U.S. debt peaked during World War II. After the war, it began decreasing until it leveled off with the reduction of higher marginal tax rates under JFK and LBJ, and providing both guns and butter for Vietnam with no sacrifice from taxpayers to maintain our defense budget. After a period of stability, the deficit began a period of out-of-control acceleration during the Reagan Administration as a result of trickle-down economics and the reduction of the tax rates for the wealthy and corporations. The deficit has continued to rise ever since, save for a period of stability during the Clinton years. Today, it is at an unhealthy level with an unsustainable increasing trajectory.
Paul Kennedy analyzed the factors leading to the collapse of great nation-states from 1500 to 2000 in his 1989 book, The Rise and Fall of the Great Powers. When addressing whether or not the United States could avoid a fall similar to those of other historical world powers, he offered that it is possible if we avoid serious debt (spending more than we are taking in) and if we avoid foreign wars and conflicts. We have done the opposite on both counts.
Senator Robert Corker, R-Tn, recently said:
“The greatest threat to our nation is not North Korea, or Russia, or even ISIS. The greatest threat to our nation is our inability to get our fiscal house in order, and it is absurd that Washington continues to turn a blind eye to the dangerous crisis staring us in the face. We are now $20 trillion in debt and that number will increase $10 trillion in the next ten years unless we have the courage to put a fiscal straitjacket on Congress.”
So many economists, analysts, and elected officials from both sides of the aisle agree on the importance of curtailing government spending. Here are some concrete things we can do to reduce our debt:
- Not starting unnecessary foreign wars such as those in Afghanistan and Iraq; if we had not begun these wars, we would have avoided approximately $4 trillion in direct and indirect costs of wars since 2001.
- Reducing the out-of-control military-industrial complex spending Dwight Eisenhower deeply warned us of that has led to the U.S. having nearly 1,000 major military bases on foreign soil and a $1 trillion dollar expansion of the nuclear program we should be reducing. The reduction of military spending could first reduce our debt and then provide funding for vitally important programs such as healthcare, social security, job retraining, vocational and higher education and research on job creating technologies.
- Ending fossil fuel subsidies
- Requiring competitive bidding for all health-related services and products under all federal programs including Medicare, Medicaid and veteran care.
- Creating a single payer option under national health care to determine its savings potential and quality of care.
- Enacting a carbon tax
- Ending the provisions/actions that allow pharmaceutical companies to extend their monopolies.
- Increasing the early Social Security retirement age of 62. When social security was established, the average lifespan was less than the retirement age of 65. As life expectancy increases, we need to adjust the retirement age accordingly.
- Reducing unnecessary farm subsidies for major crops like wheat, corn, soybeans, rice, and cotton.
- Instituting progressive taxation of personal income with a peak rate of about 50% for the highest earners. (The peak rate was as high as 92% during the Eisenhower administration; Germany, England and Canada currently have progressive taxes with a peak rate of about 45%).
- Elimination of both individual and corporate tax loopholes, including tax evasion/havens abroad and in Delaware and Nevada, prosecution of cases of tax evasion Continuation of the inheritance tax recently eliminated by Congress.
- Maintaining the existing 2017 “effective” (the term for the actual rates paid by corporations after deductions, loopholes, etc. are taken into account) corporate tax rates at today’s rates (which are comparable to those of England, Germany, and Canada mentioned above) in order for our corporations to be competitive.
- Decreasing taxes on the low and middle income population. What leads to more employment is not trickle-down economics but money in the hands of our middle class and poor who will spend it, stimulating the economy and creating jobs in the process.
- Creating a tax on Wall Street speculation [link: http://marketbusinessnews.com/financial-glossary/speculative-investment/ ]investments (those that are strictly playing value swings to make money) like those in Germany, England, and France.