20 Trillion in Debt. This is the most indebted any nation ever has been.
The debt is 165,000 for each taxpayer. This year we will add 685 billion in debt.
You cannot cut the budget and ever get out of this. A simple solution is impossible. So what can Trump do? Oh Golden Eagle save us!
The very first step is to get rid of that yearly debt. So we need to increase taxes by 350 billion and cut the budget by 350 billion – the meet in the middle strategy.
Except, everyone is all taxed out. We need to switch our government income back to Tariffs. No it won’s start a trade war, most nations already have direct and indirect tariffs against us. Starting with a 10% flat “security fee” – don’t ever call it a tariff – and it does make sense that we have to pay for additional security with anything involving borders – well how much would that bring in?
Well officially we had 2.7 trillion in imports of goods and servives. So the 10% fee would bring in about 200 billion.
Now look at US trading data. We trade about 42 Trillion a year. so a 1/10th of one percent “deficit reduction fee” would be 42 billion a year. It helps.
Allright, so we need another 110 billion to meet our goal. Our income tax revenue is abotu 1.5 trillion. So we just need to raise taxes 10% . And this should be on the top earners not the middle class.
Now, what can we possibly cut? Well for one the department of education needs to go. Even Reagan ran on getting rid of it.
We need to unify our security agencies. We have 28 different ones. It’s far to many. Plus it makes communication hard. The CIA has been doing the most nefarious things. They should cut cut in half and rolled into the FBI as the FBI Foreign wing. Kill the agency which is sucking up all the internet data and phone calls. Yah, they will never go for that, but since ITS ILLEGAL, it needs to go. Point is, there are things to cut.
Now, once we have our spending matching revenue more or less, with 10-20 billion for emergencies each month, then we still need a plan and strategy to get the debt paid off.
One way is to move the federal reserve under the department of the treasury. Then the Treasury can issue currency directly without issuing it as debt. This parallel system should be used to pay back the redeemed treasury notes which we use to finance the debt. So it’s a bit like quantitative easing but more direct.
This might amount to an increase in the M2 money supply by around 500 billion a year and it would take 20 years to reduce most of the outstanding debt. The rest at that point can be transferred in one shot to a new security. Because it is gradual it should keep a stable currency and we need to expant M2 for growth regardless. This first expansion of M2 without debt based currency will have positive results for the economy. You can’t just print up 20 Tril and pay it off in one stroke, the dollar would get hit with massive inflation. So this gradual retirement approach will work, as long as they maintain the balanced budget.
How difficult this is should tell all the Lefties and Antifa that they are wrong, america is not a rich country with resources for welfare for the entire world. Hardly. In fact the truth is we need to cut back 20-30% if we are going to reach a plan which returns us to normalcy in 20 years.
and what about those 150 Tril in unfunded liabilities. We have to hope that the other reforms discussed in this book can lead to enough of a reversal and renewed growth to get us over those issues. There’s still time. But only for another few years. The first crisis which forces interest rates UP will bankrupt the government.