Nearly everyone agrees -- the deficit is a problem and must be fixed.
Fixing this recessionary deficit will take time. Lots of time... and sacrifice. Lots of sacrifice!
There is no agreement in Congress on how deficit reduction can be fairly accomplished but, honest discourse is an absolute necessity. A few reasonable adjustments could put deficit reduction on a positive path in the short-term. There is much more involved in developing a long-term solution, but it's also easily achievable.
Short-term, seven key elements must be considered including raising taxes and closing loopholes to increase revenues. Anyone who tells you we have a spending problem, not a revenue problem, and refuses to raise taxes is either ignoring the truth or stupid.
What will it take to restore fiscal responsibility?
Addressing the key elements: spending cuts, revenue increases, economic growth, reduction in wars and the Department of Defense, controlling health care costs, social net adjustments, and congressional budgets, could net $550 billion from cuts and as much as $350 billion from revenue and growth.
And it isn't hard to do!
We could reduce our deficit by as much as $900 billion in the first year alone and begin to grow our way out of a crushing economy by sharing the pain. Over a hundred billion or more could go to deficit reduction with immediate corporate repatriation.
The biggest obstacle in trying to introduce effective and equitable solutions is Congress; but, banks, corporations, and the wealthy are also in the way.
Instead of approaching the problem with common sense, our leaders -- an obvious oxymoron -- have chosen a path that is taking us in a bad direction, slowing the economy and pushing us back into recession.
That direction can be reversed by addressing the following seven elements.
• Spending cuts are necessary to bring down the debt, but they cannot be the austere cuts Republicans are proposing; deficit reduction cannot be achieved by reducing only programs for the most vulnerable.
Cuts should come first from waste and duplication, then, as noted in the reduction of the wars, from the Defense budget. Killing programs for the poor and impoverished will require even greater expenditures in the future leading to a greater deficit.
• We must increase revenues which includes tax increases, eliminating subsidies and loopholes, and improving corporate taxes so they pay their fair share.
As Warren Buffet wrote in his Op-Ed in the New York Times, tax rates on the ultra-rich have been too low for far too long. Similarly, corporate loopholes have allowed too many corporations to avoid paying taxes all together -- in numerous cases corporations paid lower rates than many individuals.
• Revenues come from economic growth. Economic growth is imperative, and begins with job creation, which improves unemployment.
Programs must also be implemented to bring jobs back to the U.S.. Growing the labor force would increase revenues and demand. We need to create incentives to retain jobs and disincentives to take them offshore.
• An accelerated reduction in the wars should be considered to reduce spending; a significant reduction in the deficit. It would end the staggering increases in the hidden costs of war which extends out more than 40 years. More importantly, it would allow us to reduce the DoD budget; a budget that has more than tripled in the last decade.
• Additionally, we must rein in rampant health care costs. Private health care costs have soared 138 percent over the last decade. These increases are exploding Medicare costs.
Medicare Part D is addressed in the Affordable Care Act and immediate implementation would reduce the costs tremendously. The failure to implement a public option was an incredible mistake. It's costly now and will be well into the future.
• Social Net programs, though touted as our biggest deficit problem by many right-wingers, are the easiest to fix on a short-term basis and to make solvent far into the future. But first, we must overcome the lie that Social Security adds to the deficit. Social Security has not added a single dollar to our growing deficit.
Medicare, as stated earlier, is costing more because of skyrocketing health care costs, an aging population, and improved longevity. It also is the victim of Bush's Medicare Part D, an ill-conceived program with no provision for price negotiation.
Congressional budgets, if Republicans' are serious about cutting spending, must be reduced. Congress must be part of the equation since their policies created the problem. They should immediately reduce their pay by 15 percent, reduce congressional staffs by 15 percent, and reduce their pay by 10 percent. Additionally, congressional staff members' must begin paying more toward their health care and retirement programs.
Others have presented budget proposals that could work: Simpson/Bowles, the Gang of Six, Domenici/Rivlin, and some that would not: the Ryan Plan and Cut, Cap & Balance. But the best, most comprehensive, and fairest, 'The People's Budget,' gets little notice or media coverage.
In typical government fashion, Congress added another potentially inefficient layer to their dysfunctional process, adding the new 12 member "SuperCommittee." This additional layer of bureaucracy established by an inept and inexorably polarized Congress, is destined to fail; all six Republicans have signed the Norquist No Tax Pledge!
The answers to the country's fiscal morass are complicated but not unachievable.
It will never be fixed by the group recently elected to Congress; ideological obstructionists who fail to see the necessity in balance, nor the value in shared sacrifice.
Until we find individuals with common sense, the sense of right and wrong, and a clearer understanding of the damage past policies have caused good, hard-working people, and what the unbalanced transfer of wealth has done to this country, we will continue down a path of grief and desperation.
A path that, the further we go, the more difficult it is to return to the healthy life we once enjoyed.
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