The U.S. Debt Crisis: From Sclerosis to Solution

July 19, 2011

The parties that got America into its current financial mess are still bickering over whether to cut spending or raise taxes to fix the problem. Missing from this debate is a third factor that is key to keeping America strong; namely, growing the economic pie through the private sector by implementing major tax reform and democratizing innovation. First we must cut overall spending. No program should be immune from cuts. The target should be to bring the overall Federal spending to the 2001 level (before 9/11). Second, we must institute a national sales tax (retail and wholsesale) for a three year period. This national sales tax would fluctuate after a three year phase in to whatever level is required to balance the budget for each year (i.e. a true pay as you go system). Finally, we must simplify our tax code to reward savings and allow U.S. companies to invest in America instead of keeping their cash overseas. If we fail Uncle Sam will end up being the real child abuser because we will have failed our children.