The US government faces a small test on August 2nd (or around that time) on what
to do with the debt ceiling. It seems that the schism between the smaller
government forces and those who would rather raise taxes than cut any spending
are coming to a head. This could be important as the US could be in default.
Basically, the problem is that congress keeps rubber stamping debt increases
without any real intention to do anything about the real underlying problems
that got the US into this precarious (and diminishing) position in the first
place. Inevitably, one of the sides will cave (and people will not be happy).
i would have said devalue the currency 1-5%, but the government has done
an awesome job of unintentionally doing that themselves (unsolicited).
Maybe i'll have something new, but i guess i will use numbered
points
1) US government debt to itself: i find the concept of
inter-governmental interest bearing debt to be immoral (and a series of hidden
taxes). It is basically saying "congratulations we overtaxed you, now we get to
tax you again because we overtaxed you in the first place". This is really the
area where a big chunk of change could be freed up. Last i saw, the US
government owes $4.8 trillion to itself. Although it would not be politically
popular, this is where a sizable cut should be made.
i see two options
here:
* Replace existing intergovernmental debt with callable non-interest
bearing debt (maybe push it back 5+ years)
* Invalidate some government debt
to itself. This is my favorite option. All the US would have to do was
acknowledge that things like Social Security are taxes/transfer programs and the
Social Security trust fund is a lie (which it really is). Of course they won't
do this because so many people actually believe the lie they have been sold for
the past 70-80 years.
2) All Future Treasury Securities Should be
Callable: basically what this says is that the US government should be able
(at least have the option) to pay off all new debt before the maturation date.
Ultimately this could save billions of dollars in the future.
3)
Modified Balanced Budget Amendment: the government should
never spend more money that it takes in (and i'm not giving the
government carte blanche to raise taxes). No more of these reckless Keynesian
spending programs. The problem that many states saw with a balanced budget
amendment is that growth causes future spending problems. In other words, when
the economy (and tax receipts) are growing the states had to spend the money.
This will cause problems when economic conditions deteriorate. What you really
need is a balanced budget amendment with absolute spending caps.
4)
Government Layoffs: Basically the US government has too many
workers. i want to see a serious downsizing operation. i'm hoping at least a
25% reduction. Additionally, there is a need to address compensation packages
downwards. Ban unions/collective bargaining for public employees.
5)
Taxes vs Spending: the real problem is a problem of spending, not
revenue. The US, overpopulated as it is, has enough revenue it just chooses to
be irresponsible with other people's money. Increasing taxes is not the
solution.
Ok, one exception here... i favor a flat tax (10-15% with no
deductions), that would necessitate a tax increase to the 50% or so of Americans
who pay nothing (or get money back from the government).
6)
Congressional Salaries/Benefits: this is another thing that could help
a little... what i want is for the salary for congressmen to be cut to a maximum
of $100K per year (with a maximum $35K benefit package and no
pension).
7) Eliminate Tax Refunds: the way i see it,
anyone stupid enough to pay the US government more than they should deserves to
lose that money. The government is not you friend.
8) Eliminate
Obamacare: this probably will play a bigger role in the future. However,
Obamacare poses significant costs in the not too distant future that the country
is ill equipped to fund. Health care is not a right. If the
country wants more socialized medicine, they should be better able to pay for it
(right now they can't, and the future isn't looking too bright).
9)
Permanent Debt Cap Limit: the US has been playing around with debt
limits, which it quickly surpasses, for a while now. What they really could use
is a diminishing hard cap (goes down as the years pass - maybe under $1 trillion
some day)
10) Hope 2012 Really is the End of the World: without
serious changes, the only way the US will get out of its mountain of debt in the
foreseeable future is if the world ends. There are hard choices and cuts that
need to be made. The US government needs to get away from its vote buying
culture. What the US government has managed to do would make any impropriety in
corporate America look insignificant by comparison.
Original Post Date: 07/29/11
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