Monday, March 01, 2010

Zakaria: How to Solve America's Debt Problem - Fareed Zakaria - Newsweek.com

Zakaria: How to Solve America's Debt Problem - Fareed Zakaria - Newsweek.com

Fareed, as always, is right. Time to start paying the bills while continuing to invest in our future.

Today's youth - 18-30 year olds, the people with the most to gain and lose in this struggle - need to speak up and demand to be heard. Here's a starting point for them to demand of our leaders:

1. Fix entitlements. Raise the age of retirement and link it to life expectancy. Tax benefits of the wealthy or have some kind of needs testing - Bill Gates shouldn't get Social Security, or he should at least pay taxes on it. Crack down on Medicare fraud (I think it's about $60 billion a year!).

2. Restore "PayGo," or "Pay As You Go," effective in the FY 2012 budget. If Congress wants to cut taxes or raise spending, it must find a tax to increase or spending to cut to offset it.

3. Abolish the Bush tax cuts on the wealthy ASAP.

4. Commit the country to energy independence from foreign oil by 2020. Invest in truly green energy and offer tax credits to businesses and homeowners who go green.

5. Eliminate agricultural subsidies that are making big agribusinesses richer and America's kids fatter. Kill the corn subsidies and you start to save lives - and make balancing the budget easier.

6. Eliminate the homeowner's tax deduction. I love it as a homeowner, but it makes no fiscal or policy sense. Phase it out over the next 5 years.

7. Phase in a Value Added Tax (VAT). While it is regressive - it hurts the poor and middle class disproportionally - it could help balance the budget and still allow for lowering income taxes on the working poor and many in the middle class. That might work out ok. Worth a closer look, at least.