I came home from work this morning, opened the paper and saw that the government's credit rating was downgraded by S & P from AAA to AA+. AA+ is still the 2nd best credit rating, and I've been reading more than a few people say that, if anything, S & P did not go far enough. It's clear that our credit rating is more along the lines of an "F", as in total garbage. But this is a major story, and to me, the biggest indicator so far that, to quote Dubya, that "this sucker is going down".
Anyway, I post contributions from people on message boards that I read from time to time, and this is a good entry by someone with the screenname of Nergol from Dan Carlin's website, on how to manage our fiscal crisis.
The "Big Three" of budget items are Social Security, Medicare, and defense. Someone of a libertarian bent might classify all three as "welfare" programs of some kind or another, but the first two fit by virtually any reasonable definition. The problem with them is that they're simultaneously huge such that any talk of serious deficit/debt reduction is utterly moot without serious adjustments to one or all of them, and that all three have been regarded for decades as essentially untouchable for political reasons. We are now at a point where something has to give, and give in some very serious ways. We will now make deep cuts to one or more of these items, or they will bankrupt us, one way or the other.
My preferred approach would start with the following: I would turn the de facto Empire Department back into something that could honestly be called the Defense Department. I would close all military bases not on US soil, scrap the carriers, and send perhaps 2/3 of the active duty military home with honorable discharges and VA benefits. I would raise the Social Security eligibility age to 70, and enact strict means tests so that only the truly needy will receive benefits. I would restrict Medicare to US citizens only - legal aliens will have to be gainfully employed to the extent that they can receive coverage from their employers, and illegal aliens get nothing. Similarly, I would deny any government-funded benefits of any kind to illegals - sorry, we can't even afford to take care of our own. The only exception would be for emergency medical care - meaning roughly that we won't let you bleed to death in the street if you get hit by a bus, but if you get pancreatic cancer that will require half a million dollars worth of treatment, you'd better head back where you came from to get it. Is that harsh? Yes - but again, we can't even afford to take care of our own now, much less taking care of anyone who can power their way across the Rio Grande.
Beyond that are the relative small potatoes - I would, for example, kill agricultural subsidies, foreign aid, public broadcasting, the NEA, and the Departments of Education (which runs no schools and teaches no students) and Housing and Human Services entirely. Grifter "social organizations" like La Raza and Planned Parenthood - who prove without a doubt the validity of what Eric Hoffer said about what big causes degenerate into - would get zip. And no more corporate bailouts - of anyone, ever.
On the revenue side, I'd withdraw from NAFTA, GATT, and most other free-trade agreements, and enact sky-high tariffs against Chinese-made goods. What are they going to do - stop buying legitimate copies of Microsoft Windows? Fuck 'em. And fuck American CEOs who want to save money with labor arbitrage, too - let them open an iPad factory in Ohio instead of Shenzhen. And while I'm on the subject of labor arbitrage - I'd enact a fine of $25,000 per day, per offense, on any business that hired illegals, with half the money going to whoever reported it, and I'd allow unemployed Americans to sue companies that employed illegals in civil court for using illegal means to deny them employment. That should put some more Americans back to work. As for corporate taxes, the problem in America is not the rate (which is relatively high, by world standards), but the loopholes. Big corporations pay slick accountants to find ways to pay zero taxes. What Reagan did for income taxes in the 80s, I'd do for corporate taxes - lower the rates, but close the loopholes so they actually pay what they should. I'd enact an 95% tax on any income (not profit - gross income) made by any credit institution on loans (including credit cards) made at an interest rate over 10%. I'd legalize and tax drugs. I'd enact a modest national sales tax, and make up for it by eliminating capital gains taxes entirely.
Anyhow, that went longer than I intended, but you get the idea.