How to Eliminate the National Debt and Save the American Economy in 4 Years
While Congress and the mainstream presidential candidates propose budgets that would do anything from continuing to expand federal spending to cutting up to a trillion dollars, no one has proposed a plan that would actually balance the federal budget and eliminate the debt. In this article I outline a four-year plan that could be put into effect tomorrow that would not only eliminate the deficit, but the entire national debt. It would also eliminate the need for the federal government to collect direct taxes from any American.
The three biggest areas of government spending are the military, social security, and medicare. Cutting these areas is the only way to realistically reduce federal spending. The government is the largest landowner in the world. The vast areas of public land are the primary asset which the federal government must liquidate in order to pay off its debts and manage the unfunded liabilities of the entitlement programs.
1) National Defense: The first step to controlling defense spending is to bring home all American troops stationed abroad and close down all U.S. military bases outside of the 50 states. The Navy would be brought back to U.S. territorial waters and reduced in size to two aircraft carrier groups, one for each coast, and 15 nuclear missile submarines. The submarines alone provide sufficient deterrent to prevent any nation-state from attacking the U.S. The aircraft carrier groups could provide security for shipping in U.S. territorial waters, replacing the Coast Guard. The standing army and Marines would be entirely disbanded. No nation can attack the U.S. in a conventional manner due to the nuclear deterrent. The Air Force would be reduced to small squadrons of fighter jets to protect the airspace over major cities. All bombers and other offensive weapons would be immediately decommissioned. With the elimination of all U.S. military involvement in the affairs of other nations, the “terrorist” threat will largely cease to exist (to the extent it ever existed in the first place). Any organization that attempts to carry out terrorist attacks would be treated like any other criminal group and pursued by state law enforcement agencies.
2) Social Security and Medicare: These programs make up the majority of U.S. entitlement spending and are unsustainable. The first step in trimming these programs is to implement a strict means test. Individuals with a net worth of over $100,000, excluding their primary residence, would be removed from the programs. All other persons over the age of 60 would be given a credit equal to the present value of their expected social security and Medicare benefits that can be used in the auction of federal lands. This credit can be sold for cash or used to buy land, or any combination of the two. Persons between the ages of 35 and 59 should be given a similar credit equal in value to the amount they have paid in social security and medicare taxes since their 30th birthday, or the present value of their expected benefits, whichever is lower. Everyone under the age of 35 would no longer have to pay social security and medicare taxes and would have to make provisions for retirement on their own.
3) The Rest of the Federal Budget: Eliminate all federal criminal laws and shut down all federal law enforcement agencies and prisons. Persons serving time for a violent offense would be transferred to a state prison in the state in which they committed their crime, all others would be set free. Federal departments of education, commerce, transportation, agriculture, interior, energy, and housing would be shut down. Persons currently receiving welfare-type payments from the federal government who are actually poor would receive a one-time cash payment equal to two years of their current benefit amount. All corporate subsidies and other forms of “welfare” for the rich would be eliminated immediately. The bureaucracy associated with all of these programs would be eliminated. All assets of the federal government associated with these departments would be sold to the private sector. The state department would be reduced to one ambassador with a small personal staff for each region of the world: Europe, Asia, Africa, and South America. These ambassadors would manage relations between the U.S. government and the nations of their region, with a strict policy of trade with everyone and conflict with no one. The Treasury Department would be reduced to a small staff tasked with collecting fees for services provided by the government, such as courts and port security, from those that use the service. All government services going forward will be provided on a fee for service system.
The Federal Reserve would be shut down over the four-year period. It would issue no new money after the beginning of the plan. The production of money will be turned over to the private sector. Each state would enforce laws against fraud, otherwise everyone would be able to use whatever form of money that they chose. Currently outstanding federal reserve notes would be accepted in payment for all government property that is auctioned off, including the gold reserves of the Treasury. That portion of the national debt that is owed to the Fed would be renounced. At the end of four years, any outstanding federal reserve notes that had not been used in the auctions of government property would be divided by the Fed’s gold reserves and the holders of the notes would be paid an amount of gold equal to their share of the total outstanding.
Private individuals and foreign governments holding the remaining outstanding treasury debt would be paid an amount of federal reserve notes equal to the present value of the bonds, which they could then use in the federal property auction or hold until the end of the four year transition period as a claim on a share of the Fed’s gold reserve. The auction of federal property is the central part if this plan. It would distribute the assets of the federal government to the American people based upon the amount of federal reserve notes that they currently hold and the present value of any entitlement benefit that the government owes to them. It would create a huge economic boost as the resources now held by the government would be released into the private sector. It would also provide a way for holders of treasury debt to liquidate their investment.
After this plan was put into effect, the federal government would be reduced to its constitutional duties and the vast majority of government power would be transferred to the states or simply eliminated. The huge debt that now threatens the future of all of our children would be gone and the American economy would be stronger than ever. The United States would once again be a beacon to the world of what men can accomplish if only they are free. The remaining federal expenses for the maintenance of the military would be paid by a combination of tariffs on goods imported into the U.S. and a levy on the states that would be based on population. The federal government and all the state governments would be constitutionally prohibited from borrowing money in the future. All government expenditures would have to paid for by current taxes.