[713] in libertarians
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daemon@ATHENA.MIT.EDU (Vernon Imrich)
Wed Feb 15 17:36:49 1995
To: libertarians@MIT.EDU
Date: Wed, 15 Feb 1995 17:31:52 EST
From: Vernon Imrich <vimrich@MIT.EDU>
|> >Of course, once you had a balanced budget, it would be
|> >difficult to downsize government without also cutting
|> >taxes (unless you wanted revenue surpluses).
|> Interst on the national debt is now at over $1400.00 per person in this
|> country, and amounts to the highest portion of the nation's budget, more
|> even than defense spending. We won't have a surplus for a
|> looooooooooooooong time, even if the Cato Ins. got it's whole wish list.
If we resigned ourselves to a given payment plan on the debt then
we could still have budget surplus. Right now we just pay the
interest, without any plan for actually paying back the principle.
E.g. using the current federal 1.5 trillion budget as a base, roughly 20%
goes for debt interest, and 20% for defense. Interest stays the same,
only now add in 10% for debt buy-down each year. Cut out everything else,
and use defense cut-backs to fund anything else people still wanted.
Total spending would be 30% of 1995 budget on debt service and 20% of the
1995 budget on everything else -- still spending only 50% of the 1995 budget.
A future budget could thus be half of today's amount (= .75 trillion total)
but spend 40% (300 billion) on debt interest, 20% (150 billion) on debt
buydown and 40% (300 billion) on "everything else." At that rate of buydown
it would take 33.3 years to buy down the 5 trillion debt. Of course, it
would probably go faster than that, since interest would go down as the debt
got paid off. But at least that's a ball park figure. At any point in
that 33.3 years, if we took in more than .75 trillion, it would still
be a surplus and we'd still be on target for debt buy-down.
And all of this is not including selling off government lands to help
pay off the debt and other such things. In any case it shows that
we could have severe tax cuts (order of 50%) and still be on reliable
progress towards paying for past mistakes (one generation essentially).
Considering that right now about 50% of the budget is for the
big entitlement programs (SS, Medicare/Medicaid, VA/Pension, Farms)
and our current military budget is designed to allow us to fight
two concurrent full scale foriegn wars as well as any number of
alliance committments, it is not unreasonable to assume that a
total rethinking of entitlements combined with a scale back of our
military mission to yield other funds could produce such a budget
and still have room for the traditional hyped issues that come
along from time to time by human/political nature.
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| Vernon Imrich | market failure, n. The inabilty of the |
| MIT, Dept. OE | market to recover from a blow by |
| Cambridge, MA 02139 | intervention. (The Exchange) |
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| MIT LP: http://www.mit.edu:8001/activities/libertarians/home.html |
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