One of the most talked about issues in American today is the national debt and what to do about it. Both political parties pay lip service to the issues of the debt but neither is willing to tackle the problem. President Obama ran in 2008 on a promise to cut the debt in half by then end of his first term and even called President George W. Bush 'unpatriotic' for adding $4 trillion to the debt. When he took office in 2009 Obama faced a debt of $11 trillion. He has since added $5 trillion to it. Mitt Romney is now criticizing President Obama for this and claims he will implement policies to reduce the debt. His plan though, includes reducing taxes again and that is a recipe for more debt.

Why is reducing the debt important? Some argue it’s not that serious and even President Obama seemed to dismiss the seriousness of the issue during his appearance on The David Letterman Show when he said the debt was not a short term problem. His rationale was that interest rates are so low that our interest obligations are not a detriment to the budget at this time, but that is not going to last forever. Soon, those who buy US Treasuries will want a greater return on their investment and when that happens interest rates will have to rise. As rate rise the interest expense will rise. A future combination of high interest rates plus increases debt service payments will prevent the US from taking care of its other budget obligations. That is why the debt has to be addressed sooner rather than later. If not, we will find ourselves unable to do the things we need to do because a significant amount of our budget is debt interest payments.

What can be done about the debt? How can the problem be fixed? The answer is one no one wants to hear. In order to truly reduce the debt first we have to balance the budget so that we don’t have annual deficits adding to the debt. Only then can we start to reduce the debt. In order to balance the budget US policy makers have to both raise taxes and cut spending. It’s the only way it can work in the long term. Raising taxes is never popular but it will have to be done, and not just for the wealthy. To truly tackle the debt all Americans will have to pay more and that means living without such popular policies like the mortgage interest deduction and child tax credits. The wealth and corporations will have to forego tax loopholes and subsidies.

At the same time spending will have to be curtailed. Younger workers will have to work longer before receiving Social Security. Those who rely on entitlement programs will have to do with a little less. The Defense Department will have to be leaner and do its job with less money. Only by having a comprehensive plan that relies on both revenue and spending cuts can the US government truly eliminate deficits and reduce debt.