Debt control requires sacrifices
Whatever our respective political preferences, Americans seemingly agree on one major public issue: Our national debt and deficit must be greatly reduced. Should we fail to regain control, Americans (and possibly the world) face an economic Armageddon. Minimally, financial collapse will generate serious political and social consequences without one positive result.
Behold the ear-piercing stampede of words from the Beltway. National leaders race to offer seemingly respectable solutions for the debt drawdown. Get it to a manageable level they say. Bring order to our financial house.
Though agreeing on the problem, broadly defined, we vary widely in an acceptable solution. Regrettably, most offered “solutions” are little more than posturings for political gain.
Dismissing the hyper political rhetoric, any viable solution requires both cuts to entitlement programs and increases in revenue (notably taxes). Any fair resolution to the debt crisis requires that each of us living above the poverty line be affected by measurable sacrifices - paying more and/or getting less. As society-wide beneficiaries of the blind eyes cast in recent years on the nation's mounting debt, we must be lead actors in the national solution.
I've more than fretted about this debt and the looming crisis. In considering fixes I identified a short list of responsible actions. All did or will affect me to some degree. My criterion in presenting these ideas is that they are minimally disruptive while moving us toward debt reduction. None of the proposed changes originate with me. Each, or some variation, has been mentioned by a media talking-head.
As a retiree, I'm recipient of two costly entitlement programs - Social Security and Medicare. The costs of both require they be reined in, especially as baby boomers become eligible. Their numbers, along with their longer life spans, will bankrupt both if we don't act now to preserve their promises.
As a wage earner I never understood why I stopped paying Social Security after reaching a specified yearly income. I exceeded the annual cap for at least two decades. Why not pay full year? I could afford it. Should we initiate year-long assessments now, we would sensibly, without harming others, add dollars that will keep the fund in the black.
Social Security and Medicare recipients, moreover, should be means-tested before receiving their benefits. When conceived during the New Deal, Social Security was a fiscal safety net. It was not a guaranteed pension. That's been forgotten. Thus folks without need for these funds, having sufficient personal income and savings, should receive less than currently awarded.
My point is that society's wealthy already have personal safety nets. They don't need added government underpinnings. This difference in outlook toward Social Security would harmlessly alter it as an entitlement. Means-testing would return Social Security to its founding principle and stretch the fund's reserves, solving its long-term problem.
Further, in the 1930's the health and condition of folks at age 65 was not matched until today's elderly reach their late 70s. Such data reinforce the current practice of annually adding a month before becoming Social Security eligible. Let's accelerate that practice.
Lastly, eliminate Bush-era tax cuts to the wealthiest. That return seems a no-brainer. It is supported by large majorities of Americans across incomes and political persuasions.
On the other hand, I am intrigued by, though not yet sold on, an alternative income tax scheme. Texas Representative Ron Paul, today's leading libertarian political figure, reluctantly shares a straight-forward income tax plan. He calls for everyone to annually pay an identical percentage of their income. No tax breaks. No deductions.
My only exceptions would grant deductions for wage earners in poverty and those with dependents.
Importantly the Paul scheme would eliminate the most egregious practices by notorious well-to-do tax evaders. Tax dodgers hire specialists to find loopholes and other means to avoid tax payments. Consequently, under today's complex tax code, the most aggressive pay no income tax. The Paul plan would substantially remove their complicated tricks to pay less than you or I pay.
Just these changes, having effects on me, would measurably, though not fully, contribute to restoring our national fiscal house. That's what we agree we need. Hurry, though, time's running out.
Gary Knox is a retired Yuma-area school superintendent and guest columnist for the Yuma Sun.
