Outline
Intro







Two guarantees in life: death and taxes
Especially true today – coming out of college, recession we’ll see interest rates
up, taxes too
This is due mainly to our national debt
Wars, tax reductions, increased govt spending led to debt of $17.5 trillion (show
US Debt clock) – and still climbing
We inherited this and will be ones paying debt off
Don’t want to bore you, even as an econ major I understand that may not be most
exciting
Educate you about the US National Debt, talk about a proposed solution –
President Obama’s budget, and advantages/disadvantages
US National Debt











Three things that you need to know: Its enormous size, China’s place, it will take
long time to pay off
Now as stated before, it is enormous - $17.5 trillion
Hard for common person to fathom (show graphic)
China biggest holder of debt and they are getting anxious about our policies
According to Menzie D. Chinn, a professor of public affairs and economics at the
University of Wisconsin who wrote a piece for the New York Times, basically,
this China is worried about the short term solutions US has made – fiscal cliff
type deals, govt shutdown,
And China’s policies – trading away US dollar since it is starting to become worth
less and less in China – lessens US power to keep interest rates low and come out
of recession
Lastly, it will take a long time to pay off
Will take decades to pay off – still running deficit – spending > income
According to US Congressional Budget Office, 2011 Federal Revenue was $2.3
trillion
Spending was about $3.6 trillion
Even if we weren’t running a deficit and paid off $1 billion/year, would take
17,000 years to pay off – 17 trillion/1 billion
Solution
 Clearly something needs to be done
 President Obama’s budget offers the start of a solution to paying debt off
 Outlined in his budget proposal, calls for:
o Raising taxes on wealthy





o Raising taxes on large business
o Closing tax loopholes
Wealthiest Americans can afford tax hikes
Business can too
According to Ryan Tracy of the Wall Street Journal, a recent stress test conducted
by the Federal Reserve, 29/30 big banks could survive huge economic shock,
would be able to continue lending
Could definitely survive tax hikes
According to Zachary Goldfarb of the Washington Post, “New tax increases and
closing of loopholes would bring in over $1 trillion in new revenue over the next
decade”
Advantages/Disadvantages
 Advantages
o No new taxes on middle/lower class
o $1 trillion in new revenue
o Deficit will start to shrink - $564 billion by next year
 Disadvantages
o Not helping US out of current recession – raising taxes and closing
loopholes would decrease consumption and investment – amount of
money being spent in the economy
o Recession biggest hurdle in fixing debt – to come out of recession, govt
needs to increase spending and decrease taxes to spur growth
o To come out of debt govt needs to decrease spending and increase taxes
Conclusion
 In conclusion, US debt is a big problem, possible solution is congress approving
Obama’s budget, and there are advantages/disadvantages
 No easy solution – both democrats and republicans have valid arguments
 Hopefully, they can come together and help start solving this social issue