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  • Addressing the Debt Now Means Addressing It on Our Own Terms

    The 2010 fiscal year just ended, but America’s fiscal crisis has just begun. In 2010, the Congressional Budget Office’s (CBO) preliminary estimates show that the federal government spent $3.45 trillion, amassing a deficit of $1.3 trillion. Spending on entitlement programs, which include Medicare, Medicaid, and Social Security, comprised 41 percent of the budget.

    And this is just the beginning. By 2050, entitlement programs will consume the entire federal budget. To keep up with this level of spending, the CBO predicts that tax rates would have to grow to 19 percent from 10 percent for low earners, to 47 percent from 25 percent for middle earners, and from 35 percent to a whopping 66 percent for high earners. This level of taxation would cripple the economy.

    Tuesday night in Milwaukee, the Concord Coalition hosted Representative Paul Ryan (R–WI) and former Service Employees International Union President Andy Stern to discuss solutions for the nation’s dismal fiscal outlook if deficit spending is not addressed—and soon. As Josh Gordon, policy director for the Concord Coalition, pointed out, enormous deficits are not going to go away. While the U.S. has, on average, maintained a sustainable level of deficit spending of around 2–3 percent of gross domestic product, the deficit is not projected to return to anywhere near this size again.

    Although Ryan and Stern represent opposite ends of the political spectrum, they both agreed that the U.S. needs a plan to get the nation’s fiscal house back in order. Ryan has proposed a plan that he calls the “Roadmap for America’s Future” that addresses entitlement spending.

    Ryan explained that if we act now, we can address the debt on our own terms, but if nothing is done, America will lose its say in the matter—these programs simply won’t be there for younger generations. Both Ryan and Stern are members of the National Commission on Fiscal Responsibility and Reform that is scheduled to make its report by December 1.

    Posted in Economics [slideshow_deploy]

    6 Responses to Addressing the Debt Now Means Addressing It on Our Own Terms

    1. George Colgrove, VA says:

      Simple answer – do not just focus on cutting spending by marginal amounts. We need to cut the size and scope of government. If we are still talking about keeping the doors open in DC of all federal offices, then I propose a positive all inclusion solution. Congress should make this program a law. Implementing this program shall not cost taxpayers a cent.

      Create a body of volunteers that comprise of rotating members including accountants, systems analyst, budget analyst, organizational specialist, security specialist, efficiency experts and so on, from the private sector. No public sector employees shall be allowed in the analysis group. Invite federal employees, federal contractors, or American citizens (i.e. "customers") to submit ideas on how to make a particular federal procedure, process, or policy quicker and cheaper to perform as well as providing enhanced national security and transparency. No one knows better how to make things simpler than those who work on the inside and those who work with government programs. The volunteer committee would then evaluate the ideas and group them according to the program. Those requests that the body determines as contributing to a positive reduction of the size and cost of government, will be imposed on the department, agency or program for implementation. As an award, the person or persons involved with the idea will either get or split 5% of the savings. A million dollar saving will yield a $50,000 award. I would also add a $1000 award for each reduction of high-level security clearances and a $5,000 award for enhanced transparency. If the change ends up with that employee losing their job, we should award that employee with a lump sum of their salary for the past year prior to implementing their Government enhancement solution, but that would be only if the savings proved to be significant.

      This will use market principals in making government smaller. People will compete with each other to come up with the best solutions to decrease the burdens of government on people. We will take out the protectionism that each employee will have in trying to protect his or her jobs. By providing significant awards, people will try to carve of the largest chunks for their largest personal gain. Employees who lose their jobs due to other people's ideas should get full pay and benefits as if they were working for up to three months after losing their job to get ready for finding their next job.

      This program should be in place for up to two years for constant implementation. After two years, the government should revisit this program every two years for a period not exceeding six months.

    2. Seymour Rappoport Ha says:

      The biggest type of saving is to eliminate waste.e. projects like controlling auto accidents with cameras and enforcement

      No project proposal or implementation until all various alternatives have been preliminarily eliminated

      Do not fund employmeent by granting companies help to pay unneeded new employees. They will simply be fired after aid runs out.

      Look for waysx of saving local money by incentives based upon for example: housing for new teachers. Using local private funding etc.There are many other such low cost ways of saving without dislodging present services

    3. Seymour Rappoport Ha says:

      I meant to write funding by towns on public land with town employees and maintenance for lowest cost. Accepting private donations

    4. tina,ca says:

      I have the utmost respect for Paul Ryan,I would give anything if he were President right now. Andy Stern is a lowdown lying corrupt communist pig.

    5. Pingback: The Absurd Report » Addressing the Debt Now Means Addressing It on Our Own Terms

    6. Tim, IL says:

      Stern comments, “We have a distribution problem in the sense that we’ve created an industry of K-Street Lobbyists and people who sort of poked holes in the tax code to allow some people to do unusually well. We’ve sort of lost the focus of unions and other organizations that at least tried to find ways to share in the success when companies are productive and growing.” I find this very telling because the unions are all about sharing the wealth when companies are doing well and profiting but they forget that they aren’t the ones taking the risk that the company may not be productive. Those who take the risk should be compensated because they have so much to lose if the business fails. With that said, these same unions aren’t willing to share the pain when companies are not doing well, in fact, the compound it in most cases by continuing to demand more and more even when the company is losing money. In many cases that is the straw that breaks the camel’s back and the once profitable business who has fallen on hard times shuts down.

      A great example is the Georgetown, SC Steel Mill that was going through tough times a few years ago. The company was trying to stay in business and asked the employees to accept a 10% pay cut for 6 months while the company was trying to recover. After that 6 months the company was willing to pay back the lost wages to those employees. The union voted against the pay cut and within 2 months the Mill was closed. This is an example of how the union wanted to come to the party and have a good time but refused to help clean up the mess once the party was over. Why should we have sympathy for unions at this point? They have lost sight of their original charter which was to protect employees and in this particular case they actually harmed their employees because most of these Steel Workers were unable to find jobs after the plant shut down. So much for protecting the well-being of those their claim to protect! I wish everyone could have a first hand experience where the unions operate like this and they too would know just how bad the unions have become for the well being of this country.

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