10 ways to cut the U.S. budget deficit
How to put the budget on a “sustainable path” from Jeffrey Frankel of Harvard (some excerpts):
First, auction off most greenhouse gas emission permits, rather than giving them away to firms (which would confer windfall profits).
Second, raise the gas tax.
Third, cut agricultural subsidies to rich farmers and agribusiness, saving money and improving economic efficiency.
Fourth, continue to cut expensive weapons systems that the military doesn’t want, but have in the past been kept because the suppliers are in the districts of influential congressmen.
Fifth, end manned space exploration.
Sixth, let the George W. Bush tax cuts for the rich expire as under current law.
Seventh, encourage hospitals to standardize around national best-practice medicine – to avoid unnecessary tests and procedures – using levers such as making Medicare payments conditional on best practices.
Eighth, limit or eliminate the tax-exemption for employer-paid health insurance (proposed by Senator McCain), at least the cadillac plans which are very expensive but don’t even pay off in health results (proposed by Senator Kerry).
Ninth, ideally, eliminate the tax deductibility of mortgage interest too.
Tenth, to save Social Security, raise the retirement age (just a little), tax higher incomes (just a little), and progressively index benefits for future retirees to price inflation, rather than to wage inflation (just a little).
Me: As Ryan Ellis of ATR notes, “Jeff frankel has 5 tax hikes totaling $500 bil per year, and 5 spending cuts totaling $50 bil per year. How fair!” Toss in a VAT, which Dems would love to do, and you talking near a trillion dollar in tax increases. I cant see how that is good for growth. More cuts!