With the Iranian situation heating up, it seems likely that there will be serious military conflict of some kind within the next several months. America needs to realize the implications of this; no longer can we keep spending like drunken sailors on bridges to nowhere, Congressional libraries, agriculture subsidies and the like.
That we have been able to invade, occupy and largely pacify two large countries on the other side of the world, at the same time as we increase nonmilitary discretionary spending at unprecedented rates and run up huge deficits in the process, without seriously stretching our economic capabilities, is a testament to our incredible wealth and power. But there are limits. As I noted earlier, China is beginning to diversify its dollar holdings; this by itself will change conditions on the ground in the financial markets, and if we keep employing our military international investors will begin to wonder how safe their money really is. Our current fiscal policy is unsustainable, and could give way entirely if Iran does not back down.
Now is the time for sacrifice.
To shore up our balance sheet, either payouts need to go down or taxes need to go up, and very likely both. Either way, people now have money (earned on their own or received from government) that will need to be taken away from them, for the nation's sake.
Agricultural subsidies and tariffs are a costly luxury, and in any event hurt the poorest Americans most by driving up food prices. They must go.
Tax writeoffs for mortgage interest cost the government over $70 billion every year, and effectively force renters to subsidize homeowners, as well as driving up home prices by encouraging wasteful use of credit. They must go.
Tying Social Security payouts to wage growth instead of inflation causes the cost of Social Security to grow faster than the economy. This must be corrected.
Congressional earmarks, while costing relatively little in the grand scheme of things (whats a few billion here or there, after all?), encourage a culture of corruption among our lawmakers, who learn to act not for the public good but for their own. In a time such as this, where so much change can be wrought for good or ill by those strong enough to act, such a culture is intolerable. Earmarking must be curtailed, at the very least by adopting the reforms advanced by Senator Coburn.
Tax credits, while valuable tools for encouraging preferred behavior among citizens, allow individuals or corporations to sometimes receive a net payment on their taxes. Tax credits should not become a stealth welfare tool. If someone's tax credits exceed their tax liability, the overflow should be deferred until the following year instead of being paid out. This has the benefit of reducing marginal taxes for the following year, encouraging economic activity.
Most of all, people need a way to buy in, to feel invested in their country and their government. Otherwise, Americans will not stand firm behind their military for the time necessary.