The US debt has been increasing over the years. Presently, the government debts stand at $16 trillion. According to Stein (2012), the rise is destabilizing the economy calling for a solution before the situation gets out of control. The government needs a budget surplus to run its operations, and prevent the possibility of an economic meltdown. The debt crisis is already contributing to the rise in the cost of living posing challenges to the economy of the US. For instance, the country is witnessing a decline in growth and citizens are encountering challenges in meeting their daily needs (Stein, 2012). According to many financial experts, the government needs to come up with an urgent solution to prevent the crisis in the coming years. A suitable solution is necessary since the previous solutions have not been affecting America’s national debt.
Suitable solution to US debt
One of the suitable measures for averting the debt crisis is cutting governments spending since records indicate that overreliance on taxation techniques have not been effective in solving the debt crisis. Additionally, the government should balance the rise in taxation since they have not come up with a suitable strategy to solving the debt problem (Buckley & Arner, 2011). Consequently, the government should use a hybrid approach in capping tax deductions by increasing national sales tax and reducing income tax; however, this should take place systematically since the use taxation techniques can create an imbalance in the economy. According to Buckley & Arner (2011), economists face dilemma finding the best solution to the debt crisis due to lack of understanding. Different stratagems pose different challenges to the economy. For instance, some of the stratagems have reversed the gains of the economy meaning that the only suitable means to solving the debt crisis is using a combination of strategies. For example, the government can incorporate both fiscal and monetary policies to...