OT: How to deal with our skyrocketing deficit...

[1Clemzunfan]

This is not meant to be a partisan thread, just a discussion on a shared problem that both political parties have contributed to over the years along with indifference and ignorance from the voting public. The latest numbers show that annual deficit spending increased 17% just in the last year, in spite of a booming economy. Its expected to increase at an even greater percentage over the next year. Deficit spending is now the highest it has been since the tail end of the last recession. That is startling considering that we are running recession era deficits in a thriving economy. Bottom line, the tax cuts have boosted the economy, but as has always happened in the past, the economic gains from these tax cuts are not sufficient to offset the lost tax revenue given the way they were targeted.

That said, we must do something to stem the bleeding. What are your proposals? As FYI, there are only 4 areas that materially impact the deficit. They are spending cuts in one of 3 areas: 1) Defense spending 2) Medicare/Medicaid 3) Social Security. The fourth area is increasing revenue by raising taxes. I believe reform in all 4 areas is needed.

What are your proposals for reforming the 4 areas above (Defense, Medicare, Social Security, & Taxes) to reign in the deficit? Again, things like food stamps and the like aren't material for this discussion. That is peanuts. It will have to be reform in all of the 4 categories above to chip away at the $1 Trillion annual deficit we are headed for in next years budget year alone.

By the way, here is a good article summarizing the latest deficit spending numbers and the impacts on the average American. Here is a startling factoid... the last time we enjoyed an economy with unemployment under 4% (year 2000) we were running a budget SURPLUS of almost $300 billion. And now a scary thought... what happens to these deficits when the next economic downturn happens and how limited will we be in stemming it with stimulus spending as we have in the past? We wont be able to use stimulus packages to carry us through as we always have in the past. It's a scary thought.

Interested in a good discussion...

 

[MBRO]

Any solution will need to be a bipartisan solution.

I don’t see any path to that in today’s political climate that demands “I win, you lose.”

 

[The Mixed Mamba]

Fair discussion. Clinton did a great job of stabilizing but the last 3 in office have spent like drunken sailors. At least the last two have improved the economy, but there has to be a breaking point. It’s a scary problem we all collectively share.

 

[Tiger1425]

This is not meant to be a partisan thread, just a discussion on a shared problem that both political parties have contributed to over the years along with indifference and ignorance from the voting public. The latest numbers show that annual deficit spending increased 17% just in the last year, in spite of a booming economy. Its expected to increase at an even greater percentage over the next year. Deficit spending is now the highest it has been since the tail end of the last recession. That is startling considering that we are running recession era deficits in a thriving economy. Bottom line, the tax cuts have boosted the economy, but as has always happened in the past, the economic gains from these tax cuts are not sufficient to offset the lost tax revenue given the way they were targeted.

That said, we must do something to stem the bleeding. What are your proposals? As FYI, there are only 4 areas that materially impact the deficit. They are spending cuts in one of 3 areas: 1) Defense spending 2) Medicare/Medicaid 3) Social Security. The fourth area is increasing revenue by raising taxes. I believe reform in all 4 areas is needed.

What are your proposals for reforming the 4 areas above (Defense, Medicare, Social Security, & Taxes) to reign in the deficit? Again, things like food stamps and the like aren't material for this discussion. That is peanuts. It will have to be reform in all of the 4 categories above to chip away at the $1 Trillion annual deficit we are headed for in next years budget year alone.

By the way, here is a good article summarizing the latest deficit spending numbers and the impacts on the average American. Here is a startling factoid... the last time we enjoyed an economy with unemployment under 4% (year 2000) we were running a budget SURPLUS of almost $300 billion. And now a scary thought... what happens to these deficits when the next economic downturn happens and how limited will we be in stemming it with stimulus spending as we have in the past? We wont be able to use stimulus packages to carry us through as we always have in the past. It's a scary thought.

Interested in a good discussion...

I don't know where the cuts would come. But, I can tell you that the budget will never be balanced, and consequently lowering the overall debt, without raising taxes AND lowering spending. Never going to happen Ever.

 

[Every name taken]

As I mentioned in another thread, if we have to go to war, take stuff from the loser. Why didn't we keep Iraqi oil?

 

[71tig]

Fair discussion. Clinton did a great job of stabilizing but the last 3 in office have spent like drunken sailors. At least the last two have improved the economy, but there has to be a breaking point. It’s a scary problem we all collectively share.

Actually I think Newt had more to do with it than Clinton but to be fair Newt and Clinton learned to find pathways together to work on many things including reining in welfare some . I believe Clinton would have been really good if he could have controlled his hormones . Clinton and Reagen both knew how to negotiate and come to some conclusion with their adversaries. The deficit will not be controlled until the extreme partisanship regains some balance and Washington becomes an advocate for reality . Just my 2 cents .

 

[andcam]

A big start would be to reverse the recent tax cut that caused the deficit to go from ugly to just a disaster. So revenue enhancements, whether we like it or not, has to be part of the equation. After that I think something meaningful has to be done to healthcare in this country to drive down costs. What? I don't see where giving people more HSA options is gonna do it and that is about all the GOP has to offer. The Dems want healthcare for all and, while I agree that really the only way to meaningfully drive down costs is to have govt control, everyone needs to start paying money for healthcare, even the poor. If you can afford a cell phone, then you can afford to pay for part of your meds and doc visits. Social security needs revision because someone making $10 million a year should not collect social security. Payout reductions are probably necessary for this area too, unfortunately. The last area I would touch drastically would be defense spending, but I do think some changes can happen there too. For instance, do we really need nine aircraft carriers when not one country in the world has an aircraft carrier with anything close to our existing capabilities. How about we just have seven maybe?

One other thing. No one except us few libertarians give a crap about the deficit anymore. The GOP used to care and try to control it but they threw in the towel with the recent tax cuts. You have a few dumb GOP folks that think you can balance the budget by eliminating the Dept of Ed and the EPA and the food stamp program but the math is just sooooo not on their side. Do all of that and you move the needle by 1 percent, maybe 2? The Dems have never cared much about it except maybe Clinton to some extent. Until the deficit starts causing us to have higher costs of borrowing I dont think anything will be done about it. Likewise, until one party gains control of both chambers with better margins you will not see anything either. Likely it will be left up to the GOP in the end to deal with it, but right now the GOP has two internal schisms and the one with the power has no interest in the deficit.

 

[FLaw47]

Unpopular opinion but we need to raise taxes. I don't think the spending cuts are politically feasible but here are some things that could maybe help on the margins (I imagine everyone will hate these):

Military - Reduce the overall size of the military, reduce benefits (disability needs to much harder to get, retirement requirements are probably too generous, TriCare is probably too generous)
Medicare/Medicaid - Allow for negotiations on prescription drug prices. Move towards a single payer system to reduce admin costs, improve bargaining power. Have more restrictions on treatments that extend life but not improve quality. Allow for supplemental insurance for people who want to pay for it
SS - Raise the cap on the tax. I'd be interested in seeing this move towards more of a Thrift Savings Plan style system. Give people control over where their money is invested among limited choices with the default being the L fund. Figuring out the contributions would be a challenge, though. That would get better returns on everything but still make sure that people were saving responsibly.

 

[nytigerfan]

Any solution will need to be a bipartisan solution.

I don’t see any path to that in today’s political climate that demands “I win, you lose.”

This x10000. We need to overhaul our entire political system to achieve anything. With elections every two years neither party wants to be the one to yank Medicare and Social security from seniors who actually go out and vote. Decisions are made to garner votes, not fix real problems.

 

[BigPapaWhit]

Heard it mentioned that Trump might just default on much of the US debt. Apparently, it is his business model. Not intending to drop a grenade and run here. Is there a connection to debt and spending in the above context? Could a President just default on much of our global debt? What are the ramifications? Would it lead to a dramatic rise in interest rates and grind our economy to a halt?

 

[andcam]

As I mentioned in another thread, if we have to go to war, take stuff from the loser. Why didn't we keep Iraqi oil?

Good question. The answer I received from a Rumsfeld round table: That is all they have now to rebuild their country. Take that and you create millions of angry terrorists that are starving with no infrastructure. Basically, you create another afghanistan. After WW1 the allies basically took all of Germany's wealth and its ability to rebuild itself and it created one of the worst regimes in history. So, yeah, let em keep their oil. Even better answer: Don't go into places like that for spurious reasons in the first place.

 

[The Orange Wave]

The only two areas that matter regarding long range deficits are medicare/medicaid and social security.

Social Security- When it was originally enacted life expectancy was much lower than today. It needs to be linked to current average life expectancy and slowly rise over time. Problem is no old people will vote for this while younger people reasonably do not expect to live off social security in the future. So, it must be phased in over time so no one within 10 years of getting benefits will lose anything. The other thing is it should be means tested so the benefits are phased out if you have high income in your retirement years. That part is not necessarily "fair" I know, but it is for the greater good of a having a social safety net, which is what these programs were initially intended for instead of "entitlements"

Health Care- Clearly this is the big one. Most people say they don't want government health care but fail to realize that close to 40% of the population is on some form of government run health insurance via medicare/medicaid/VA or others. Health Insurance needs to be decoupled from government programs and employment and purchased like any other insurance (home/auto/etc) where each individual makes a conscious decision and knows what they are purchasing. Making the health care industry a true free market will lead to more innovation, supply of health care, and efficiency. The government can then issue grants to those in needs, so once again it acts as a safety net vs. an entitlement.

 

[SCTexanTiger]

The tax cuts will do better to keep the economy healthy. But neither tax hikes or tax cuts will be effective unless we cut spending. Simple as that, cut spending. Problem is no one wants to make those necessary cuts, but they have no problem borrowing and spending more and more every year.

 

[andcam]

Heard it mentioned that Trump might just default on much of the US debt. Apparently, it is his business model. Not intending to drop a grenade and run here. Is there a connection to debt and spending in the above context? Could a President just default on much of our global debt? What are the ramifications? Would it lead to a dramatic rise in interest rates and grind our economy to a halt?

Sorry to steal this thread but I think Jamie Dimon referenced that recently in a podcast I heard. Maybe it was another big bank CEO?? So, Do that, and the entire world economy implodes. The US dollar is the world currency and it would destroy all of the confidence people have in the ability of the strongest nation on earth to meet its demands. It would then set off a chain of other defaults and regimes would fall left and right. Not a good solution.

 

[The Orange Wave]

Heard it mentioned that Trump might just default on much of the US debt. Apparently, it is his business model. Not intending to drop a grenade and run here. Is there a connection to debt and spending in the above context? Could a President just default on much of our global debt? What are the ramifications? Would it lead to a dramatic rise in interest rates and grind our economy to a halt?

0% this could happen. First, the President does not have that power. Second, the knock on effects of that would be catastrophic. Any gains from reduced expenses would be immediately lost in the implosion of US assets and collapsing economy as just about every single asset in our markets are based on the "risk-free' return of treasuries. Fact is no country defaults when the debt is in their own currencies. All they end up doing is printing more currency so there is not technical "default". The currency gets obliterated and inflation increases (Argentina, Venezuela, Zimbabwe, etc.) unless of course you are Japan.

 

[Transference]

In times of economic prosperity and low unemployment, we need to increase taxes on large corps and high income earners while reducing the total deficit spend. Reduce the standing army and focus investments on non-human warfare to cut defense spending, raise the age limit of social security to the mid-70s and allow for medicare to manage contracts with care providers and pharma companies for a start.

Its not bad to deficit spend when the economy is lagging, but there is no need to do it when the economy is humming.

 

[1Clemzunfan]

As I mentioned in another thread, if we have to go to war, take stuff from the loser. Why didn't we keep Iraqi oil?

This has been tried before and it led to the rise of Hitler and World War II.

 

[SlovenskoTiger]

I hope this isn't considered derailing thread, but one reason we're at where we're at with Social security problems is that we've killed 40 million workers off with Roe v Wade since 1970s. Thats a lot of people not paying into the system, contributing to the economy, etc.

Once gov't puts stuff in place, its very hard to take it away without getting lambasted for "you hate _x_ people group". If we were able to look at our budget like adults, evaluate what we're spending in terms of its effectiveness, we'd be in a lot better shape. Gonna be a good while before this problem gets solved. Prob will get a lot worse before it gets better.

 

[tigerrecon]

A balanced budget law had to be added, if only to stop the wasteful spending.

If we really want to pay off the debt, we need to shut all of the foreign military bases. We have enough aircraft carriers to go where needed, and the nukes should be enough deterrent as well.

Being oil independent and maybe even taking our oil and food off the global market is another way to pay down the debt. American tax payers subsidized this and then turn around and buy it on the global markets. We need to sell our excess in relation to what we pay for imports.

Finally, all Americans are going to have to bite the bullet on tax increases. The wealthy are going to have to pay more than their "fair share". Not to the point of making them middle class, but enough to make them feel it.

You raise tax by say 5 or 10 thousand on the middle class, it changes their life style. Maybe they don't even go on vacation. The upper middle class and the elite have a lot of fat to trim B4 their life style, much less being able to keep the lights on are impacted.

Everyone is going to have to feel it, B4 we can really get serious about paying down the debt, much less stop the borrowing.

 

[TigerEE91]

Unpopular opinion but we need to raise taxes. I don't think the spending cuts are politically feasible but here are some things that could maybe help on the margins (I imagine everyone will hate these):

Military - Reduce the overall size of the military, reduce benefits (disability needs to much harder to get, retirement requirements are probably too generous, TriCare is probably too generous)
Medicare/Medicaid - Allow for negotiations on prescription drug prices. Move towards a single payer system to reduce admin costs, improve bargaining power. Have more restrictions on treatments that extend life but not improve quality. Allow for supplemental insurance for people who want to pay for it
SS - Raise the cap on the tax. I'd be interested in seeing this move towards more of a Thrift Savings Plan style system. Give people control over where their money is invested among limited choices with the default being the L fund. Figuring out the contributions would be a challenge, though. That would get better returns on everything but still make sure that people were saving responsibly.

FWIW you typed exactly what i was going to type. All highly unpopular and literally impossible to discuss in today’s political climate. In fact, politicians get elected today by running on the opposite of the above.

 

[FLaw47]

Social Security- When it was originally enacted life expectancy was much lower than today. .

This point is somewhat misleading. There is a pretty substantial gap in life expectancy by wealth. Increasing the retirement age would really negatively affect lower income people (the ones for whom SS payments are hugely important). You push the retirement age up to 70 and then they're getting less than a decade of payments while the more well off people who don't need the money get close to 20 years. It's something to keep in mind and it's why I don't (currently) support raising retirement age.

Source. There is a graph there for women that is similar but I didn't want to eat too much room.

 

[FLaw47]

A balanced budget law had to be added

Absolutely not. Deficit spending is extremely important in periods of recession. This is a really, really bad idea for any federal government.

Edit: This response was harsh in light of the rest of your post, which I agreed with a lot of. This is just an idea that gets casually tossed around (like term limits) that has really negative ramifications and I just get all hot and bothered.

 

[Dackel]

The social security wage base limit should be increased. Also, social security payments should decrease or be limited for high income retirees.

 

[Buzzards Roost]

A balanced budget law had to be added, if only to stop the wasteful spending.

If we really want to pay off the debt, we need to shut all of the foreign military bases. We have enough aircraft carriers to go where needed, and the nukes should be enough deterrent as well.

Being oil independent and maybe even taking our oil and food off the global market is another way to pay down the debt. American tax payers subsidized this and then turn around and buy it on the global markets. We need to sell our excess in relation to what we pay for imports.

Finally, all Americans are going to have to bite the bullet on tax increases. The wealthy are going to have to pay more than their "fair share". Not to the point of making them middle class, but enough to make them feel it.

You raise tax by say 5 or 10 thousand on the middle class, it changes their life style. Maybe they don't even go on vacation. The upper middle class and the elite have a lot of fat to trim B4 their life style, much less being able to keep the lights on are impacted.

Everyone is going to have to feel it, B4 we can really get serious about paying down the debt, much less stop the borrowing.

What is wealthy? My definition of rich is one who can stop working and not have to change a thing in his or her lifestyle. Ever. I do pretty well but if I stop working I’m in trouble without dipping into retirement plus major lifestyle changes.

And I don’t know jack about finance but my practice accountant told us once that the only way to improve the bottom line is to improve the top line. So in this case that would be everybody work more or make more and thus tax revenue goes up.

 

[gprivette24]

Stop being the world police and just bring or army home. We could save trillions if we only had a defensive military. Besides all the upsides of no longer creating enemies because we have to get all up in everyone's business. And yeah i know what happened the last time we tried isolationism, but I think the world is a much different place now and i just cant see another Hitler situation as small as the world has become.

 

[The Orange Wave]

This point is somewhat misleading. There is a pretty substantial gap in life expectancy by wealth. Increasing the retirement age would really negatively affect lower income people (the ones for whom SS payments are hugely important). You push the retirement age up to 70 and then they're getting less than a decade of payments while the more well off people who don't need the money get close to 20 years. It's something to keep in mind and it's why I don't (currently) support raising retirement age.

Source. There is a graph there for women that is similar but I didn't want to eat too much room.

Maybe it goes back to means testing then that is phased in at different ages and income levels. Also, wouldn't those in the poorest of incomes already be getting some form of income assistance from the government prior to getting on social security?

 

[Ancheaux's Revenge]

Stop being the world police and just bring or army home. We could save trillions if we only had a defensive military. Besides all the upsides of no longer creating enemies because we have to get all up in everyone's business. And yeah i know what happened the last time we tried isolationism, but I think the world is a much different place now and i just cant see another Hitler situation as small as the world has become.

Who takes over the vacuum we create? China? Russia?

 

[CreoleTiger]

These discussions always remind me of what Senator Russell Long said about this issue. To paraphrase, "Everybody what's all these services but when it comes time to discuss who pays for them, their response is always tax that other guy over there behind that tree".

 

[FLaw47]

Maybe it goes back to means testing then that is phased in at different ages and income levels. Also, wouldn't those in the poorest of incomes already be getting some form of income assistance from the government prior to getting on social security?

Not really? Unless you're counting the EITC, which I'm pretty sure you lose in retirement.

 

[isleofpalmstiger]

In times of economic prosperity and low unemployment, we need to increase taxes on large corps and high income earners while reducing the total deficit spend. Reduce the standing army and focus investments on non-human warfare to cut defense spending, raise the age limit of social security to the mid-70s and allow for medicare to manage contracts with care providers and pharma companies for a start.

Its not bad to deficit spend when the economy is lagging, but there is no need to do it when the economy is humming.

What % should high wage earners pay?

 

[Rychek4]

I honestly think we will keep inventing new financial tools (like derivatives) and layering them on top of each other to keep the system going for hundreds more years.

 

[Rychek4]

What % should high wage earners pay?

I can't imagine that we, on this message board, could or would be willing to do the research to come up with the answer to that in any meaningful way.

 

[cutigers532]

I have to be honest. The fact that we spend nearly $600 billion on the military with proposals to balloon it to the high $600's is the problem. We should not be the world police. Let's trim the defense spending by a lot. We spend like 35% of the total global expenditures on military spending. Either we get honest with everyone and say hey, we are raising taxes to balance the budget because we, the United States of America, feel the need to police the world, simultaneously rooting out terrorism and preventing world wars. Or we cut spending and tell France, Germany, and the UK to figure out Europe, while removing restrictions on Japan so they can figure out Asia (we can remain allies in crisis but not free bodyguards). I'm honestly tired of having gobs of military bases on every continent, policing the middle east, posturing in Europe to intimidate Russia and the same in Asia with China.

 

[Every name taken]

This has been tried before and it led to the rise of Hitler and World War II.

OK, I guess its time has come and gone. When the Europeans took stuff from their "colonies" they didn't have to worry about terrorists. The English navy could stop any problem before it got home. We don't have that luxury with air travel, open borders, easily transported weapons etc.

 

[1starprospect]

There has to first be a fundamental change in the way people view government. Many view it as a government's function to provide every perceived need or want. But a few specifics are:

Raise retirement age to 70.
Reduce size of federal government by sending as much back to states as you can. (Dept. of Education, Energy, etc.)
Abolish Postal Service (obsolete).

I doubt anything of consequence happens to change the downward spiral we are in, but I hope to be proven wrong.

 

[1Clemson]

A big start would be to reverse the recent tax cut that caused the deficit to go from ugly to just a disaster. So revenue enhancements, whether we like it or not, has to be part of the equation. After that I think something meaningful has to be done to healthcare in this country to drive down costs. What? I don't see where giving people more HSA options is gonna do it and that is about all the GOP has to offer. The Dems want healthcare for all and, while I agree that really the only way to meaningfully drive down costs is to have govt control, everyone needs to start paying money for healthcare, even the poor. If you can afford a cell phone, then you can afford to pay for part of your meds and doc visits. Social security needs revision because someone making $10 million a year should not collect social security. Payout reductions are probably necessary for this area too, unfortunately. The last area I would touch drastically would be defense spending, but I do think some changes can happen there too. For instance, do we really need nine aircraft carriers when not one country in the world has an aircraft carrier with anything close to our existing capabilities. How about we just have seven maybe?

One other thing. No one except us few libertarians give a crap about the deficit anymore. The GOP used to care and try to control it but they threw in the towel with the recent tax cuts. You have a few dumb GOP folks that think you can balance the budget by eliminating the Dept of Ed and the EPA and the food stamp program but the math is just sooooo not on their side. Do all of that and you move the needle by 1 percent, maybe 2? The Dems have never cared much about it except maybe Clinton to some extent. Until the deficit starts causing us to have higher costs of borrowing I dont think anything will be done about it. Likewise, until one party gains control of both chambers with better margins you will not see anything either. Likely it will be left up to the GOP in the end to deal with it, but right now the GOP has two internal schisms and the one with the power has no interest in the deficit.

When we stop conflating health care cost with health insurance, we will have a chance to make progress. As long as insurers and those financially linked to insurers are making the laws, it will never be resolved. Guaranteed profits and zero risk never result in innovation.

Do you also propose those making real money be exempt from SS withholding? Do that and the Ponzi scheme fails tomorrow. Or are you proposing that those that make money fully subsidize those that make less more than they do today? Do that and the entire program is abolished within 4 years. It may not be popular to say, but there is already payout reductions for SS that strongly favor lower income levels (per Social Security Administration, note PIA is amount of monthly SS insurance payment):
"For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2019, or who dies in 2019 before becoming eligible for benefits, his/her PIA will be the sum of:
(a) 90 percent of the first $926 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $926 and through $5,583, plus
(c) 15 percent of his/her average indexed monthly earnings over $5,583."
Based solely on the declining payouts and accepting the embedded subsidies, the fix for social security is as simple as doubling or eliminating income cap exposed to the SS tax- revenue would increase significantly faster than any future payouts. As one who is negatively impacted by the current approach and the likely quick fix, I would prefer to be able to opt out completely.

Deficits and their impact on interest cost will be the straw that finally breaks the back of this nation. It is not possible to fully fund debt principal repayments and ever increasing interests costs of the debt without inflating the dollar to pennies- which is the same as saying we are just going to steal the money from those that loaned it to us to pay them back. The rising interests cost will also have the added benefit (tic) of increasing the cost of capital for business growth, resulting in ever decreasing business revenues. Continue the cycle and you get a default, at which the US dollar no longer becomes the default currency standard and the inherent interest cost savings disappear overnight, further exacerbating the problem. If you need concrete historical examples, look at your favorite South American or Southern European country. At the rate disparity of outcomes is increasing it will not be long before we see two historical quotes become reality:

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure"


For now, many have convinced themselves that their interests have no chance of winning an election and thus do not vote- when they decide to vote, many in power today will not like the outcomes. Once they taste their ability influence outcomes, it likely will not be quenched.

I'm not sure single party control of our government is in the best interest of the country long-term as both parties are run by ideologues from the fringes- neither of which is sustainable as you can't tax your way out of it or cut your way out- it will take both. The longer I live the more convinced I am that we do not have a single person in DC working in the best interests of the country as a whole as a statesman, but instead as a partisan raider of the public treasury.

 

[cutigers532]

Who takes over the vacuum we create? China? Russia?

Russia can't afford to do that. China can, but they honestly are just concerned with Asia. They want to be the top dog economically and be the dominant military force in the greater Asia area. If we left them alone they would probably become stronger trade partners with us. France, Germany, and the UK will either work on peaceful relations with Russia or move into the strategic positions that we vacate. If they don't then they will just capitulate. Either they take responsbility and pay for their own protection or they don't pay and listen to whatever Russia says.

If we pull out of the middle east then countries like Turkey or Egypt will have to take control of the region. And for all our differences, those countries don't want nutjob theocracies running the region either.

Lastly, at the end of the day, we will still maintain a very proactive defense force that is more localized with our backbone in the Air Force and Navy. Since we also still have a large nuclear arsenal, and missile defense technology is getting better and better, we are nearly untouchable as is. We are protected to the north by our snowflake allies (pun intended) and on either side by large oceans. To the south we have a weak whatever you want to call Mexico, but they fear us and dare not try anything.

 

[allorangec]

I see a lot of good ideas but then I see the same person slam other ideas. The only way it works is both parties have to get something.

If you're going to raise taxes. You need to reduce the federal government.

It just cannot be all conservative or liberal ideas.

 

[ClemsonPaws]

This is not meant to be a partisan thread, just a discussion on a shared problem that both political parties have contributed to over the years along with indifference and ignorance from the voting public. The latest numbers show that annual deficit spending increased 17% just in the last year, in spite of a booming economy. Its expected to increase at an even greater percentage over the next year. Deficit spending is now the highest it has been since the tail end of the last recession. That is startling considering that we are running recession era deficits in a thriving economy. Bottom line, the tax cuts have boosted the economy, but as has always happened in the past, the economic gains from these tax cuts are not sufficient to offset the lost tax revenue given the way they were targeted.

That said, we must do something to stem the bleeding. What are your proposals? As FYI, there are only 4 areas that materially impact the deficit. They are spending cuts in one of 3 areas: 1) Defense spending 2) Medicare/Medicaid 3) Social Security. The fourth area is increasing revenue by raising taxes. I believe reform in all 4 areas is needed.

What are your proposals for reforming the 4 areas above (Defense, Medicare, Social Security, & Taxes) to reign in the deficit? Again, things like food stamps and the like aren't material for this discussion. That is peanuts. It will have to be reform in all of the 4 categories above to chip away at the $1 Trillion annual deficit we are headed for in next years budget year alone.

By the way, here is a good article summarizing the latest deficit spending numbers and the impacts on the average American. Here is a startling factoid... the last time we enjoyed an economy with unemployment under 4% (year 2000) we were running a budget SURPLUS of almost $300 billion. And now a scary thought... what happens to these deficits when the next economic downturn happens and how limited will we be in stemming it with stimulus spending as we have in the past? We wont be able to use stimulus packages to carry us through as we always have in the past. It's a scary thought.

Interested in a good discussion...

Good question/ discussion. This issue exemplifies one of the drawbacks of representative governance by elected officials with relatively short terms. It's too difficult to muster the political capital to make hard decisions in the short term that will benefit all in the long run.

I think part of the solution will need to be to better educate the electorate on why deficits matters. The traditional approach has been to compare it to personal and household budgeting, but that's just not a satisfactory approach (seeing that you and I don't issue T-bills). It's a difficult issue because in a lot of way deficits don't really matter... until they do. And there's not really any prior examples of this type of deficit by the world's biggest superpower that we can study to learn its effects.

I don't have the expertise to offer any specifics, but I'm sure there are ways to knock off some at the margins of the entitlement spending (SS and healthcare) and military spending, but the reality is you're going to have to do it with a scalpel, not a sledgehammer.

The best way to attack the deficit is probably just a series of quiet and small actions and inactions over the longrun (allow certain tax cuts to sunset, avoid cost-of-living increases here and there), in conjunction with avoiding taking any more actions that would significantly increase the deficits (more tax cuts, big non-essential military campaigns).

And then in the super longrun, let your best weapon against debt be (hopefully) normal rates of inflation. Do this and look up in 50 years and the deficit probably wouldn't look so bad.

 

[tigertowne]

The only two areas that matter regarding long range deficits are medicare/medicaid and social security.

Social Security- When it was originally enacted life expectancy was much lower than today. It needs to be linked to current average life expectancy and slowly rise over time. Problem is no old people will vote for this while younger people reasonably do not expect to live off social security in the future. So, it must be phased in over time so no one within 10 years of getting benefits will lose anything. The other thing is it should be means tested so the benefits are phased out if you have high income in your retirement years. That part is not necessarily "fair" I know, but it is for the greater good of a having a social safety net, which is what these programs were initially intended for instead of "entitlements"

Health Care- Clearly this is the big one. Most people say they don't want government health care but fail to realize that close to 40% of the population is on some form of government run health insurance via medicare/medicaid/VA or others. Health Insurance needs to be decoupled from government programs and employment and purchased like any other insurance (home/auto/etc) where each individual makes a conscious decision and knows what they are purchasing. Making the health care industry a true free market will lead to more innovation, supply of health care, and efficiency. The government can then issue grants to those in needs, so once again it acts as a safety net vs. an entitlement.

I like these answers. I wish I could see a scenario where Health Insurance was transformed into what you're saying, but an action like this would 'rip the Band-aid' and no one is willing to accept that. It is political suicide, and nobody wants to pay the cost of losing voters because people didn't get a certain level of healthcare and they suffered as a result... Emotional stories of family survivors depicting their loved one's tragic finish will end a political career really fast.

I have a feeling the deficit will eventually pull the country down to a point that we cannot avoid the consequences, which would mean something unavoidable and catastrophic happens. It will take a long while for the Titanic to fill with so much water that she can't be saved - just guessing I'd say at least 15 years or more. When that does happen, reform will happen from the ashes.