Strategies To Reduce The National Debt

The national debt is an anchor dragging our country down to murky depths. In this article, we take a look at strategies to reduce the national debt.

Red Herring

Much of the discussion about the national debt is a red herring. By this, I mean it isn’t particularly relevant to the real problem or the real solutions. Instead, we see our politicians argue over small items that really make no difference in the scheme of things. One need only consider the recent budget debate. The Republicans wanted 60 to 100 billion in cuts and the Democrats wanted something closer to 35 billion. While these might seem like big numbers at first glance, the truth is the annual deficit for this budget is $1.6 trillion. In short, we are talking about 3 to 5 percent of yearly deficit, which is not exactly a big move.

The Big Three – Social Security, Military and Medicare/healthcare

The truth of the matter is these three areas cost us more than we bring in each year in tax revenues and the picture will only get worse moving forward. Why? More and more baby boomers are retiring and drawing down on Social Security and Medicare programs. Let’s look at the problem with each area and strategies to reduce them to help with the national debt.

Social Security

Social Security is perhaps the easiest one to deal with. The problem with Social Security is it has never been adjusted for the average life span of Americans. When it was created, the average life span was around 65. Now it is in the high 70s. This means more people are getting into the system than was originally intended. The way to solve this problem is to gradually institute age increases as we move forward. The qualifying age might be set to 70 in 2015. 72 in 2020. 74 in 2025. This will effectively cut down on claims as statistically many seniors will pass on before then.

Military

This is another easy area where cuts can be made. We spend upwards of $700 billion a year on our military and the question is why? I am all for national defense, but we have a military that is built for a Cold War and yet have no enemy to fight. To give you an example of how much more we spend then other countries, only China spends more than a hundred billion on defense with a budget of $114 billion. Remember big bad Russia? It now spends $52 billion, less than France. This begs the question of who exactly are we competing with these days?

Cutting the military is all about focusing on programs we no longer need and becoming more efficient. This has proven difficult. Military spending creates jobs, so we have politicians that mandate military programs that even the Pentagon doesn’t want. If we can cut through this mentality, we could significantly cut the military budget without doing any harm to our national defense prospects.

Medicare

In truth, this subject is about government provided healthcare in the form of Medicare, Medicaid and the prescription plan for seniors. All told, we are facing about $35 trillion in spending on these programs in the next couple of decades. This is problematic because we current have not a single penny saved up to pay the bill.

What is the answer? This is a tough area. We need to cut out waste and force doctors/hospitals to take less in payment. Then we get to the brutal part. Over 30 percent of all expenditures are on patients in their last year of life. Despite the fact the end result is clear, tests are run time and again, treatments that won’t work are tried right and left. All of it is wasted money. I realize that sounds cold, but we need to decide exactly what this program is for. Allowing people to pass on in dignity makes a lot more sense then hitting them with intrusive, painful treatments and tests in their last days.

Politics

So, why are politicians so reluctant to deal with these issues? Simple. They want to be re-elected. If a politician tries to modify Social Security, groups like AARP will hammer them and motivate seniors to vote against them. A similar thing happens with the military. Any politician that suggests cuts to the military is posterized as soft on defense. For what happens with a discussion on healthcare, just look at what happened with Obamacare and death panel claims and so on. It ain’t a pretty picture.

Are there other strategies to solve the national debt? Frankly, no there are not. We’ve reached the end of the line when it comes to finding solutions. These are the only strategies to reduce the national debt that will still work and they are going to call for real leadership in Washington, D.C. That should scare you!

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