Question 1: The general reasons for the debt crisis as defined in the report.

Expenditures are on the rise and government collections reducing, this necessitate the state to borrow vast amounts per annum to breach the gap. The country face overwhelming deficits. Surprisingly, in year 2010, federal expenses was almost 24% of GDP. The last time was scenario of federal using larger share of economy was in the World War II.

Also, Tax collections are roughly at 15% of GDP, the bottommost equal since 1950. The difference between expenditures and revenue which is the budget deficit is under 9%t of GDP.

Adding to the debt glitches, they have a budget that emphases excessively on consumption at the price of vital investments, and an incompetent and multifaceted tax code that emboldens housing needs and health care cost development rather than job, investment, and universal competitiveness.

The intensification was facilitated largely by a swing of fiscally undependable strategies, together with a deep economic recession. The politicians and political parties also take the blame (Alan K. Simpson, 2010).

Question 2: An overview of the proposed solutions offered by the authors.

The authors have proposed a six section plan to solve the fiscal situation of America and promote growth of economy. The frame objectives of the plan are as follows;

• Realize approximately $4 trillion in deficit decrease through 2020.
• Lessen the shortfall to 2.3% of GDP by 2015 (2.4% discounting Social Security reform).
• Abruptly minimize tax rates, eradicate the AMT, and scratch off backdoor expenditure in the tax code.
• Control revenue to supplement 21% of GDP and bring spending beneath 22% and ultimately to 21%.
• Guarantee enduring Social Security affluence, prevent the estimated 22% cuts to be seen in

2037, condense elderly poverty, and dispense the load fairly.

• Alleviate debt by 2014 and moderate debt to 60% of nations GDP by year 2023 and 40% by the year 2035

The plan laid down by the authors has six primary elements

1. Discretionary Spending Cuts

The commissioners gave various recommendation under this including but not limited to; Proposal to indorse harsh discretionary spending laws to force budget castigation in Congress, hold expenses in 2012 equivalent to or inferior than spending in 2011, and return spending to 2008 margins in actual terms in 2013, frontier upcoming spending advancement to half the probable inflation rate through 2020.

The Commission proposed that flexible spending may be frozen at 2011 echelons in 2012, and carried down to inflation-attuned pre-crisis heights in 2013. This track would entail thoughtful belt-jerking to begin in 2012, shadowed by considerable trifling cuts in 2013.

Incorporate implementation contrivances to give the restrictions real teeth. Make noteworthy cuts in mutually security and non-security outlay by wounding low priority projects and reshuffling government processes. Both the Congress and the Presidency should be enthusiastic to cut superfluous spending when need be. They should launch a disaster kitty to budget justly for catastrophes. In narrow circumstances, various emergency costs may be indispensable. Nonetheless, such disbursements must be substance to far greater answerability and accountability of good level.

In spending; they should bestow a 15-cent per gallon upsurge by the gas tax to transportation subsidy, and bound outgoings if crucial to match the returns the trust fund accumulates per annum. The state should also institute cut-and-invest board to cut low-slung expenses, intensify high-precedence investment, and fuse duplicative federal lineups. This will ensure they embrace instant reforms to condense costs and make the federal government more proficient.