There is simply no way for national bills to be paid under current levels of taxation and promised benefits.
Sure there is! The same way we've done it since FDR! Print more money! I do understand what you are saying here (except for the slap at conservatives), we do need to take a realistic look at what we are doing with our money.
You mentioned tax when making a point about revenue, along with promised benefits. I would say the level of promised benefits is the real problem, not taxation. We could adopt a 75% tax rate, and it would not pay for what we have on our plate already, but the real problem is politicians who would spend any windfall before we could pay off the debt. Subsequently, taxation directly relates to revenue, the higher the tax rate, the less revenue ultimately generated. This is a consideration most pinheads aren't smart enough to understand, but it's been proven over and over again. You simply can't tax your way out of debt. It sounds like you could, and if all things were static, it would certainly work that way... more tax = more revenue... But, this assumes a static condition, that all people who are being taxed at a higher rate, are just going to pay the higher rate and continue making the money they made under the lower rate. This only happens in the middle class, where rate increases are fairly negligible, not with the uber-rich. To them, a increase of just a few percent, means millions or billions of lost dollars. These people didn't get to be rich by being unconcerned with the loss of millions or billions.
Raise the tax rates on these folks, and suddenly a company that made $30 million in profit last year, is showing a loss this year. Money that would have been invested in new equipment, new employees, raises, etc... all gets shoveled off into a foreign investment or trust. In the end, Uncle Sam sees less of this money.
So, you have a complicated problem here, you simply can't look at it from a stupid perspective and be able to figure out a solution that works. While you are trying to calculate the point of diminishing returns on your revenue, you still have the 800 lb. gorilla on your shoulders, of the promised benefits you can't sustain. The problem is not taxation, it is the benefits promised.
There are only two solutions to this problem, we either provide them and absorb the cost, increasing our debt, or we reduce them and modify them through reforms, increasing the discontent and whining from the left, and those who would lose the promised benefits. Since they vote, this is a problem as well.
I have always supported a combination of several ideas, as opposed to the simplistic remedy of either raising taxes or cutting benefits. Start with adjusting the level at which Americans aren't required to pay tax... let the lower to lower middle class pay some portion of the bill. This doesn't have to be a large amount, anything greater than zero is going to yield positive revenue. This sounds greedy, but from an economics standpoint, it is well-reasoned. The super-wealthy don't need to make money, they are easily motivated to not make money, if the tax rates are too high. Middle class people simply have to make money to live, they don't have the luxury of not making money to avoid taxation, as the rich have. So, the most effective taxation, in terms of real revenue, is always going to be on the middle class.
The next problem, and the real root problem, are these "promised benefits" and how we deal with them. We can't very well expect politicians to abolish the benefits, they are elected for the sole purpose of obtaining these benefits for their constituents. So, that is not going to happen in reality, ultra-conservatives can dream about it all they like, it ain't going to happen. Food Stamps, Head Start, and AFDC are here to stay.
What I would suggest, would be reform and modification, to make the benefits less available for those who don't need them. Why do people like Joe Kennedy get to draw Social Security and Medicare? Why can't these 'benefits' exclude those who don't really need assistance? Another scam we have going, is 'disability'. I can understand, if a guy gets his arm caught in a machine and becomes disabled, we need some mechanism to protect him and his family. I can see where this is a reasonable and responsible thing to do, and I don't have a problem with that... it's the 40-year-old fat ass who lives with Momma, and doesn't want to work, so he has some quack doctor diagnose a back problem, and there he sits on his ass playing his X-box, waiting for his check. These sort of "promised benefits" need to be revisited, in my opinion.
There is also the principle of growth. The rather simple concept, that as long as we are making more than we spend, the debt can be reduced over time. This requires that we use discipline and not spend the extra money, which politicians have proven they are unable to do. When we do manage to make more than we spend, politicians tend to find a way to spend it! Of course, my favorite way, is for them to give me a tax cut, at least I can see some tangible benefit for myself. But politicians in DC have a million ways to spend your money, and most of them include no tangible benefit to you individually.
This is what caused me to laugh so hard at Al Gore's idea of a "lock box"... it doesn't do much good if politicians have the key to the lock box, in my opinion. It's like a cocaine addict locking his stash in a box... will that plan ultimately work to break his habit? How about a cigarette smoker locking his smokes in the car? Will that make him quit smoking? We already had a SS "lock box", it was called a "trust fund" and it's full of I.O.U.'s now!
This is not an easy can of worms you've opened here, when you are legitimately serious about solving the problem. The simple-minded liberal approach of raising the tax rate for the rich, will not solve it. If anything, it will exacerbate the problem by reducing the gross revenues. The conservative libertarian idea of stripping government down to its bare essentials, would work, but there would be a lot of pissed off benefit recipients, as well as people dying in the streets from starvation and poverty... something most politicians don't want to be responsible for.
Balance the budget! Modify, reform, and change the current parameters of the "promised benefits", so that your payout is not greater than your revenue. Once your budget is out of the red, allow the natural growth to pay down the debt over time. Amazingly enough, when this starts to happen with regularity, the debt will vanish relatively quickly... not in two or three years, but within a few decades. This can't happen in the current environment, it's too political. People are stupid, and don't understand economics... they hear that so-and-so is going to "cut" their pet program, and they better vote for the other guy... and they do. They hear that so-and-so is planning on giving them a tax cut, and they essentially sell their vote for cash.
It's like Uncle Sam has become our Rich Uncle Sam. We don't have the slightest concern for our rich uncle's problems, or how he conducts his financial affairs, we just expect him to dole out the money to enable us to keep living like the rich nephew.
You are right though, it can't keep going the way it has indefinitely.
