If you were the supercommittee, with actual governmental superpowers, where would you start with reducing the federal government’s budget so that we could actually start reducing the national debt without condemning the nation’s poor to starvation, homelessness, and/or death from preventable illnesses and workplace injuries?
Well, the answer to this would depend a lot on how much power said supercommittee had. Like, does what we say become law? Does it have to be voted on? What happens when people protest? And so on.
Here I’m going to assume that the committee has the power to force through legislation and people just have to lump it, but doesn’t have supernatural powers to change the hearts and behaviors of people. We make the laws, they try to get around them. They can’t vote us out. In any case, some really easy cuts would be to go with evidence-based policy.
Note: We may not actually *want* to reduce spending when times are bad because even just throwing money out of a plane over a city is better than reducing spending. So I’ll assume that in those situations the money saved goes to feed kids, fix infrastructure, fund education, stimulate important research, and otherwise fix the economy in ways that are good for our long-term growth.
So easy things:
- Phase out the mortgage benefit– this benefit does not encourage homeownership, only overconsumption of houses
- Phase out the SS tax cap
- Completely eliminate ridiculous agricultural subsidies that are making us fat.
- Examine the corporate tax code– this is hard because there’s a lot to be cut, but there is a real worry that corporations will move things overseas, so it’s not just a slam-dunk. I’m sure more educated folks than I have better ideas.
- Go with the Poterba policy recommendations for stream-lining the tax code so that there are fewer loopholes for extremely high earners (this is essentially expanding the alternative minimum tax system)
- Make stock earnings taxed as income (or otherwise make it so the Buffett tax hits people who own American stocks)
- Cut inefficient military spending, replace it with efficient military spending or infrastructure spending so as not to hurt communities dependent on the industry (possibly phasing out plants)
- I’m not so good at foreign policy, but there’s a lot that can be done to decrease our spending in this arena without jeopardizing our national security. We need more focus on doing things with coalitions rather than unilaterally. And we do need to help out more like with the Syrian refugee crisis.
- Cut foreign policy aid to Israel and possibly to Egypt.
- Cut some Medicare spending– allow Medicare better bargaining power, allow outcomes from experiments to influence policy, cut some doctor reimbursement (but not to Medicaid levels)
- Allow federal funds to fund abortions.
- Add a public option to health care with an eye towards eventually transitioning to single payer health care (this will actually cost money and we’ll have to pay more taxes but it is good for efficiency).
There’s probably a lot I’m forgetting. In my work office I have a chart of government spending, but I don’t have one off the top of my head here.