The news media in recent weeks and months has reported repeatedly about the upcoming fiscal cliff. But, as I see it, the fiscal cliff itself is only a symptom of the underlying true problem.
The true problem is that our federal government has been spending much more money than it takes in. The nonpartisan Congressional Budget Office's website reported:
"Fiscal year 2012 marks the fourth consecutive year with a deficit above $1.0 trillion."
The terrible thing is that without changes the problem will get far worse in upcoming years -- due to rising health care costs, baby boomers reaching retirement age, the war on terrorism, etc.
I see two basic approaches to solving the problem:
- If everyone engages in much better preventive health care
- unemployed persons immediately find (or create) a job they love
- all persons eligible for Social Security decide to keep working at jobs they enjoy instead of retiring
- and all people around the world decide to eliminate military spending and to find ways to resolve differences peacefully, our federal budget deficit will likely turn into a surplus.
(2)Practically: Excluding that idealistic alternative above, perhaps the three basic ways to correct the problem are:
- to raise taxes
- to cut spending
- or to do a combination of tax increases and spending cuts.
I support progressing toward the idealistic solution. I am an optimist! But for the short term the practical approach may be more realistic. Below I elaborate on the three choices in what I called the practical approach.
Raising taxes on the masses enough to solve the problem would upset voters and likely lead to politicians losing their reelection bids, unless they do a marvelous job of convincing voters of the need, so that isn't likely.
Raising taxes only on the wealthy wouldn't raise enough money to solve the problem. Also, raising taxes on the wealthy isn't easy. One reason they are wealthy in many cases is their dedication to making and keeping money and material possessions. They have tax lawyers and tax accountants to find loopholes in tax laws, they send money overseas, and in some cases as a last resort even relocate outside the country themselves to avoid paying taxes.
Lots of folks talk about cutting unnecessary spending, but when it gets time to make specific cuts, the special interest groups seem to typically stop action from taking place on a big scale.
Making substantial cuts to Social Security, Medicare, Medicaid, SNAP (food stamps), various regional projects, etc., isn't easy. Even talking about it almost always offends lots of people.
Making big cuts to the military may be more popular with the public most of the time. But as soon as something like 9/11 or a world crisis erupts, Congress and the President seem to quickly approve massive military spending bills without taking the time to think them through. Even in peacetime the Pentagon has lobbyists urging spending on the military. And Congressional Representatives help one another protect bases and projects in one another's districts.
Raising Taxes and Cutting Spending
In theory, this is the easiest way to do it, because it provides balance. But raising taxes and cutting spending seems to offend almost everyone.
Somehow we (the public) need to be convinced of the severity of the problems. And we need to recognize that they will get much worse if we don't take major corrective action. Then we will be receptive to reasonable corrective actions.
What types of corrective actions? I support gradually raising the retirement age for Social Security another couple of years, raising taxes a bit for the middle class and a bit more for the wealthy, cutting unnecessary military spending substantially, and reducing health care costs by better preventive care.
I also advocate getting more persons to work at good jobs so that unemployment benefits (and Medicaid, SNAP, etc.) are reduced. In the short term, just getting many unemployed people involved in something like the WPA program that FDR's administration provided would let them be productive and develop some skills.
In summary, I support progressing toward the idealistic solution I mentioned earlier through gradual steps that include elements of the practical solution.
I think it can work. In my opinion, it would help if we had a lot of nonpartisan, independent people representing us in Washington, D.C. But even the partisan Democrats and Republicans will respond if enough voters speak out in favor of this compromise plan -- at least I think so.
What do you think? Do you have a solution that you think is better?