The Debt Commission's Homerun

Obama’s much maligned debt commission, issuing a preliminary report, got it right. In fact, the recommendations are a home run. We are in a debt crisis which is effecting every aspect of our life, and everything needs to be on the table. And what is surprising, the hue and cry of criticism has been remarkably muted. America is in the mood to get all of this mess straightened out, and realizes there are no sacred cows.

Among its recommendations is the elimination of the home mortgage interest deduction for mortgages in excess of $500,000.00. Finally!!! While the government and populous has long viewed this sacred cow as an entry way into home ownership representing the America dream; how has that worked out for you? Most experts ask a very logical question. Why should a segment of the population who responsibly attempts to limit the amount of money borrowed against their houses subsidize interest payments for those who use it as a cash cow…which is the effect of this tax deduction!! It skews the prices of real estate, and punishes those who attempt responsible behavior. It is particularly egregious on luxury homes, where rich take the tax deduction and use their money for something else as taxpayers make the interest payments.

Social Security was originally designed as a government safety net for those seniors who probably would die prior to qualifying for the benefit. It has morphed into the government paying for all living expenses once you turn 66 and for the next 20 -25 years. It is a ponzi scheme based on new people coming into the workforce paying for those leaving the workforce at the other end. Whereas before 20 people coming in payed for 1 person leaving, it is almost two to one now! It is unsustainable.

The recommendations are to raise the retirement age to 69 by the year 2075. That is not as goofy as it sounds. Advances in medicine, including cures for cancer and Alzheimer’s disease will most likely extend the average life span to almost 90 years old, and general overall medical care will make people more fit for work for longer periods of time. Hardship provisions will be built into the system for those who have physically conditions preventing them from working over 65…but for the most part this idea is a winner. In addition, it raises the amount of income subject to social security contribution to $150,000.00.

The balance of recommendations is mixed bag of fairly standard stuff. There would be an increase in the gasoline tax by 15 cents per gallon. Government would subject to mandatory reductions in earmark programs and an across the board budget cut for all agencies. Also included is a freeze on federal employee wages (long overdue). Tax rates will be simplified and greatly reduced in exchange for elimination of the alternate minimum tax and other tax deductions which are slights of hand for special interest groups. It is chuck full of all sorts of stuff!!

There has been some rumbling from the right and the left. It reminds me of the immortal rules of the late, great Mahoning County domestic relations Judge Leskovansky: If both parties leave here angry at me, then I have done my job.

It remains to be seen how many, if any, of the recommendations will be eventually adopted. But I am encouraged that difficult issues will now be addressed in an adult manner. For all of the posturing on the left and right wing blogs and pundits, most of America is ready for a serious conversation of those things that are necessary to secure the financial well being of our country for ourselves and our children. Bravo, debt commission!!