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Seven Ways to End the Deficit (Without Throwing Grandma Under the Bus)


Society & Culture  (tags: activists, americans, corruption, culture, dishonesty, education, ethics, family, freedoms, government, law, politics, religion, safety, society )

Kit
- 718 days ago - truth-out.org
My colleagues at the Institute for Policy Studies (IPS) have identified seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.



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Kit B. (276)
Friday September 7, 2012, 11:59 am
(Image: Jared Rodriguez / Truthout; Adapted: SqueakyMarmot, teresia)


This fall, the U.S. Congress is going to wage a pitched, dragged-out battle over cutting roughly $120 billion a year to solve the so-called deficit crisis. Vital things like teachers' jobs and Medicare could well get cut.

The Right is already launching new coalitions to push for an austerity budget, calling for cuts in "wasteful government spending," including key safety-net programs like Medicare, Medicaid, Social Security, and food stamps. America has overspent, they say. America is broke. But at the same time, they are calling for an extension of the Bush tax cuts and ruling out cuts in military spending—both policies that will increase the deficit.

It doesn't have to be this way. My colleagues at the Institute for Policy Studies (IPS) have identified seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.

These proposals, from the IPS study called "America is Not Broke," would also address the two deficits that author David Korten says do more to erode our society than the fiscal deficit does: our social deficits (rising poverty and inequality) and environmental deficits (starting with the climate crisis).

More Fairness, Less Deficit

Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.

1. Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.

2. Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands.

3. Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.

These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn't have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.

More Green, Less Pollution

The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.

4. Tax Pollution: $75 billion per year. A tax on the carbon content of fossil fuels would reduce our dependence on oil while cutting air pollution and emissions of greenhouse gases. And, as economist Robert Frank pointed out on August 25 in The New York Times, "News that a carbon tax was coming would create a stampede to develop energy-saving technologies."

5. End Fossil Fuel Subsidies: $12 billion per year. This call should unite left and right. Why would anyone want to maintain a giant government subsidy to an industry that is the world's major contributor to fossil-fuel emissions? 350.org has made this a centerpiece of their work. We should be able to win this.

More Savings, Less War

Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.

6. End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.

7. Close a third of our overseas bases and our Iraq operations: $21 billion per year. Over two decades after the Cold War ended, the United States still maintains roughly 1,000 military installations in other countries. A majority of the President's own deficit commission, which includes three Republican senators—the National Commission on Financial Responsibility and Reform—backed a proposal to close one third of our overseas military bases.

These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.

In other words, this plan could help erase the nation's dangerous social and environmental deficits.

Many groups—from Jobs with Justice to National People's Action to the AFL-CIO—are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation's safety net. Let's up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.
****


By John Cavanagh, Yes! Magazine | Op-Ed | Truthout |
 

Kit B. (276)
Friday September 7, 2012, 12:02 pm

If only we could lose our addiction to Oil and War, then we could follow some of the steps and finally again know an era of peace and prosperity.
 

Brian M. (145)
Friday September 7, 2012, 12:04 pm
Excellent article, I read it on yesmagazine.org just the other day.
 

Sandra M Z. (114)
Saturday September 8, 2012, 12:22 am
Great Truthout article that shows how simple it really is, to bring America back to solvency and prosperity without sacrificing anything we need.

Noted, Thank you Kit.
 

Betsy Bee (1047)
Saturday September 8, 2012, 9:13 am
I believe in my heart of hearts, there are followers of Ayn Rand among our country's leaders who want to throw grandma under the bus for the perfidious reason that she is grandma.
 

Jae A. (323)
Saturday September 8, 2012, 9:39 am
We can start that ending of our addiction to oil and wars by ending the careers of GOP congress persons and those of local and state political office with each of their up coming elections...in my opinion :-).
 

Ioannes J. (1)
Sunday September 9, 2012, 8:05 am
Is great to cut national debt and end military Waste. My question about security on #6. Is national security or some thing else (security)? Definition of security to bi partisan government????

6. End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.

In opinion, bi partisan is planning to cut vet medical benefits, hurt those soldiers return from all wars.

2ndly, Loophole in Tax the Wealthy Fairly, and Tax Pollution.

3rd. If Tiny Tax Wall Street on tax on stock and derivatives transactions. Tax on stock and derivatives transactions for people have stock over a certain limit. People stock under certain limit (
 

James Travers (45)
Sunday September 9, 2012, 8:30 am
haha Blasphemy! If you take one dime from the bloated defense budget we will be over run by Commies or Muslims or Russians or Romulans or somebody we haven't thought of yet. Unfortunately loannes J is probably right. If they do trim some of the waste from the defense budget it will most likely come from VA medical benefits.

How about this addition? Tax any multi million dollar campaign donation 50%
 

Stephen Brian (23)
Sunday September 9, 2012, 9:14 am
Hi :)

I've seen these proposals before and they mostly run into major problems. Before going into them, I should probably point out the reasoning behind the Bush tax-cuts: They are intended to work as a stimulus and help the economy grow enough so that even with lower tax-rates, total net-revenues (including reductions in welfare-spending as jobs are created) would rise. From what I understand, according to people who have studied the effects of tax on growth, this is exactly what has happened and that is why Obama did not end them, no matter how popular that would have been. Now, on to the proposals themselves:

1: Stock-trading is an extremely mobile industry as it functions entirely electronically these days. Depending on how the tax is structured, taxing those transactions would either just lead to the stocks being traded elsewhere, outside the U.S., or just send the trading-accounts out of the country, reducing tax-revenues either way.

2. what exactly constitutes an abuse and how would it be fixed? The regulations allowing tax-breaks exist for a reason. Unintended loopholes may be closed, but that is an extremely delicate procedure. Insufficient aggression in that regard would simply make use of the loophole more expensive, harming the company without actually recovering any of the funds for the government. Excessive aggression on some of the big ones could actually shut down entire industries with a single law. Professionals maybe able to handle this sort of thing, but not ones who are sensitive to politics, and those laws would be written either by politicians or people who answer to them.

3. A $79 billion tax-raise on the rich would reduce the deficit by roughly 7%. However, the tax-structure as it stands is intended to promote growth. I should probably also point out that Buffet never actually released any documentation supporting his claim (tax forms) despite being asked to do so repeatedly. Regarding the healthier and more peaceful societies, the correlation is due to a common cause (governmental corruption), not a direct causative relation between income-inequality and the problems noted. In fact, U.S. violent crime-rates have continued to drop as the inequality rose (though I read recently that the current drop in crime-rates began roughly 15 years after the Roe vs. Wade ruling, so that may be a confounding factor).

4. News that a carbon-tax is coming would not create a stampede to develop energy-saving technologies. To say this, Robert Frank must have absolutely no idea how technological development works, and how risk-averse big companies often are. It would recreate the stampede to outsource manufacturing. Again, this would actually raise the deficit.

5. The biggest tax-breaks on fossil-fuels are, ironically, the major "green energy" subsidies. They are for generating energy from sources not formally listed as U.S. energy-reserves, and those other sources include things like shale oil. How do we eliminate one set of subsidies without the others which arise from the same regulation? Making more complex regulations, constrained by law, would probably just create another loophole or kill green energy, just like with changes to tax-loopholes.

6. There is definitely waste within the U.S. military and cutting it would not only not harm U.S. military capabilities, but may actually help them quite a lot. They have a massive overabundance of officers and general staff with high salaries crowding the chains of command. They have weapons-programs which Congress structured as jobs-programs, selling their votes for mandates to produce parts in many different states and reducing efficiency and putting the entire programs at risk if one state's part of the program runs into trouble. However, not all of the waste can be eliminated: Extreme cases of waste may in fact be the covert operations-budget. With the ways wars are now often fought, the army may need to buy another, say, five thousand million-dollar wrenches from a front-company owned by the military each year to fund an additional $5 billion worth of covert operations.

7. Consolidating logistics-operations within fewer countries and locations would probably save a lot of money. It does put U.S. military power-projection at the mercy of allies' politics, though, and that can be an issue, as was demonstrated in New Zealand where a ban on nuclear reactors prevents a lot of U.S. naval ships, which technically have docking-rights under military-treaties, from exercising those rights due to on-board weapons or reactors.

Even if all of these had worked, I added up the deficit-reduction and it came out to about $550 billion. The deficit is over double that. There are a lot of good people trying to find effective ways of reducing the deficit. The sad fact is that, at this point, there will have to be very painful cuts to reduce it substantially.
 

Elm Morrison (357)
Sunday September 9, 2012, 10:46 am
The munitions makers will NEVER allow the expenditure on arms to decrease by any significant amount. After all the weapons of death is their 'stock'. If no one wants their stock they will go out of business.... And if there is no war they will - and have done so in the past - manufacture a war. A brilliant site for more info on the 'bankers/munitions' conspiracy is: http://www.divinecosmos.com Every single item on this website is backed by fact - not crowd hysteria and neither by hocus pocus science.

And then on a completely different note, but very applicable to saving dollars in America: Fast foods are killing Americans. The health expenditures have risen exponentially - lots of statistics for this. Eat healthy = cut medical costs. A fantastic book to read about this is: "Eat to Live" by Dr Joel Fuhrman, M.D.

Thank you Kit for this article. As always your articles certainly tickle the brain cells.
 

Kit B. (276)
Sunday September 9, 2012, 11:59 am

Your right of course, Eureka but for a while we can still try for peace. Yep, I think Americans know that and make the choice to ignore the information. I hear people tell me that can afford McDonalds and not the grocery store. Maybe that is true for one meal, once a month but they are hurting themselves and their children by not cooking at home. Then again, some don't know how to shop or cook.
 

Phyllis P. (422)
Sunday September 9, 2012, 1:22 pm
Seems so simple. Even if one or two of those things did not work...even trying the ones that would work, would help. Never going to happen, sad to say.
 

Stephen Brian (23)
Sunday September 9, 2012, 2:00 pm
Hi Eureka :)

I know what you mean about fast food causing so much trouble: I live in a college town with a lot of students who are worried about their finances, and keep telling newcomers that the easiest way to save money is by going to the grocery store and preparing food oneself rather than going out to eat (or using a meal-plan for undergraduates). I ran the numbers, calculating my average cost-per-meal and comparing it to fast food-prices. The difference is thousands of dollars per year in favour of preparation at home, and the diet is better too.

There actually is a major research-initiative in the U.S. military to reduce the cost of munitions. Part of the objective of the rail-gun project is to replace short-range self-propelled missiles with artillery-shells, which are vastly cheaper. The missile-makers may not like it terribly much, but it's a buyer's market so they don't get to dictate terms. Besides, they could just sell their stock to other countries, make the new shells which are vastly cheaper to produce, sell them at a higher profit-margin despite lower prices, and maintain their profits very easily.
 

Azle B. (17)
Sunday September 9, 2012, 2:07 pm
If we limited the tax exemptions for retail stores and religious property owned by the churches we would have more money to pay off the deficit.
 

Past Member (0)
Sunday September 9, 2012, 2:16 pm
Good article.
 

Elm Morrison (357)
Sunday September 9, 2012, 2:47 pm
@ Azle

I am not in favour of any tax exemptions. There is no such thing in reality. There is always a balance. If you give to someone you have to take from someone. There are no free rides in life. It is a perception error. And any government that continues to sustain such policies are digging a pit for the mainly middle classes - because these are the people being taxed to death to pay for the freebies so graciously handed out. Every time I hear someone demand something for nothing I think of what I pay in taxes...... My next thought is always along the lines of the historical 'Boston Tea Party'. There is a deficit only because government makes free with money they are stealing from those they are meant to serve, namely the people! How in God's name did we ever give our lives away, our responsibilities away and then when we are forced into abject poverty and unasked for wars we have the gall to cry out against the so-called injustice? We reap what we sew...... I'm not just raving about America here - my country is no better off. Fool's gold, all around.....

If one gives freely it is not paying out on demand - whether it be time or goods, skills sharing or money. Democracy does NOT work - it is an allusion of having a say. Thug rule can be and is in most cases the general rule. Now and again an honourable politician comes to the fore, only to be either voted out in the next round or murdered, but even these good people often foul their own nests, to the detriment of the nations they are supposed to lead.
 

Lois Jordan (55)
Sunday September 9, 2012, 5:44 pm
Excellent article, Kit, I agree 100%. Cuts are already in place for the Pentagon, but Republibots are fighting against them....although they already agreed to them. Typical. These won't impact our veterans....just the Military-Industrial-Corporate complex. With the surveillance state fully underway, there is no threat to national security whatsoever with these cuts. The threat is to the economic security of the ever-shrinking middle class.
 

Kit B. (276)
Sunday September 9, 2012, 6:09 pm

For two years the Congress has come to a grinding halt while the republicans wait it out and turn down any thing requested by the administration. This attempt to make it look like it's the fault of the administration while the Congress sits on their butts doing nothing has backfired. So it should. What utter nonsense. These obstruction-nitsa should all be fired, they have lived off the political free-ride for 2 years of game playing. No jobs bill, it might make Obama look good, no tax bill or any thing else addressed while this guys and gals sit around doing nothing. People you should be angry, it's not a band aid situation it's a recovery from an very serious economic hit. Is any one dumb enough to think a president can fix it in 4 years?
 

Mary Donnelly (47)
Sunday September 9, 2012, 6:16 pm
Thanks Kit. As usual great post.
 

Tal H. (8)
Sunday September 9, 2012, 6:23 pm
Thanks for the share
 

marie Taylor clarke (166)
Sunday September 9, 2012, 6:31 pm
Thanks Kit
 

Gloria H. (88)
Sunday September 9, 2012, 6:32 pm
throw Grandma under a bus? Under public transportation? Shove her in front of a Repub's Lexus! At least it may make them stop for a while to clean off the windshield.
 

Kit B. (276)
Sunday September 9, 2012, 7:29 pm

Thanks Gloria, I need that chuckle.
 

Christine Stewart (131)
Sunday September 9, 2012, 8:02 pm
Now if we could just get someone in the government to read this article too!
 

Kit B. (276)
Sunday September 9, 2012, 9:22 pm

I mailed to my Senators and Congressman and a copy to the White House. Just wish any of them would now read it, okay that's asking too much.
 

Esther Z. (101)
Sunday September 9, 2012, 10:17 pm
Stephen wrote, "the reasoning behind the Bush tax-cuts: They are intended to work as a stimulus and help the economy grow enough so that even with lower tax-rates, total net-revenues (including reductions in welfare-spending as jobs are created) would rise. From what I understand, according to people who have studied the effects of tax on growth, this is exactly what has happened and that is why Obama did not end them"
Well, based on a Forbes article, the Bush tax cuts only produced 4.5% to 7% job growth from 2001 to 2008, and this growth was prior to the U.S economy falling off the cliff during late 2008. The job growth figures were based on the Current Employment Statistics Survey (CES) and theCurrent Population Survey (CPS).The Bush Administration's single digit job growth was LESS than what other two term presidents produce without ANY major tax cuts. So, what does this tell us? Well, for one, tax cuts as a stimulus for job growth only benefits the rich, er, I mean the "job creators", and that a tax cut as a stimulus is yet another Repug myth perpetuated into the American conciousness ad nauseum.
 

Susanne R. (249)
Sunday September 9, 2012, 10:30 pm
I couldn't help but notice that every single one of the seven steps would affect either Wall Street, Big Energy and/or the military/industrial complex. I think it's safe to say that, other than the very poor decisions made during the Bush administration, they created the lion's share of the problems --so let them pay for their resolution!

I'd love to give you a star, Esther, but the system won't let me --yet! Thanks for posting this terrific article, Kit!
 

Elaya Raja (39)
Monday September 10, 2012, 12:00 am
Thanks: Noted
 

Past Member (0)
Monday September 10, 2012, 9:03 am
Hvala,odlican clanak.
 

Micheael Kirkbym (85)
Monday September 10, 2012, 9:12 am
Interesting ideas but they will meet obstacles with whichever party is in power. Taxing the rich is all fine and well but not very effective as these people have more loopholes and investments to hide their resources in. Buffet will still pay less taxes than his administrative assistant.
Glass-Steagall would remove the unfair advantage that investment banks have over commercial/public banks. It would also be a precursor to actually taxing all major commodity trades made. Closing the loopholes allowed under the Delaware/Kraft structure wherein major investors; politicians and corporations take advantage of paying no tax or little tax at all would also increase revenues. Last but not least; if you shut down the FED and place the American currency back under the control of the US government and treasury department it would feed the 17% tax on every Fed dollar issued back into American coffers instead of funneling it into international bankster coffers. Fourthly, war is the greatest drain on any economy. It takes ten to fifteen years for an economy to stabilize after an extended conflict. The US army should be returned to its Constitutional purpose of defending the American nation and not building hegemonic empires for the sake of international Corporatist kingdoms.
How about a green tax on all major energy firms and manufacturing corporations who have polluted the environment and have as yet failed to clean it up? National green cleanup programs could be financed throughout. It would create jobs; stimulate the local economies and reduce unemployment.
The new bailout asked for by Obama should not be granted. He should have employed the austerity measures back in 2008 that he wanted the EU to employ. It would have been tough but you would be seeing real growth by now and not a POTUS in trouble. On the other hand if the Republicans are elected Romney will bring in Friedman's economic programs of destroying the middle class; slashing wages and benefits; and reducing social and government services. You have already had a taste of this as of now. One person should equal one vote and the government should be the one the people elect and not the Electoral College or the internationalists.
 

Micheael Kirkbym (85)
Monday September 10, 2012, 9:31 am
I haven't lived in the States for some time now. Here in Canada every time we get a tax cut or the minimum wage is increased the cost of living rises.
 

Kit B. (276)
Monday September 10, 2012, 9:44 am

Which part of the Glass-Steagall Act do want to discuss? The main body of banking and legislative over sight? That is still in effect. Though obviously not enforced.
 

Kit B. (276)
Monday September 10, 2012, 9:55 am

How on earth can anyone living on this planet not realize that Friedman was con-artist and that it was his thinking that brought this economic crash. I was going to address that comment above, how can any one do that without giving a long lesson in economics 101?
 

Veronique L. (213)
Monday September 10, 2012, 10:37 am
Thank you for this article!
 

donald Baumgartner (4)
Monday September 10, 2012, 2:38 pm
I agree & thanks for he GREAT article!!!
 

Sue Matheson (70)
Monday September 10, 2012, 2:46 pm
thanks
 

Stephen Brian (23)
Monday September 10, 2012, 5:49 pm
Hi Esther,

I think you misread your source: You said initially that it said the tax cuts were responsible for 4.5% to 7% job-growth, and then later seemed to interpret that to mean that all of Bush's policies together led to that much growth. Estimating the corresponding reduction in social welfare-spending at 5% of total welfare-spending, ~ $100 billion as of 2010, not even including state-spending and reductions in state-bailouts, this already accounts for the cost in revenues:
http://www.washingtonpost.com/blogs/ezra-klein/post/calculating-the-cost-of-the-bush-tax-cuts/2011/10/14/gIQADB7dkL_blog.html
Then we can factor in that these would then be responsible for roughly 5% of revenues (between taxes on income, payroll, and international trade), bringing the total net-revenue as of 2012 up from roughly breaking even to about $125 billion per year, not counting additional job-growth from continuation of the tax-cuts after 2008.

Even if my numbers are a little optimistic as I neglected any welfare-costs that would remain even in full-employment, despite all of the state-welfare-costs I did not count and with the continued positive influence on job-growth, the net-revenues could still easily be over $100 billion per year.
 

Glenville J O. (0)
Monday September 10, 2012, 6:49 pm
Thank you for the article Kit. Until we all learn to care for one another more, and stand up to the ones that don't, refusing to be used and abused by them, our future well-being doesn't look to rosy, and even less so for the unfortunate creatures that share this world with us.

Happiness is what we all desire, and as a child I had it aplenty with good friends to play with and a loving family to go back home to. Although there were things I yearned for which my parents were unable to provide, those things, although desirable, would have been a poor substitute for my dear friends and family, who were irreplaceable.

Too many of us now seem to be addicted to things we don't really need in our lives and don't give enough thought to the things that should really matter to us such as needy people, and the impact our ever expanding population is having on this planet and our fellow creatures. As long as our security is protected, developing and expanding our care for one another is of far greater value than expanding our wealth, which can become a burden and is easily lost.
 
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