First, the simple truth: The United States federal government is spending much, much more than it brings-in. There are two basic approaches to fixing this. First, we can reduce the level of federal spending to match current and projected tax income. Second, we can increase taxes [drastically] to pay for the current level of government spending. (And, of course, there is a spectrum of options in-between that mix the two approaches.)
So far, President Barack Obama (D) and the Democratic Party have said they favor a ‘balanced approach’ of tax increases and spending cuts, but they have, in reality, not proposed any actual spending cuts whatsoever. They have only proposed reducing the expected increases in the federal budget over the next decade. Imagine that your annual cost of living is $100,000, even though you only make $75,000 per year. You already expect your costs to increase to $125,000 next year. The Democrats propose spending $115,000 next year instead, and then proudly tell the public that they’ve cut $10,000 from the budget. Except that’s not a ‘cut.’ They’re still planning to spend $15,000 more than what they’re spending today. They also have a plan to increase income to $80,000 though, so that mitigates the impending disaster . . . slightly.
You might think that the Republican Party has a better plan. If we continue with our example, the Republicans plan to spend $105,000 next year and keep our income flat at $75,000. Like the Democrats, the Republicans lie through their teeth and say they’ve proposed cutting $20,000 from the federal budget. In truth, they’re still proposing deficits as far as the eye can see, and they’re still proposing actual increases (not reductions) in federal spending. I’ve said it before and I’ll say it again (and again, and again): the two parties are fighting to the death over how to arrange the deck chairs on the Titanic.