Despite missing the fiscal cliff, we still have a huge fiscal gap

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  • lawrence grossman benicia, CA
    Jan. 11, 2013 10:58 a.m.

    Here are elements of a relatively equitable, feasible and comprehensible plan to resolve the fiscal challenge.
    1. A fixed percent surtax would be added to all Federal income tax returns until fiscal balance is restored.
    2. A fixed percent spending cut would apply to all Federal government expenditures until fiscal balance is restored.
    3. The surtax and the spending cut percentages would be equal.
    4. The tax and spending percentages would start at 2% and increase 2% each year until fiscal balance is restored. This would gradually restore fiscal balance in about 10 years.
    5. Remaining federal deficits until fiscal balance is restored would be financed with Treasury bonds funded by the Federal Reserve. This would immediately halt the debt explosion. It would not add to the net cost of financing our debt because the interest we would pay on new debt to the Federal Reserve would be paid back to the government as income.

    This plan would not preclude more thoughtful change if that could be agreed upon and may even make such change easier to achieve.