How to Solve the National Debt Crisis
Budget and economic guru Alice Rivlin explains the problem with the national debt and how to fix it
As founding director of the Congressional Budget Office and director of the
She recently spoke about the problems associated with a large debt. Excerpts:
How did President Obama's spending in the past year affect our debt?
The debt has increased quite dramatically in the last couple of years as a result of the recession, not primarily because of the spending of the Obama administration -- although that contributed. Primarily because of what happens in any deep recession: Tax revenues fall off and some spending goes up, like unemployment compensation. The measures that the Bush administration and the Obama administration took, along with the
What are the consequences of the debt?
First, it's going to be difficult to borrow all that money. We finance much of our debt overseas, about half of it -- in recent years it's been bought by other countries, the Chinese, other emerging market countries, and other parts of the world. Building up debt to other countries makes us quite vulnerable. Also, the rising debt is very likely, if it can be financed at all, to be financed at much higher interest rates. That means that interest rates will go up in
Will Obama's proposed spending freeze work?
The spending freeze that the president announced is a small step in the right direction, but it applies to a very small part of the budget. That is not going to solve the big looming deficits that come largely from the entitlement programs growing faster than taxes in the future.
What do you think of the
Has partisanship affected the debt?
Yes. The problem at the moment is that
Is it possible to manage our debt and create jobs at the same time?
Yes. The debt problem is a long-run problem. No one would want to take immediate action either to cut spending or to raise taxes, but if we start now to figure out what we're going to do and enact measures that will take effect after the recovery is solid, then we will have a better chance of getting the debt under control.
Available at Amazon.com:
- Selling and Debunking Economic Recovery
- How to Solve the National Debt Crisis
- What Could Derail Economic Recovery
- Job Search Grows Cold, Creating Reluctant Retirees
- The Great Retail Revolution
- Surviving the American Economic Makeover
- What the Economic Bust Left Behind
- Tough Economic Times Molding Tough Consumers
- Careful Planning and Discipline Can Pull Consumers Out of Debt
- Green Jobs Can Spur Economic Recovery
- Green Jobs and Market Meddling Will Not Work
- Obama's Mixed Economic Signals Won't Create Jobs
How to Solve the National Debt Crisis | Jessica Rettig
(c) 2010 Jessica Rettig