Debt Payback Plan

An equitable and fair solution to the national debt issue.

Currently the National debt per citizen is equal to $56,634 and climbing, www.usdebtclock.org. This includes men, women, and children. Unfortunately is does not include illegal residents.  Every single living, breathing person in this country owes a whole lot of money that eventually must be paid back. But we keep on spending and borrowing to pay for our spending, this is a problem that will not go away. But I do see a solution on how to bring down the national debt.

The first step is, of course, to stop the profligate spending. We need a balanced budget, no more borrowing to pay for things we cannot afford. And I am not talking about cutting the "growth of spending" for the future and calling it a tax cut. We deserve a balanced budget, we demand a government that is responsible with the taxes we give them.  It is estimated that over $850B per year is channeled through the welfare system, this is larger than the GNP of some countries, and unsustainable.  So step #1 is a Balanced Budget, and make in an Amendment to the Constitution, so it will be harder to ignore.

The second step is to devise a fair way of paying off the debt we have already accrued, which stands at $18T, as of this writing.  The only fair way to do it is to make everyone, including non-citizens, pay back their portion of the debt, the $56,634 mentioned earlier.  I know that sounds harsh but here is how we do it.

1. We are not unfair misogynists, we do realize that there are some people who cannot work to pay off their portion, but there will be only a few exemptions. My list includes anyone under 18 (until they turn 18 and then they begin paying back), anyone who is not physically capable of meeting their own basic care needs, elderly, infirmed, those confined to wheel chairs, and the severely mentally handicapped.  I believe everyone else needs to provide some measure of work to pay back their debt.  The majority can do something, even if it is just a couple hours a day washing dishes or greeting people at the door. Even a paraplegic can use a grabber to pick up trash along the roadside or in parks.

All the taxes they pay into the system go to decreasing the debt. This will require many years of hard work and labor for most Americans, including the illegals.

2.  So the second step is to inform all residents, citizens, resident aliens and illegals that they will be required to take part in paying back the national debt. As a condition of living and working here in the United States, you and your family assume responsibility for the debt that has accrued.  I can almost guarantee a mass exodus of people from the country if this would be included in any Amnesty law.  All the Muslims that have found refugee status here will also not be exempt. If our money is good enough to pay for your daily expenses, then you will be required to invest in the future of the country.

3. The fair part comes in now, because everyone will have their previous contributions to the tax base considered as paying their share of the debt.  So the senior citizen that paid into the system their whole life, will have their taxes for their whole life deducted from the debt they owe. This will mean that most will have already paid their portion off, leaving them debt-free to live out the rest of their lives.  For decades the Social Security Trust Fund has been used as a slush fund for increased spending, and not set aside, as it was established, for the funding of the Social Security Program. This means that most of the people who have paid into the fund over the years will see nothing for their contribution to the Trust Fund. Unfair instance #1.

For decades the hard working American laborer has paid their taxes, and taken little, or nothing, in benefits out, and will still be straddled with the huge debt our citizens owe. Unfair Instance #2. And if you were to include as their contributions the taxes they have paid into the system, their debt would be paid off or almost paid off.

Let me lay this out with an example:  A family of 4 will have a debt of  $226,536 ( almost a quarter of a million dollars).  The children under 18 will not have their income included because their debt will be paid off after they turn 18 so $113,268 will be their current obligation.  With a household income at the median income $52,250 (www.deptofnumbers.com/income/us) and a tax rate of approximately 25% (www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-deduction-amounts-and-more)  would pay $13,000 into the government per year. Meaning they would have their debt paid off in less than 10 years.

 This does however leave a rather sizable portion of the population that will owe a great deal of taxes and will need to find ways to pay that debt back. Those with a larger family will have more debt to pay back. Those who have not made any contributions to the system will have a larger burden to pay back. 

Before you think the rich are getting off, after all they have paid into the tax base for decades, in exceedingly larger amounts over the years, so their portion of the debt could already be considered to be paid back. But we will still have a government to run, the taxes the rich pay into the system will be used to contribute to the current running of the system. But remember we will have a Balance Budget and the only funding available for the running of the government will be the money the rich will be paying into the system going into the future.  That of course means the budget will be much lower than it is today, because the available tax base will be smaller as the majority will be paying into the system to pay back the national debt.

I know this will mean that the poor will have to find a job and start paying taxes. This is not heartless, as some may contend, this is what is right and fair for the whole population, we have subsidized the poor for decades and the problem has not gotten any better, in fact, we have grown the population that contribute nothing and receive assistance from the government. The time to pay back is upon us, we can no longer afford to borrow against our future.

How much are you worth?

Why does anyone have a job? It is not complicated. You and everyone has a job for one reason, and only one reason.  Someone has a great idea for something, say they want to produce food, people need food and want a variety of it. So this one person (lets call him Stan) figures out a way to produce his food product, and lots of people like it. But now he has a problem, more people like his product than he can produce by himself, so here is where your job comes in. He needs to have someone help him produce his product, so he finds you to help him (we'll call you Joe). In exchange for helping him produce, you agree to take X amount of dollars as compensation for your labor. So we now have an exchange of something (usually a wage) for something of value to him (your labor). TA DA! the first job is created.

This is the only reason you or anyone else has a job, there is too much work for one person to do for himself, so he finds other people to handle the excess labor. In our small world everything is working great. Stan now can produce enough, and Joe has negotiated a price for his labor that he thinks is "fair". Until..... the day that Joe sees another person (Phil) doing a similar job and making X+1 dollars. So you now feels slighted because you are not making the same wage as Phil. So you ask Stan for an increase in your compensation (a raise), Stan says okay, because he has more customers and can pay more for your labor. Yippee! you are now compensated more for your labor.

But now Phil finds out that you are getting the same as he is getting, only he is actually doing more labor, so now he feels that he is making less than he is worth, so he goes to his boss to get a raise. Competition has now been entered into the whole labor market. And it works, Stan is happy, Joe is happy, and Phil is happy.  The system works. It is called Capitalism.

Now we add the labor union leader (Norma) into the picture. Norma thinks that Joe is being wronged, and should be making the same  as Phil, it doesn't matter that Joe is happy, all that matters is that Norma thinks he is not being treated "fairly". So Norma convinces Joe to have her represent him in labor negotiations where she will guarantee better wages and better working conditions. She believes that Joe should be making X+3, but Stan cannot afford to pay Joe X+3. This, of course, doesn't stop Norma from demanding x+3, in fact she will make it impossible for Stan to make any money because she will have Joe not do any work (a strike) for a time to force Stan to pay Joe x+3.

Before Norma came in our little system was happy. Nobody felt slighted that they were not being paid less than they were worth. But Norma now introduces class envy into the labor exchange process. "Stan is making his money off the back of Joe's labor, and isn't sharing sufficiently," Norma whispers in Joe's ear. Stan negotiates with Norma and is forced to pay Joe X+3, but it puts him at a great disadvantage in the market in which he is competing. Eventually Stan cannot afford to pay Joe anymore and lays him off. Now Joe isn't even making X, much less the X+3 Norma negotiated for him. So who get the fingers pointed at them? Stan the "greedy, selfish Capitalist". But who is really to blame in this scenario? I think its Norma, who thought that she could demand more for Joe than Stan could pay.

So that leaves us with today's dilemma, labor unions have been demanding higher wages and more benefits from the taxpayers for years. They have told workers that they are worth X+10 ( it doesn't matter that the society cannot continue to pay them X+10 any longer), they are worth it and feel slighted if they do not get it, because of their "intrinsic value to society".  Who is to say that a teacher, or a firefighter or cop has more "intrinsic value" to society than a farmer, or a truck driver? We cannot continue to demand that one portion of society (non-union labor) continue to sacrifice more each year for another, smaller, portion of society (unionized labor).

Just because the labor union says you are worth X+10 dollars, doesn't mean that the society can pay you X+10 dollars. So what happens when society says, "Enough, we can only pay you X+8 dollars"? Well look at the Capital Square in Madison, WI to see what happens. We the people are not saying you are not worthy of our compensation, what we are saying is we don't have the resources that you believe, and we cannot continue to give you more of those resources than we ourselves need.

This is not a fight over a pile of excess money laying around (as the labor unions would like their members to believe), this is about an ever decreasing pool of money, that we all need access to.  Just because you are a member of a labor union doesn't mean you get more access to it than I do. If you think Phil will willingly chip into Joe's wages when he is now getting less compensation than Joe, you are not thinking clearly. Phil is tapped out, and now he is outraged as well.

We cannot continue to listen to Norma and have Joe get mad at Phil. Both Joe and Phil are laborers, even Stan is not evil and corrupt because he wants to keep the fruits of his labor as well. Nope! Our problem is Norma's class envy, and meddling into a system that has worked for a very long time.  The enemy is not Capitalism, it is class envy! Have we sold our souls for a bowl of cheap oatmeal?

Is Profit Moral?