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America: Trillions owed in unfunded promises

America’s federal government's financial situation deteriorated rapidly last year, sinking deeper and deeper into debt, and the United States now boasts $61.6 trillion in financial promises that are not yet paid for.

The cost is about equal to $534,000 per US household in unfunded financial obligations. Many wonder if the US will ever be able to repay its own citizens.

To make bad matters worse, a recent US Treasury report found that the US national debt will exceed the overall size of the US economy later this year for the first time since World War II. A year ago, a report by the Treasury claimed such an event could be avoidable because it was not due to take place until 2014.

Heather Cirmo from 440 Group Public Relations said the foundation of the US Economy and can only sustain so much, cuts must be made and policy changes adopted. Negotiations are needed to hammer out a new Medicare plan and other cuts to entitlements and other government spending.

To the contrary however, Dr. Caroline Heldman, a professor of political science at Occidental College argued that the biggest problem to address is not what to cut, but what to tax. The US should reestablish taxes on wealthy Americans and also address the massive expansion of unfunded US wars.

Cirmo said cuts must be made, changes must take place, no other options exist – raising taxes is simply not an option either.

Personal sacrifices must be made,” she argued. “We have to cut programs.”

Those who make more should be cut from government programs. Cuts should be made to help America, not increased taxation, Cirmo contended.

The wealthiest Americans can afford greater taxes, Heldman argued. There is no need to supplement millionaires – they can afford to pay more.

We need needs based programming,” she said.

Heldman and Cirmo agreed that wealthy Americans should not receive government aid, but Heldman contended that those with more should pay into the system at higher rates. Wealthy Americans can afford to pay more taxes.

While many debate cuts to social programs, defense is often overlooked by politicians.

American defense spending is skyrocketing. Yet, most Republicans calling for cuts are ignoring the rises in military spending. Many argue cuts to the military risks national security, while others contend everything should be on the table.

I think that’s a very noble thing to spend money on,” commented Cirmo, noting some cuts may be needed, but overall military spending is highly important.

We spend more money on our military industrial complex that, Eisenhower warned us about 60 years ago, then all of the other advanced industrialized nations combined,” said Heldman. “We’re also spending it unconstitutionally.”

It’s important to honor military service, but spending and long-term priorities must be considered when considering the budget, she said. It is important to spend and invest legally and with the bigger long-term picture in mind.