Nowadays an average human being is bombarded with information. One has to make numerous decisions daily, which influence further events in his life. Thus, there are countless issues he has to overcome to achieve a good life. The same struggle relates to countries. Leaders are facing numerous choices, which have diverse effects on different groups of people. Some of the decisions turn out to be good for the majority of people. On the other hand, there are decisions, which cause issues that politicians are later blamed for. In this paper, I will discuss the US debt crisis and its economic foundation.

According to the definition, the debt crisis is “a situation in which the large debts owed by a number of individuals, organizations or countries threaten to overwhelm them, so that they become unable to service their debts” (Collins Dictionary). In other words, it is a situation when a country is spending more than it collects in taxes; thus, it has to look for other financing options. Very often, instead of reducing its expenditures, nations decide to borrow funds from other states or institutions. Kimberly Amadeo, the US economist, claims that the country’s debt crisis started in 2011, “when Congress almost caused a government shutdown by delaying approval of the FY 2011 budget” (Amadeo). Since then, the amount of US debt was constantly rising. In 2014, it equaled approximately 18 trillion USD; thus, the number exceeded the economy’s total output of goods and services (Amadeo). There are no short-term effects of the US debt crisis on society’s welfare. As long as investors are willing to loan money, do not demand it back, and the government can pay its current obligations, the economy is functioning well. On the other hand, this situation is very dangerous long-term. Thus, this issue should be very compelling for young people. Eventually, the US government may reach a condition when other countries do not provide it with more money. Since the current debt is exceeding the nation’s total output, it will not be able to pay it off with the state’s own means. This issue will lead the economy into crisis. The current situation with the economy of Greece should be of an example for the US.

Nation’s debt is a consequence of a condition when the country’s spending exceeds revenues. Thus, there are two fundamental economic decisions that the government should make. First, it should decrease spending. The country should stop funding programs that are not very important for the nation’s wellbeing. Also, the government could consider decreasing its spending on social programs. Even though it might be a tough political decision, it definitely will have a positive economic effect. Second, the government should increase its revenues. Raising taxes is one of the ways of accomplishing it. In this condition, the government is making more money, which it can use to fund other programs or decrease the budget deficit. Ideally, these two actions lead to a situation when government revenues exceed spending. It would help the nation to stop going deeper into debt and start accumulating funds to pay off the debt. Tough political and economic decisions today could save the nation’s ‘tomorrow’ and prevent young people from paying the debt that their parents and grandparents enjoyed for a long time.

In conclusion, in this paper I addressed the issue of the US debt crisis and its economic foundation. Despite the social welfare issues, the US debt crisis is an economic problem that the state should address from an economic point of view. Cutting expenditures and increasing revenues are two of the most fundamental and important ways of dealing with this situation.