Kirby wrote:Are the debts and deficits currently being faced by Western Countries (U.S., France, Japan, U.K., Canada) a very serious problem? Will the amount of debt accumulated lead to economic collapse?
Depends on a few things.
1. Who's financing the whole she-bang? The US has sought foreign loans with increasing frequency. This means a lot of $US dollars will go out of the country, interest on the loans over and above the capital borrowed. Alternatively, most of Canada's debt is owned by Canadians. It will cost the taxpayers just like it will cost the US taxpayer, but the whole amount, capital and interest, stays in Canada. The American way will most likely slow US economy, the Canadian way will be the one that more likely stimulates Canada's economy. As to economic collapse, Canada and France's banks are sound. The US has huge financial commitments going forward, but with creative thinking, it might not be too harsh. Sometimes one problem can be handled to solve another problem.
2. How's the money being spent? Every ledger has two sides, credit and debit. As Dr Lee pointed out, some social programmes, ie education, law, and health create a positive investment for both the individual and for the country. Some, not so much. Look at education for a moment. Red states are laying off teachers just to reduce state budgets a squidge. Out of 34 countries, the U.S. ranked 14th in reading, 17th in science and 25th in math. Increasing class sizes and decreasing time between the teach and individual students aint going to help.
Politicians have to learn the average working stiff spends or invests every dime s/he makes in the local economy or for his/her pension. A huge part of a teacher's salary goes back to the state for taxes, and pays into the teacher's pension plan. And retired teachers, like working teachers pay taxes and spend the bulk of the rest locally. Conversely, you're paying for the teacher to sit on Unemployment Insurance, later maybe dole, and if s/he doesn't get work again, you'll also pay his/her pension. And your kids will be dumber than the ones who move to the US to get the good jobs that still exist within your country. Does firing teachers still sound economically viable?
Spending to rebuilt the power grid, positive, spending to build a bridge to nowhere, forcing cuts in better programmes has a positive impact on the congressman who managed the boondoggle, a negative impact on almost all others.
Kirby wrote:Is the best way to solve this crisis involve cutting government programs or making sure corporations and wealthy individuals pay a fair share of tax and don't take jobs out of the country to other countries?
Cut where you can, but as the Indians say "What will it look like tomorrow" For example, if putting a stop to welfare meant a large and immediate increase in crime, you'll be much further ahead to continue welfare programmes. Stop building fighter jets you'll never use is a probably to the good.
Supply-side economics, deregulatory practices, two wars, tax cuts - especially when fighting two wars, and giving away pallets of money to foreign interests and at-home businesses (including oil subsidies) created the mess the US is currently in.
“There are a terrible lot of lies going about the world, and the worst of it is that half of them are true" - Winston Churchill