Where Should the New 114th Congress Focus Its Attention?

 

The two main themes of this website are how to boost economic growth and how to get our national debt under control.  Faster economic growth will put more people back to work by creating more jobs.  Faster growth will also bring in more tax revenue and therefore potentially reduce deficit spending.
The latest monthly unemployment rate, 5.8% for November 2014, is much higher than it should be almost six years after the end of the Great Recession in June 2009.  The best thing that Congress could do to boost economic growth is to adopt broad-based tax reform, lowering tax rates in a revenue neutral way by closing loopholes and limiting deductions.  I’m still in favor of doing this but I no longer consider it to be the top priority for the following reason.
The huge drop in the price of gasoline is already providing a big economic stimulus.  At the current price of $2 per gallon, the average American family will save about $750 per year in driving expenses.  This is even more relief than a tax cut would provide.  The economy has already picked up steam in 2014 and is predicted to grow at the rate of 3% in 2015.  This will keep the unemployment rate decreasing steadily throughout 2015 and beyond, which represents much progress.
Capture1It’s now time for Congress to focus more strongly on putting the debt on a downward path.  This can only be done by shrinking our annual budget deficits well below the $483 billion deficit for the last (2014) budget year.  As the above chart from Fix the Debt shows, our current fiscal path leads inexorably to a growing debt which is completely unsustainable in the long run.  Annual deficits will have to be at least cut in half to be able to turn the debt trajectory downwards.
Getting this done will require much dedication and hard work by Congress.  Many programs will have to be eliminated.  Surviving programs will need to operate more efficiently.  The entitlement programs of Social Security, Medicare and Medicaid will have to be greatly tightened up.
Is Congress up to this task?  The future of our country depends on it!

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