Thursday, March 7, 2013

How can we fix the US debt?

Since we can't go back in time and correct the errors as they occurred, we have to come up with a prospective plan. The short answer is: collect more revenue and outlay for fewer expenditures. But even before those detailed negotiations, there are actually important things we can do to move the US toward debt resolution.

Most importantly, what we need are citizens willing to demand our legislators take corrective action and we must have legislators who are not afraid to take corrective action. So the first thing we need to do is stop the influence of lobbyists representing special interests. We can do this by prohibiting any budget entries that would benefit one specific company over any other. This will prevent further escalation of the crisis.

Once we stop the pork barrel earmarking and institute competitive bidding for ALL government-funded projects, we can address other underfunding problems.
Seesaw with small green income $ and LARGE red expense $
You can't balance a budget if you spend more than you earn.
First we've got to stabilize and increase our income. To achieve that, we need to change the national mindset away from thinking taxes are a burden to be avoided; rather we need to educate the public to realize that taxes are the price we pay for our common (national) welfare -- that is: we need to invest (with taxes) in our fair share of government in order to have the funds that make it possible to live in a country we are proud of, to have education and employment opportunities to enable all citizens to earn a satisfactory living income, to expect the assurance of safety and well-being for all our neighborhoods, and to have the upkeep of common infrastructure managed and maintained for the benefit of all.

This means we must charge equitable taxes so everyone in this country will pay a fair share for their support of our nation. That will take some long hard looks at the tax structure for both individuals and corporations. We've got to be more equitable in our expectations of individuals, ensuring that those who have lower incomes still contribute to the nation's well-being; national service by those who cannot afford to pay must be expected both to provide needed services to the nation and to provide training and experience to those who require skills to enter the job market.
Bailout cartoon: Parachutes for banks; cement blocks for homeowners
credit: blogs.worldbank.org
Corporations, too, must be held accountable for their choices and decisions. Bad management should not be a ticket to bailouts. Just as Congress and regulatory agencies often retrospectively reinterpret rules affecting taxes and Medicare (not hypothetical: costly retroactive adjustments were imposed on me and on my mother), the bailout subsidies extended to corporations that contributed to the financial and real estate debacles should be reconsidered. Corporations contributing to the economic disaster should be held accountable and their "stimulus" payments reinterpretted as the loans from the the nation's taxpayers as they should have been, with interest and principal due back to the US Treasury.
graph showing you have to have income to balance the budget
credit: kalyan-city.blogspot.com
Finally, we need to hold our elected officials responsible for their management of the economy. The budget should be balanced, with income to meet the expenditures, including debt service. There should be monthly, quarterly, and annual reviews, with the President reporting the bottom line to the nation in the State of the Union and transparent accounting of ALL expenditures (that is: NO slush funds and black ops back holes of secrecy) open to review by all citizens. When cost overruns occur, the managers should be held accountable for correcting the problem immediately and those who are unable to do so should be fired if the discrepancy hasn't been resolved by the following quarterly report. It shouldn't take a Constitutional amendment to ensure prudent fiscal husbandry, but the evidence shows that our representatives cannot be trusted to show appropriate conservation of our funds. We the People must demand accountability. If it takes the threat of automatic impeachment of elected representatives cannot manage to oversee a balance budget, then that is what we must insist be put in place.
cartoon: balance scale with all wanting a balanced budget but none wanting to sacrifice
credit: www.cartoonstock.com
So can this really be achieved? Sure, but it will take a legislative mindshift and commitment of the populace to make the necessary choices and contribute their fair share.
 
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