How I would fix things
Ok, let’s start with the economy. These figures are from <http://www.usdebtclock.org/> which roughly correspond to other sources I’ve seen so I’ll use them.
Our GDP is currently somewhere at around 14.5 Trillion dollars. that means the US produces that much money annually. It’s basically a measure of how much money America has made this year. Now the national debt is right around 14.3 Trillion dollars. That means that is everyone in America spend 98.6% of their income paying off the debt, we would knock it off in about a year. That’s a bit insane, but that’s where we stand.
So, what would I do? First thing is eliminate every bit of the budget and work from zero. Next up I would figure out a proper way to pay off the debt. Our mortgages go out for about 30 years, so I figure that’s a good place to start. 14.3 cut into 30 is around half a trillion dollars each year. So that’s the baseline. Tax everything at around 3.5% and we’ll have the debt paid off in around 30 years or so.
Now it’s time for a disclaimer, I’ve forgotten most of my formulas and things so I’m generalizing here, but the principals apply, and I somehow don’t think I’m too far off.
Now, Medicare/Medicaid cost us around .8T, while Defense and Social Security cost abut .7T each. Income Security (unemployment, federal assistance, food stamps and similar programs) cost about .43T pensions and general interest take up .2T each. So let’s take a look at these items… they add up to a smidge over 3T dollars, or about 20% of the GPD.
This is where we have a choice, one that represents the fundamental schism between the two dominant philosophies. One camp says we simply need to raise taxes. The revenue-gdp ratio (how much money the government takes in as compared to how much we make) is about 30% So far, less than what I’m proposing, but I haven’t taken into account the entirety of federal, state and local spending. Our spending-gdp ratio is closer to 46%. You’ll notice we spend drastically more money than we take in. In order to cover our base obligations and pay off our debts, we’d need to tax everyone close to 50%
So… think about that for a moment will you.
While I still read everyone's LJ I come across, my blog has been moved to http://www.gunnerrpg.com/blog this entry can be found at http://www.gunnerrpg.com/blog/?p=1179