Balancing the Federal Budget: Summary

If this is the first of the Balancing the Federal Budget series you’re reading, you might want to start here. Otherwise, it’s time to bring it all together. This is the master plan for getting the federal budget balanced so the U.S. can start chipping away at the national debt. I’ve not said it will be easy, but nothing so important ever has been. We, as a people, have an obligation to ensure the responsible behavior of our government toward the environment. We must also prepare our economy and society for the continued modernization and the rapid automation of millions of jobs in the face of a massive portion of the population aging and retiring.

Here is our step-by-step guide on how we might accomplish those goals:

  1. Social Security
    • Subsidize non-traditional work for physically disabled workers to reduce disability payment requirements from the Social Security program.
    • Remove maximum income contribution limit of $118,500.
    • Set partial retirement age at 65 with full retirement age at 70.
      Effects:

      • Annual Social Security program receipts boosted to $963.9 billion.
      • Reduction in Social Security outlays to $822.7 billion.
      • Social Security surplus of $141.2 billion.
  2. Health Care
    • Create a single payer system and provide universal health care.
    • Increase spending on preventative health care including: birth control, abortion services, and nutrition programs.
    • Streamline healthcare processes and reduce duplicative or unnecessary services.
      Effects:

      • Health care coverage for all Americans.
      • Decrease in health care spending of $1.6 trillion.
      • Increased worker productivity resulting in increase of GDP of $260 billion.
  3. Non-Defense
    • Increase funding for science programs such as NASA, education, transportation and economic development, and health care research.
      Effects:

      • Investment in NASA results in investment in new technologies, company spin-offs, job creation, manufacturing in the United States, and international collaboration48.
      • Investments in education, transportation, economic development, and health care research all result in a more highly educated society that is healthier and has the ability to do business more easily due to improved infrastructure. This spending is the backbone of a high-tech economy.
  4. Defense
    • Reduction of foreign bases to key strategic locations.
    • Convert most, if not all, foreign bases to joint bases.
    • Establish stringent metrics for military contracts and contractors.
    • Review current military spending processes and modern combat needs.
    • Increase funding of United Nations.
      Effects:

      • Reduction in military spending to $278.43 billion or 1.5% of GDP.
      • Increased international efforts and reduction in U.S.-only responses.
      • Refocus of military on strategic initiatives rather than global security presence.
  5. Income Security
    • Increase spending on Income Security programs to $371.24 billion, or roughly 2% of GDP.
      Effects:

      • Increased socioeconomic opportunity for Americans to climb out of poverty and into self-sustainment.
      • Decrease of malnutrition in poverty stricken families, especially children.
  6. Taxes
    • Eliminate tax loopholes and unnecessary complexity.
    • Implement a Carbon Tax.
      Effects:

      • Short term GDP decrease.
      • Creation of 20 million new long term, tax paying jobs.
      • Tax revenue increase of $561 billion per year.


Conclusion

Effect on the federal budget:

  • Decrease of existing federal budget outlays of $1.02 trillion.
  • Increase in new federal budget outlays of $120 billion
  • Increase in federal budget revenues of $739 billion

Net result: $1.05 trillion federal budget surplus to be used to pay down national debt.

The effects of the proposed steps would have far reaching effects and implications on the current economic model. Multiple industries like fossil fuels, automotive production, airlines, natural resource production, and general production would need to undergo multi-year overhauls to meet new expectations, avoid expensive tax penalties, and to succeed in the new economic model.

It is understood that these suggestions and conclusions are not all-encompassing. More extensive studies would need to be made before any of the proposed solutions could be implemented.

However, if approached correctly, I believe that these steps could help the United States reclaim economic dominance, decrease it’s reliance on antiquated energy production and distribution technologies, and increase the overall welfare of it’s citizens while creating new opportunities for individual socioeconomic growth. I believe that true capitalism should rely more heavily on providing basic care for the needy in order to stimulate opportunity for growth while rewarding those who distinguish themselves with grit and ingenuity. Capitalism should be a meritocracy, not an achievement of birthright.

For more options for reducing the deficit, check out this report from the Congressional Budget Office49.


References

48 The Tauri Group. NASA Socio-Economic Impacts.

49 Congressional Budget Office. 2016. Options for Reducing the Deficit: 2017 to 2026.

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