Fiscal Crisis

by Rina Dhawlikar

The fiscal crisis has been an ongoing issue in the United States Congress for the last several months because the United States is spending a lot more money than it’s revenue allows. While both Democrats and Republicans agree that the budget deficit needs to be reduced, they have had serious disagreements to come to a conclusion. While Republicans, especially the conservative right wing members do not want to touch defense spending but drastically cut Medicare and social security, democrats have taken the opposite view.  President Obama set up a By-Partisan Simpson-Bowls Commission to address this issue. However, the president did not follow through and accept their balanced approach. This led to the sequestration cut at the end of 2012, which ordered significant cuts in defense and government spending while allowing the bush era tax cuts to expire.

 In my opinion, the U.S congress should take a balanced approach to bridge the deficit gap. While cutting spending by two dollars for every one dollar in increasing taxes, this will lead to rapidly solving the fiscal crisis. Currently, the defense budget remains very big from the cold war era and defense requirements have not been cut down even though it ended in the last century.  Although new security threats and terrorism have emerged, these threats in my opinion are better fought by an international coalition of countries, which could substantially decrease the US financial burden. With the baby boomers aging, there is a significant increase in Medicare spending. I would make Medicare a need based program following means testing, making the rich pay more to get the benefits since they can afford this. But I would not cut Medicare for the poor and needy. Also, I would subject social security, so that the needy will get more than the super rich. This will cut the entitlement budget substantially in my opinion.

The budget can only be balanced if there is an increase in revenue as well. I agree with the Bush-era tax cuts being allowed to expire, which would generate income for the government.  Also, I would cut tax loopholes used by the rich such as Carried Interest. The cuts I make will be balanced and affecting the rich more than the needy, poor and the elderly. This will lead us to fiscal responsibility and prosperity through free market capitalism.  I think my views are more consistent with that of a left leaning moderate/ independent looking at both sides of the argument but making a decision somewhere in the middle, being fair.