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. 

Americans Pessimistic About Fiscal Cliff Negotiations

With the fiscal cliff looming just weeks away, the Pew Research Center released a poll reflecting the public's concerns regarding the ongoing negotiations between the White House and Republican Congressmen. 40% of Americans believe lawmakers will reach a deal before the January 1^st deadline, when mandatory spending cuts and tax increases take effect.  49% believe no deal will come to fruition, hurling the U.S. over the fiscal cliff – something many experts believe will drag the economy into another recession.  If no deal is reached, 53% of the public said they'd blame Republican Congressmen, and just 27% would place blame on President Obama.  Democrats are more optimistic about negotiations, with 55% saying they expect a deal to emerge before the New Year, compared with just 22% of Republicans

Positive Momentum in Economic Confidence

A recent report released by Gallup Economy indicates that Americans' confidence in the US economy is the highest it has been in four years.  The monthly average of economic confidence in November (-13) is significantly improved from confidence levels recorded during the onset of the Great Recession in January 2008 (-32).  Throughout the month of November, Economic Confidence was relatively stable, ranging from a high (-10) in the week leading up to the presidential election and dropping slightly toward the end of the month (-15) as the fiscal cliff approaches.

The Gallop Economic Confidence Index determines monthly averages of economic confidence by averaging Americans' interpretation of current economic conditions and their future expectations for the US economy. Although in November more Americans viewed the economy as "poor" (38%) than "excellent" or "good" (17%) and the net score of Americans' opinions of the current US economy was negative (-11), the average rating of the current US economic conditions in November was the highest it had been since March 2008 (-20).  Additionally, while more Americans believe that the US economy is getting worse (50%) rather than better (45%) for an economic outlook net score of (-5), the economic outlook score is steadily improving.   Therefore, while Americans' assessment of the current economy and their economic outlook is bleak, it is the best it has been nearly five years.

Certain subgroups of the American population are more confident in the US economy.  Notably, Democrat (30), Black (30), Hispanic (6), and 18-29 year old (3) Americans reported the highest levels of confidence in the US economy, whereas married (-20), elderly  (-23) White (-23) and Republican (-59) Americans expressed the least confidence in the US economy.

Consumer Sentiment, Job Creation Could Suffer if Congress Fails to Reach a Deal

According to a White House report cited in the WashingtonPost, if Congress fails to reach a deal that would renew for the Bush-era tax cuts for middle class Americans, the economy may suffer. Among other consequences, consumer spending could plunge by $200 billion dollars, since middle-class Americans may become reluctant to spend if they are forced to pay $2,200 more in taxes. Consumer sentiment could also take a hit. Although 2007 marked the highest level in consumer sentiment, it declined rapidly in the summer of 2011 during the negotiations over the debt ceiling. Consumer sentiment has recovered since then and currently, it stands at its highest level in over 5 years. However, the Council of Economic Advisers warns that the fear of the “fiscal cliff” could drive down consumer sentiment and consumer spending. The Congressional Budget Office (CBO) also seems to concur with some of the findings of the Council of Economic Advisers, mainly that an extension of middle-class tax cuts could provide a much-needed boost to the economy. The CBO estimates that such an extension would result in a 1.3% increase in GDP and could help add up to 1.6 million jobs. Currently, it appears that negotiations are at a standstill. Although in recent days some top Republicans said they were willing to break Norquist's anti-tax pledge, Republicans and Democrats have not reached a deal to avoid the major spending cuts and tax increases that are set to take effect in 2013.