From a macro-level perspective, it’s not that difficult to balance the budget in both the short and mid-range terms. Using an online toy at the New York Times, I was able to get not a balanced budget but modest surpluses. Specifically, I got a $1 billion dollar surplus in 2015 and a $158 billion dollar surplus in 2030, by doing the following:
- Cut foreign aid in half
- Eliminate farm subsidies
- Eliminate earmarks
- Reduce federal workforce by 10% (through attrition)
- Reduce nuclear arsenal and space-based spending
- Reduce military to pre-Iraq war size, reduce presence in Europe and Asia
- Reduce Navy and Air Force fleets
- Delay or reduce new weapons programs
- Reduce troops in Afghanistan to 30,000 by 2013
- Enact medical malpractice reform
- Raise Medicare eligibility to 68
- Cap Medicare spending growth to GDP+1% per year in 2013
- Raise Social Security eligibility age to 70
- Reduce SSI payouts to high-income earners
- Tighten eligibility for disability
- Use alternative measures for inflation to index SSI increases
- Return estate tax to Clinton-era levels
- Subject some incomes over $106,000 to SSI tax
This gave a balanced budget in FY 2015 and a healthy surplus in FY 2030, with only 15% tax increases (the last two levels) and 85% spending cuts. Notably, I did not enact a Federal pay cut for either civilian or military employees, reduce payments to Federal contractors, or enact a carbon tax or a national sales tax. What I did do was, mainly, reduce entitlement spending and military spending. Which, of course, sucks. But meaningful attempts to tackle government overspending require that these sacred cows be placed upon the altar.
I would anticipate in my scenario that the surpluses would be used to retire outstanding debt. This would result in eliminating the long-term debt of the United States by about 2050, leaving only the sort of short-term debt financed by short-term instruments necessary to work through week-to-week shortfalls in revenue.
