The national debt currently stands at about $13.8 trillion dollars. I’ve recently become more interested in the topic of the deficit after learning about how European countries are dealing with their budget woes: they are cutting spending and raising taxes. Here in the U.S., however, we seem to think that we can eliminate a deficit by increasing spending (Obama’s preference) and cutting taxes (Congressional Republican preferences).
Everyone seems to think they know how to balance the federal budget. This interactive tool from the NYTimes gives you the chance to take a crack at it:
Go ahead – give it a shot! The tool allows you to select among a wide variety of spending cuts and tax increases in an effort to eliminate the national deficit. I think this is extremely instructive because it allows you to see the relative effect of various proposals. For example, the big talk in Washington this week is to pass a ban on congressional earmarks. While this is a step in the right direction… this tool also demonstrates that eliminating earmarks will reduce the short-term deficit only by about 3.3%. What really makes a difference is tinkering with the retirement age and letting some or all of the Bush tax cuts expire.
For those who are interested, here is my proposed plan to fix the deficit:
I propose to eliminate the deficit by: eliminating earmarks, reducing (but not eliminating) our military presence around the world, raise the age eligibility for Medicare and Social Security, enacting medical malpractice reform, letting the Bush tax cuts expire on those making more than $250,000/year (while keeping the tax cuts in place for those making less), implementing a “carbon tax” on pollution, and enacting the Bowles-Simpson plan for reducing tax deductions and simplifying the tax code.