Before I lay out how I would bring our Federal Deficit and Debt as if I was King of America. And I could do it anyway I would want to and water wasn’t wet and fire wasn’t hot and people didn’t breathe air, etc etc etc. I would like to first lay out what I wouldn’t do. I wouldn’t attempt to cut the deficit on a measly 13% of the Federal Budget, which is what the House GOP has attempted to do. Probably knowing that wouldn’t get it done. Even if that ever became law. I believe what they were trying to do, was to cut or eliminate programs just because they don’t like them. It was more about ideology then economics. I also wouldn’t try to reduce the deficit by passing Tax Hikes on everyone, including the struggling Middle Class who can’t afford them. And cutting our Defense Budget to the bone. And then not even using this revenue to pay down the deficit. But instead of investing it in every Social Insurance program under the sun. Including inventing some new ones as well as infrastructure. Thinking that we can get our deficit and debt under control by cutting things we don’t like and investing in massive new government spending. Which is what the House Progressive Caucus has proposed to do, which I believe got about forty votes in the 435 member House of Representatives. At least Progressive Caucus truly believes in this concept I believe.
Deficit Reduction to me is a four step process. Step one, strong Economic Growth which leads to strong Job Growth. Creating more jobs so people are paying taxes and consuming less Social Insurance. Step two, cutting back on things that we don’t need as much of and reforming things that aren’t working as well as they should be. And use the savings to pay down the deficit. Step three, passing Tax Hikes on people who can afford to pay more in taxes and wouldn’t get hurt by them. Thats not everybody, a small percentage of the population 10-20%. If your making 50K$ a year, you can’t afford a Tax Hike right now especially from the Federal Government. Especially if your State or Local Government just passed one on you. Because of their budget problems. And your not in that 10-20% bracket that can afford a Tax Hike right now. Step four Tax Reform individual and corporate, where we tax more things but at Lower Rates. Which is something the Bowles-Simpson Debt Commission proposed.
Now the question is how do we achieve these things. As far as the economy, we need a new Infrastructure Policy that would create 100s of thousands of well paid and well skilled jobs in the Private Sector. Like creating an independent Infrastructure Bank which would be a service. That would raise money through the Private Sector. To encourage company’s to invest in Infrastructure Projects around the country. We have 100s of billions of dollars of needed infrastructure repairs and expansions that need to be worked on according to the Core of Engineers. And IB would pay for itself in the long term and be Self Financed but need Start Up Capitol in the short term. That it could probably get from the Gas Tax. And we need a Energy Policy that gets us off of Foreign Oil and moves us towards Energy Independence by promoting our own Natural Resources. That would create 100s of thousands of well paid and well skilled jobs in the Private Sector. By expanding our domestic Oil Drilling and creating brand new Energy Industry’s. This would pay for itself as well. And then I believe we need some type of Consumer Tax Credit and Living Wage not Minimum Wage. That would encourage Consumer Spending which would create more demand. Which would lead to more Economic and Job Growth.
Since we have a 1.6T$ Budget Deficit and 14T$ National Debt. The Federal Government has a deadly combination of spending too much and not collecting enough revenue. We need to cut back on things we don’t need as much in the Federal Budget. And reform things that aren’t working as well as they could, which by itself would create savings. We need to look at defense, when our troops from Afghanistan and Iraq come home. Instead of reinvesting that money, we should put it towards Deficit Reduction. We also should start closing bases oversees in Developed Nations that can afford to defend themselves. And get those nations to take a bigger role in their National Security. And put that revenue towards Deficit Reduction. We could save 100-200B$ a year doing that, as well as the 15-20B$ in cuts that Secretary of Defense Gates wants. Then we need to reform our Social Insurance programs in a way. Whether people who are on them are working or not and are not retired. The people who are mentally and physically capable of working. We should empower them to become Self Sufficient through education and Job Placement. So they are paying taxes and not collecting Social Insurance. And then we need to reform our entitlements and design them only for the people who need them. And demand everyone else to contribute more to them and work longer.
Then finally and politically the hardest thing to do along with Entitlement Reform. We need to increase taxes on the people who can afford to pay them on High Earners. As well as broader Tax Reform both on individuals and corporations, by eliminating most if not all Tax Loopholes. And lowering our Tax Rates except on High Earning individuals. But lower taxes on corporations and Small Business to make them more competitive around the World. Tax more things at Lower Rates. Eliminate all Corporate Welfare including Agriculture Welfare. And make farmers pay for their Agriculture Insurance to collect it in tough times.
Fiscal Responsibility to me is a basic concept, creating a Fiscal Policy thats responsible for the country. That benefits the country and everyone thats dependent on Public Services and the economy. That pays down our deficit and debt in a responsible way that benefits our economy.