OK, I have a debt reduction plan. (revised)

Discussion in 'Politics' started by Missourian, Aug 6, 2011.

  1. Missourian
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    Missourian Gold Member

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    Updated from this plan that was general panned by both sides of the political spectrum, http://www.usmessageboard.com/politics/139425-ok-i-have-a-plan-to-reduce-the-deficit.html from October, 2010.

    I'm reintroducing it , as we now face a new reality.



    OK...I have a plan to reduce the deficit and debt.

    It will require a Constitutional Amendment that:
    1) Requires a National Balanced Budget

    2) Would allow deficit spending ONLY in the event of a crisis and would require a 3/4 majority vote in Congress AND Presidential authorization.

    3) Would institute a Value Added Tax, the revenues from which would apply 100% to reducing the national debt.

    4) The Value Added Tax would sunset after the national debt was paid off. It could be re-instituted to pay off any new deficit spending that resulted from crisis deficit spending.

    5) Would outlaw Value Added Taxes for any other purpose than paying off the debt.
    Yes, I know it is difficult to pass a Constitutional amendment, but I see no alternative.

    This could also free up the 8% of the federal budget that is used to pay the interest on the national debt, which, in conjunction with spending cuts and entitlement and defense spending reform, may allow for a balance budget.

    Critique?
     
    Last edited: Aug 6, 2011
  2. Greenbeard
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    Greenbeard Gold Member

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    Aside from the VAT, it's a bit of an Underpants Gnomes plan.

    1. Set goal/requirement of balanced budget.
    2. ???
    3. Budget balanced!

    But then again, quite a few deficit reduction plans these days tend to have that structure.
     
  3. Animus
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    Animus Member

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    Not all debt is bad, but when the majority of the debt is on entitlement/social programs it is bad debt. I'd like to see all those programs restructured and/or some totally eliminated or privatized. If our 15T debt was being used for job creation then I'd really wouldn't have a problem with it because the tax revenue created would pay off the debt in no time.
     
  4. NYcarbineer
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    NYcarbineer Diamond Member

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    Politically impossible. The Republicans couldn't vote for the VAT tax because of their vow to Grover Norquist.
     
  5. Missourian
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    Missourian Gold Member

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    I had to look up "Underpants Gnomes". :)

    Let me clarify, this is actually a debt reduction plan.

    It helps reduce the deficit by freeing up all or part of (or none) of the revenue that now goes to paying the debt...Around $164 billion in 2010.

    That would go along way toward balancing the budget.
     
  6. Missourian
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    Missourian Gold Member

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    They could and they would vote for this one.

    It does three things fiscal conservatives want...a balanced budget amendment, a constitutional outlaw of VAT taxes for every other purpose and stabilizes the national debt.
     
  7. Foxfyre
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    Foxfyre Eternal optimist Gold Supporting Member Supporting Member

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    The only way a balanced budget amendment will be feasible is by limiting Congress's ability to use the tax payer's money to increase its own power, prestige, authority, and personal fortune. You have to limit the size of the budget they will balance to get the federal government off the backs of productive Americans.
     
  8. dilloduck
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    dilloduck Diamond Member

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    You are under the illusion that politicians care about the debt.
     
  9. Zander
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    Zander Platinum Member

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    There is an easier way. Just "Freeze" spending.

    When these morons in DC talk about spending "cuts" they are talking about cuts in the rate of growth of spending- not actual cuts. Only in DC is a spending increase a "cut" in spending!

    If we freeze spending and tax rates at today's levels, we have a balanced budget in 5-6 years assuming normal growth.

    [​IMG]
     
  10. Toro
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    Toro Diamond Member

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    A balanced budget amendment is a bad idea. It is pro-cyclical. Policies should be counter-cyclical. Run deficits when the economy is contracting and surpluses when the economy is expanding.

    Also, there is no reason to pay off all the debt. Some debt is good.

    I do like the idea of a VAT tax to go directly towards paying down the debt, however.

    I'd also say no tax cuts during wars.

    The best framework in which to conduct monetary policy is for the people to be diligent about the deficit. You run surpluses when the economy is expanding and deficits when it is contracting. The people should get pissed off when it is run otherwise. But for that to happen, the American people need a big dose of cold water reality first. They haven't had that yet.
     

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