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A Plan for Debt Relief
Townhall.com ^ | October 23, 2018 | Cal Thomas

Posted on 10/23/2018 9:30:58 AM PDT by Kaslin

As difficult as it may be to believe, there was a time when Republicans were known as the anti-debt and balanced budget party. Now, the GOP prefers to tout low unemployment as the debt soars and they are co-conspirators in its rise.

It's not that Republicans (and once-fiscally responsible Democrats) lack a way out of debt; it's that they lack the will. Both parties, but especially Republicans, fear a backlash from voters if they cut spending, much less make actual reductions.

How bad is it and what can be done about it?

It's this bad: The Treasury Department and Office of Management and Budget announced last week that in fiscal year 2018, the federal deficit rose to its highest level in six years, 17 percent over the previous fiscal period. That's an increase of $779 billion. The national debt is over $21.5 trillion and counting.

The federal government is hardly starving for revenue. Washington collected a record $1.68 trillion in individual income taxes in fiscal 2018, but the money always goes out faster than it comes in.

Brian Riedl of the Manhattan Institute, a free-market think tank based in New York, has written a proposal which, if adopted (and that is highly questionable given the hyper-partisan atmosphere in Washington), could avoid a coming fiscal disaster.

The entire proposal can be found at manhattaninstitute.org, but here's his summation of the problem and his proposed solution.

First, the problem, which everyone knows, but few will face: "Today, one-third of the baby boomers have already retired, and another one-third will retire over the next six years. Annual budget deficits will soon pass $1 trillion on the way to $2 trillion and possibly $3 trillion in 10 or 15 years. Overall, the Social Security and Medicare systems face an unfathomable $100 trillion cash deficit over 30 years.

"Without reform, runaway deficits will all but guarantee a debt crisis that will profoundly damage the country's economic and social order. There is still time to avoid that crisis, but it will require the nation's fractious political leaders to leave their respective comfort zones and compromise."

His solution: "Stabilize the national debt around 95 percent of Gross Domestic Product (GDP) through spending cuts and tax increases that gradually rise to 6 percent of GDP by 2048 against a current policy baseline, which in turn saves 3.7 percent of GDP in interest costs. In that year federal spending at 23.4 percent of GDP would be attached with revenues at 20.1 percent of GDP." Sound complicated? Read the entire proposal for a detailed explanation, along with definitions.

Democrats won't like any tampering with Social Security, Medicare and Medicaid, which they have used as a political weapon against Republicans for decades. Republicans won't like even the small tax increases Riedl proposes, but maybe that is why this plan will work.

The biggest problem, though, is that too many Americans have an entitlement mentality, the notion that government somehow owes them something. For some, government has become a first resource, instead of a last resort. Industry and personal responsibility are character traits from a distant past, if people can even remember those days.

The notion that government owes us is a difficult concept to break, but someone has to begin the process, or the economy risks a fate that not even the wisdom of a Brian Riedl will be able to fix.

Politicians in both parties can't say they haven't been warned, but perhaps they believe they won't be around when the buck not only stops, but crashes, as it inevitably must.


TOPICS: Culture/Society; Editorial; Government
KEYWORDS: federalspending

1 posted on 10/23/2018 9:30:58 AM PDT by Kaslin
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To: Kaslin
Stabilize the national debt around 95 percent of Gross Domestic Product (GDP) through spending cuts and tax increases that gradually rise to 6 percent of GDP by 2048

Sounds like "Read My Lips". How many times you wanna play Charlie Brown and the Football, Cal?


2 posted on 10/23/2018 9:40:40 AM PDT by Buckeye McFrog
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To: Kaslin

The only way to get some control of the huge federal debt problem is to keep the Republicans in the majority in the House/Senate now and in the future. Yes, they have been guilty of big spending but the Democrats will spend three times as much. Vote GOP this November!


3 posted on 10/23/2018 9:53:58 AM PDT by RicocheT (Don't argue with an idiot; people watching may not be able to tell the difference.)
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To: Kaslin

The only way to get some control of the huge federal debt problem is to keep the Republicans in the majority in the House/Senate now and in the future. Yes, they have been guilty of big spending but the Democrats will spend three times as much. Vote GOP this November!


4 posted on 10/23/2018 9:54:52 AM PDT by RicocheT (Don't argue with an idiot; people watching may not be able to tell the difference.)
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To: Kaslin

Not gonna happen. Politicians are risk-averse.

Before spouting off stupid stuff like this, Cal Thomas should run for public office.

He wouldn’t even be elected dog-catcher on that platform.


5 posted on 10/23/2018 9:54:56 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Kaslin

Not gonna happen. Politicians are risk-averse.

Before spouting off stupid stuff like this, Cal Thomas should run for public office.

He wouldn’t even be elected dog-catcher on that platform.


6 posted on 10/23/2018 9:54:58 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Kaslin

Shut down unneeded depts like Energy and Education. Cut every other dept by 10%. Disband the BLM and give the lands back to the states.


7 posted on 10/23/2018 9:57:16 AM PDT by kaktuskid
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To: kaktuskid

Republicans wouldn’t even defund NPR so I suspect there is a fat chance it will make much difference.


8 posted on 10/23/2018 10:02:55 AM PDT by Buckeye McFrog
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To: kaktuskid
Are you saying education is not necessary?

Well if you want to stay ignorant all your life that is your right. I will not talk you out of it.

9 posted on 10/23/2018 10:05:04 AM PDT by Kaslin (And that is not)
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To: RicocheT

I wouldn’t dream of voting for the rat party or any third party candidate who doesn’t have any chance to get elected.


10 posted on 10/23/2018 10:07:59 AM PDT by Kaslin (And that is not)
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To: RicocheT
The only way to get some control of the huge federal debt problem is to keep the Republicans in the majority in the House/Senate now and in the future. Yes, they have been guilty of big spending but the Democrats will spend three times as much.

When it comes to reigning in spending I'm not seeing a lot of difference between the two. Keep the Republicans in for other reasons but not for fiscal responsibility because they don't have any.

11 posted on 10/23/2018 10:09:44 AM PDT by DoodleDawg
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To: kaktuskid
Disband the BLM and give the lands back to the states.

The government makes money off leases and what have you on federal land. How is ending that income stream going to help with the deficit?

12 posted on 10/23/2018 10:10:56 AM PDT by DoodleDawg
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To: Kaslin

I will agree that we need tax increases to pay off the debt, tax revenue increases. We do not need tax rate increases, just the opposite. If we lower tax rates, I guarantee you revenue will increase considerably. This is always the case, thus the Democrats can never grasp or understand it.


13 posted on 10/23/2018 4:06:12 PM PDT by Richard Axtell (So, this is the Third World! What happened to the first two?)
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To: Richard Axtell
This is always the case, thus the Democrats can never grasp or understand it.

Then if we cut the rates to zero then the money should come pouring in?

14 posted on 10/23/2018 4:12:27 PM PDT by DoodleDawg
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To: Kaslin

let’s see. What is it, about 60% of our budget goes to welfare and social programs? Before we were at full employment, anyway. So, it goes down to guessing 35%. Look at all the money we saved. And then there’s that payroll withholding on all those new paychecks. And the not-sending-it foreign aid we’ll not be sending. Seems like a good start to clearing some debt.


15 posted on 10/23/2018 4:21:05 PM PDT by blueplum ( "...this moment is your moment: it belongs to you... " President Donald J. Trump, Jan 20, 2017)
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To: Kaslin
A Plan for Debt Relief

1. Do NOT buy anything you do not have money in hand for.
2. goto 1

16 posted on 10/23/2018 5:54:34 PM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Elsie

Why wouldn’t it work for gummint; too?

https://www.google.com/search?q=dave+ramsey+simplified&ie=&oe=


17 posted on 10/23/2018 5:57:04 PM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: DoodleDawg
"Then if we cut the rates to zero then the money should come pouring in?"

Why would you think that? Could it be that if we increase tax rates to 100%, money would stop coming in? Actually, that is true, the following tax year. Since the government took everything, the economy would collapse, and so the following year no one would be either making a profit, or be able to pay taxes.

Your devil's advocate argument is well taken though. The government suppresses the economy with too much taxation, and at the same time spends way, way, way too much. Much more than it takes in.

So, there has to be an ideal tax rate, that allows the economy to grow, thus increasing the overall size of the GNP, and thus total tax revenue. That rate may be between 17 to 19% of income.

This must be combined with fiscal restraint for the government, in the form of a constitutional Balanced Budget Amendment. Since the Democrat Party is in the business of accruing power and influence by buying votes with tax payer's money, there has always been a political road block to the kind of reform that might avoid the ever increasing debt they and an expanding unaccountable bureaucratic state inevitably burden us with. This is the problem and the solution that will never be understood by those who are immune to real world economics.

18 posted on 10/24/2018 1:00:11 AM PDT by Richard Axtell (So, this is the Third World! What happened to the first two?)
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To: Richard Axtell
Why would you think that?

Taking your claim that tax cuts always result in higher revenues to the extreme.

This must be combined with fiscal restraint for the government, in the form of a constitutional Balanced Budget Amendment.

OK, say the balanced budget amendment is reality and you're in charge of Congress. You have a $900 billion deficit. What do you cut to bring it into balance?

19 posted on 10/24/2018 7:05:57 AM PDT by DoodleDawg
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