The US economy, according to Paul Krugman (liberal pundit) and Payl Ryan (conservative Republican congressman), is on a fundamental threat as the federal debt is increasing rapidly due to the stimulus driven bulge in federal deficit. In the next few years the level of debt will keep rising and building the burden even more to an unsustainable and catastrophic level. Although Krugman still strongly supports Obama’s spending plans, he admits that the long-term outlook of this remains worrying.
What Americans should be scared of now is the dangerous Great Debt Threat. Although the stimulus package seems to be to help Americans, the consequences is the huge deficit which can only be covered
by the only practical solution of a giant tax increase. Within a decade, the average householdthat pays income tax will owe the equivalent of $155,000 in federal debt. To save the economy, America has to raise annual federal income taxes an average of $11,000 in 2019 which is an increase of 55%.
Because of the growing debt burden, Americans will not only be weighed down by taxes but also higher interest and slower economic growth.
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