caused the United States to fumble a great total amount borrowed from investors to finance the government's deficit spending Clayton G E 2016 also known as National debt The debt is a continuous accumulation of federal Budget Deficit a negative balance after expenditures are subtracted from revenues Clayton G E 2016 that is about six hundred seventy two billion dollars a year As well as Budget surplus that are a positive balance after expenditures are subtracted from revenues Clayton G E 2016 New programs such as social security Medicare and tax cuts add onto the national debt The United States government spends more than what is being brought in this deficit gets added onto the national debt each year Causing the United States to stay in a negative balance that results when expenditures exceed revenue with the amount of money the government spends and the way these costs are divided up Clayton 2016 Also known as a Budget deficit Government Spending A way to reduce the national debt is to cut the funding that the government spends on Social Security Social security is a proportional tax which implies that it is the same percentage rate of taxation on everyone regardless of his or her income Clayton 2016 Social Security has been one of the largest federal spending programs since 1993 the United States spends over eight hundred forty five billion dollars each year to fund social security Boccia 2014 The current tax rate for social security as a whole is 12 6 the employer is required to pay 6 2 in taxes and the employee pays the remaining 6 2 Investopedia 2017 This percentage of money is taken from citizens and is paid to the government to cover monthly payments for the retired and disabled Americans
The need for social security will only continue to rise as many Americans retire or become disabled as a result the government will raise taxes Spending on social security will surge by 77 from 845 billion dollars to 1 4 trillion by 2024 Boccia 2014 Reducing the amount of money spent on social security will contribute to lowering the national debt Cutting Social Security Funding Cutting tax rates for Social Security will reduce the national debt by at least 1 6 billion this is an effective way to reduce the 672 billion deficit since social security adds that onto the deficit each year While this helps reduce debt unfortunately cutting social security funds will have a great effect on the 18 of people who rely on Social security every month For example poverty would surge among the elderly and disabled Palmer 2011 Medicare Medicare tax is a progressive tax which is a tax that imposes a higher percentage rate of taxation on higher incomes than lower ones Clayton 2016 Medicare is one of the largest and fastest growing programs in the entire federal budget Amadeo 2017 It is also the largest health care program and its spending will surge 72 percent from 603 billion in 2014 to 1 04 trillion in 2024 Amadeo 2017 The Medicare payroll tax is 2 9 It applies only to earned income which is wages you are paid by an employer plus tips You re responsible for 1 45 of the tax and it's deducted automatically from your paycheck Your employer pays the other 1 45 Fidelity 2017
Therefore high wage earners will owe an additional 0 9 on earned income Fidelity 2017 Reduce Spending On Medicare Medicare is one of the biggest health care programs that over 40 million Americans rely on therefore the program should not be cut completely Instead the amount the government spends on Medicare should be cut in half This will allow citizens to still receive the same benefits there will just be less money Cutting the Medicare budget in half will reduce a large portion of the national debt Conclusion Overall the United States is a place filled with many opportunities and although being in great debt is very troublesome to the country these solutions and many others can be an effective way to slowly reduce the debt and maintain a balanced budget known as an annual budget in which expenditures equal revenues can ultimately help with the current struggles of the high debt Clayton 2016 Starting with lowering the funds of Social Security and Medicare is a great way to begin seeing great results Works Cited Kessler G 2011 July 12 Social Security and its role in the nation's debt Retrieved December 15 2017 from https www washingtonpost com blogs fact checker post social security and its role in the nation's debt 2011 07 11 gIQAp1Wl9H_blog html utm_term 682ca8551813 Amadeo K n d 3 Reasons Why America Is in So Much Debt Retrieved December 15 2017 from https www thebalance com the u s debt and how it got so big 3305778 What's driving American firms overseas 2015 August 16 Retrieved December 15 2017 from https www economist com blogs economist explains 2015 08 economist explains 9 Medicare taxes and you 2017 October 04 Retrieved December 12 2017 from https www fidelity com viewpoints personal finance new medicare taxes Boccia R n d Federal Spending by the Numbers 2014 Government Spending Trends in Graphics Tables and Key Points Including 51 Examples of Government Waste Retrieved December 15 2017 from http www heritage org budget and spending report federal spending the numbers 2014 government spending trends graphics Clayton G E 2016 Economics Columbus OH McGraw Hill Education
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