Question

Analyze new fiscal policy actions undertaken by the U.S. government throughout 2000 - 2010 by describing their intended effects, using macroeconomic principles to explain the actions. This rubric element wants you to examine what the fiscal policy initiatives were going forward, to respond to the changing economic landscape. You should specifically state what the intent of the actions were - for instance, it could be to decrease unemployment. Then, use our macroeconomic principles and models (like the AD-AS model or Keynesian consumption function) to explain why the action would lead to the outcome desired by the government.

Scholarly research is required here as well

•Congressional Budget Office

•White House website

•Economic Report of the President (from FRASER, which has many other great resources)

•National Bureau of Economic Research

Answer 1

Before the U.S. Public Debt can be reduced, the U.S. Federal Budget Deficit must be eliminated. That means the Federal Government of the United States needs to stop increasing the debt before it can reduce it. Currently the Congress spends over one trillion dollars more each year than it takes in tax revenues.

This situation is even worse than it sounds. Many federal programs are designed to constantly increase in spending. Major examples are Social Security and Medicare. As the population gets older and inflation reduces the value of the U.S. Dollar, these programs cost more and more each year. Even if the federal government reduced "discretionary" spending to zero, the "mandatory" spending programs will cause ever increasing deficits.

This all adds up to an apparently impossible problem with increasing spending. If there is any way at all to reduce the 17 trillion dollar national debt, the spending must be reduced rather than always increasing.

Update August 2014

I didn't actually answer the question of reducing national debt in my first entry, so I decided to add an idea for that purpose.

The US government owns a lot of land and the mineral rights that attach to that land. If it encourages development of those mineral resources it could then collect royalties on the production of minerals. These include huge reserves of oil and natural gas along with many other valuable minerals.

There are many advantages to this approach including helping the balance of trade that is destroyed by huge imports of crude oil. Unfortunately there is also a down side in the political arena because the radical environmentalists will do anything they can to destroy energy production in the USA. That means to develop these resources there must be political resolve to ignore the environmentalists.