There is no one solution to solving America's fiscal issues
these 2 papers look at the 2 opposing approaches to resolving the deficit/budgetary issues facing America today and point out that neither by themselves will fix the issue
http://content.thirdway.org/publications/586/Third_Way_Report_-_Death_by_a_Thousand_Cuts_Why_Spending_Cuts_Alone_Won_t_Fix_the_Deficit.pdf
In order to demonstrate that cuts alone cannot reasonably solve our impending
fiscal crisis, we explore three scenarios, all of which rely solely on spending
cuts and use some variation of the pledges that most GOP congressional members,
as well as the GOP ticket, have made.*
• Scenario I puts all spending on the table and cuts all federal programs
evenly across-the-board. To reach deficit targets, annual cuts rise to 20%
in 2025 and eventually reach 25%, hitting everything from FBI agents to
schools to Social Security to highways.
• Scenario II takes politicians at their word and exempts Social Security
from harm in a cuts-only approach (as the House-passed GOP budget
does). Sparing Social Security benefit reductions leads to annual cuts in
other areas of 26% in 2025 that eventually surpass 30% in subsequent
years, leaving gaping holes in key government services.
• Scenario III most closely follows Romney’s position and exempts both
national defense and Social Security.1 Annual across-the-board cuts would
reach 32% in 2025 and eventually rise to 40%, eliminating two-fifths of
non-defense government.
http://content.thirdway.org/publications/585/Third_Way_Report_-_Necessary_But_Not_Sufficient_Why_Taxing_the_Wealthy_Cant_Fix_the_Deficit_.pdf
In order to demonstrate that taxes alone cannot solve our budget woes, we
explore three budget scenarios, all of which rely solely on revenue and leave
entitlements and other spending as is.
• Scenario I includes each of the Democrats’ key proposals for taxing the
wealthy: roll back the Bush tax cuts for those with high incomes, limit
their deductions, bump up the estate tax, and pass the Buffett Rule.
Even if each major Democratic proposal to raise taxes on the wealthy
becomes law, the national debt will double as a share of the economy
by 2035, and the annual deficit in 2040 will exceed $4 trillion, in
inflation-adjusted dollars.
• Scenario II piles on more tax hikes for the rich, enough for the
government to reach and surpass its record-high level for revenue as a
percentage of GDP (averaging 21% of GDP between 2014 and 2040). In
this second scenario we aim all of the tax hikes on the wealthy with only a
smattering hitting the near-wealthy. Even with tax rates for the wealthy
at 50%—higher than any rates under discussion—the national debt
will double as a share of the economy by 2040, and the annual deficit
that year will exceed $3 trillion, in inflation-adjusted dollars.
• Scenario III shows the volume of tax hikes needed for taxes to singlehandedly
contain long-term deficits. This scenario keeps the tax hikes on
the wealthy from Scenario I, leaves entitlements on autopilot, and pushes
deficits to the target level with additional tax increases on everyone.
Relying on taxes alone to hold long-term deficits at 3% of GDP would
require phasing in a 60% tax increase on the median-income family,
raising its annual tax burden by $6,200, in 2012 dollars.
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