Obama’s debt-chopping plan – Is it fully equipped for a debt free 2012?

After the scuffles over the raising of the debt ceiling ended with a final rise of the most awaited debt limit and after S&P cut off a notch from the pristine credit rating of the US (AAA), President Barack Obama has finally rolled off his plan to help the US get back on track. Unless the Obama administration slashes off the national debt, nothing positive can ever happen to the economy. Though a number of groups have published their own debt reduction plan, nothing has ever been effective in curbing the spiraling debt level of this economic superpower. Just as the consumers are running to the professional debt help companies to control their personal finances, the government is also continuously borrowing money from other nations in order to cope up with the rising expenses of the nation. As Obama has rolled out the new plan to decrease the increasing debt level in the US, the most common question by the financial analysts is whether or not this plan is equipped enough to make the difference. Read on to educate yourself on this.

Some major ideas that Obama left out while crafting his debt reduction plan

Though Obama has borrowed a number of ideas from the Bowles-Simpson effort like the cuts on the agricultural subsidies and the tax reform that could lower the interest rates and also decrease the loopholes within the system, yet there are some prominent suggestions that he has missed out while implementing this plan for the nation. Read on to know about them.

• The required cuts in the Congressional and White House budget: The consumers and the nation are not only responsible for curbing off the debt level. The White House and the Congress should also cut down their budgets by at least 15% before asking the other sections to bring back some restraints in their budget. This shouldn’t be a too tough decision as the spending in the legislative branch has increases by 50% in the recent years.
• A pay freeze of the Congressional members: According to the Fiscal Commission, unlike most people in the US, all the members of the Congress benefit by getting their salaries increased by a drastic level every year. Therefore, if there would be a 3-year Congressional pay freeze, there could be a certain level of austerity. However, though this may seem to be a good option, Obama isn’t seconding this suggestion probably because he doesn’t want to pick a fight with the Congress at this moment of time.
• Tax hikes among the middle-class people: Obama has expressed his concerns over raising the taxes among the households who earn more than $250.000 while endorsing a huge tax reform that would involve lower rates. The Obama commission took a further step in outlining the specific elements of the tax-reform plan that could lower the tax rates for everybody but slightly raise the tax burden on most of the families.
• Putting off all the earmarks: The spending projects that are given for the favored members of the Congress actually cost the taxpayers dearly and this often ranges to $16 billion per annum. The fiscal commission of Obama said that such things should be banned totally but unfortunately Obama didn’t include any such earmarks in his debt reduction plan and this is perhaps another mistake by the nation to reduce the debt level of the nation.

Though there is no positive hope for the US economy in 2012, yet by taking certain steps, something can at least be thought of for the economy. If you’re someone who spends a huge amount of money and then rush to the professional debt help companies, you should change the habit as soon as possible so as to get back a firm grip on your finances and also help the economy.

About the author:
Rick Murphy is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles.

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