The President has proposed a new Federal Budget for the fiscal year 2011 which is a new record with record money (which we don’t have) to be spent. The deficit is projected to be more than US 1 trillion Dollars and raising the taxes also US1 trillion. It is a massive budget with mind boggling numbers. The President will be having a hard time passing the budget as is with both the Republicans and the Democrats (mindful of the voters’ anger) against the big budget deficit and they should be.
Even with record increase in taxes, the deficit will remain in the trillions. This cannot go on forever. Who will pay for all this? With this record debt, there won’t be much money left for domestic programs for the foreseeable future. And along with less money for domestic programs, out clout in the world affairs will diminish further since we will be hampered by our inability to pursue or persuade other countries to follow our policies and defend our interests. Even with increasing taxes on the so called wealthy and corporations, in the future the Middle class will not be immune to a tax increase.
We cannot spend our way out of this deficit even when some economists are saying that we should not be worried about the Federal debt right now.I am not an economist but I know this for sure, we cannot wait for the economy to get better, because the world out there is not going to wait for us to grow again at the expense of their money. Sooner or later our foreign creditors will start demanding higher interests rates on our securities, which will lead to more long term interests on every thing and we will become hostage to outside influences and money just like we are now on the foreign oil.