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

[Foxfyre]

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.

How would you accomplish this?

You pass a Constitutional Amendment or something just as iron clad prohibiting Congress or the White House to use the people's money for their own health care, retirement, or to benefit any person, group, or entity that does not benefit all, rich and poor, equally. You make them fund their own 401ks and healthcare plans. No more would a six or twelve year 'career' in government net somebody a lucrative lifetime retirement at the people's expense.

And you take away their ability to buy votes. Entitlements would need to be phased out slowly so as not to break faith with those made dependent on them, but by 5 or 10% or whatever increments, they would be transferred to the states to manage. Federal taxes would be reduced to the amount needed for Congress to fufill its constitutionally mandated responsibilities and nothing else and that would free up cash the states could then use for their increased responsibilities.

The states will do it a far sight more economically than the feds do or the people will revolt there and put in people who will be fiscally responsible.

When our fearless leaders and their constituencies found they could vote themselves money, the system became hopelessly corrupt both in government and among those who are beneficiaries of government charity.

 

[Missourian]

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.

See Zander's post on this. I agree with him, couldn't have said it better...it's human nature. That is what I was trying to explain in the other post.

I bow to your vastly superior knowledge of economic theory. In a perfect world, you are correct. But we are talking about politicians here.

Without the balanced budget amendment, a VAT to pay down the debt is writing congress a blank check...backstopping and rationalizing every deficit spending bill they can manage to sell to the public.

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

I considered this. No reason the floor for the debt has to be zero.

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.

If it could have worked, it would have worked. In the good times, people don't pay attention. That's human nature too.

 

[Missourian]

Add a penny to every transaction that occurs. Call it what it is: a debt tax that pays off our debt. Once paid, drop it.

We haven't had a Congress since before FDR that didn't spend every penny it took in plus a little bit more. And in 70 plus years, our fearless leaders have learned how much they can use our money to benefit themselves personally and that had emboldened them to not only not stop the snowball, but they keep pushing it faster down the hill.

We will not solve anything by giving them more money. The ONLY solution is to give them steadily less to spend.

All of what you said is true and I completely agree. I'm against giving them more money to spend on endless, worthless endeavors that benefit none of us. I do think the debt needs to be paid off though through responsible management of our taxes. I only threw the penny debt in there so that we could work towards paying our debt off quickly.

Interesting idea...how much do you think it would raise per year?

And how do you keep the politicians from diverting it like they did SS?