We currently have a 1. 1 trillion dollar budget. The new budget deal raises 60 billion in taxes. That increase will cut 10 billion from interest on the debt. We need to come up with another trillion to balance the budget. Here's how to do it.
1. Cut the military budget in half. This saves 320 billion.
2. Cut agriculture subsidies by 50 billion.
3. Impose a 50 % bracket on income above a million. This raises 50 billion.
4. Tax inheritance, capital gains,dividends the same as regular income. This raises 50 billion.
5. Tax income over 100,000 at 40 %. This raises 50 billion.
6. Apply the payrolltax to all income. This in addition to the payroll tax hike just passed will raise 200 billion dollars.
7. Interest on the debt will fall by 20 billion with the previous steps making a total of 810 billion.
That leaves a deficit of about 300 trillion which can be closed by more growth. If we impose austerity gradually and combine it with massive easing from the Fed we can have growth of 3% and an unemploymnet rate of 6%. This additional growth should lead to enough additional revenue to balance the budget. What about the debt of 16 trillion?? Forget it !! As long as our economy grows faster than the debt we'll be fine.