Edit: Whose to blame?
Politicians for cutting taxes, corporations for cutting wages to maximize profits making it so that their own workers can't buy the products they make, workers for wanting cheap goods, and thus allowing their own jobs to be outsourced. In short we're all culpable. It's been a slow decline since the 1980s. 30 years of bad behavior that has come to a head.
As to how to solve the problems of the US economy? Well there are two problems, credit and jobs. Under those two problems we see these issues:
Jobs
1) We've outsourced most of our good blue collar jobs. Fewer jobs, more people, more unemployment. Lower wages has created more corporate profits, allowing the rich to get richer and the poor to get poorer. This has allowed money to be concentrated in the hands of the wealthy.
http://beta.images.theglobeandmail.com/ ... 40863a.jpg2) Many people who are employed are under employed, meaning they might have a job, but work less for fewer dollars. People are forced to work harder for fewer dollars as wages have remained static. People have less, goods cost more meaning that less dollars are being circulated in the economy, creating fewer jobs. Jobs are created by money circulation. Money to store, store to manufacture, manufacture to grower of raw material, raw material producer to bank, bank loaned out, borrower back to bank, etc etc etc etc etc. When money is concentrated in the hands of the rich it tends to stay there, since rich people like their money and want to keep it.
Credit:
Predatory lending of all varieties, housing especially but also credit cards, payday loans, etc. to people who can't afford to pay off loans leads to too much default hurting banks as well as poor credit rankings allowing fewer people to borrow money, leading to less lending, less money circulation between lender/borrower, leading to stagnant money. Antidote, more regulation of financial sectors (hey that would also create jobs).
The larger issue of US funding of two wars, Medicare Part D, and the general issue of government spending while cutting revenue, the Bush tax cuts of 2001 but also tax cuts under Reagan leading to deficit spending since the 1980s. Revenue is the other side of this coin. The time when America was considered "great" (by many the Golden Age of the 1950s-60s) tax levels were far higher. In the 1950s under Eisenhower the highest tax bracket was 91%. Under Kennedy they dropped to 70%. Heck under Reagan's first term the highest tax bracket was 46%, higher than taxes are now. (Also busting the myth that Reagan never raised taxes as thought by many.)
highest tax bracket chart:
http://www.atlanticfinancial.com/images ... -chart.jpgBasically our debt problem in America is caused by cutting taxes, something that has been proven time and again to not create jobs, and keeping spending the same, creating deficits that have slowly been building to our current debt of around 15 trillion. Also when it comes to spending cuts the main cuts proposed by the Republicans are things like welfare and NPR and stuff, things that make up a tiny fraction of the budget.
The big three of US spending are military, Medicare/Medicaid and Social Security. Social Security is it's own distinct thing and is fine for another 20 years. The place people want to cut are medicare (for Reps) and defense (for Democrats). Cuts will have to be made somewhere unless people want to raise taxes. I prefer small tax raises on the wealthy, who have done very well during this "jobless" recovery of 2009-11 when many of them caused it. A return to Clinton level tax brackets on the wealthy would do much to solve our deficit issues.
Also I think we should go to a single payer health care system that seeks to eliminate the price gouging by private health care with the caveat of allowing the better off to buy as much supplemental health care as they wish. Also there should be more emphasis on preventive health care, trying to get people to lower their blood pressure before they need a $200,000 bypass surgery and a hundred other things they could do to avoid needing expensive medical procedures.
That's it in short. (And when some conservative asshole comes in and tries to tear up these thoughts I preemptively say "Screw you". Small changes in the way our country runs could curtail a lot of the problems. Tax increases on the rich of 5% would do much to solve our debt problems. Also I'm perfectly willing to support spending cuts as long as they're across the board, welfare as well as militarily. Do we really need troops in Germany?)
The debt has been accumulated over 30 years. It will not be eliminated in 3. It will take a long slow growth of the economy coupled with minor cutbacks and small revenue increases (taxes. Yes taxes) and a general tightening of the collective belt.
