How to Eliminate the Deficit

Submitted by Ken Watts on Tue, 11/30/2010 - 17:25

SOME TIME AGO, A reader suggested I look at a clever little puzzle on the New York Times site.

It allows you to make your own decisions about getting rid of the federal deficit, and see how they come out.

I went there, and I eliminated the deficit.

You're welcome.

The real point of the exercise, to me, was that it became clearer and clearer as I went through the choices why we are in the mess we're in.

But before I go into that, here's how I did it:

  1. I refused to cut foreign aid in half. (Savings: $0)
  2. I didn't eliminated earmarks. (Savings: $0)
  3. I eliminated farm subsidies. (Savings: $14 Billion)
  4. I refused to cut the pay of civilian federal workers. (Savings: $0)
  5. I refused to reduce the federal workforce by 10%. (Savings: $0)
  6. I refused to cut $250,000 government contractors. (Savings: $0)
  7. I refused to make other cuts to the federal government. (Savings: $0)
  8. I refused to cut aid to states by 5%. (Savings: $0)
  9. I reduced nuclear arsenal and space spending. (Savings: $38 billion)
  10. I reduced the military to pre-Iraq War size, and further reduced troops in Asia and Europe. (Savings: $49 billion)
  11. I reduced navy and air force fleets. (Savings: $24 billion)
  12. I cancelled or delayed some weapons programs. (Savings: $18 billion)
  13. I refused to reduce non-combatant military compensation and overhead. (Savings: $0)
  14. I reduced the number of troops in Iraq and Afghanistan to 30,000 by 2013. (Savings: $169 billion)
  15. I didn't enact medical malpractice reform. (Savings: $0)
  16. I refused to increase the Medicare eligibility age. (Savings: $0)
  17. I refused to reduce the tax break for employer-provided health insurance. (Savings: $0)
  18. I refused to cap Medicare growth. (Savings: $0)
  19. I refused to raise the Social Security retirement age. (Savings: $0)
  20. I reluctantly reduced Social Security benefits for those with high incomes. (Savings: $54 billion)
  21. I refused to tighten eligibility for disability. (Savings: $0)
  22. I refused to "use an alternate measure for inflation". (Savings: $0)
  23. I returned the estate tax to Clinton era levels. (Savings: $104 billion)
  24. I returned capital gains rates to Clinton era levels. (Savings: $46 billion)
  25. I allowed the Bush tax cuts to expire for brackets over a quarter of a million dollars. (Savings: $115 billion)
  26. I extended the payroll tax above $106,000. (Savings: $100 billion)
  27. I levied a "Millionaire's Tax" on incomes above one million. (Savings: $95 billion)
  28. I eliminated some tax loopholes, but kept rates slightly higher than the Bowles-Simpson plan. (Savings: $315 billion)
  29. I reduced mortgage deductions for high-income households. (Savings: $54 billion)
  30. I refuse to implement a national sales tax. (Savings: $0)
  31. I implemented a carbon tax. (Savings: $71 billion)
  32. I implemented a bank tax. (Savings: $103 billion)

And that eliminates the deficit in both the long and short terms.

It actually produces a surplus—you can go here to see for yourself.

Some of you may be thinking that some of my choices need a little explaining.

I'll be happy to do that, in future posts—by explaining them as individual choices, but also by explaining the over-arching philosophy behind them.

Next: The Explanations Begin...