We've all been anxiously awaiting that moment when Washington gets out of its own way and proclaims that they've solved this whole fiscal cliff thing. It seems as if we are gripped in a fever of uncertainty about a rather ambiguous benchmark that few level-headed people think we have any chance of actually passing. In all likelihood Congress will push the matter further down the road and breathe easily in the time they give themselves.
The problem, as you may have heard, is that there are a whole lot of people with a whole lot of opinions and views on the issue of deficit reduction and tackling our national debt, and they don't seem to agree on much of anything except that we have to deal with it NOW. But how we go about it, and whether we will have compromise in Washington, seem to be the hot topics these days.
One school of thought, which mostly covers Republicans, is that we just need to cut spending and reform our entitlements. Reduce the size of government, and the deficit will take care of itself. There's also a prominent arm of this philosophy which says that we can simultaneously lower tax rates to boost economic productivity, further helping out the debt issue.
The other side of the coin, of course, is that we can raise revenues by increasing taxes. Those who support this view, mostly Democrats, believe that we can raise rates on the wealthy and solve all the issues.
There are those on the Left and on the Right who say that the other is wrong. There are those who are in this for themselves. Truth is, the answer lies in the middle.
For one thing, raising taxes won't solve the issue. At least, not on its own. Everyone knows that. Similarly, closing tax loopholes, as Republicans like to pretend is useful, would do nothing except harm the middle class. Slashing spending to get rid of our deficit is not a solution on its own either. Besides, no lawmaker in their right mind would cut our way out of debt, especially now.
Truth is, we need a balance. It's not going to be nice, but it will be successful. Keep in mind, this is my view of what we can do to cut our spending, boost revenues, and balance our budget without the pain and suffering that will be imposed by other programs.
First, we have to raise taxes on those who can afford it. That can't be avoided, but we can do it smart. For one thing, we can diversify that top tax bracket so that those who make $250,000 a year are paying a lower rate than those making $250,000,000.
Second, we clean out regulations and beuracracy, and streamline the system. That means we combine offices, make the system smoother and easier for companies and individuals to navigate through, and save time and money in the process.
Third, we cut spending on programs that are overfunded, and relegate those funds to programs that need it. We also make sure that our social programs (Social Security, Medicare, etc.) are appropriately funded. While we do that, we look for ways to streamline the red tape that prevents those programs for their full effectiveness.
Fourth, we reinvest in American infrastructure. Putting people back to work repairing and building new roads, bridges, power grids, and so on. We can bring our failing system of mass transit into the 21st Century. I know it would cost money up front, but it would save much more in the long run.
Fifth, we invest in our future: education, green energy, new technologies, research, etc. We make America the place to do business and research again. We turn ourselves into a producer nation, not a consumer one.
Finally, we keep the ball rolling. That means, we get this plan moving, and we don't let political extremists from either side of the aisle hijack it and turn it into a piece of political artillery. We make sure that we elect common-sense, even-minded representatives who are willing to work together for the benefit of everyone.
That's it in a nutshell. Sure, there's a lot to do, and it seems insane in our current political climate. But you know what? We can do it. All we have to do is begin.