For a long time, the United States has been in a substantial amount of debt. However, it was not until around the presidential debates this year that a huge stir was created about the situation, which left every news station covering the fiscal cliff practically 24/7. To be exact, the United States has $16 trillion in debt. A record number of people have been unemployed since what experts refer to as the start of the recession, which occurred in 2008 when the housing market took its biggest hit yet. Obama and others realize that something needs to be done about this issue, and it needs to be done quickly because financial gurus have said that once the number hits $16.4 trillion, we are heading off the fiscal cliff.
There have been debates back and forth between the republican and democrat parties in regards to what the best and easiest way to fix the solution is. The democrats believe that the best way is to raise taxes on the upper class while also making a few cuts. The republicans operate more under the mindset that cuts should be made, then the tax brackets can be examined.
President Obama claims he is completely against ending the Bush-era tax cuts for the middle class, but he is planning on jacking up the rates for the richest class in America. He also says that he plans to make a few cuts, but the full details on what this will include have not been officially released, which makes it hard to speculate.
Under Obama’s plan, he estimates that the amount of new tax revenue gained from increasing the highest tax bracket will be about $1.6 trillion over 10-years’s time, so this would work towards getting us out of debt in approximately 100 years. However, he also believes that he will generate another $60 billion per year by cutting back spending on certain programs.
To break it down even further, reports say that Obama plans to take every $1 in new revenue and make $2.50 in cuts to match. This sounds like a good theory, but we have yet to see where he plans to cut spending, and how people within this industry will be affected. Obviously, you can only make so many cuts in so many different places until you end up having just that many more people listed as unemployed.