Novel (?) Idea for Reducing the Deficit

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Here’s an idea suggested to me by my friend Tom W.  We (all of us) would contribute (voluntarily) “our fair share” to a fund that would go to pay off the deficit.  The following is one way this could work.  The federal budget deficit is roughly $15 Trillion (see Time, May 9, 2011, You Are What You Owe and there are roughly 300 million people in the US, approximately $50,000 per person.  This is a very large sum for most people, but if we all supported the effort the best we could, even spread over 10 or 20 years, we could put a big dent in it.  Ten to twenty years is a long time, but 1) we didn’t get here overnight and 2) our goal is to hand off a better world to our Grandchildren.

Step one: We all start buying additional US savings bonds (various types, take your pick), which are the the major portion of the Federal deficit.  As we purchase these bonds we send them to a designated private, administering organization which holds them for us in the Deficit Reduction Fund.  Alternative, maybe better idea, we send a notification- email- to the organization and include: number of bonds, denominations, date purchased, maybe the serial numbers too.  At the end of the year, or at the end of the second year following the target year, the organization determines from public records whether or not Congress and the Administration ran the country in the black. If they operated the country with a surplus, which would be used to pay down the deficit, the administrator of the Deficit Reduction Fund, then delivers bonds to the Treasury Department in an amount equal to twice the surplus.  In the alternate plan, the Administrator notifies people with the most mature bonds to send a specific value of bonds to the treasury. These surrendered bonds are used to reduce the deficit.  A second facet of the program would be that before money starts being released, Congress must pass a law: 1) The money MUST be used to reduce the deficit and 2) the interest on the Federal Deficit saved by this donation must be used the following year to further reduce the deficit.  We could even demand that Congress and the Administration continue in the out years to use the interest saved to further reduce the deficit (compounding the interest) until the deficit is paid off.

NOTE: The Treasury Department already has a site for accepting donations to reduce the deficit:

http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance

However, from my perspective paying down the deficit without a balanced budget just encourages US (the citizens) -through our elected officials, Congress and the President – to continue irresponsible spending.  Let me repeat that- It encourages US to continue to dodge the hard choices.  WE have to make the hard choices, less spending and/or more taxes, and then put the pressure on our elected officials, probably by voting out more incumbents.  [Note: WE CANNOT choose more benefits and less taxes.  Doesn’t work] I believe the above plan of balancing the budget first and then contributing matching funds is the best way for all of us to demonstrate that we are serious about a workable budget.  I believe this could gain momentum as more people sign on, and be a very tangible demonstration of Americans pulling together for the common good and for our Grandchildren.

Comments are welcome and will be accepted as written (minor editing on extremely derogatory comments on race, religion, etc)

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