February 2, 2013
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A Balanced Federal Budget
It seems to me that the sensible solution to the current US financial crisis should start with movement toward a balanced Federal budget - that is ZERO deficit spending.
Such a budget should include all those current types of fundings which Americans have come to expect and plan on using in their future - such as Social Security and Medicare - as well as those expenditures necessary for the general wellbeing of the country.
1.Social Security and Medicare should both be "Off budget"that is, fully financed through their own FICA (payroll) funding independent of the general tax structure. Currently Social Security is funded this way, Medicare should be, but is currently, only partially funded through dedicated FICA contributions. A single-payer universal medicare system would probably be the most efficient.
2. The income tax structure should be set so that all earners contribute something - no matter how little. This is necessary if citizens are to feel that they have some part in the government. The IRS contributions levels should be progressive - say from 10% to 40% depending in income. If a taxpayer does not make a certain minimum, all but a token payment may be refunded. All earned income, from whatever source, should be taxed.
3. The budget and tax rates should be for a period longer than a single fiscal year.
This would be a start toward a sensible tax and spend system. Eventually, less tax revenue would go toward debt service and more toward general expenditures. History has shown that sensible government spending leads to a more robust economy - at quite a rapid rate.
Comments (5)
Dear Dick,
We always get lots of orders from municipalities, local government houses, etc, at the end of each quarter. They have lots of money to spend before it goes away. Seems like a lot of civic money just disappears if it isn't spent. Wonder how many rusty gennies are sitting out in somebody's cow field which never get used.
I like and agree with all your bullet points and will endorse you for President next election should you decide to run.
I never cease to be amazed that the federal government is either operating with a generous surplus, or is deep in red ink. Has the federal budget EVER been balanced? The American economy will just get worse if the same 1-5% (much less than 5, I'm forgiving) who make most of the big bucks would be accountable, or even if they paid the percentage of taxes most of the rest of us do. But they always get the (tax) breaks.
We're actually better off than a lot of countries, but I'm forever criticizing the amount of money and energy spent basically gambling on "futures".
But that's capitalist economics, and not really the subject of your entry, which deals with balancing the government budget.
I could outline basic socialist principles, but for some reason socialist principles never seem to work when applied in real world situations.
Michael F. Nyiri, poet, philosopher, fool
@baldmike2004 - The last time the federal budget was balanced was during Clinton's second term - when there was a modest surplus which could have been applied toward the debt - but instead under Bush, was the excuse for massive tax cuts and a couple of ill-thoughtout wars. During the Bush years there never was any attempt to balance the federal budget. Obama has always submitted a balanced budget to congress and has had it declared "Dead on arrival" because it called for increased revenue.
California has had terrible budget problems for many years - An educational system once among the best in the US has all but collapsed along with many other state projects. A state which should be among the richest has had a long succession of bankrupt municipalities and - in the case of Orange county - a defaulted county bond issue.
Here in Florida, we are, as are many states, required to balance the budget every year. Under our current governor and GOP-dominated legislature, this has been done by massive "privatization" of government services. This is supposed to cost the state less, but generally has resulted in massively decreased service along with considerable overruns.
Your reasoning here makes a lot of sense. I wish more people would listen....especially your government. Governments should stop trying to govern every aspect and govern only the essentials...directly.
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