The United States Government Debt Issue
The United States government just like other jurisdictions have debt that is rising every minute and making the citizens question the eligibility of their administrations. By September 2018, the U.S government debt increased to $21516058 million from $21458850 in August (Trading Economics). The debt refers to federal debt held by individuals, corporation and state and local governments. The debt occurs as a result of having a deficit government budget which can only be met by taking up more debt. The following are ways which the government can use to solve the national debt problem.
Opening Borders to Willing Workers
First, the United States government should open its borders to willing workers all over the world which will aid in increasing the creation of businesses. Throughout the world history, migration has been a key contributor to social, cultural and economic changes (Clemens 85). Many countries view immigrants as a problem for they are always associated with increased crime. However, there are several benefits created by migration to the host country. According to Clemens the gains to eliminate migration barriers amounts to a large fraction of the world's GDP a portion higher than benefits accrued from dropping restrictions on international flow of goods and capital (Clemens 85). Immigrants will start up businesses which will pay taxes hence increasing the revenue of the government and aid in reducing the debt. In addition to the creation of business, refugees boost the local economy through additional purchasing power and provision of human capital. Moreover, as these foreigners work, they pay income tax hence increasing the government revenue. The issue of whether refugees are a burden or cost depends on the host country's policies such as giving them the right to work, access to capital and educational opportunities.
Raising the Retirement Age
Second is through raising the retirement age. Currently, older Americans depend on social security, Medicare and Medicaid. For one to be eligible for social security funds they must be above the age of 65 or have a disability. There are currently approximately 55 million people on Medicaid among them being 9 million disabled people under 65 years of age (Smith et al. 20). The known full retirement age is 66 but most people start retiring at 62 and survivor benefits begin at age 60. Extending the ages to 68, 69 or even 70 will not only increase the government's revenue but also save some of its costs. For instance, if the people likely to retire in 2019 continue working for the next five years, they will continue paying taxes which will increase government revenue thus help reduce the government debt and will also save the nation money which they could have been paid as social security, Medicare and Medicaid.
Easing off on Regulations
Third, is easing off on regulations. High regulations damage the economy by $1 trillion each year because it increases costs and inefficiencies (Forbes). Having fewer government regulations motivates individuals and group investors to create businesses which in turn increases a country's revenue. For instance, when a nation has flexible rules on tourism, it encourages more people to visit the country which increases the revenue gained in tourism hence helping boost the government's budget. Moreover, when the government wants to boost economic growth, it focuses on increasing aggregate demand that is through demand-side policies and aggregate supply of the supply-side policies. Under the supply-side policies include deregulation and privatization which helps increase the efficiency of private firms which then make higher profits and thus pay more taxes to the government. Moreover, having flexible labor markets encourages people to set up businesses which also increases government revenue. Countries with highly regulated labor markets usually discourage firms from employing workers or even setting up businesses.
Revamping Tax Code
Fourth is revamping tax code. For the government to reduce the national debt, it must stimulate economic growth. The growth of the economy can be attained through many ways one of them being through increasing the supply-side aggregates through reduction of taxes (Slemrod et al. 32). Although the government revenue will reduce in the short run, it will eventually increase. Low tax rates have the power to boost incentive to work and increase labor supply. When income taxes are high, cutting them encourages people to work more because they will take home more income. When the people in the economy work more they end up paying more taxes and saving more to start up businesses hence the overall increase in government revenue which in turn helps reduce national debt.
Combination of Other Policies
Lastly, the government can solve the high debt by a combination of other policies such as cutting down its spending, getting bailouts from organizations such as IMF and reducing armed forces spending. The government can evaluate different departments and cut down their spending which will help reduce government expenditure hence enable it to repay its debts. Asking for a bailout from IMF will also help write off part of the government's debts hence enabling it to reduce the large portion of debt which keeps accumulating. Moreover, the United States has highly invested in firearms which costs the government millions every year. Reducing this spending will help boost government's revenue through cost saving.
Conclusion
Government debt will continue increasing because it is accumulating interest. Boosting the economy, allowing immigrants into the country, cutting government spending, reducing taxes, and easing off regulations are some of the ways through which the U.S. government can solve the debt issue.
Works Cited
Clemens, Michael A. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?" Journal of Economic Perspective, vol. 25, no. 3, 2011, pp. 88-106, American Economic Association. www.aeaweb.org/articles?id=10.1257/jep.25.3.83. Accessed 22 Oct. 2018.
Forbes. "5 Ways the United States Can Get out of Debt." Forbes, 2018, www.forbes.com/pictures/ef45ghjkh/revamping-the-tax-code/#4d36544b56e7. Accessed 22 Oct. 2018.
Trading Economics. "United States Government Debt | 1950-2018 | Data | Chart | Calendar." TRADING ECONOMICS | 20 Million INDICATORS FROM 196 COUNTRIES, 22 Oct. 2018, tradingeconomics.com/united-states/government-debt.
Slemrod, Joel, and Jon Bakija. Taxing ourselves: a citizen's guide to the debate over taxes. MIt Press, 2017.
Smith, Jessica C., and Carla Medalia. Health insurance coverage in the United States: 2013. Washington, DC: US Department of Commerce, Economics and Statistics Administration, Bureau of the Census, 2014.
