"The 'unfunded wars' [of recent history] have driven up the debt." This argument points to recent military conflicts that were not accompanied by tax increases as the source of U.S. financial problems. A careful analysis of all spending and receipts, however, shows these conflicts are responsible for, at most, 15 percent of the national debt. Learn where the money is really spent in Chapter 3.
Fast Fact #5: Some people think military conflicts are the cause of our current debt problems. However, national defense outlays are only 20 percent of the total spending over the last 36 years. Learn where the money is really spent in Chapter 3.
The U.S. government has a spending rather than an income problem. A sound financial counselor wouldn't suggest that a habitual spender find ways to increase his earnings. The same logic applies to the government; historically, receipts have generally risen and fallen with expenses. We must look at expenses in order to reduce deficits and the debt.
Fast Fact #8: The budgeting process of the U.S. government is broken. Cuts in discretionary spending are not the answer. Even if all non-defense discretionary spending is completely eliminated, we will have deficits every year for the next 10 years.
How can programs like Social Security and Medicare drive up the national debt? After all, Americans pay into these systems via payroll taxes, and the government invests this money for future beneficiaries. There should be a corresponding set of assets in these trust funds to offset the amount outstanding--right?
Fast Fact #1: The U.S. government has a long history of debt, starting with its initial obligations from the Revolutionary War. Unfortunately, the debt hasn't been reduced even once since 1958. The last and only time we've been debt free was in the 1800's. Understand the debt from a historical perspective.
Dr. Niall Gaffney, director of Data Intensive Computing at the Texas Advanced Computing Center (TACC) and Dr. Michael Hasler, program director MS Business Analytics, IROM, McCombs School of Business