Dr. Coburn Releases $9 Trillion Deficit Reduction Plan - Press Releases - Tom Coburn, M.D., United States Senator from Oklahoma

So, now we have this plan, the Ryan plan, and the bipartisan Bowles-Simpson commission plan to reduce the deficits and the national debt. Pick one, or the best features from each and get on with it.

This shouldn't be so difficult.

Dr. Coburn Releases $9 Trillion Deficit Reduction Plan - Press Releases - Tom Coburn, M.D., United States Senator from Oklahoma:

"(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) today released a new report “Back in Black” that outlines how the federal government can reduce the deficit by $9 trillion over the next ten years and balance the federal budget. The 614-page plan was the result of a thorough and exhaustive review of thousands of federal programs.

“The American people are tired of Washington waiting until the last minute to avoid a crisis, particularly when it is a crisis Washington itself created. The crisis, though, is not the debt limit deadline. The crisis is Congress’ refusal to make hard choices and reduce a debt that has become our greatest national security threat. The plan I am offering today gives Washington 9 trillion reasons to stop making excuses and start solving the problem,” Dr. Coburn said."

“Both parties will no doubt criticize portions of this plan and I welcome that debate. My goal is not to replace the work of the budget committees but to show the American people what is possible and necessary. What is not acceptable, however, is not having a plan and delaying reform until some perfect political moment that will never arrive. The fact is doing nothing is a tax increase, a benefit cut for seniors and the poor, and a betrayal of the core values both parties hold dear,” Dr. Coburn said.

All of the above mentioned plans dig into the details, but the approach should be fairly simple and above partisanship. We have a long economic track record to draw from.

I'll try to apply the K.I.S.S. (Keep It Simple Stupid) principle here:

- To balance ones budget, one must match Revenues and Expenses.

- Currently the government collects ~ 15% of GDP in Revenues. The long-term historical average is ~ 18%.

- Currently the government spends ~ 25% of GDP in Expenses. The long-term historical average here is much more variable, ranging from 18 - 23% of GDP. There are many reasons for the variability, but the middle of the range is around 20%.

- Everyone agrees that the 15% Revenues - 25% Expenses which produces 10% of GDP in deficits cannot continue.

- At some point we have to begin producing surpluses to even hope to ever pay down the mountain of accumulated debt.

- Applying the middle of the range figure of 20% of GDP as a Revenue and Expense goal in the short-term seems to make reasonable sense as a compromise number.

This would increase revenues from ~ $2.1T to ~ $2.8T and reduce expenses from ~ $3.5T to ~ $2.8T. And presto, a balanced budget. Leave it to the wonks to decide where to raise the revenue (some appealing targets out there) and where to trim the fat (also many, many fat targets).

The Republicans Cut, Cap and Balance proposal uses a 18% target. In the short-term, that may be too low. As a longer-term goal, 18-19% is pretty reasonable. We've survived as a nation with our belts tighter in the past.

Taking ~ $700B per year out of spending should more than meet the $4T goal over 10 years that the rating agencies are looking for to avoid a catastrophic downgrade.

This is not a difficult exercise fellas, most of the broad strokes can be agreed upon just by using simple math, some knowledge of history (without distortion and rhetoric) and the back of an envelope. Get It Done!!!

The following quote explains why it is different this time. To all those bozos who go on TV or the floor of Congress and spew venom that this is about race more than economics, the Bill Buckler quote explains pretty clearly why.

There is no plan to cut US government debt. There never has been a plan to cut US government debt. There has been no reduction in US government debt since 1960 - when the funded part totalled about 2 percent of today's total. Today, nearly half of every US Dollar spent by the federal government is borrowed. Today, the US government's annual budget is about fourteen times what its total funded debt was back in 1960. - Bill Buckler,Gold This Week...July 16,

But that's not enough for the President to engage in fear-mongering (why is it OK when Dems scare old people, but Repubs are mean spirited?) or his acolytes to engage in irrational race-baiting.

Sheila Jackson Lee asks "Why is this President Different?"



All the other past instances where the Debt Ceiling was raised, we were not staring down the gun barrel of a rating downgrade.

Apparently, Ms. Jackson-Lee forgets how respectfully and decently she and her ilk treated the previous President.

By the way, not raising the debt ceiling is simply not the same as defaulting on the debt. The debt still gets paid, other expenditures get delayed until they come up with a more credible plan.

Apparently one former President weighs in with his opinion that we should continue with our current "trailer-trash" theory of economics that says you should pay your maxed out credit card balance by asking the credit card company for a credit limit increase and more balance transfer checks.

This is the economic policy and budgetary maneuvering generally favored by meth-heads, crack-heads and trailer-trash nationwide. It's not the type of policy befitting the so-called greatest nation on earth.


from The American Spectator:
http://spectator.org/blog/2011/07/19/bill-clinton-on-debt-limit-id

The American Spectator takes issue with Clinton’s opinion on the matter, writing that the Fourteenth Amendment doe not call Congress to borrow monies whenever needed. Rather, the amendment instructs Congress to pay for what it spends:

Meaning it can choose to cut spending, raise taxes, or print more currency. Arguing as Clinton does would also license the president to print more currency in order to pay the bills, effectively running down the value of the dollar.

It‘s like saying that once you’ve maxed out all your credit cards, you have no choice but to transfer the balance to a new credit card.