Today I want to talk about what are some really reasonable options for cutting our budget deficit and begin to cut our national debt. Now a lot of people tend to say that the debt is just too big, and eventually the Fed and gov’t are just going to come in and usher a CBDC. I tend to agree with this, but I want to focus today on reasonable cost cutting.
First off, a budget deficit is when the federal gov’t spends more than it receives. The government tends to get the majority of its income through tax revenue. Any difference, or shortfall and the government, will make this up by issuing treasury bonds. As deficits continue year after year, they add more and more to the national debt.
Here are few ways we can reduce spending and start to pay down the national debt.
Reduce Govt spending
(1) First idea is to increase the tax for Social Security tax that large companies pay. I would define this as any company that earns more than 100 million in revenue, although I could be convinced to lower that revenue. Now currently, companies pay 6.2% in social security taxes – like employees, but I believe these companies need to be paying a higher amount. When you think about it why should a small business with maybe $200,000 in annual revenue being the same percentage as a company that earns 200 million? Social security is projected to run out early next decade and there is actually a little bit of surplus right now, but this should decrease with more boomers retiring and the workforce shrinking.
(2) Shorten the time period for unemployment insurance, especially when the unemployment rate is so low. And we saw the last few years how many people milked the system. Right now, unemployment insurance lasts up to 26 weeks. That’s almost half a year. This should be reduced drastically and especially when unemployment is low. Some people made more with unemployment than their regular job.
(3) Put in place higher consumption taxes for non-essentials items. One example could be iPads and iphones. We spend way too much time as a society looking at screens and our kids never stop with the social media. I believe we need to find a way to tax this and discourage this behavior. We tax cigarettes more as they are deemed unhealthy, isn’t staring at screen bad for your health? We simply don’t know the health effects at this point.
(4) Less Taxes for certain essentials industries. We tax gasoline additional which disproportionately hurts the poor but when it comes to something like alcohol there is no additional tax. So, we have no problem putting extra taxes on cigarettes but seem to have a big problem taxing alcohol. Now when you think about it, this would help people save when they need to and spend when times are good. And I’m generally not a fan of taxes but certain businesses make boatloads of money and pay little tax.
Other ideas:
(1) Reduce govt subsidies and tax breaks to specific industries. There s companies that get benefits for things like putting in smart lights and solar panels, this definitely shouldn’t be a write off.
(2) Penalize companies that offshore workers. We need more production at home. It might hurt in the short term but let’s not keep adding more and more debt for our children to pay off.
