Instead of boring everyone on facebook with my thoughts and ramblings on the US Debt Ceiling debate, I thought I’d explain it little more here.

First off I believe we need to raise the debt limit and at the same time get our spending under control. Defaulting on our debts would be a horrible thing for the country, and may very well send the world economy downwards. So let’s raise the debt ceiling.

Now let’s fix the problem at the root.

The budget that President Obama submitted to Congress would have the nation spending $3.456 Trillion (source).  I think that’s too much. Let’s cut that by 11%. That’s a budget of $3.075 trillion. It shouldn’t be too hard. I’ll also point out that the proposed budget in 2008 was $2.9 trillion.

Second let’s fix the problem of tax loop holes and companies not paying their “fair share”. (Hang with me on this one, conservative friends.) Let’s institute a 16% flat tax on all corporations. Based on a $14.66 trillion GDP (source) that equates to roughly  $2.345 trillion in tax revenue. That lowers the corporate tax rate from 35%, and closes all of the loop holes. This makes us very competitive on the world scale for tax rates.

Third let’s fix the problem of tax loop holes and citizens not paying their “fair share”. (Yes deductions are “loop holes” so there goes mortgage interest deduction and the charitable contributions deduction.) Let’s have a flat rate of 15%. Individuals will still pay less than businesses. That would bring in roughly $848 billion in tax revenue (Taking number of households in US times the median household income as provided by the US Census Bureau).That also means any single person making more than $34,000 a year would see a tax cut. Married people making more than $68,000 a year would see a tax cut. Those making less than $8,375 would see a tax increase of 5% (that’s $419 per year). Married couples making less than $16,750 would see a tax increase of 5% (or $837) per year.

This brings us to a total US Revenue of $3,193,915,773,111.  My budget proposal was $3.075 trillion. So we have a budget surplus of $118 Billion. That would allow us to retire the national debt that much sooner. Putting away $118 billion to paying off debt would (on top of what we are budgeted to pay off each year already) would help straighten out the financial ship of the United States.

It’s easy to see that the numbers speak for themselves. Unfortunately there’s no political will for this kind of drastic reform.

Disclaimers: Due to rounding and the like my numbers may be off a little bit, but they should be generally accurate.

All opinions are my own and not that of my employer.