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The Deficit Commission Set up by President Obama to study ways to reduce the federal deficit has delivered a draft of their proposal. I believe the commission wants to send it up the flagpole and see who salutes. I don't think anyone is going to salute it because it just blew away in the wind. It comes up light. Its as if they have been doing nothing and just threw something together last night. Here is a list of the highlights.
- Phase in federal spending cuts
- Cut farm subsidies by $3.0 billion
- Freeze federal salaries for three years
- Cut foreign aid by $4.6 billion
- Eliminate all Congressional earmarks
- Freeze pay for civilians in the defense department
- Cut federal workforce by 10%
- Eliminate 250,000 non-defense service/staff contractors
- Repeal Alternative Minimum Tax
I see a lot of words like cut, freeze, eliminate, and repeal. I like the idea of eliminating 250,000 workers. Cutting the federal employees by 10% is a good start. Cutting cash payments like farm subsidies and foreign aid would save money immediately.
What I don't like is, it's not enough. We are on the precipice and these folks are giving us a cup of coffee. We need systemic changes, it's not business as usual anymore. We need whole departments cut. Budgets need to be cut. Salary's need to be cut. We need painful reductions in government.
Here's the harder stuff:
- Raise social security retirement age to 68
- Cut $100.0 billion in defensive spending
- Raise gas tax by $0.15
- Eliminate mortgage deduction for mortgages $500,000 and more
For the repeal of the mortgage interest deduction, new tax brackets will be instituted.
Lowering tax rates is a no cost stimulus plan. People will spend that money and more jobs will come from it. Raising the social security age to 70 years old would make more sense. It would help social security by making people pay in longer and receiving less benefits. Cutting defense spending is a hard to do but would reap the the biggest rewards. I am sending the Deficit Commission back to the drawing board. Give them a sharper knife and tell them to cut deeper. If these guys were cutting my turkey I would not have enough meat for a sandwich.
I like how almost everyday in the news cycle there are stories about the financial mess we are in. When something is in the public eye as much this is, it begins to sink into the culture. Wherever the politicians turn these days, the deficit is the main subject. It's not going to be swept under the rug anymore.
