You ran for President on one issue, paying off the national debt. You and your supporters won in such a landslide that you pretty much have a mandate to do whatever you want short of anything unconstitutional. Here arethe numbers you get to play with but ultimately you need to pay off about $14.25 trillion or about $1.8 trillion a year above the $1.3 trillion deficit.
My first move: balanced budget amendment. Politicians have proven that they are fiscally irresponsible and need to be contained. How can you pay off the debt if you still have deficit spending?
Net effect: prevention of more debt
My second move: tax reform. Notice that personal income tax is 4.5X that of corporate taxes. I think current rules allow for corporations to write off expenses in a way people are not. Let me give you an example: I am going back to school to gat a doctorate so I can teach in a university. I cannot write that off on my taxes as a work expense (and to be honest, how is a math teacher getting an EdD in math education anything but a professional expense?) but if a corporation (like a private school) paid for it, it is written off as a expense for them. Certainly things like COGS and payroll should be expensed out, but the rules are so convoluted that you can’t tell me corporations are paying their fair share.
Net effect: If corporations pay the same as personal income tax, +$725 billion per year.
My third move: return to Federalism. Since the New Deal, the federal government has taken on more responsibility for stimulating the economy. Some are necessary and within Federal jurisdiction such as the Interstate System while some are necessary but outside of the Fed’s constitutional domain such as community rebuilding. Some are completely unnessary pork. Hey, if your community of 12 needs a road to the main highway, build it with community, county or state funds and not $137million from the Feds. Basically, this would make the Federal government only pay for those things they are mandated to have an interest in by the Constitution in Article I, Section 8.
The sticking point is the “general welfare” clause. Tax and spend politicians use it to justify spending on everything. Take education. That is a state responsibility not Federal but I can see where the Feds have jurisdiction to ensure that a basic level of education is available to all Americans. As President, I would look at all of the Federal programs and use two criteria in deciding how much to spend:
- Does it benefit Americans in general? If not, then it is out.
- What is the minimum amount to spend to ensure that it does provide some benefit? “General welfare” may mean I buy you toilet paper but it doesn’t mean I have to buy you 2ply quilted them wipe your ass for you.
Net effect: In 2010, discretionary spending was 19% of the budget or $660 billion. Cutting that in half would be $330 billion per year
Now that the deficit is taken care of time to take care of the debt. Some or maybe all of these will be temporary but it is no different than what average Americans have to do when in debt over their head.
Social welfare is almost $1.5 trillion. Social security is a goverment Ponzi scheme and someone should have been aware something was wrong with the numbers when the first recipients received much more than they paid in. Social security funds should be put back into the economy to help it grow and become a pay for itself program. Medicare and medicaid can be lessened by providing student loan forgiveness for doctors that provide pro bono medical work for the poor. Some cuts to benefits necessary until the program is self-sustaining.
Net effect: variable but it should be more savings as the program becomes more developed. Let’s say and average of $375 billion per year
Defense & Homeland Security 10% cut for $75 billion per year
Discretionary: Another cut to what is absolutely minimum for general welfare. $165 billion savings
Tax increase: 10% across the board that is used to directly retire the debt. Since corporate tax is now at $925 billion along with personal tax after I raised them, net effect is +$185 billion.
Interest payments: As we pay down the debt, we do not need to make as much in interest payments.
Net effect: an average of $100billion per year.
OK: $900 billion to retire the debt per year. More taxes or less spending or is that good enough? Or do you have a different plan?