Seems to me the government is trying to solve the wrong problem.
Everyone keeps talked about deficit reduction. ...but that's just a fancy way of saying we're going to keep spending more than we take in.
What we need to be talking about is DEBT reduction. This is the plain way of saying we're going to spend less than we take in and use the remainder to pay down the debt.
The reason politicians never talk about debt reduction is they all have pet projects/programs they want to protect at all costs.
There's a simple solution to this. It will be painful as all hell, but not as much as the financial collapse that will occur if we don't act. In short, pass a balanced budget amendment like the one I wrote below:
Balanced Budget Amendment
As our elected representatives seem to be incapable as a body, of spending within the country's income, this amendment's purpose is to leave them no choice, at any time there is a national debt.
Section 1
The provisions of this Amendment shall go into effect on the calendar year following any calendar year in which there exists a national debt, and shall remain in effect until the debt has been paid in full.
Section 2
The United States shall be prohibited from spending more money than it received as revenue during the previous calendar year, except as outlined in the Sections below. In the event that the previous year's revenue is greater than that of the current year, the United States may borrow such funds as are necessary to make up the difference.
Section 3
While the provisions of this Amendment are in effect, 25% of the revenues taken in by the United States (or the full amount of the debt, whichever is less) shall be allocated out of budget to pay down the debt, before any other spending. If it was necessary to take out a loan under Section 2 of this amendment to meet the previous year's income level, an amount equal to the loan shall be added to the 25%, to pay the loan off in full the following year. The remaining revenues shall be spent on the budget, all budget items being funded on an equal, pro-rated basis. If remaining revenues after paying down the debt are only half as much as required to fully fund all budget items, then all budget items will be funded at half their budgeted level.
Section 4
To prevent the United States from circumventing this amendment by shifting costs to individuals or states, all existing unfunded or underfunded mandates shall become null and void from the date of ratification of this amendment. Creation of additional unfunded or underfunded mandates shall be prohibited. If the United States mandates behavior of individual states or individuals, and that behavior has a cost, the United States must fully fund the cost. In addition, the United States shall be prohibited from making monies paid to individuals or States conditional on behavior it cannot legally require.
Section 5
In the event of the United States engaging in a declared war, Sections 1 through 3 of this amendment shall be suspended so long as the state of war exists.
If Sections 1 through 3 of this amendment are suspended during wartime, neither any currently serving member of Congress, nor the President or Vice President may run for election or re-election until one election cycle has passed after the end of the war.
Section 6
To encourage actual budget cutting rather than simply increasing the budgeted dollar amount of a budget item beyond all reason in order to get a larger piece of the pro-rated pie, the budgeted amount for any budget item is prohibited from being increased while Sections 1 through 3 of this amendment are in effect. Further, the budgeted dollar amount for any budget item whose budgeted dollar amount was increased while Sections 1 through 3 were suspended due to the United States engaging in a declared war shall immediately revert to pre-war levels as soon as the state of war ends.
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Thought on the above provisions:
Section 1 - This could instead be modified to have the amendment take effect at a pre-defined trigger level - such as 10% of the yearly revenues - with minor language changes. For the amendment to be useful, the trigger level must be low enough that the debt level is healthy.
Section 2 - Ties spending to income, in such a way that spending is based on expected revenue, and may not exceed that level (except in special circumstances detailed later). Allows for variance in revenue via a healthy borrowing strategy. Guarantees popular support among the masses.
Section 3 - Requires that, while the restrictions are in effect, 25% of revenues go to paying down the national debt, before any other spending. Further requires that any loans taken out in the previous year be paid in full after the 25% and before any other spending. Funds all remaining budget items on a pro-rated basis - meaning that contentious debates on budget cuts are simply not required for the system to work. Legislators can enact new spending all they like - but it competes for available funding with all the other budget items, and it is funded at a percentage based on the remaining revenues after the debt paydown and any loan repayments. No matter how many new budget items are added, spending cannot increase beyond revenues. The 25% number is the hardest sell for Section 3, but it is required if we are to pay down the national debt within our lifetimes (even at this level, it will take nearly 30 years to pay off the debt). Pro-rating remaining revenues hurts everything equally, so could be a positive or negative selling point depending on how it is spun. Nobody loses their pet programs outright as negotiations on budget cuts are completely separate from this amendment.
Section 4 - Prevents the Federal Government from offloading former federal programs onto states or individuals without fully funding them. Without this provision, the Federal Government would make an end run around the spirit of this amendment and bankrupt the citizens or individual states in the same way it has bankrupted itself. Further, the last sentence of this section prohibits the Government from using federal funding as a carrot to encourage behavior that the Constitution prevents it from legislating. This provision makes the amendment a huge win for the individual states, though proponents of mandatory State-funded social spending will not like it, nor will those who seek to circumvent the 10th amendment by creating unfunded mandates and then offering funding conditional on the states doing things the Federal Government can't require they do. Programs the Federal Government -can- legally require are still possible, but must be fully funded by the Federal Government. On the other hand, this section should make ratification easy.
Section 5 - Allows the Federal Government to exceed spending limits during wartime, but prevents politicians involved in that decision from benefiting by remaining in office beyond their current term, and prevents them from running for election after stepping down so long as the war continues. This removes the incentive for the declaration of (or continuation of) wars for the sole purpose of exceeding spending limits, since those responsible for declaring or continuing a war will be unable to remain in office beyond the current term. Likewise, it removes the incentive for Peace Treaties immediately before elections for the sole purpose of allowing politicians to run for re-election, with an immediate resumption of hostilities after.
Section 6 - Forces congress to actually cut the budget if they wish to increase pro-rated funding for the remaining items, rather than simply increasing the budgeted funding for their specific item beyond its needs to "steal" pro-rated funding from everything else.
Is it draconian? Yes. However, rampant overspending has been allowed to go on to the point where draconian measures are required. The government is nearing total financial collapse because it is dependent on borrowing that will soon no longer be available except at ruinous interest rates, and shortly after that, not at all.