"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Monday, November 15, 2010

The Regular Guy Balances the Budget in Ten Minutes... Thanks to the New York Times?

The New York Times of all people has an interactive page that allows you to make decisions on spending and taxes to work toward a balanced budget as of 2015 or 2030.  I was able in ten minutes to get the deficit down to $38 million in 2015 and eliminate it entirely by 2030.   Here is what I did:
  • Cut foreign aid in half
  • Eliminate earmarks and farm subsidies.
  • Cut the size of the federal workforce by 10% and cut federal pay by 5%.
  • No cuts to military except to benefits for noncombat personnel.
  • Enact medical malpractice reform
  • Raise Medicare and Social Security retirement ages to 68.
  • Cap Medicare growth at 1% over GDP.
  • Means test Social Security.
  • Apply payroll tax for Social Security above $106,000.  
  • Reduce mortgage interest deduction.
The big one by far is capping Medicare, which suggests to me that you can't really come close to balancing the budget without some pretty harsh medicine on Medicare.  

My ten-minute plan got 87% of savings from spending cuts, and only 13% from tax increases, which sounds about right.  

I also am convinced that, if you enacted something like this, it would show world markets that the US is serious about getting our fiscal house in order, the economy would rapidly shift into growth, and the government's revenue would actually quickly exceed the estimates used in this model, which I am fairly certain are static and not dynamic.  

Interesting stuff.  

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