As President Obama indicated in his State of the Union address last night before Congress, the United States is dealing with the weight of horrible recession with skyrocketing deficits and there is the need to find a rational solution to deal with our escalating mountain of debt.
Today, the Congressional Budget Office reported that they are anticipating a budget shortfall by $1.5 trillion for 2011, making it the largest deficit in our country's history, and representing 9.8% of our gross domestic product. To make matters worse, the bickering that has been contentious between both political parties, has done little to find any form of compromise between tax cuts and federal spending cuts.
Republicans want to repeal Obama's controversial Health Care Reform law, which the CBO insists would only add $230 billion to the nation's deficit by 2021, and Democrats want to raise taxes, which are not favorable among many Americans.
Thus far however, President Obama and Congress have achieved some success on government spending. The President proposed $78 billion to be cut from the Military Defense over the course of the next five years. That would explain why the three Generals sitting in the front row of the State of the Union address last night were not smiling.
In addition to this, one has to consider that even cutting staff in government departments will just add to more unemployment. If a government worker looses their job, this is just one more person unemployed in this country, even though it is no secret that government workers get outrageous salaries and pension funds paid for kindly with tax payer money.
Either way you look at this, there is no easy way out of our nation's escalating financial problems. As one former budget adviser to President Reagan put it: "The United States has reached the point of no return"
Indeed, we have.
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