Federal debt has recently reached yet another all-time high, reaching a staggering $34 trillion as of December 2023, driven by $1.7 trillion in revenue and spending deficits.
It's true that deficits increase debt, but spending is the driving force. Despite what Democrats would like us to believe, the solution is not to raise taxes or even balance the budget, per se. The only long-term solution is to cut spending.
To achieve significant reductions, we need nothing more than American Revolution 2.0. That revolution begins with CPI-X.
remarkable CPI minus XThis budget explosion is a rigorous, objective, and practical method that is both politically and administratively feasible to significantly reduce spending over a reasonable period of time, rather than simply delaying or withholding spending. is.
In short, CPI-X is a formula based on official historical and forecast data that allows spending to increase by inflation (CPI) minus inefficiency (-X). can. Reductions occur when economy-wide inflation exceeds government inefficiency, meaning CPI is less than X.
The X-Factor of Inefficiency is based on spending benchmarks for the federal government, all 50 states, and five similar countries and the European Union. These span 10 policy areas, including welfare and defence.
In fiscal terms, spending increased by 133% from $3.4 trillion in 2008 to a projected $8 trillion in 2024. That spending is projected to increase by 57% from a projected $8.3 trillion in 2025 to $13 trillion in 2038.
The political context is that spending is a bipartisan issue in Washington, DC. The two worst-spending single-term presidents since 1970 are Donald Trump and Joe Biden, with his $24 trillion and his $31 trillion, respectively. The two worst two-term candidates were George W. Bush and Barack Obama, with $23 trillion and $33 trillion, respectively.
CPI-X was invented in the early 1980s by Margaret Thatcher to better control spending in privatized government businesses. These were considered “natural monopolies.” It has since been used for decades to regulate utility charges in the UK, Australia and elsewhere.
I first conceived, modeled, and applied CPI-X to the ultimate source of unnatural monopolies: big government.
It is hoped that a one-time bill will be passed and signed into law in 2025, but the subsequent annual process will primarily consist of appropriating tapering amounts to government agencies across 10 policy areas. become. Each agency may have the discretion to prioritize and allocate internally based on the CPI-X budget cap.
This would reduce spending from $8.3 trillion expected in 2025 to $3.7 trillion by 2038. This is a 55% reduction, roughly returning to 2008 levels. The resulting $75 trillion in budget cuts could lead to both 100% debt relief over that period and income tax relief worth $19,347 per year per taxpayer.
America's bloated budget is not powerless. As they say, “In some places, intention,there is. Method” that Method CPI-X.
Darren Brady Nelson is an independent economist and think tanker working in the United States, Australia, and around the world. He is an expert on fiscal, monetary, and regulatory policy, as well as Austrian, Chicago, and Christian economics. He aims to “keep the bastards honest”, as the maverick Australian politician Don Chipp once did.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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