The Problem
“The graying of America means that the portion of people who are of prime working age is getting smaller, with fewer workers available to fill open positions, ultimately reducing productivity, straining the federal budget, and slowing economic growth.” – Antonioli, J., & Malde, J. (2023)
“…between inflation and the growing federal debt, interest payments on that debt are gobbling up a larger share of federal revenue every year. Per the Congressional Budget Office (CBO), annual net interest costs would total $663 billion in 2023, and by 2053 interest costs on that debt are projected to be nearly three times the amount the federal government has historically spent on R&D, infrastructure, and education combined.” - Exploring the Problem Space: How to Gradually Lower the Federal Debt, Part I
“Rising interest payments can crowd out other priorities in the federal budget and lead to a cycle of higher deficits, growing debt, and even more interest payments in the future…As interest costs rise, so too will the gap between federal spending and revenues. In fact, CBO [Congressional Budget Office] projects that interest costs alone will account for 38 percent of federal revenues by 2053, significantly exceeding the level of 10 percent recorded in 2022.” - Peter G. Peterson Foundation
The Solution
Increase Taxes
Cut Spending
Grow the Economy
Fix the Political Culture
Specific Proposals
Taxes (addressed in Part I)
Raise income taxes for households with incomes of $90K and higher, i.e., households in the top 40% of the US income distribution .
Raise payroll contributions to Social Security and Medicare.
Increase the corporate tax rate to 24%.
Raise taxes and fees from other sources of federal revenue, including a value added tax (VAT).
Spending (addressed in Part II)
Slash the insane amount of waste and fraud in the Medicare/Medicaid system.
Implement cost-cutting recommendations made by the U.S. Government Accountability Office (GAO).
Economic Growth (addressed in Part III-a and Part III-b)
Provide an Adult Student Basic Income to address chronic skills shortage.
Increase legal immigration to address chronic labor shortage.
Now for the Hard Part… Fix the Politics
This is an immense undertaking, way too much to tackle in a couple posts. So I’ll just focus on one aspect of the problem: how to sell federal debt reduction to voters.
In other words, I’ll address how politicians and elected officials might be able to persuade the public and powerful interests to go along with disagreeable policies that promise plenty of short-term pain and almost no immediate payoff, all for an eventual yet somewhat uncertain greater good. Next