“The budget should be balanced, the treasury refilled, public debt reduced the arrogance of

officialdom tempered and controlled … lest Rome become bankrupt”

Cicero

For the decades, our federal government has perpetuated a myth that, unlike individuals, it can routinely spend more than it takes in … so long as such deficits are only some small fraction of GNP.

However, staggering deficits have ballooned our national debt to more than $14 trillion and, even with the currently proposed spending cuts; this figure will still grow close to $20 trillion this decade!

With their eyes on the upcoming Congressional and Presidential elections, our Beltway politicians have only nibbled around the edges and made no serious proposals to rein America’s unsustainable deficit spending binge while continuing to demonize each other.  Moreover, many of the targeted programs were tied to narrow political agendas.

Republicans have drawn a “no new taxes” line in the sand while Democrats staunchly refuse to consider cutting or modifying so-called entitlement programs and both are protective of home-state projects.

Only the Deficit Commission, Congressional “gang of six” and, lately, President Obama, have begun to talk about “shared sacrifices” to get the country out of its fiscal abyss.  Still their $4 to $5 trillion in savings sounds like a lot.  But those are ten year figures and when annualized, amount to less than 30% of this year’s proposed shortfall.

It is a reality that every governmental program has a dedicated and vocal constituency who can make a cogent case for its value … and argue that to slash or cut it will bring us to the brink or Armageddon.

Not since the end of World War II have Americans been asked to sacrifice for the good of the country.  Like it or not, however, those “guns and butter” days are about the hit-the wall!

On the spending side, nearly every program will need to operate on less … and many programs (including most earmarks) eliminated.  Defense spending will face significant cuts; as we can no longer afford to be the world’s policeman.  Medicare, Medicaid and Social Security will require major adjustments (i.e., raising the retirement age, increasing the FICA tax base, means testing, etc;).

When deciding on programs to cut or eliminate, extreme social agendas should play no part, as such issues accomplish little and are of only passing concern to the vast majority of Americans.

From a revenue perspective, the nation’s tax code needs a complete revamping!  Such changes must exclude any form of favoritism benefiting one group of individuals or entities over any other.

For individuals, a flat tax with no exemptions (the mortgage interest deduction being phased out over ten years) other than for charitable giving and state and local taxes … and an income floor, below which no taxes would be due.

If the flat tax were (for argument’s sake) 18% and the income floor for a family of four were $40,000:

  • Someone making $1,000,000 (with no deductions) would pay $180,000.
  • Someone making $100,000 would pay $18,000.
  • Someone making $40,000 would pay nothing.
  • Someone making $30,000 would receive a check for $10,000.

No one is exempt and those making more pay more.

The floor and tax rate would remain fixed unless changed Congress by a super majority (perhaps 75%) and signed by the President.

For corporations, taxes should be reduced to make them competitive with those in other industrialized nations.  The income basis would reflect all [net] revenues earned in the US.  Industry subsidies need to be curtailed.  Multinationals should be restricted in their ability to manipulate their income so they can book it in the most tax-favorable nation.

Finally, require all funding bills, particularly those for new programs, to be voted on a case-by-case basis and not buried as amendments in other unrelated legislation … and be subject to sunset provisions if they exceed cost projections.

If our representatives truly want to be the “public servants” they claim to be on the campaign trail, then they need to forget the reelection implications of their votes and make decisions based on what is in the best long-term interests of their constituents and of America!