Friday, November 12, 2010

Debt Reduction and Spending Cuts

The more I think about this Commissions plan the more I like it with a few exceptions, sure we can extend the retirement age and monkey around the edges of true SS and Medicare reform, but it still isn't enough to get the job done because despite all the heat and smoke generated there will still be a $300 billion deficit in 2015. Does this sound like true progress? I think not.

If you want to impress me, balance the budget by across the board cuts and then we can talk about taxes to pay down the debt. As everyone knows that as long as we are deficit spending we are not truly solving the problem because our debt payments are continuing to increase because the principle is still rising. If we want to save this country then we need to balance the budget first and fast. Then we raise a specific tax to retire the debt. Roll both of those into an amendment that the jackals can't screw up.

I have stated several things that we can do to cut spending, but 10% across the board cuts until we balance the budget are necessary and based on the fact we are currently at 43% deficit spending these cuts are going to be happening for quite sometime.
Of course this assumes that the full 10% is cut from deficit spending and that Congress doesn't increase any spending during the four years that it will take to balance the budget. We all know that is a bad assumption as our debt payments will continue to increase, so four years is optimistic.

So, four years from now we have successfully balanced the budget, but we still have two huge issues how to pay down the debt and maintain the balanced budget. I am sure that the retiring baby boomers are going bananas at this point because how do we cut 43% of SS and Medicare spending and what do we lose. Maybe we loose fraud and high priced senior managers or we cut benefits, but that is why we elect representatives to Congress.

So back to the debt, I am and will continue to advocate a 2% federal sales tax that is solely for paying off the national debt. This is all part of that budget amendment that keeps the career criminals from messing it up. We do all these very hard things then maybe we fix the national debt problem. I don't advocate currently changing tax rates or deductions, because if you have too many moving parts then the criminals will hide their collective dirty deeds in a mass of confusion. The only change in the tax system that I would accept is a flat tax with zero deductions or exemptions because this puts everyone in the game and prevents Congress from providing sweetheart deals and loopholes for their buddies. This would go for corporations as well. If you when with say 15% then the budget would pretty much be set by the GDP and we would know immediately how we are doing and when we can see the light at the end of the tunnel. This plan would result in 17% tax rate for everyone with 15% set and 2% variable.

I know that this hurts the people that don't currently pay taxes, but this is America and everyone is equal so their share in the cost should be equal. It isn't like the "rich" won't be paying more dollars than the poor, but everyone will be paying according to their earnings. Also if you reduce the corporate tax to 15% then we suddenly become super competitive and that means more jobs and that means more revenue and that means more tax collected and that means balancing the budget sooner and that means starting to pay off the national debt sooner and that means a stronger dollar and that means it is more profitable to do business here, repeat.

I know that it is simplistic, but this doesn't need to be so difficult. I know cutting the sacred cows is going to cause howls of unfair and keep my gravy train flowing. The national and state gravy trains are wrecked and the only way we are going to salvage what is left is to make tough decisions now. Does that mean that certain government services are going to be slower or non-existent, yes. But, we have spent money hand or fist for years to streamline government services to reduce waste and make them more efficient and how has that worked? So, lets stop throwing good money after bad and force efficiency or elimination.

I know you all have some strong ideas on this matter, so lets hear them. We can't sit back and wait for the explosion from the derailed gravy train.

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