The path to Federal fiscal solvency happens to overlap with the path towards national prosperity. That is fairly obvious when you think about it. If more people are economically self-sufficient, then the government has no business spending as much money as it does on social programs. (While it’s also true that even when there is legitimate personal need, the Federal Government has no business spending money on social programs – that is an argument for another day).
The steps towards both solvency and prosperity are maddeningly simple – yet somehow tremendously difficult for both the public as well as politicians to grasp.
- Lower tax rates significantly for everyone
- Eliminate almost all deductions
- Make drastic cuts in discretionary spending (which includes Defense)
- Create a long-term plan to return Social Security, Medicare, and Medicaid to their original status of being Supplemental assistance, rather than being things that people actually rely on.
Combining steps 1 and 2 will generate more revenue than simply doing one or the other (and will raise much more revenue than increasing rates on anyone).
We are not going to get anywhere unless we address our number one issue: Spending. That is where steps 3 and 4 come in.
I think this is all common sense and most people can probably acknowledge that they agree with it on some level. However, in the current political climate, you can’t even talk about any of these things.
Suggest that we need to greatly reform Social Security and Medicare/caid and you get accused of wanting to throw Granny off the cliff. Suggest that we need to cut some wasteful spending practices in the Defense Department and you get accused of wanting to put our soldiers in danger.
Suggest that tax rates should be lowered on everyone and you get accused of wanting the rich to pay less than their “fair share”. Suggest that we need to do away with most deductions and you get a double whammy… the Right accuses you of wanting a de facto rise in taxes and the Left says you are trying to soak the ‘middle class’.
To start paying down our debt, we need to do more than just balance the budget… we do indeed need a surplus. Before we get to that point we either need statutory guarantees or maybe even a Constitutional Amendment which makes it illegal spend surplus funds on anything except paying down our debt. But that’s a bridge that’s beyond a horizon too foggy to even see right now.
Our first goal must be to lower our deficits and put us on a trajectory towards a balanced budget and eventually a (debt-reducing) surplus.
To get there, the government must set a plan to work towards operating on less than it brings in. (Again, common sense, simple math, etc). If we are still stuck in a 1913 mindset and consider the income tax to be sacred, then no one should be completely exempt from paying it. We should lower the rates by quite a lot across all income levels, but at the same time expand the tax base. This has a couple of benefits: 1) revenue clearly goes up and perhaps more importantly in the long run, 2) all income-earning citizens will be participants in our national community. There will be no more takers. Anyone who gets a paycheck should not only have to contribute to social security and medicare/caid… but should also pay something in income taxes.
The needed spending cuts will hurt… but we’ve gotta do what we’ve gotta do. And we need to do it fast… before we turn into Greece, where the entitlement-addicted youth rioted when the government tried to lower their handouts. We’ve got some people with genuine needs here, more people who are flat out gaming the system, and still more people who are simply being held back by receiving entitlements. (They have no motivation to better themselves, since the government is taking money from someone else and giving it to them for free).
Lower tax rates, expand the tax base, cut both discretionary and mandatory spending.
(The above is what you would call a Balanced Approach to our debt problem. Currently, the President has a different definition for Balanced Approach. He uses that phrase like it is going out of style… but what he actually means is: Do Nothing Except Raise Taxes)