The fiscal policies necessary to counter US overspending would be pretty simple to implement, if only there was political willpower to make it happen, Research Affiliates CEO Chris Brightman wrote on Thursday.
“Necessary fiscal reform is economically easy,” his note said. “Unfortunately, it’s politically difficult.”
Most or all of the federal deficit could be erased through adjustments to the Social Security program, as well as the introduction of a national value added tax, or VAT.
Specifically, the government could find needed funding by raising the retirement age for Social Security benefits, as well as raising maximum income on Social Security taxes.
Meanwhile, a nationwide VAT program could be enough to eliminate the US budget deficit by raising total tax receipts to a necessary level of 36% of GDP. Today, that figure stands…
