Think you know how to fix the federal budget deficit? The New York Times has posted an interactive tool that lets you take a shot at it.
The Times gives you 40 different options to play around with, including spending cuts in areas such as the federal government payroll, the military, Social Security and Medicare, and revenue increases of various types.
With about 15 minutes of tinkering I was able to wipe out the deficits (both the short-term one of $418 billion by 2015 and the long-term one of $1.345 trillion by 2030) without cutting Medicare or raising the Social Security retirement age, although I did opt for reducing the rate at which Social Security benefits would increase with inflation for upper-income recipients. I also avoided cutting the federal workforce or the pay of federal workers, but agreed to eliminate earmarks and farm subsidies, saving $14 billion on each.
The big long-term savings came from cutting $180 billion from defense spending and saving another $169 billion by sharply reducing troop levels in Afghanistan and Iraq. (The option of pulling all the troops out, unfortunately, wasn’t offered.)
On the revenue side, I went for a bundle of tax increases totaling $724 billion. These included returning the estate tax and capital gains and dividends tax to the levels that existed during Bill Clinton’s administration (raising $150 billion), allowing the Bush-era tax cuts for people making over $250,000 a year to expire but keeping the cuts for taxpayers below that level ($115 billion), raising the ceiling on payroll taxes for Social Security and Medicare ($100 billion), and levying a carbon tax ($71 billion), a tax on big banks that make risky investments ($193 billion) and a 5.4% surtax on incomes above $1 million a year ($95 billion).
Politically, of course, enacting even a small portion of these tax increases will be impossible, especially with the Republican / Tea Party gang in control of the House. But crunching the numbers was a useful exercise anyway, if only to demonstrate that the deficit can pretty easily be brought under control without making draconian cuts in programs that matter to ordinary Americans or imposing tax increases that would cause pain to anybody who’s not a multimillionaire or billionaire.
The interactive graphic also demonstrates that it’s impossible to make even a small dent in the deficit without cutting defense spending, Social Security and Medicare or raising any taxes – so any politician who tells you he can do it is blowing smoke.
This article appears in Nov 18-24, 2010.
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In your last paragraph, you say that the key changes require cutting defense spending, Social Security, Medicare, and raising taxes. You don’t mention what you did with Medicare, and you only said you decreased the Social Security COLA for upper-income recipients.
How much did these two items save?
HBM: “The big long-term savings came from cutting $180 billion from defense spending and saving another $169 billion by sharply reducing troop levels in Afghanistan and Iraq.”
Obama’s 2010 total defense department budget was $664 billion which INCLUDED $130 billion for ALL operations in Iraq and Afghanistan (see defense.gov). So you would cut over 50% just like that, no problem…and only you could reduce by $169 billion something that costs $130 billion.
But you would not decrease the federal workforce or decrease federal pay. Think rationally for just a second, HBM. How do you reduce defense spending by over 50% without reducing the civilian federal workforce that provides much of the backbone for support operations/supply chain management for the defense department.
And you think a carbon tax of $71 billion “would not cause pain to anybody who's not a multimillionaire or billionaire.” Well if you do the math, HBM, $71 billion is about $200 per year for every man woman and child in the US or about $800 to $1,000 per year per family.
Typical brain-dead liberal elitist logic.
Please explain to us all how the military is not a program that matters to “ordinary” Americans. A strong military matters to every American.
I can’t wait to hear this.
“In your last paragraph, you say that the key changes require cutting defense spending, Social Security, Medicare, and raising taxes.”
No, what I said was that we can’t make a dent in the deficit without cutting defense OR Social Security OR Medicare OR raising taxes. It isn’t necessary to do all of these things, but we have to do some of them.
I didn’t call for any cuts to Medicare. Decreasing the Social Security cost of living increase for more affluent recipients would save a projected $6 billion by 2015 and $54 billion by 2030.
“Critic”: “Obama’s 2010 total defense department budget was $664 billion which INCLUDED $130 billion for ALL operations in Iraq and Afghanistan (see defense.gov).”
That’s for ONE YEAR. I was talking about projected savings over a period of 20 years.
“Well if you do the math, HBM, $71 billion is about $200 per year for every man woman and child in the US or about $800 to $1,000 per year per family.”
Population of US: Approx. 307 million.
$200 x 307 million = $61.4 TRILLION (not $71 billion)
Furthermore, the projected revenue of $71 billion is for 20 years, not one year.
You’re the one who appears to need a remedial arithmetic course, Einstein.
Jegglie: “A strong military matters to every American.”
Yes, but I believe we can achieve that without spending more than all the other countries of the world COMBINED on “defense.”
Please, please HBM. Don’t doubt me. Take $200 times about 350,000,000 people and you get $70,000,000,000. That number is $70 billion not trillion. Or use your number of 307,000,000 times $200. That equals $61,400,000,000 which is $61.4 billion, not $61.4 trillion.
Billions/trillions what’s the diff?
“Critic”: Okay, ya got me — I added too many zeroes. But you’re still off by a factor of 20, because the $71 billion is 20 years’ worth of revenue, not one. So the annual cost per capita is $10 — not exactly back-breaking. And that cost is not going to be equally spread among everybody.