How to address the future US debt? (Reagan, gasoline, regular)

[BMORE]

While I agree that current deficits need to be decreased further, we need to look at our unfunded liabilities to get a true grasp on how much the US is in trouble. What could be done? I've toyed with the idea of the US operating it's own oil company similar to Saudi Arabia for a while, but now I'm thinking we need to do two things, create a Sovereign Wealth Fund to drill on the federal lands and sell the oil to foreign markets specifically or maybe even sell the oil to oil companies, and we also should begin building a FOREX (foreign reserves) as well specifically targeted at purchasing Chinese bonds in attempt to create a balanced playing field between us two.

I'm not completely sure what type of bonds are available at the moment, but Century, Transportation, War, and Etc bonds should begin to be issued to begin rebuilding infrastructure; personally, I'd love to invest in US bonds out of patriotism.

But anyways, what are your short and long term proposals?

[hawkeye2009]

Originally Posted by BMORE

While I agree that current deficits need to be decreased further, we need to look at our unfunded liabilities to get a true grasp on how much the US is in trouble. What could be done? I've toyed with the idea of the US operating it's own oil company similar to Saudi Arabia for a while, but now I'm thinking we need to do two things, create a Sovereign Wealth Fund to drill on the federal lands and sell the oil to foreign markets specifically or maybe even sell the oil to oil companies, and we also should begin building a FOREX (foreign reserves) as well specifically targeted at purchasing Chinese bonds in attempt to create a balanced playing field between us two.

I'm not completely sure what type of bonds are available at the moment, but Century, Transportation, War, and Etc bonds should begin to be issued to begin rebuilding infrastructure; personally, I'd love to invest in US bonds out of patriotism.

But anyways, what are your short and long term proposals?

1. Your above idea is a good one
2. Balanced budget amendment
3. 15% VAT
4. 20% flat income tax
5. 15% flat business tax
6. increase medicare/social security eligibility ages
7. limit food stamps/medicaid to three years of a ten year cycle
8. dump Obamacare
9. earmark 5% of annual revenues for debt reduction

[Winter_Sucks]

I would pass the Simpson/Bowles plan.

[jimj]

I like your thinking!
Here's the one huge problem I see with any solution and it's the problem we're seeing played out right now as I write this.
Yes we're in debt trouble, yes it's horrible but don't you dare touch (insert program here) that I want for me and mine. Cut something else.
The problem is the "something else" belongs to someone that feels the same way.

The other big issue is power/control and the people that have it and refuse to even consider lessening their (perceived) grip on it.

The flat or fair tax is something that should be done RIGHT NOW and that's the one thing that would do so much to clear up both issues listed above.

[LoveToRow]

The first step is unelecting politicians who have proven through their inaction that they don't care about unsustainable debt and unfunded liabilities.

Doing so would eliminate 98% of the current Democrats in office and about half of the current Republicans in office.

Term limits would be a nice start to this process. Then pass serious entitlement reform that includes means testing social security, raising the retirement age to at least 70 and phased in privatization of SS and Medicare for younger people.

[Frank DeForrest]

Originally Posted by Trace21230

The first step is unelecting politicians who have proven through their inaction that they don't care about unsustainable debt and unfunded liabilities.

Doing so would eliminate 98% of the current Democrats in office and about half of the current Republicans in office.

Term limits would be a nice start to this process. Then pass serious entitlement reform that includes means testing social security, raising the retirement age to at least 70 and phased in privatization of SS and Medicare for younger people.

Getting rid of old crooks and replacing them with new ones solves nothing.
Stripping the government of power,choking its revenue stream and removing its ability to create new money are better solutions.

[MTAtech]

Google Surveys asked the question: "How do you think the US Federal Government's yearly budget deficit has changed since January 2010?"

The results were that 39.5% thought it increased a lot; 12.3% said it "Increased a little;" 24.7% said "Stayed about the same;" 11.7% said "Decreased a little" and 11.8% said "Decreased a lot." Thus, 65% said it was rising when in fact it is falling.

So, most people have a false impression of deficits.

While it is advisable to bring down debt in the long-term, it is not advisable to do so in a fragile economy.

Originally Posted by hawkeye2009

1. Your above idea is a good one
2. Balanced budget amendment
3. 15% VAT
4. 20% flat income tax
5. 15% flat business tax
6. increase medicare/social security eligibility ages
7. limit food stamps/medicaid to three years of a ten year cycle
8. dump Obamacare
9. earmark 5% of annual revenues for debt reduction

These aren't solutions, since they cause more problems than they solve. There are times when government rightfully should run deficits (and surpluses) and a balanced budget amendment prevents the government from mitigating recessions and depressions.

A value added tax is regressive and hits the consumer class, not the investor class. Flat taxes are the opposite of progressive income taxes and benefit the wealthy.

Social Security doesn't contribute to the debt, so there is no reason to short-change seniors who dutifully paid their taxes their working lives. Increasing Medicare's eligibility age also punishes seniors.
Limiting Food Stamps punishes the least able to afford the cost. Since most of Medicaid expenditures are elderly living in nursing homes, limiting Medicaid to three years means grandma won't be able to get nursing home care.
Obamacare reduces government's expenses, so dumping it will raise the deficit.

If one wants to bring in more money for deficit reduction don't place the burden on the needy and seniors -- just return to the tax-rates we had under Reagan.

[Dockside]

Originally Posted by jimj

The other big issue is power/control and the people that have it and refuse to even consider lessening their (perceived) grip on it.

Agreed. According to the CCH Standard Federal Tax Reporter, as of 2013, it now takes 73,954 regular 8-1/2" x 11" sheets of paper to explain the complexity of the U.S. federal tax code. WTF??

But politicians love using the tax code to both punish and reward, or even, as the Obama administration did, using the powers of the IRS to derail the Tea Party.

I doubt I'll see significant changes to the tax code in my lifetime. If the last financial crisis couldn't change it, nothing will.

[Del Boy]

This idea would never work.

The majority of the oil in the US and Canada is heavy and high sulfur or sour. As BRIC continues work with developing nations, eventually they are going to have stricter environmental standards, which means it will not be economically feasible for them to purchase oil from North America.

Why is this important?

Well, firstly, there are no heavy oil refineries in the US, so the US lacks the capability to refine domestic oil.

Secondly, heavy oil is limited with what it can be used for. For instance, phamaceuticals, food coloring, laundry detergent, etc, is all made from light oil.

I believe there are 49 oil refineries in the US; however, only 17 are used for gasoline. The majority are used to create the American lifestyle, in which, light sweet crude oil is necessary.

This has been stated numerous times on this forum by posters more knowledegable than I.

I don't understand how this is still an issue. Why do people choose not to read and investigate what is said by others on this forum when it pertains to exactly what is being proposed in this thread?

If the US were to abandon the PETRO dollar, which I assume will have to be done in the future, although not by choice, the demand for American dollars would plummet and there would be real inflation and severe economic hardship.

[Del Boy]

Americans, including myself obviously, are going to have no choice but to get used to a decrease in purchasing power, and a higher unemployement rate.

As other posters have suggested, perhaps families could consider sharing residences in order to save money and invest in learning new skills or for a down payment on their own house.