The answer to this math is obvious: cut spending across the board, cut entitlements and increase designated revenues to fund the commitments that remain. And no the debt ceiling should not be increased. History assures us that humans with runaway spending rarely find discipline and better habits until the line of credit ends. Perpetual increases will only continue to escalate the problems. CNBC’s Rick Santelli takes a close look at U.S. debt estimates since 2000, and explains why the rating agencies have yet to weigh on the fiscal cliff issues. Here is a direct link.
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Might there we another way? Like designate licensing fees for the coming shale revenues from our humongous shale fields (sorry Canada, but the US has always been a resource-blessed nation). Yes, there is a huge boom developing that will be a game-changer. And all of our problems are going to go away. What, us worry? Lucky Mr. Obama. Lucky indeed.
I can’t much downside to this market with so much stimulus in the system and neither does this well known manager from cnbc
http://www.cnbc.com/id/100320120
He’s right – Social Security payments are high now due to the baby boomer glut so for a while the payroll tax must be raised. Also, severe limits must be put on allowing people to collect SS if they didn’t work and contribute to it. From what I’ve read, minor increases in the payroll tax would keep SS solvent. It’s our retirement system (I know it wasn’t “supposed” to be) so it is critical to keep it solvent. Eventually the boomer glut will pass and the tax can be lowered again. Most of us would have preferred to have a company pension like in the old days, but craporations dodged their responsibility to provide those so SS is all we have.
On spending cuts: NO LAYOFFS. Give hourly/monthly pay cuts and contract reductions across the board evenly for all government employees and contractors. No working fewer hours, no working overtime to make up the lower pay rate, abolish the Congressional/Executive retirement plan – put the money into SS and let them collect SS – most will get the max – better than most of the rest of us. Examine all current government retirements – none shall be greater than $100K annually.
That’s a start.
Because we cannot have a $1+ trillion reduction in spending without going into a total collapse, I’d allow a deficit of around $500B this year and cut that in 1/2 each year until it’s balanced, then start paying off the debt.
As per your comment on disability on your radio interview earlier. Interesting article
http://www.forbes.com/sites/adamhartung/2012/08/22/is-disability-the-new-unemployment-insurance/
Just to add here in Ontario I know at least two people that faking disability claims (both using depression), to collect money. Apparently it’s fairly easy as doctor’s consent is easy to get. Both of course don’t even take the medications they are given (at taxpayers cost of course). That’s how bad things have gotten in Ontario.