We need to stop the charade. Entitlements are not the cause of the debt. These programs are still solvent. Since we started the Unified Budget under President Johnson, we have been using the surpluses from these programs to help pay for tax cuts and military spending.
Our deficits and debt are the products of tax cuts, a bloated military budget and the economic recession. Those should be the points of focus.
To solve the problem we need to do the following:
1. Get military spending under control by cutting at least 30 percent from the military budget. This saves about $200 billion per year.
2. Raise income taxes to previous levels, to either the 39 percent under Clinton or even the 50 percent under Reagan. The goal is to gain at least $100 billion a year in income.
3. Reduce income security spending (unemployment, food stamps, etc.) by gaining full employment and raising the minimum wage to $10 or $11 per hour. The goal is to cut income security spending by about $300 billion per year.
4. Employ people in infrastructure repair and raise the minimum wage to gain an additional $75 billion per year in tax revenues.
5. Gradually increase the gasoline tax by 10 cents per gallon each year for the next 10 to 20 years to help fund infrastructure repair, encourage energy efficiency and reduce CO 2 output.
6. Re-estabish a 0.25 percent financial transaction tax to gain an additional $100 billion per year in income.
7. Tax capital gains and dividend income as regular income.
This produces at least an additional $775 billion in savings and income. This exceeds the present discretionary budget deficit of $548 billion by at least $227 billion per year.
The American Society of Civil Engineers reports that repairing our infrastructure will cost about $450 billion per year for the next five years. This can be offset by gains in GDP from infrastructure efficiency and increased gasoline tax revenue. The sooner we start this repair, the lower the cost will be. Any shortfall could be financed over the next five years with deficit spending that can be currently had for less than 3 percent. That is a good short-term use of debt. It is "good debt" that will put many people to work and produce more long-term gains in GDP than it costs. This is an investment opportunity that America cannot afford to pass up.
I believe that our fiscal problems and our debt issues can be solved without as many problems as we think. We need to stop the political posturing and get busy now.
I have already communicated these ideas to my elected officials in Washington, D.C., and I encourage you also to keep the pressure on to solve our problems instead of making them a political football. Yes, it does require compromise, but it is possible with honest and sincere actions.
Charles Chlysta III, Shalersville