ECONOMY: Repaying the National Debt

One of the biggest problems facing America today is the $7 trillion national debt. You can see the exact total by viewing the National Debt Clock. Poor economic policies, shoddy accounting, mismanaged lending, and a slew of other factors have put us into this predicament. Libertarians believe that they have a three fold solution to the problem: cut spending, don�t raise taxes, and balance the budget.

Libertarian Party platform, and solutions to the debt:

First and foremost, �government must not incur debt, nor should it be allowed to hold assets, for these are debts incumbent on and assets taken away from the individuals of this country.� [1]


Solution Number 1 - Cut Spending: We need to use some restraint and stop spending so much money. How do you cut spending? Several ways. First, privatize all government operated businesses such as Amtrak and the TVA. Also, privatize all government federal agencies that are commercial in nature, air traffic controllers for example. All excess land holdings, buildings, and inventories need to be sold off as well. [2]

In 2000, Harry Browne stated that: I want to pay off the federal debt by auctioning off the assets the government shouldn't own -- western lands, power companies, unused military bases, and commodity reserves. The first proceeds from these sales should buy private retirement accounts for everyone dependent on Social Security. The remaining proceeds should pay down the federal debt. No one can know in advance what the assets will bring in the open market; the estimates have ranged from $5 trillion to $50 trillion. But if they bring in just $12 trillion, we can solve the Social Security problem once and for all, cover the other unfunded liabilities of the federal government, and pay off the entire national debt."

Solution Number 2 - Don�t Raise Taxes: This is a simple concept. Raising taxes results in more government spending. The Cato Institute�s Veronique de Rugy explains: �A key problem with trying to balance the budget with tax increases is that higher taxes fuel more spending�Another reason tax rate increases do not succeed in balancing the budget is that they shrink the tax base by reducing economic growth and spurring greater tax avoidance. As a result, the government only receives a portion of the typical revenue it expects to receive.�[3]

Solution Number 3 - Pass a Strict Balanced Budget Amendment: �We support the drive for a constitutional amendment requiring the national government to balance its budget, and also support similar amendments to require balanced state budgets. To be effective, a balanced budget amendment should provide:

a. that neither Congress nor the President be permitted to override this requirement;

b. that all off-budget items are included in the budget;

c. that the budget is balanced exclusively by cutting expenditures, and not by raising taxes; and

d. that no exception be made for periods of national emergency.� [1]

Drastic measures need to be taken to get this enormous debt off our shoulders, and the shoulders of generations to come.


References:
1 - www.lp.org...

2 - Cato Handbook for Congress 2002 Chapter 23, page 224.

3 - Veronique de Rugy


[edit on (8/21/0404 by PistolPete]

Thanks for outlining the Libertarian Party Platform on this Pistol Pete.

Perhaps it should have gone here though: ECONOMY: Budget Deficit and the National Debt

Edit: sp

[edit on 8/21/2004 by Gools]

Oh man, my bad Gools...I didn't mean to step on your toes! The sad thing is I did check to see if the topic had been done and missed it.

I believe much of the debt is owed to China (Or the biggest percentage)

This is what i heard from somewhere, how ever i dont know much truth it holds in it