After fully studying the deficit reduction proposal put forward by Catfood Commission co-chairs Alan Simpson and Erskine Bowles (PDF), I realized that I could write a 55-world proposal that would do a substantially better job of reducing the federal debt. I’m calling the “Super Awesome Deficit Plan” and here it is:
Starting in 2016, to be in effect until the debt is gone: I recommend requiring both the President and Congress to make recommendations whenever average cost growth has exceeded GDP minus 0.2 percent over the prior five years. To the extent health costs are projected to grow significantly faster than that pace, I recommend the consideration of structural reforms to the health care system.
That is it. My Super Awesome Plan would make no other changes to our government.
My Super Awesome Plan would fully “eliminate” the deficit and debt. It would do it by telling the future President and Congress in 2016 that they need to figure some way to bring down health care costs if they grow faster than GDP minus 0.2%. It “works” because health care costs are exclusively the source of our long term deficit.
I fix the deficit by telling people in the future they need to fix it. It is so simple! I even put together a chart roughly showing how way more effective my plan is than the Simpson-Bowles Commission proposal:
That is amazing! My Super Magical Deficit Plan performs way better and is a lot shorter. What fool would even consider Simpson’s and Bowles’ worse plan?
Now you may think I’m cheating. You might argue that my plan is not really a solution because all it does is claim that in the future magically someone else will figure out the politically tough fix. You might think it is tantamount to claiming you are rich because you promise yourself in ten year you will convince someone to give you $10 million. That all may be true, but what my Super Awesome Plan is doing is absolutely no different than what the Simpson-Bowles plan does.
My proposal was lifted straight from their report. I just changed a handful of words, modifying the size of their global health care cap and moved the start date up from 2020 to 2016.
If “serious people” are going to treat the Catfood Commission proposal as a serious attempt to bring down the long-term deficit then there is no logical reason they shouldn’t treat my “Super Awesome Magical Deficit Plan” with any less reverence. Their proposal only begins to perform much better than the current law baseline, or the alternative scenario, after 2020 because they are using the same health care cost reduction magic of making it some future group of suckers’ problem while they take the credit.
Simply commanding that people ten years in the future figure out something to reduce health care spending might not sound like an actual solution to you, but in Washington, among the “serious” people, it is in fact held up as a great triumph.






25 Comments

Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL Action
“Superawesome” brilliant move, Jon. Too bad the “serious” people won’t read it.
I have a very “serious” deficit reduction plan too. It prescribes 1) Keeping average interest rates at 0.0226 and 2) finding a way to increase the growth in nominal GDP from an average annual change ratio of 1.044 (CBO’s assumption about growth) to a more historically (since 1940) typical average annual change ratio of 1.072. The two changes result in deficit reductions of $8.3 Trillion from 2011 to 2020. The absolute value of the national debt increases from $9.2 Trillion in 2010 to $10.7 Trillion in 2020, and the debt to GDP ratio declines from 69% in 2010 to 37% in 2020.
One objection that may be raised to this is a claim that the Government doesn’t control the interest rates it pays on bonds, and that the rates are controlled by the bond markets. But that happens by our choice. (See: http://www.moslereconomics.com/mandatory-readings/the-natural-rate-of-interest-is-zero/ for example) If the Congress would let the Government deficit spend without issuing debt instruments dollar-for-dollar (something not required by the constitution), the Treasury and the Fed could target whatever interest rate they wanted for Tsys. Japan has already shown that this is the case and has only a 0.0025 interest rate on its debt.
In addition one can argue that all debt issuance on Federal deficit spending should stop because it only 1) keeps interest rates materially above zero; provides “welfare” for the rich and foreign Governments; and also keeps the national debt issue alive when it can easily be laid to rest (since if we don’t issue anymore debt, all of our current debts would be paid off in a few years as hey come due). If we did this it would save roughly $11.8 Trillion in interest payments between now and 2025. (See: http://my.firedoglake.com/letsgetitdone/2010/07/13/which-would-you-rather-cut-social-security-or-interest-for-foreign-governments-and-rich-bondholders/)
Great post.
Once I saw the CBO graph showing escalating health care costs to be equal to the projected growth in the deficit, I quit reading much more about the debt crisis. It’s all Kabuki put on by the oligarchs, enabled by the uninformed in my view.
Why more pundits in the MSM aren’t hammering this I can’t figure. “After the commercial break: why tax cuts for the rich will save our economy.”
What these guys are doing macroeconomically makes you want to cry . At what point does America say, “enough with the wealth redistribution to the oligarchs and their tools!”?
Your plan is flawless, however the chart would benefit from the Scooby Doo Mystery Machine riding down your trend line.
OK, your plan is flawless too. During World War II, Tsy and Fed agreed to cap short-term interest rates at .375% (and along-term rate of 2.5%, but they could just roll over short-term notes instead). For some reason, President Roosevelt never had to come out and say “Well, we are out of money now”.
I imagine if Pete Peterson could buy a time machine, he’d send David Walker back in time (“sorry Dave, its a one way trip”) to warn Morgenthau and Eccles of their mortal error.
Thank you and it is a good idea but perhaps too late to add.
Maybe if David Walker went back Eccles and Morgenthau would do the convincing, and then he would come back and persuade Peterson that if he wants to be a loyal American he’s got to cut out all that BS. Only in my dreams, of course!
What a terrific plan! I love it!
Or maybe they’d send him to BF Skinner’s pigeon lab for reprogramming.
http://en.wikipedia.org/wiki/Project_Pigeon
I’m amazed no one in DC hadn’t come up with this already. A sure-fire winner at all those DLC retreats, I’m sure.
The goal of the CatFood Commission is to reduce taxes for the rich. Most politicians don’t really care how that is accomplished, but they need to hide the real goal in 55 pages of nonsense. So your plan would not be acceptable.
The other goal of the CatFood Commission is to make sure that there continues to be money available so we can do this.
~~modnote: Graphic Footage~~
The “AK-47″ was the camera of the Reuters photographer.
My 10 word plan:
Let Bush tax cuts expire. Single payer. No forever wars.
me 2
Exactly. Their proposal seeks to complete the pillaging of the country’s wealth started under Reagan. They can’t have their Neo-Feudal Paradise without destroying the middle class and reducing everyone who is not a millionaire to the status of serfs.
If they were serious about genuine reform, instead of wealth redistribution to the already giga-rich, they would cut the Pentagon budget by about 90 percent. Deficit problem solved. Throw in single payer healthcare and fully tax corporations, no matter where their fake headquarters happens to be, and we can fund the entire government and have a huge surplus too.
That should be Double Mega Super Awesome Plan.
All these comments are a farce. A reputable president must call for an investigation of the foreclosure fraud, indict and prosecute the financial wizards at all levels of the title chain, take TBTF banks into receivership, restructure or liquidate as needed.
After that end all of our wars, close foreign military bases.
Unemployment will soar in the short run but capital would flow back creating indescribable opportunity.
What chance do we have for this? ZERO.
Say there’s a boat – it springs a leak, starts to sink. Rather than getting everyone working together to bail out the water, the captain decides to start throwing people out. Slows down the sinking and a select few people might make it to shore in the boat before it sinks.
Great! One thing I would add–Do the same with Social Security. Just let it work itself out in future generations. No need to get all panty wadded about it now.
Here’s my deficit plan.
1) Decide what you want to accomplish with government.
2) Calculate what it costs.
3) Add in a half-trillion per year to pay down existing debt.
4) Progressively tax that amount, with very little of the tax burden being levied below the median income.
IF our “leaders” were serious, they’d start YOUR plan in 2012!
Enough said, have a great day.
2 words to solve the deficit: single payer
3 steps to create surpluses:
1. single payer
2. end tax loopholes and tax cuts for wealthy
3. end the wars in iraq and afghanistan
Make it 59 words and add “The Moment of Truth” to it.
4. Don’t start any new, really stupid wars