A third option that no one has pointed out is increasing our GDP. To do that, this nation as a whole need to stop being so f*&$ing lazy.
Isn't the productivity of US workers the highest in the world, in terms of hours per week worked and actual value created per unit time? I seem to recall reading that somewhere, sometime (every few months of every year that I've been alive and paying attention).
There's a worthless nonproductive underclass in every society. Maybe (maybe) we over-enable ours. But our nation's problem isn't laziness. Ask all the unemployed people who've watched their jobs and industries evaporate.
Our problem is simple. We spend too much money, we live beyond our means, we borrow from Peter to pay Paul, we prefer cheap foreign goods over more expensive domestic goods. Even if we could flog more production out of the nation's workers, what's the point if that extra creative energy just feeds the spending cancer?
Trajan said:
A truly balanced budget is not desirable. Remember, part of Alexander Hamilton's genius was recognizing that our nation should assume a national debt in the first place. Virtually all economists agree that a balanced budget is actually a bad thing when we are talking about growing the national economy of the United States.
There is such a thing as managable debt, and the managable interest on that managable debt is a fair price for the opportunities and growth it affords today. Our state and federal governments have long since passed "managable" though.
There is only one way that running continual deficits can possibly be sustainable, and that is inflation courtesy of a fiat currency (which effectively reduces or holds constant the actual value of that debt, even as the digits keep climbing). But inflation is just a hidden tax on every citizen - savers, producers, and sloths alike.
The irony is that it's the tax-the-rich-more crowd (that tends to be toward the left, and supportive of president Obama) that has been least vocal and critical of this. Inflation via quantitative easement is the ultimate hidden and
regressive tax. The wealthy won't notice a 25% increase in food prices. The unemployed and poor sure will.
Do you really think what we've got and what we're doing is preferable to keeping debt in check in the first place?
Hamilton is famous and remembered because he successfully argued for the federal government to assume the states' Revolutionary War debt, and was the driving force behind establishing a central bank (among other things ... he did a little bit of writing, too). That kind of debt and monetary policy has N O T H I N G to do with the problems and fiscal habits we have today.
