Wednesday, April 12, 2006

Paying back the debt will not be easy

Paying back the debt will be a lot harder that it was to incur it. Here are a few ideas on how we can start and how much revenue the suggestion will generate annually.

Roll back the Bush Tax Cuts. ($200 billion)

Raise postage rated by three cents ($6 billion)

Cut all pork from the budget ($200 billion)

End the Prescription Drug Plan. ($100 billion)

Impose a 5% national sales tax (Variable but, at least several hundred billion)

Roll back the tax cut on stock dividends (difficult to estimate but, at least several billion)

Increase minimum wage by 15 cents an hour (variable but significant)

Impose a 1o cents a gallon national tax on gasoline. ($13 billion)

Impose a $2 a pack national tax on cigarettes. ($2 billion every year from the tax but, the end goal here is to discourage smoking and cut medical costs later on)

Revenue from these new taxes would cause negative economic impact in the short run but, once the economy adjusts it will not hamper the it at all. Obviously these measures will never pass because in addition to raising taxes on individuals they poke at some powerful lobbying groups including oil. tobacco, and retail. Theses new taxes would give us about a $100 billion surplus. Reducing the deficit is more important than reducing the debt so this would offer a long term solution to our budget problems.


Thought Head said...

Your points are correct. If we had the political will it would be easy to get rid of the deficit. Firstly, we should tax gasoline much more than you suggest. I am talking about doubling the price. Such an increase would be political suicide in the USA but if we did, our gasoline would still be cheaper than in Europe. We would also start driving fuel efficient cars, cease to be energy hogs(the USA consumes 30% of the energy in the world)and remove our dependance on oil imports.
We should also tax heavily all our dependancies - cigarettes, alcohol, gambling (after taking them out of the hands of Indian tribes) and drugs (after legalising them).
Let's leave the tax cuts alone. Those who support the rest of the population are paying a disproportionate amount of taxes as it is. Better let's stop all the legalized tax fiddling and go to a flat tax as a percentage of income for everyone.
At least you can see why I am not in politics. The majority of voters have no interest in removing the deficit, they just want to soak the rich, defined as people having income at least twice their own.

chad said...

howabout stop this stupid war on drugs and tax it at a reasonable rate. The consumer will win because it'll be cheaper to buy 1/4 of weed, the non-consumer will win because crazed addicts of hard drugs won't be breaking into cars to be able to afford it and the gov. wins by getting over $500B in additional revenue a year!

young_activist said...

I'd agree that legalizing marijuana-not other drugs, is a good idea for a multitude of reasons but, it is also to politically sensitive to be adopted and I'm not sure I'd agree with your $500 billion figure in increased revenue. Just look at what happend during prohibition, if we would legalize marijauna tax revenue would go up, the cost for fighting trafficers would go down, and I believe that the usage of drugs would also go down. Part of the alure toward illegal drugs is the fact that they are illegal.

phantomx1 said...

Certainly trade is good for an economy. When it is balanced. But foriegn trade that the U.S. does with the other countries creates an imbalance of trade for the U.S.
For too long have products made in Japan, and China, filled the American commercial shelves. This has happened for decades. This transfers wealth out of America, and with the large trade imbalance with these countries ensures that America's wealth is transported to these countries.
It would not be an issue if the trade with these countries were of a balanced nature. Nothing wrong with global trading when it is balanced. In fact it is healthy for the economy on a global scale. It certainly is no secret that America's stores are stocked full of foreign made products. There used to be an easily identifiable choice to buy higher quality American made products or the cheaper lower quality foriegn made product. Now, the foreign made products have come up in quality and are the cheapest, for now, to stock store shelves with. The American retail store is naturally going to stock what is cheapest and has been selling the most. American consumers don't even take notice who made the product anymore, but the American dollar gets exported.
If trade imbalances happen, wealth is transfered unproportionately. We are talking mega-billions of dollars. When a small cities consumers go to the large cities for all it's consumer needs that will transfer all of the small cities consumer wealth to the larger cities bank accounts and the small city's economy will soon dry up. However, if there is balance in trade the two city's economies will eventually obtain equal economic size. Sure we would like to see the world economy grow, but not at the depletion of wealth of our own economy, and in my opinion, through the action of the IMF, WTO, and other worldly organizations we are seeing a deliberate push to expand the global market place and world economy, and that expansion will come at the expense of America's wealth being allowed to be exported through an "allowed" trade imbalance. Sure, global economic expansion is a good thing. A thriving economy is healthy, it is especially good for corporations, but guess who is paying for these global economic growing pains. The American people through transfer of their wealth through imbalnced U.S./ foreign trade. The American consumer isn't going to take it upon themselves to quit buying foreign products on American store shelves. An the U.S. government aren't going to apply the trade sanctions to prevent the American store shelves from being flooded with foreign products that ensures the American wealth transfers.
There is a U.S. trade deficit. It is creating global economic expansion, but the countries that are enjoying expansion need to start helping out on this trade imbalance if they truly want to retain a position in a global market economy and they need to fill their foreign consumer shelves with products that say Made in the U.S.A
So IMO, the U.S. foreign debt is directly attributable to the allowance of a U.S./ foreign trade deficit, or an imbalance.
Continuance of this trade imbalance will weaken the U.S. economy and keep the deficit high.
Increased U'S. trade sanctions would reduce foriegn products on American store shelves and the U.S. debt would disappear, but then that would curtail global economic market expansion.
So in other words America's debt is paying for global economic market expansion. Corporation like the idea, but for the average American it means less meat on the table for now and at best an eventual return of a stabilized economy that they have seen before this latest push for more global expansion.