The concept is simple: Manage the federal budget much the same way we manage our own personal finances and everything will be fine. In fact, I believe, if sound financial principals are used, the federal government and, consequently, our economy will prosper beyond anything we have seen before in the United States.
Most of us have a set level of income. We make all types of decisions based on that income….what can we buy? How much can we save? What will have left over? What should we do in the future? Sometimes we come up a little short at the end of the month and sometimes we come out ahead. The bottom line is that the amount of money we make and have on hand directs how we conduct our financial affairs in the future. So why can’t the government show similar restraint? The simple answer: THEY CAN!!
In fact, we, the American people, should DEMAND that our government stop assuming that the money we pay them is rightfully theirs. We should insist that they treasure the money that our hard labor produced, show some restraint and make wise decisions. Any of us could be unemployed at any time, so we work hard to make sure we have a job and an income. We try to show the source of our income (our employer) that we are worth of the money they give us. That the money they give us produces an equal return of services on their behalf. That’s how our government should view the money we give them.
With that rather lengthy introduction in mind, I want to now share with you my solution for our current economic crisis…..which will, hopefully, prevent any future problems. First, I will briefly list the main points, then I will discuss them further:
1. Implement the Fair Tax
2. Create responsible borrowing guidelines for our government
3. Establish a transparent record of all government transactions
Disclaimer – My plan does not necessarily address reforming government spending. That is a whole different blog debate. However, if implemented, my solution will certainly bring the governments spending under greater scrutiny and, therefore, excercise a certain amount of control and influence over future expenditures.
1. Implement the Fair Tax – This step accomplishes 2 things: Provides the federal government with the same level of income they get now from all forms of taxes and puts money back in the hands of you, the taxpayer. Briefly, the Fair Tax replaces income, capital gains, corporate, death, FICA and Medicare taxes with a national consumption tax on all new goods. This is revenue-neutral for the government but will allow every American to take home his entire paycheck.
With the governments income back in the control of the people, we have instantly made the government accountable. Plus, the economy would see a tremendous boost from the additional spending by the citizens. Companies will come back to our shores, jobs will be created and the entire economy will be back on the road to unprecedented prosperity.
2. Create responsible borrowing guidelines for our government – This step will set forth restrictions and dollar limits on how much our government can borrow and for what purposes. We are all limited by our credit score and ability to repay and our government should be likewise limited.
First, the American people have a SURPLUS of almost $52 TRILLION in assets. I propose that we make our government borrow from it’s citizens and pay us all those dollars in interest payments ($239 billion in 2008) instead of paying it to foreign countries. The government should have to propose a CLEAN bill (no earmarks) to the Congress for an up-or-down vote. If the program passes Congress and is within credit limit guidelines, our government then is authorized to ask the American people for the money through loan guarantees at VERY competitive interest rates.
In case you were wondering, our national debt is just over $10 trillion…..I think we can cover that with our $52 trillion, don’t you? And I would certainly be willing to loan my government some money for a 5-7% return (today) and a promise to pay it back within a specified time period. How about you? But if they can’t get enough from the American people, we can allow them to seek other funding sources…again, within pre-set guidelines and limits. For example, no more than 10% from foreign sources. Afterall, we have access to credit for unexpected or extraordinary expenses, so I don’t see why the government shouldn’t have the same benefit…as long as we approve the spending.
Currently, the public holds a little over half ($5.8 trillion) of our national debt, but the rates are crap. Up the rates to a competitive level and they would probably get more takers.
I know that was long, but thanks for sticking with me! 🙂
3. Establish a transparent record of all government transactions – Finally, we, the American people, need to know what’s going on AT ALL TIMES. There should be a website specifically set up to chronicle, archive, track and debate any and all extra speding the government wants to initiate.
This website should post the full bill (which will be very short because we will require it to be CLEAN) and the full voting results. This website should also handle the loan request, which will have a descriptive name so citizens can pick and choose which programs they want their money to support. For example, let’s say the government proposes and Congress passes a bill to fund a new Consumer Protection bill. You got to the site, browse the list of government loan requests and select “Consumer Protection Department Funding Bill 2008”. You read the description, decide you like that idea because you got screwed on a bad washing machine and you loan your government $1000 dollars to help get it started.
How will the government pay you back? How about the extra tax revenues generated by the new national consumption tax and a country full of citizens with their full paychecks in their pockets? Or new tax revenues from the black-market sales that will now be taxed? Or the new tax revenues from tourists that come over here and purchase goods and services?
In conclusion, it’s a simple concept whose time has come: Let the people keep their money to bolster the economy and make our government accountable to those same people for their spending. Once again, a government for the people and by the people.
Please visit – http://www.fairtax.org