Dear Mr. President:
As I am sure you are well aware, one of the biggest, if not the biggest issues of this year’s presidential campaign is the federal budget and how it to balance it. It is obvious that our economy isn’t growing at nearly a fast enough rate. In fact, the economy has grown at rate of two to three percent lower than is has in the past. People have had to adjust their lifestyles to accommodate this smaller growth in the economy, my family included. Right before Christmas of 2009, my mom lost her job. Due to the slow growth in the economy, she was unemployed for the next two years. We have had to cut back on our way of living and even now we don’t live how we used to due to a 15 percent decrease in pay. I believe balancing the budget and promoting the growth of businesses will bring the economy out of its current stagnate growth and high unemployment.
According to treasurydirect.gov, the current US debt is over 16 trillion dollars. In 2008, the US debt was just over 10 trillion dollars. This means that over the course of Barak Obama’s presidency, the national debt rose by over 6 trillion dollars and by a rate of 60% over those four years. According to the article, “National Debt has increased more under Obama than under Bush” (M. Knoller, CBS News) in order to pay this debt off, each person in the United States would have to pay just under 52 thousand dollars. If this is sounding like the United States is going to be in trouble soon, then you’re getting the right idea.
The interest payments on this debt are becoming a significant part of the overall federal budget. If we continue on this path of borrowing money, the government will have less money to spend on real issues due to the interest payments. According to the article “Fiscal Challenges Weighing On The 'AAA' Sovereign Credit Rating On The Government Of The United States” (N. Swann, CFA at standardandpoors.com) this debt has affected the national credit rating as well; dropping it from the AAA credit rating to the AA+ credit rating. The lower credit rating causes higher interest rates, which further reduces the amount of money available for real issues.
To fix this, decreasing spending should be the number one priority. According to the article “How to Fix the Debt Problem - Without Trashing Government” (J. Brookes, Rolling Stones Politics) how one would do this is to cut spending where it is not needed. This in itself could be another topic but to put it simply, you cannot spend more than you take in. The next step should be to increase the revenue. You cannot do this by increasing tax rates, for this discourages economic activity. Lowering corporate tax rates will give businesses an incentive to grow and expand which increases net revenue to the federal government. The growth of businesses counteracts the high unemployment rate, which also causes an increase in revenue for the federal government through income taxes.
Once the spending is under control and revenue is increased through business growth, then you can start to pay off the debt. Decreasing the debt will cause the credit rating to increase causing lower interest rates. This will result in more money available that can be spent towards other important issues. The nation is relying on your leadership Mr. President, and given the current economic times, we need it.