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Revised spending will decrease nation's deficit

After months of heated debate over raising the debt ceiling during the summer, Congress continues its policy of refusing to address the long term consequences of not cutting spending. It is imperative that Congress reins in spending and permanently balances the budget. Thus, any effective solution to resolve our debt should contain a plan for entitlement reform and the curbing of growth of the federal government.

The current size of the U.S. national debt is about $14.7 trillion dollars. That amounts to about $47,000 per American citizen. To put this into perspective, the national debt is roughly equal to 100 percent of the GDP and the amount held by the public is equal to 67 percent of the GDP.

President Obama and Democrats in Congress have proposed ending the Bush tax cuts for individuals earning $250,000 a year or more. The Economic Growth and Tax Relief Reconciliation Act of 2001 lowered the highest income bracket from 39.6 percent to 35 percent.

Even if we disregard the economic impact of raising taxes on anyone during unstable economic times, the amount of revenue raised under this proposal would be miniscule. Ending the Bush tax cuts for the highest income bracket would generate about $700 billion during the next decade. If the income tax were doubled for everyone, it would still not cover the deficit.

Clearly, while raising taxes on the wealthy is a winning political issue, it fails to solve any problems relating to our deficit. Although it may not be as popular, the only realistic solution is to cut spending or pray for an economic recovery.

Conservatives have been the only group to adequately address the need to reform entitlement spending. The Heritage Foundation, a conservative think tank, has suggested multiple long term fixes to entitlements that actually address the deficit.

They propose to change Medicare from its fee-for-service program. Instead, the government would subsidize private health insurance based on a retiree’s income. They desire to make similar changes to Medicaid, allowing families to purchase health insurance based on their own needs.

In the long term, Social Security needs to transition from a pay-as-you-go system to private accounts. Under the current system, current workers pay taxes to support current retirees. Inevitably, such a system will collapse as the number of workers per retirees decreases.

The best short-term solution for Social Security, in order for it to remain solvent, is to initiate means testing, cutting benefits for wealthier citizens. While this remains highly controversial, it would ensure that seniors never fall into poverty.

As part of the debt ceiling compromise, a bipartisan panel is tasked with finding $1.5 trillion in cuts. If cuts are not found, “triggers” activate that will automatically cut spending to the military and certain entitlements. The trigger is designed to push Congress to action to avoid painful cuts to politically popular programs.

Many Democrats are hopeful that military spending is cut to offset larger entitlement cuts. While some military activities and projects should be scaled back, defense is the primary role of government and risking American security is unacceptable.

Furthermore, entitlement growth will eventually offset even the largest of cuts to the Department of Defense. Any serious solution to the deficit requires addressing entitlement reform, something Democrats refuse to touch.

Even with the economy in disarray and U.S. debt reaching catastrophic levels, Democrats continue to play class warfare and advocate higher taxes on the so-called “rich” to pay for their wasteful spending. Instead, Congress and President Obama should work together to balance the budget and ensure that government has the funds for its primary functions.

For another view on the current economic deficit, read the Oct. 4 article, Higher taxes, cuts to useless programs will restore economy.

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    Josh HopperJan 7, 2012 at 12:02 am

    Josh Jimenez is honestly one of the most real and down to earth dudes I know. He’s always honest, and you can be sure to have a good time whenever you’re with him. That hug simply commemorated his bodacity.

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