National Debt

America needs to eliminate our $16 trillion debt.

The yearly cost of the national debt is $280 billion.

Our elected officials talk about deficit reduction like it's a good thing to allow the debt to continue to grow without bound. I'm talking about becoming debt-free.

With the debt repaid, the Social Security trust fund will receive $2.7 trillion (the amount “borrowed” by congress when times were better), ensuring its solvency.

We also get back the $2.1 trillion congress has borrowed for other stuff we couldn't afford to pay in cash.

Here is my proposed solution.

• Increase the tax rate for those with adjusted gross incomes greater than $350,000/year to 50% on all income (both income and capital gains). This generates another $300 billion/year (on top of the $60 billion recently levied as part of the fiscal cliff deal) to pay off the debt (and only until the debt is paid off).
• Put teachers & parents back in charge of K-12. This saves $400 billion/year yielding another $80 billion/year in debt payments. See my blog on the subject for details.
• Renegotiate trade agreements that balloon trade deficits and export jobs. This shaves $400 billion per year off the trade deficit, increases consumer spending by the same amount (since the jobs come back to America) and increases debt payments by another $80 billion per year.
• Ban resale of consumer debt. This forces the banks to service their own loans and prevents another mortgage meltdown from happening. It will also prevent meltdowns from credit card debt, student loan debt, home equity debt, etc..
• Break up the mega-banks and make it illegal to bail out them or any other private company again in the future.
• Pass a bill to replace the foolishly discarded Glass-Steagall Act and repeal the Graham-Leach-Bliley Act to prevent the banks from becoming "too big to fail" again.
• Allow the current debt payments to continue as they are: $280 billion/year.
• Pass balanced budget amendment. This prevents the politicians in Washington from shirking their responsibility.

These actions contribute $800 billion/year toward our $16 trillion debt so it can be repaid within 20 years.

After 20 years, we’ll have an $800 billion/year surplus, a solvent security net, a properly educated workforce, higher employment from repatriated jobs, significantly reduced opportunities for the banks to get us into trouble again and a reigned-in Congressional appetite for spending our money.

This proposal balances my deficit elimination by adding more revenue, but once the debt is repaid the ridiculous tax rate for the highest bracket can revert to the Clinton era rate of 39%.

Again, you may not agree with my choices but we need to fix this and resume our place as world leaders.