How would you solve the debt crisis?

With all of the controversy regarding the United States' debt, several sites have released games that allow people to try their own hands in debt balancing.  Specifically, the Committee for a Responsible Federal Budget released the interactive tool seen in the graphic.  Choose when to phase out troops from Afghanistan and Iraq, whether or not to pursue a moon colony, and how to treat retirees.  The site displays savings relative to current policy dependent upon the policies you choose.

The Wall Street Journal released a similar activity, allowing you to choose between "fiscal cliff" scenarios, extending current legislation, or adopting new measures of your own. The decisions one makes influence whether or not the United States debt would make it to 60% of GDP in 2020, as some policymakers and experts have suggested. 

Holders of the U.S. Federal Debt

A recent Daily Chart blog on The Economist's website includes an interactive graphic created by Congressional Quarterly that breaks down the U.S. federal debt by its various bondholders. As of the end of March, the total federal debt was 14.27 trillion dollars to holders of US Treasury securities. The two graphics below indicate these holders of US Treasury securities and the amount that they hold in billions of dollars. As the chart indicates, the three nations that hold the largest amount of US debt are China (with 1.15 trillion dollars), Japan (with 906.9 billion dollars) and the United Kingdom (with 333 billion dollars). It is important to note that this doesn't necessarily mean that the governments or central banks of these countries own the securities, but are simply the location of the securities. Additionally, about 4.61 trillion dollars of the federal debt is held by US government accounts, over half of which (2.61 trillion dollars) is held by Social Security trust funds. Who actually holds the federal debt has become relevant recently, as a government default has become a feasible possibility with the approach of the debt ceiling deadline (August 2nd). As a related Congressional Quarterly article discusses, an increase in the debt ceiling is necessary to prevent a default so that the government can continue to borrow in order to meet its financial obligations.
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Pew: Public Divided on Significance of August 2 Debt Limit Deadline, Potential Consequences

According to a July 15-17 survey conducted by the Pew Research Center for the People & the Press, the public is divided on the importance of the August 2 deadline to raise the debt limit. Forty percent of those polled say that - based on what they've read and heard - it is "absolutely essential that the federal debt limit be raised by Aug. 2 to avoid an economic crisis," but 39% believe the deadline could come and go "without major economic problems."

Opinions on the subject are correlated to partisan affiliation: while 53% of Republicans believe the deadline could pass without major problems and 30% take the opposite opinion, the percentages are reversed among Democrats; 56% of Democrats believe raising the debt limit is essential, while only 28% do not. A plurality of independents (43%) say the deadline could pass without major economic problems. Republicans who agree with the Tea Party were most likely (65%) to say the deadline could pass without major problems. Interestingly, "the degree of attention to this issue has only a modest relationship with peoples’ impressions of the seriousness of the Aug. 2 deadline." Both those who are following the issue closely and those who are following it less closely are divided on the importance of the deadline.

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Who is to Blame for Failed Debt Negotiations?

As debt looms over our heads and the debt limit draws ever nearer, people are getting antsy and starting to point fingers at who they think is to blame for failed negotiations about raising the debt limit. In a survey of 1,003 Americans done by the Pew Research Center, most people agreed that the Republicans in Congress are to blame. When broken down into political affiliations, 58% of Republicans blame the Obama administrations, and only 22% blame Republicans. 72% of Democrats say that Republicans are to blame, while 34% place blame on the Obama administration. Independents are pretty neatly divided on the issue, with 34% blaming the Obama administration, and 36% blaming Republicans in Congress.

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