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The USA now takes in about $2.5 Trillion per year, and spends approximately $3.7 Trillion. So how can one reduce outlays by $2.6 Trillion if the income is only $2.5 Trillion?

Please tell me what to do.

First, don't make simple math errors. You're deducting the $1.2 Trillion overspending twice. Once you cut spending to $2.5 Trillion, you only need to cut the annual $1.36 Trillion from the 15-year plan, leaving "just" $1.14 Trillion.

Secondly, nothing says that 15 years is required. Like a mortgage, you can make lower payment by paying over a longer term.

Thirdly, are you sure these numbers ("The USA now takes in about $2.5 Trillion per year, and spends approximately $3.7 Trillion") are correct? I thought both figures were higher.

Fourthly, the Federal government has vast vast resources that it refuses to utilize. It owns more than half of the Western US. Those lands alone are worth Trillions. Secondly, if the US would stop blocking natural resources by declaring every wooded lot a "protected national forest" (as Clinton did in Utah for the Indonesians who had the only other large deposit of super-clean coal discovered). There are several Trillion more dollars under the ground, and if the government would get out of the way, the taxes on those resources would add more Trillions. Further, if government would cut down on the red tape and bureaucratic obstacles, and let the engine of Capitalism free, the recession would end, business would thrive, unemployment would drop, and federal revenues would bloom without raising taxes at all.

Thanks Teach, I was wrong as you saw. We would need to cease the deficit spending and non-deficit spending by about the same... total cuts $2.6T but only $1.3T would come from the intake. Of course if we cut outlays by $2.6T we would lose approximately $1T of the intake because there would be no income tax return on the money not spent, right? I just guestimated this at 25% average tax rates on the loss of Corporate income tax and the loss of taxes on all of the individuals who would lose their jobs.

So maybe this is still mathematically incorrect, but it was always a reduction ad absurdum to make the point... it ain't gonna happen.

As to the 15 years, I actually wrote that that number was arbitrary on my part. And yes if it were to be amortized over 30 years, the payments would be much smaller... but let me ask you, if you had what you consider a substantial part of your investable capital in 15 year US Treasury bonds right now would you swap them for 30 year Treasury bonds? Remember that the price volatility of a 30 year bond is 25% more than that of a 15 year bond. If 30 year yields were to rise to 7% from their current rate of around 4%, their value would drop by approximately 37.5%. During my personal professional career as a bond trader I saw 30 year treasury bonds at 14% (approximately 1981), if that were to reoccur those 30 year bonds would drop by 70% in market value.

A quick googling brought me to the Brookings Institution who says we spent $3.54T and took in $2.45T in 2012... I can't vouch for their accuracy, but I couldn't vouch for anyone else's either. About 3 days ago the President said "an increase in the debt ceiling does not mean more debt"...of course yesterday the US borrowed $328B, the most in history, I suppose he didn't have you to check his math... (joke).

The US is now a net exporter of Hydro Carbons, harken back to near the end of my post, what I intended to imply was that there is no one to buy all these $Trillions of underground assets.

We are "Big Enough to Fail." I truly believe this and at the same time I hope that my math and logic are deeply deeply flawed.

You took my closing inquiry correctly and told me what I should not do. In reality I misspoke with that plea...I should have typed: Please tell me what are we to do.