Ok, this thread is going to be different from anything else you have read here so far. I am a grass roots activist, just started actually about 2wks ago, and I am looking for critique and input on three specific ideas that I have had involved with solving the federal debt problem. I am nonpartisan, have little interest in discussing the debt just to give me something to talk about and have zero interest in blaming a particular politician or party for our problems. This thread is based strictly on solving the problem and I need as much constructive criticism and input as possible from all the intelligent posters I have read here.
My fellow conservatives annoy me, libertarians infuriate me, and liberals kind of disgust me.
Conservatives can not really identify the cuts needed to balance a budget.
Libertarians can, but don't acknowledge the crisis as a result.
Liberals would take any increase in revenue and spend 50% more infuriating the problem.
I'd love to see them impose a 5% across the board sales tax on all goods and services that contribute to the GDP. This would raise $700 billion a year and our budget balanced unless liberals added more govt and more expenses. To me a balanced budget it more important than lower taxes right now, and 5% across the board effects all including the 40 or so percent that don't pay federal income taxes or anything at all.
No amount of taxation will pay off any debt. It will only grown government more. Politicians aren't interested in doing what is right. They are interested in doing what maintains their power. Any addition tax is crazy.
My fellow conservatives annoy me, libertarians infuriate me, and liberals kind of disgust me.
Conservatives can not really identify the cuts needed to balance a budget.
Libertarians can, but don't acknowledge the crisis as a result.
Liberals would take any increase in revenue and spend 50% more infuriating the problem.
I'd love to see them impose a 5% across the board sales tax on all goods and services that contribute to the GDP. This would raise $700 billion a year and our budget balanced unless liberals added more govt and more expenses. To me a balanced budget it more important than lower taxes right now, and 5% across the board effects all including the 40 or so percent that don't pay federal income taxes or anything at all.
These are essentially all the ideas at their most simplified level that we could use to pay off the debt:
Use austerity measures including a reduction of Social Security, Medicare, Medicaid and other health and retirement benefits to hold the line on further indebtedness.
Use draconian austerity measures, including a wealth tax on bank accounts, to save the financial system.
Increase sales and income taxes.
Shift an increasing share of health care costs to the American worker.
Shift more federal spending to State government budgets.
Increase the rate of inflation by adjusting interest rates.
Print money (also inflationary)
Default on selected blocks of treasury debt
Use trade and/or currency measures to enhance domestic economic growth.
Increase tax revenues by encouraging the growth of the private sector.
All or some of the above.
Obviously, we aren't going to default on any debt, but the last option is our most realistic. We don't need to pay off the debt completely, but we do need to make sure we aren't running budget deficits >3% of GDP, properly meeting our obligations, and investing in the future of this country.
My plan for paying down the debt would be to:
1. Reform tax code to eliminate most tax expenditures including the mortgage interest tax deduction and institute a progressive, but simple tax system that eliminates the complexity and favoritism of our current tax code. Count capital gains as income and apply income tax to it. Reduce overall corporate tax rate but eliminate all loopholes/credits. Cap budget deficits at 3.5% or something of GDP except during war time.
2. Completely reform SS for anyone under 35 or so. I would suggest creating a mandatory retirement savings account similar to what Singapore does but a much smaller amount and it would only pay out what was put in. Revert SS into what it was supposed to be..Poverty insurance for the elderly. Only provide money for people who have exhausted their savings. Reform 401 (k) and IRA plans to encourage more private retirement savings through shelters. Currently it is fully funded, but its growth model is unsustainable and I don't believe it is needed in its current form.
3. Cut military spending significantly. Close at least 1/3 of overseas bases. Cut active duty personal and increase reserves. Make a constitutional amendment to not go to war unless we or one of our allies are attacked by a military entity. Our military is too big. There is 0 reason we should be spending 50% more on our military than the other top 10 military spending countries combined. The Military Imbalance: How The U.S. Outspends The World « Breaking Defense - Defense industry news, analysis and commentary
4. I advocate a single payer healthcare system so I won't talk about reforming medicare in particular, but we need to take a more rational approach to our healthcare spending. We spend 40% of Medicare dollars on chemotherapy which has been shown to have little to no effect on most types of solid tumors (pancreas, lung, brain, etc.). We spend 25% of Medicare dollars on the last year of life on interventions that do nothing to prolong life or only keep people "alive" artificially. Make living wills a mandatory requirement for all people and make them 100% binding contracts that are part of a patients permanent medical record that will allow doctors the freedom to enforce them without the fear of a lawsuit (which is a major reason they aren't followed much now).
So essentially, I advocate that we balance the tax code, circumvent our future debt crises from medicare/ss now, and cut military spending.
I had considered a sales tax. However it seemed a bit punitive and would cost us growth. We already know what our current payment is to service the debt and that won't change except new debt. Inflation alone would lower the burden year by year until the bonds are paid off and it disappears. Balancing the budget right now would send us into recession again, which would increase our deficit by lowering the tax base just like in the recent recession. That is one reason I came up with the ideas I did, to grow our way out of the debt instead and get the benefits of deficit spending without accumulating more debt.
You don't seem to play well with others but it may just be from banging your head into the wall too many times, I feel you.
I would agree with you if it was a large sales tax, but at 5% the progressive taxation is far more fair than it is today with a significant part of society not contributing very much - if anything - to the governance of our nation. I for instance, pay no income taxes and have income of less than $5k a year; I have survived this way for 4 years now and its now my way of life. I am able to spend a little more than that as I draw on lifes savings but my contribution to the governance of our country is none existent and how is that fair?
You may not pay income taxes but you are still taxed every time you make a purchase. No, not sales tax, but embedded taxes that are figured into the pricing of everything you buy. Every step that a product takes to get to market is taxed, and the taxes are passed along to, eventually, the final consumer. On average, embedded taxes add around 22% to the price of a product. Our politicians love this kind of tax because it's hidden and most consumers don't even know they are paying it.
I would have to see the evidence which supported that. Since most businesses ( I used to win a few) can easily avoid taxes that just does not ring true to me. What little I spend is on food, services, and even communications. The later might have a 22% burden but I doubt the farmers I barter with and even the Costco I visit has that level embedded.
Taxes are overhead to a business. The tax burden of a producer is figured into the cost of the final product or service. When the farmer bought a tractor, every part of that tractor had a tax component, and each component was passed along to the purchaser of that component. When the tractor was assembled and ready to sell, all the tax components were included in the price of the tractor. When the farmer bought the tractor, he paid the taxes. However, to him, it was just another cost of farming that he took into account when he sold or bartered his crop. This applies to everything the farmer purchases in the course of farming.
It's the same for Costco. When they buy a product to put on the shelf, taxes are already embedded in the price they pay for the product. Their overhead (labor, taxes, toilet paper in the bathroom, etc.) must then be figured into shelf price to ensure a profit. The final consumer pays the taxes. He just doesn't realize it.
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