The elephant in the room for the United States is the staggering size of its federal debt, a result of decades of uncontrolled and reckless spending despite many promises of reigning in the cost of government and the funding required to pay for it. The simple reality is the federal government is both spending well beyond its means, and failing to collect enough revenue to pay for what it budgets year in and year out. This is true with both parties and there’s is very little to suggest it will end, especially with the latest Republican tax bill which actually INCREASES deficit spending while attempting to cloak those increases with legislative legerdemain. Bond markets are the ultimate arbiter of this fiscal reality and they do not agree with the sanguine assertion that the bill won’t create massive deficits and a much larger federal debt. It will.

A proposed solution is two fold: 1) Implement a credible, durable and balanced plan to reduce the debt over 10 years, using additional revenue along with reductions in government programs in order to share the burden, and 2) amend the Constitution to include a Balanced Budget Amendment that requires balanced budgets as federal debt exceeds 85% of GDP, a common measure of the level of government indebtedness. To be clear, the amendment does not prevent any borrowing by the government, just excessive borrowing, and even that can be done temporarily in case of emergency with a two thirds vote of Congress. It is the definition of limiting government, in this case the reckless piling up of debt that will have to be paid for by future generations, and a necessary companion to the government’s power to collect taxes.

The ideal nature of a debt reduction plan is to share the load across ALL aspects of the US while implementing policies that capture more of the revenue from a balanced taxation approach versus the polarized and often unfair reliance on income taxes, in other words implement what every other developed country uses, a consumption tax while reducing reliance on income taxes. Another advantage of a balanced budget amendment is that it will force elected leaders to work collaboratively and using consensus to reach compromise in achieving that balance.

Inevitably there will be requirements in order to reduce spending by the government, which will necessitate reductions in benefits and modifications in how those benefits are delivered. Some can be achieved by increased efficiency and eliminating misuse of services but others will have to address systemic issues that cause the inflation of the costs of these benefits. Entitlements incorporate inflation adjustments but do not recognize the reality that Americans are living longer and thus consuming more of these resources, while medicine is making huge strides in extending life but at a much higher cost. Adding mortality as an index to how benefits are administered should have been part of the original Social Security and Medicare bills, it’s a necessity now. Also, the cap for high income earners should be removed and the contribution limits raised.

It will also require the country to address it’s historical view of our defense department, a massive part of government spending, and our role in the world as a superpower based on the fact our military is the most powerful in human history. This cannot continue, at least not as it has to date. We cannot support a military that is predicated on the assumption we must fight a two theater war, we cannot support a military that has little if any control over the cost of its procurement and certainly little incentive to procure economically and efficiently, and we cannot continue an ethos of “going it alone” as an organizing principle. These issues with spending could be overlooked during the Cold War when there was an existential threat to the country, but that is no longer the case and our role as the only solution for the world’s defense of freedom should be replaced by a new reality that stresses ALL of our allies responsibility for defending freedom. The current administration recognizes that last part but not the first one. As we reduce our commitments around the world, we must reduce the size of our military. We must also reform how it operates, adopting a motto of doing more with less and being far more efficient in husbanding its resources.

In terms of revenue, a proposed solution should address three realities: 1) the nature of our economy is that of significant wealth disparity and 2) one where that revenue is unbalanced in its sources, 3) the US is the premier economy on the world, providing all manner of resources no other country can deliver, those resources should be reflected in the taxes paid by corporations. The first had been recognized and addressed for decades before 1980, the progressive nature of our tax system increased the amount of taxes collected from individuals as income went up to the higher tiers. After 1980, those income brackets were reduced and eliminated and the result was a skyrocketing of income inequality. Any solution should restore those higher income brackets while also eliminating loopholes that only the extremely wealthy can exploit in order to avoid paying taxes. In order to balance that action, we should also expand where we collect taxes and implement a consumption tax, similar to what every other developed country has. There should be credits and exemptions but countries far more left of the US have these taxes and found means of balancing the regressive nature of them. Lastly, the corporate tax rate should be raised to 30%, a fair compromise that balances the contributions the country provides for corporations with the incentives needed for a thriving and dynamic business environment.