Cynics point to the Tea Party folks and other conservatives and derisively challenge them with, "OK, genius, what are you going to cut to balance the budget?"
Not professing to be a genius, nonetheless here is my answer:
First, the low-hanging fruit. Eliminate every non-essential federal program and agency. Easy ones are the NEA, PBS, Education, and every other agency and bureau that contributes nothing of value to the country.
Then, slash other agencies. Reorganize Homeland Security and eliminate the TSA. Let the transportation system pay the freight for airport security and take funding away from the taxpayers.
I'm fairly convinced that we could cut money from the military by focusing on readiness and security and eliminating the ability of influential congress members to fund and maintain unnecessary weapons systems simply because they directly benefit their district or key campaign donors.
Entitlements are the toughest nut to crack. Medicare is in the most trouble, followed by Social Security. Unemployment is also a big problem. Here's a solution with heart.
Wean the government off of Social Security revenue by actually beginning to separate it out of the main federal budget. It can't be done right away, but over the span of the next 20 years or so, gradually convert the Social Security system from it's current transfer payment entitlement to an actual retirement & disability fund maintained in each citizen's name.
Something like this would make it solvent: Start with everybody under 50 getting 2% of their annual payroll tax deposited into an interest-bearing account with their name on it. The investment of this money would be in government bonds or money market funds, or while the debt is being paid off, the government can borrow from our accounts at a market interest rate. We simply can't touch the money until we retire, then it becomes a source of our retirement income. Since the percentage goes up 1% per year, within 15 to 16 years, 100% of the payroll tax is now going into the fund, and by the time those entering the workforce today retire, they will have a sweet nest egg that will fund their monthly retirement income and can be willed to their heirs at death.
Medicare's another story. The fact is that seniors need the most expensive medical care, and the cost of that care exceeds the annual income of the vast majority of these retirees.
How to escape this seemingly impossible problem is to use an approach with a philosophy that mirrors what I've written about many times before. Again, gradually over the next generation, we will gradually wean everyone off the Medical Welfare program called Medicare in favor of a realignment of the way the healthcare system pays for treatment.
Gradually change the system so that insurance is separated from both the government and the employers, and is purchased individually on the open market. Some insurance companies may choose to offer comprehensive plans that pay for prescriptions and routine care, but the most attractive policies will be what we used to call "Major Medical".
Those insurance policies cover everyone, regardless of age, for surgeries, inpatient procedures, and major illness. Employers can offer payroll deductions or even kick in contributions toward these plans if they want to, but ultimately everyone buys their own.
What will happen is providers will have to compete for patients, will have to post their rates so people can compare and make their own decisions on the best use of their available healthcare funds. No prescription drug insurance means pharmaceutical companies will no longer be able to get away with charging $100 per pill on their brand-name drugs.
Finally, Unemployment Insurance. I'd like to separate this from government entirely as well. Instead of Federal and State taxes on the employer, let the employer opt out in favor of a simple 2 percent savings plan. The employer can put 2 percent of each employee's salary into a tax-deductable, interest-bearing account. The employee can elect to contribute up to 2 percent of their own salary into the same account, using pre-tax dollars in the same way they can save for retirement in a 401K.
If the employee loses his or her job, for any reason, the cash value of their unemployment account immediately becomes available. The employee can take the money, pay the tax on it at normal marginal rates, and spend it as they see fit. Or they can choose to take it in a weekly payout to tide them over while they look for a new job. Or they can roll it over into their IRA, just like they can roll over their 401K when leaving an employer. Or they can roll it over into the Unemployment Fund at their next employer.
All these ideas represent freedom, help provide security for people, and still give us all the ability to make our own financial decisions.
If someone chooses not to buy the major medical policy, if they get very ill or severly injured, they're on their own. The providers will still treat them, but can take all their assets. But the individual has the freedom to make that choice.
If someone gets laid off and cashes out their unemployment account, then goes to Vegas and blows every last dollar, that's their choice. But there's no help for them from the government. They are bankrupt by their own choice, and must make their own decision on where to go from there.
Some might say that we have to take care of even these irresponsible folks who make the wrong choices and end up broke. I'll only agree to a point - the rest of us can and will have compassion toward these folks, but that doesn't mean we all chip in to give them a free house, free medical care, free food, etc. I think they should always have a place to go where they can get a roof over their head and food to eat, but if able-bodied, they should return some service for those handouts.
More about that some other time.
But imagine that the government is no longer in the business of handing out Social Security checks, Unemployment checks, or checks to our parents' doctors and hospitals. Suppose we cut them out of the process, in essence removing the "middle man" who skims way to much off the top.
It will not only solve our government's budget crisis, but result in better lives for all of us.
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