Are we serious about the deficit?
For some reason, I get inspired to write over breakfast. Maybe it’s the promise of a new day, or perhaps it’s the juice of the java beans. Today though, it was reading about the deficit, the President’s plan, and the GOP’s plan for combating it.
In my opinion, both sides are right and wrong. There are good ideas there, things that will help reduce the deficit, but neither side seems to be serious enough about it to make real progress. In light of that, here are my ideas on solving this serious issue.
To start, I can honestly say that very few will agree with everything I post here. In fact, I don’t like a lot of it myself. But if we are going to be truly serious about solving the deficit problem we are going to have to take measures we do not like.
1) Compromise is a must – Neither side has a majority or a “mandate”. To claim the GOP have a mandate because they won a lot of races is folly. Most of the races won last year were typical GOP strongholds that they got back after the consecutive Democratic victories of 2006 and 2008. Since neither side controls Congress or the White House, there is no way that a workable budget will pass from just one party. Therefore, both sides must compromise and work together in order to accomplish anything. It is absurd for the GOP or the White House to believe they can pass a budget without working with the other side. This is one of several points that will show if anyone is really serious about fixing the budget.
2) Smart Cuts – Spending is out of control from both parties. For example, the Pentagon is against the extra engine that is purchased along with the F-35 Joint Strike Fighter, so why pay for it? That’s just one example of many of making smart budget cuts that will save money.
3) Don’t forget the Big 4 – There are four areas of our budget – Medicare, Medicaid, Social Security, and Defense – that represent the majority of our federal spending and therefore if anyone is serious about wanting to solve our deficit problem, they cannot be excluded from cuts. I realize that cutting these entitlement programs will hurt the poor more than any other portion of Americans, but we all need to make cuts if we want fix the problem. Cuts in these are must be well thought out and done with a scalpel instead of a machete.
4) Hold spending – Putting a freeze on spending to past year levels – 2008 or even 2005 – will also help to control the outflow of cash.
5) Job Incentives – There are many ways to encourage employers to hire more workers. Several good ones are payroll tax holidays, tax breaks for hiring long term unemployed, tax breaks for expanding businesses, and so on. Also, by getting more people employed there will be more sales and income tax available as well.
6) Regulation and Deregulation – At the State of the Union, the President mentioned how salmon are under the jurisdiction of one government agency when in salt water, a different one when in fresh water, and several different ones when they’re smoked. By doing a top to bottom overview issues such as this can be fixed, and areas where regulation that do more harm than good can be found and fixed. In the process, new regulations on areas that are needed can be examined, such as more regulation in the financial and real estate industries so as to not repeat the mistakes that caused the financial problems we’re still recovering from.
7) Tax Codes and Breaks – Let’s face it, the current federal and corporate tax codes are a mess of loopholes. Corporate tax rates are too high because its far too easy to get around the code. Therefore, a rewriting of both the federal and corporate tax codes, along with an adjustment to the rates, will help to bring in more income to help pay off the deficit.
Also remember that as of this year, all Americans are paying a much lower tax rate than any time in history. While it is nice to have all this money, if all of us are serious about wanting to solve the deficit problem, then each and every American must be prepared to sacrifice as well as all corporations and financial entities. In light of this, one of my ideas is to rescind the tax cuts that Presidents Bush and Obama have issued and roll back tax rates to Clinton era levels. Between the rewriting of the code, lowering of corporate tax rates since they will be paying more, and the removal of tax breaks there will be more money flowing to the federal government that can be used to pay off the deficit.
8 ) Federal Sales Tax or VAT – Another proposal I have is that a VAT be added to all items with the exception of raw food (supermarkets and such) and possibly clothing. This is a tax that will not disproportionally hurt the poor, yet help pay down the deficit.
Solving our financial crisis means each and every one of us, from corporations to citizens, must make sacrifices and pay our fair share. Just cuts alone will not solve it, we also need more federal income to pay it off. If we are serious about wanting to solve the problem of the deficit, then we must take serious actions to solve it.
What are your thoughts? Are my ideas sound, need work, or do you have creative ideas of your own? Feel free to post your comments here or email me at firstname.lastname@example.org. I look forward to hearing from you.
As an aside, I’ll be taking a week or two away from the blog to work on some personal stuff and try to unwind a bit. Before I go, I want to leave you with a quote to think about over the next week or so…
We are blessed as Americans with the Freedom of Speech. We are allowed in this great country to say what we think and how we feel. But we must remember that the people to our Right and to our Left also share that same freedom and we must respect that as well.
— Frank Vicari, political blogger, 02/17/2011