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  • The European Debt Crisis: A Preview of U.S. Woes?

    Similar issues are confronting both the U.S. and Europe today. As the Grecian debt tragedy unfolds, the underlying fear is that it may be a prequel to what will happen here.

    The nation’s spending and debt situation is dire and our course must change. Washington is coming closer to the debt ceiling deadline; terse negotiations have led several in Congress to pull out of the talks reportedly over some insisting on tax increases that would harm a fragile economy. While Americans have clearly expressed their desire for bold action on our nation’s spending problem, some in Washington simply have not come to grips with the situation.

    Calls for budget cuts proposed by some in Congress will likely be blocked by those who fear the very reforms that would save the programs they so strongly support. Conservative lawmakers are right to stand firm against any tax increase, especially as unemployment has been persistently high and our economy continues to falter.

    The debt ceiling negotiations have broken down over whether tax increases, which are always harmful to our economy, should be on the table. The spending crisis is rooted in our nation’s entitlement programs. Mandatory spending—which includes the funding for programs such as Social Security, Medicare, and Medicaid—has increased more than five times the rate of discretionary spending. As spending increases, the net interest on the debt is expected to more than triple over the next decade. Paying for these entitlement programs, as they are currently constructed, would require more than doubling tax rates, making the U.S. even less competitive internationally and driving unemployment higher.

    The Heritage Foundation has outlined a plan that would balance the budget in 10 years and stabilize the debt. Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity does all this without raising taxes. Most importantly, it would redesign Social Security and Medicare to make them sustainable and capable of performing the role for which they were initially intended.

    Americans clearly understand the gravity of the spending and debt situation in the U.S., and Heritage has provided a plan that would solve this crisis. It remains to be seen if Washington grasps the gravity of the spending situation that, if left unresolved, will ultimately propel the U.S. on the same trajectory as many of the struggling European countries.

    Posted in Economics [slideshow_deploy]

    6 Responses to The European Debt Crisis: A Preview of U.S. Woes?

    1. David Forms says:

      All points made in this article are true and factional, but it does not address the elephant in the room, and that is monetary stability. That can only be achieved by returning to the gold standard and eliminating the Federal Reserve. Until this is accomplished, the cycles of inflation and recession will continue endlessly and the destabilization of our economy will continue.

    2. George Colgrove, VA says:

      All over Europe – Greece, Italy, England, Spain are telling us a story of where we will be if we do not stop the spending. These are warnings. I do believe we have an economy that can support the reconstruction, but it cannot support sustaining the egregious spending any more. The struggles they are facing is our foreshadowing of events that will happen here. Let us learn from this and stop the madness. The federal government cannot do everything – and shouldn't. Demint is warning Republicans about raising the debt ceiling: http://abcnews.go.com/Politics/senator-jim-demint

      Only I think he is missing the point, where he is warning that meaningfull across the board cuts have to be made and a ballanced budget amendment has to be in place before the ceiling is raised, I think what we the people want is NO INCREASE PERIOD. Cuts can be made. The annual deficits equal the recent growth of government. Just get the government back tot he sloth that was in place in 2001 and the problem goes away.

    3. George Colgrove, VA says:

      STOP SPENDING. over 80% of the population is tuned into the budget talks and if the ceiling is raised regardless of what crumbs "we get out of it" these politicians are over. RINO's be warned there is a growing number of conservatives who would rather have a "Democrat spender" as opposed to a "RINO spender" in office (by title) so that the blame goes in the proper place. To all of congress, you gave an Oath to your office. Adm. Mike Mullen HAS DEFINED the national debt our nation's number one national security issue. This debt IS A DEFINED DOMESTIC ENEMY! If we the people must, we need to start mobalizing conservative legal minded folks together to start legal actions against any congress member or federal official who manages or creates budgets that do not shrink! Promoting continual deficit spending goes against your oath!

    4. Lloyd Scallan says:

      Americans had better realize Greece is almost here. Unless we do something NOW about Obama
      and the Dems in Washington, not only will our economy be delibertly collapsed, but our freedoms and way of life will be lost. Wake-up and look around at what Obama is doing. Look at what is taking place throughout this country today. "Flash gangs" terrorizing business. Fistfights on buses and fast food restaurants. War in Libya without Congressal aproval. Sending "government spies" into doctor's offices that will distroy doctor/patient privileges (the book 1984) anyone). Strip-searching 95 year old grandmothers in a wheelchair. Bribbing Congress to pass bills opposed by the majorty. Spending us into oblivion. And let's not forget about Obama's "250,000 man army" waiting in the wings to enforce control. The list goes on and on. It will not wait until 2012.

    5. Stirling says:

      Just watch what George Soros is saying publicly to see the end to the eurozone. He's been correct to this point saying he wants an "orderly decline of the dollar." in turn the worlds currencies falter, debt becomes larger then possible to service, and chaos in the streets over pensions and austerity. America is the last card in the equation to flee to financially meaning we will see a bounce of inflows from abroad, until our deathnail is sealed ultimately by the debt accumulated thru bailouts and entitlements.

    6. and2therepublic says:

      "He that goes a borrowing, goes a sorrowing." – Benjamin Franklin – 1758.

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