Getting Serious

Ok, so we're bailing ourselves out of this financial mess by borrowing $700 billion from various foreign governments (with our budget and trade deficits, that's who's basically going to fund it). One of these days, these foreign governments are going to say "Thanks, but no thanks" to our generous offers of debt. We need to start getting serious about this.

Here's a few quick and effective ways we can show the world we are determined to mend our profligate ways and continue to provide a safe haven for foreign investment.

• Announce a withdrawal of troops from Iraq within 12 months and from Afghanistan in 24 months. Eventual savings: about $150b per year.
  
• Apply a 75 cent tax on gasoline nationwide. We already collect federal taxes on gasoline sales - all we need to do is up it by a mere 6 bits. Estimated annual revenues: $100b.
  
• Enact a 1% income tax surcharge on all incomes above $200k up to a maximum of 10%. Additional revenues: $170b.
  

Just these simple measures would reduce our budget deficit by $420b per year. In addition, we need to announce a transition to a Value Added Tax and away from income taxes on middle incomes and on capital gains and interest up to $20k per year. This would increase savings and reduce profligate consumption. It would also make our exports more competitive with other VAT nations without initiating a trade war. But, to hedge our bets, we should institute a trade fuse-box that would kick in across the board tariffs in response to trade deficits exceeding a specified threshold.

These measures would not just pay the bills. We would be telling the world we are serious about not wanting to expand our military adventurism, reducing our dependence on foreign energy, as well as willing to take the hard steps necessary to pay our debts and become fiscally responsible.