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Politcally Incorrect Musings
How to pay down the national debt 
17th-Jan-2011 11:33 am
Money
The GOP will win the debt-limit fight

By Marc A. Thiessen
Monday, January 17, 2011

Let's be clear: Republicans have the upper hand in the coming fight over raising the federal debt limit. President Obama will push to raise the limit without giving Republicans the massive spending cuts they demand. But in the end he will cave. [...]

The national debt has grown by $3.4 trillion since Obama took office. According to the Congressional Budget Office, our public debt is now about 62 percent of our economy -- the highest percentage since shortly after World War II -- and could reach 87 percent of our economy in just 10 years. Now, after maxing out the nation's credit card, Democrats are asking Republicans -- who just campaigned on a promise to reduce the national debt -- to bail them out by raising the debt limit. If Republicans do so, Democrats must agree to significant cuts and spending controls in exchange. [...]

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Raising the debt limit without a budget implies that the money has already been spent - or is being planned on being spent. I say freeze it and let's make the government "sacrifice" their little pet programs, for once. Force the government to only fund the very basics. A freeze on the debt limit will NOT cause the government to collapse. Since Obama has taken office, the national debt has increased approximately $11,040 per person in the US. That is the INCREASE, not the total amount of debt. Since the ability to finance the national debt is based on the productivity of the people, that is a hefty burden per person.

Now consider that about 20% of the population THAT IS EMPLOYABLE is unemployed or underemployed. Scared yet?

I don't care where you stand on government health care - we can't afford it. Period. But, this post is not about that. This post is about how to pay down the national debt and I have a plan. It is not complete, but it is a start.

The current share of the national debt - per citizen at the time of this writing - is $45,036.04. What if (and it is a BIG "if") people were allowed to pay off their share and then not be taxed again for a long long time. That is, someone pays off their share of the national debt and then they don't pay federal taxes again for the next (just tossing out a number, here) 20 years. No federal taxes. No accrual of them, either. After the time is up, then taxes are filed and paid as normally done. In the meantime, the federal debt ceiling is also frozen for a similar length of time and spending cuts are strongly employed.

Obviously, this is not a perfect plan. Young people get saddled with the same amount of debt as the older generations. Clearly, they didn't contribute the same amount to the national debt since they simply were not alive that long.

Then you have all the people griping that the rich are STILL not paying their "fair share" (by who's determination is the criteria for "fair"?) since now they don't have to pay ANY taxes (even if only for a limited time) and the lower income folks still have to file annually.

I did mention that this is the START of an idea. This monster needs more flesh.
Comments 
17th-Jan-2011 08:41 pm (UTC) - Fuel for the fire
Just had another thought (yeah, it hurt - har har har) - what about taking out a bank loan to pay your portion if you don't have the cash to pay outright? If the tax free term is 20 years and you take out a 15 year loan, you get five years of no federal taxes!

Plus, this gives the banking industry another interesting financial instrument to play around with. Think of how much extra money you would have each paycheck to play with.

But something interesting also happens. Some states fix their taxes to a percentage of federal taxable income. After you pay, you don't have have an federal taxable income. Your state tax goes to zero.

This would mean that states would have to tax you on the calculated amount of federal taxable income you would have to pay on as if you didn't pay your portion of the debt. This still results in a larger paycheck and keeps the accountants employed.

Let's say you invest the extra money. State revenue would increase as your total income rises due to addition of your investment derived income. You STILL take home a larger paycheck even though you are not getting out of state taxes.

What if your state (if it has an income tax) implemented the same tax program? The only thing you'd be paying is sales tax on the things you buy! Ka-ching!
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