We face a "fiscal cliff" - a combination of expiring tax cuts and across-the-board spending cuts set to hit on January 1. The fiscal cliff may throw the US into a new recession and will certainly push unemployment higher. Politicians in Washington know what needs to be done to address the fiscal cliff and the national debt. The problem is that if politicians do what needs to be done, they won't be re-elected.
Congress decides how much money to spend and what to spend it on, not the President. The President submits a budget request to Congress. It is a "wish-list". Congress can modify the President's budget any way it wants, and does. For example, Congress enacted more spending in fiscal years 2010 and 2012 than the President requested. (Fiscal year 2013 began Oct 1, 2012, and is still running.)
We are where we are due in large part to: 2 unfunded wars, an unfunded prescription drug plan, an unfunded tax cut, rising health care costs covered by Medicare, Medicaid, FEHB, and the Military Health System including Tricare, and the expense of having to redeem Treasury bills held by the Social Security Administration.
On top of all that, the US has by far the largest military budget in the world. In 2011 the US military budget ($711 billion) was larger than the next 13 largest military budgets combined ($695 billion), and all but two of those 13 countries are US allies. But during the runup to the election, one Virginia Republican candidate repeatedly warned that his opposition Democrat candidate wanted to cut military spending, and he bemoaned how many Virginia jobs would be lost if military spending was cut. Every time I saw that ad my thought was: is the Department of Defense supposed to be a jobs program? Should DoD employ people unnecessarily on programs we don't need just so those people can get a paycheck?
If there is a weakness in our political system, it is that instead of doing what's best for the country, politicians want to do whatever it takes to win an election. Voters want lower taxes and more government largesse. We hear slogans like "we'll pay for it by cutting government waste," while government waste always turns out to be money spent on someone else's program, never our own.
Sometimes medicine is bitter, but voters want only ice cream and cake.
Note:
See this earlier blog post for more information about the growth of federal debt: http://virtualwayne.blogspot.com/2012/02/doubling-time-and-debt.html
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