At some point, investors in U.S. Treasuries will demand higher interest rates to compensate them for the greater risk. Higher rates mean debt payments will consume more of the budget, deepening the debt. Here's more on How Budget Deficits Affect the Debt.
If the dollar falls in value, foreign debt holders will paid back in currency that's worth less, further decreasing demand.
The biggest worry is what China, the largest foreign holder, might do. If it decides to call in its holdings, it could send interest rates skyrocketing. For more, see What Is the U.S. Debt to China?
Worst of all? The debt will ultimately be paid back by our children and grandchildren. For more, see Who Owns the U.S. Debt?
Many solutions have been proposed, but they either boil down to raising taxes or cutting spending. No elected official wants to do either to their own electorate, because it's political suicide. What's the solution? Here's what readers suggest as the best ways to reduce the U.S. national debt.
is it not easy to see?
- We have 300+ million Americans if everyone donated to the national debt relief it would lower our debt over all. All of us are to blame, isn't it time to stop pointing fingers and try to help with a solution? This debt will not go away by pointing fingers and saying you fix it. We need to help our country so our children and their children won't be part of a epic failure. It is time to show your true colors.
- —Guest true American
- All the money the government spends is ridiculous. Bring all the troops home and have defense be mainly on American soil. This will keep terrorists out and keep us from being terrorists to the civilians of other countries. I believe Social Security, Medicare, Medicaid, welfare and programs of that nature are important but it is still important to cut as much spending as possible. Create stricter requirements for those trying to recieve welfare, like a mandatory drug tests before approval and if they do not pass and but have children, the government should be involved anyway to protect those children. To decrease the debt we owe to other countries, have American citizens, who want to go, work for the countries in order to pay back national debt. Those Americans will recieve some sort of reward when they return home. Also, a new program for helping all of America's homeless find jobs will decrease the number of homeless people and also means there will be more people paying taxes.
- —Guest Teen Concerned For Her Future
Force Congress to Act
- Require Congress to enact laws that will balance the budget within 4 years and will eliminate the debt in another six year. If the entire package is not completed by the next election cycle, no member of congress with 4 or more years in office will be reelected. This will force both sides to compromise if they want to keep their jobs. If the package is completed, then retention in office will be determined by their record on how well their constituents feel they did on the compromise and on all other issues addressed.
- —Guest David
- BUILD A FENCE ON THE BORDER. BUILD ANOTHER FENCE ONE MILE INSIDE THE US BORDER. PLACE LAND MINES INSIDE AND SIGNS OUTSIDE THE FENCE. HAVE SECURITY STATIONS AT INTERVALS ALONG THE FENCE ON THE US SIDE. IF YOU HEAR A NOISE CHECK IT OUT. PROBLEM SOLVED CHEAPLY AND EFFICIENTLY.
- —Guest DIRK
Last in, First out
- Sell Hawaii. Allow those citizens to buy into any of the millions of foreclosed homes. This will add jobs to the housing 7 transportation sector. Next, sell Alaska and do the same. Now our deficit will be paid in full. Next, dismantle the Federal Reserve now that they are owed nothing. Emanate Domain. Remember, these regions were once sold to us, and as a country that is overextended, we must do what is necessary for the preservation of the continental 48 states. These lands are far enough away as not to be a military threat.
- —Guest Mark Cortino
Complete Plan - Jumpstart America
- AGRICULTURE • Limit enrollment and subsidies in Department of Agriculture conservation programs • Reduce subsidies in the crop insurance program • Eliminate direct payments to growers of cotton, feed grains, oil seeds, peanuts, wheat and rice BUSINESS/FINANCE • Impose fees to cover government regulatory costs and higher fees for private sector use of federal services, land or waterways. • Eliminate the tax exemption on state or local government bonds used for private-sector projects • Limit options used by businesses to measure inventory when calculating their taxes • Repeal certain tax preferences for oil, gas and mining industries • Extend the period for depreciating the cost of certain investments • Repeal the low-income housing tax credit offered to developers • Modify the rules for the sourcing of company income from U.S. exports • Determine a company's foreign tax credits on a pooling basis • Impose an annual fee on large financial institutions • Change the terms for federal oil
- —Guest SmartAlex
Look to our past
- We should look to our past history and there we shall find the remedy to our national debt problem. What was it our forefathers did right when they oversaw a prosperous economy with a much smaller national debt load? The answer is plain and simple. They did what was best for the country as a whole not for oneself or ones party affiliation. The two major political parties need to work together and dare I say compromise for the better good of our nation. Cut the hugely wasteful military and defense budgets, and reform our healthcare system to make it more efficient. Reform our safety net to make it more efficient. We could easily reform our bloated tax code by cutting out subsidies and using those revenues to lower personal income rates. Exporting more goods and lowering our bloated trade deficit would help do wonders for our national debt as the two are connected.
- One: balance the budget. Two: raise taxes Three: reduce spending
- —Guest Louis Nicholson
Print more money
- Print more money. It would drive inflation up, but, at least in the case of the European Union, that wouldn't exactly be a bad thing. The reason they don't do it, however, is that most European countries have already given up the right to print their own money. Thankfully America has not, and since our money isn't tied to anything, the effect will be limited.
- —Guest Debt
- uni students should start repaying their fees at an affordable amount even if they don't reach the required wage for hex
- —Guest ar
Get rid of Socialism and Barrack Obama
- Barrack Obama is a raging Socialist who is out of control with his spending. Spending is the worst thing to do in a time of national debt. A debt which is over 10 trillion dollars and sky rocketing further. Only by cutting spending will be allow to make a difference in the debt.
- —Guest Miles
Only 2 ways to get out of debt...
- Slavery is the only method to get a country out of a perpetual debt cycle. The USA is constently borrowing money from the federal reserve and paying that money back with interest. If the only source of money for the US is to borrow from the federal reserve than where does the money come from to pay back the loan including interest? It comes from the federal reserve therefor creating a perpetual cycle of borrowing and each citizen is getting further and further in debt. The only solution is to either A) work for $0.00 or B) abolish the banking system that has a solid grip around the throat of the USA.
- —Guest BillyBob547
- Debt is an economy rules that we created ourselves to measure performance. Lets go back to the stone age and there will be no DEBT!!
- —Guest Confused Americans
- We have turned into a country of greed and wastefulness. I see people using welfare as a career path. They're paying with food stamps while their kids are talking on cell phones and mama is carrying a designer purse with brightly polished acrylic nails. I'm sick of it! The federal govt spent $700 billion in welfare programs in 2010 according to Forbes. State govt spent an additional $200 billion. That's in just one year! I don't have a problem helping those who help themselves. I do have a problem with irresponsible people who act recklessly and expect everyone else to take care of them. If this one issue was addressed to the point of actually doing something about it, then ALL that money could be applied to reducing our debt. Because that's where a large portion of it is being spent. http://www.forbes.com/sites/peterferrara/2011/04/22/americas-ever-expanding-welfare-empire/
- —Guest Christine H
make congress pay it!
- let's see here if congress is forced to pay ALL the debt I would bet dollars to donuts they would find a way that very day to eliminate it...
- —Guest steve