Obama is pushing legislation through that will repeal some excessive Bush tax cuts. These taxes only applied to the richest Americans and saved the citizens 70 billion a year. It turns out that this was not such a good idea for the American economy, the deficit widened and dollar weakened. That costs you more taxes, yip-ee.
They tax cuts will give the American government those extra 70 billion dollars to work with. This is good for almost everyone, and those that are hurt by this tax repeal have enough money to cope with the situation. They will have to cut back on the money bathes.
However, critics of this policy highlights that all politicians are still increasing the deficit with other tax cuts. These cuts remain unopposed. The politicians logic is that if these tax cuts were repealed it would knock the American, and the world, economy back into a recession. Nobody wants that, excpet perhaps my Aunt Sally. Bitch owns Walmart (well some stock in it).
Therefore, they are extending them for the next couple of years. The trade off is that the deficit increased and the American government loses 3 trillion dollars every year. This is unacceptable.
The American government is an irresponsible teenager who just received his first credit card. Now they have a new car, some very slick technology, and everything they could ever want. That is when the bill turns up, for 13.4 trillion dollars. But, just like a teenager, the American government pays the bare minimum interest and returns to having fun. Short term, this is a perfect cheap solution. Long term, this becomes costly mistake.
The American deficit is money that we borrowed from other countries and private entities, that is being slowly paid back over several years in bonds. Bonds should only be used in times of extreme need, in times of war or crises. Using them to fund a government at any other point is simply irresponsible. It is irresponsible because there is interest on the bonds, just like the credit cards. The government loses money on every bond they sell. Big no-no.
The solution to this dilemma, stop increasing the deficit. Across the board there must be cuts, with exceptional exceptions, to make America be able to fund the American budget. The military spending should be cut back, it is unnecessary to maintain such a large army for a country in peace time.
The exceptions should be spending that will yield beneficial taxes in the long term. Spend money to make money. An expansion of NASA and the space program will increase science growth in every field, so there will be more things to tax long term. Environmental protection programs should also be expanded; they always bring additional employment opportunities. Parks need rangers, animals need vets, and endangered forests need scientists. This program will increase the employment rates in America, therefore it will also be profitable or at least this program will pay for itself. Americans need to wake up and take care of the national deficit, before it takes care of them.