The Money Tree
(this is a republication of a previously published article. I thought it was timely given the urgency of the debt ceiling crisis and the insincerity of debate in Washington over real solutions).
Frankly, I didn't think it would be so easy.
I took the New York Times interactive "Budget Puzzle: You Fix the Budget" challenge,
thinking it would give me a host of draconian choices between tossing widows
and orphans on the street and abandoning needed infrastructure fixes etc. No, nothing of the sort. You can see my results here:
NY Times Balance the Budget Survey
and take the test yourself here:
By 2015, I had achieved a $730 billion surplus, and by 2030, nearly $2 Trillion, and I was just getting started (see below).
I mostly cut military expenditures, and if I had had the choice, I would have reduced troop levels in Iraq/Afghanistan much more quickly and thoroughly then the Times allowed only to 30,000 by 2013. In its partial place, I would support money for Afghan/Iraq secular schools, microloans (supervised so that excessive levels of interest are not imposed, but mostly using already existing lenders like Kiva, Grameen Bank etc.). These would be built and staffed by local populations as in the model of Rory Stewart's "Three Cups of Tea." This would obviously add some costs, but far, far less, and would have much, much greater "bang for the buck" in lasting changes, especially for the oppressed female half of the population.
I cut Social Security benefits, but only to the wealthiest, who
live longer, have other resources, and take more benefits anyway. This is a debatable cut, and I might be
willing to give on this one if there were enough savings elsewhere. What I am NOT willing to do is
eliminate the option for retirement at 62 for those who are just too worn out
to work longer and need immediate benefits there is a huge difference, up to
20 years, in longevity between an upper middle class office worker and a lower
middle class factory worker, and there has to be a Safety Net below which
Americans are simply not allowed to fall.
Ever. No matter their bad
economic choices in life.
There is also little point in raising the retirement age much more than it is now (67 for the youngest workers, 66 & 8 months for me), until it can be proven that a substantial number of people will live a healthy life into their 80s and 90s. I did allow for raising the age to 68 (but not 70), but only over time (the Times' interactive doesn't say when, but I wouldn't accept it before 2030, and then only if the other options for Medicare and early retirement are retained).
I would also allow payroll taxes above $106,000 for the first time
(though the Times survey didn't say how much above; I would eliminate the cap
entirely). Since this would
provide too much money into Social Security, I would enact a payroll tax CUT
across the board that would effectively result in a tax break for 97% of
workers making near or below the current cap, while making the top 3% pay their
fair share for the first time. The
government should only be concerned about keeping this popular and necessary
safety net solvent , and should not be in the business of "picking winners" by
imposing an arbitrary cap above which no payroll taxes are paid. Imagine if we did that with Income
taxes, saying people making more than $106,000 should pay no taxes above that
amount! Would that be fair?!
Oh, that's another thing. I rolled back the Capital Gains taxes to Clinton-era levels. We had the most powerful stock market and economy in modern American history in the 1990s; there is absolutely no reason to believe that rewarding money-hoarding millionaires and billionaires by letting them invest in the FIRE sectors at 15% capital gains rates, instead of 20%, (or 10% for low income earners), does anything to help the overall economy. For the same reason, I allowed the expiration of the Bush tax cuts for those making $250,000/year just 2% of a given upper-income household's income - but generating $100 billion in savings by 2030.
I indexed Medicare to inflation, which was the biggest savings ($562 Billion by 2030), but to really make healthier Americans, I would direct some of those savings to restoring physical education and/or sports programs to the schools, 5 days a week, 90 minutes a day (to allow for locker room changing times), better nutrition at lunch, for free too (and organic gardens in schools where possible to teach children about their connection to, and appreciation for, the Earth). For the adults, I would direct more Transportation Department funds to cheap bike lanes and other "livable city" options, to encourage both healthier lifestyles and more local shopping and community building, while discouraging use of polluting autos and clogged streets.
I would create panels, staffed by doctors, consumers, and other health providers, to measure medicine by outcome by efficacy. While these have to be structured carefully so as not to become the dreaded "death panels," they can also be a way to check the growth in me-too pharmaceuticals that are created just to exploit patent loopholes, while providing no health benefits over patent-expired drugs, and doing so at a much higher cost. I would direct Medicare to pay for generics unless there was a medical reason not to do otherwise, which would have to be clearly delineated by the prescribing doctor. I would allow for properly inspected foreign sourced drugs to be imported. A similar set of analysis would need to be undertaken with respect to surgeries or other therapies. To make up for the reduction in incentives to discover new therapies these changes would entail, I would beef up the FDA and improve the approval time by one third. I would also consider lengthening the drug patent time by up to 25% for truly new and novel therapies that enhanced treatment outcomes significantly (the phrase "25 for 25' comes to mind, as in "approve a drug for a 25% longer patent if it provides a 25% longer survival rate"). I support the recent Appeals Court decision not to allow patents on genes. These are products of nature, except where created anew, and should not be patented, only the inventions using them should be.
I imposed a carbon tax to encourage development of renewable energy sources.
I taxed banks according to a riskiness assessment of their investments (this has to be worked out).