From: tostan@bert.lerc.nasa.gov (Stan Mohler)
Subject: LET ME PAY OFF MY UNCLE SAM CREDIT CARD !!!
Organization: NASA Lewis Research Center [Cleveland, Ohio]
Distribution: usa
Date: Thu, 10 Sep 1992 15:35:10 GMT


              A PROPOSAL FOR CONTROLLING FEDERAL SPENDING

Fellow tax-payers:

Each year, the federal government makes numerous purchases for which you and I
ultimately get billed at tax time.  The government decides how much each of us 
is to pay this year, and how much we are to pay off later with interest.  The
latter is the deficit.  The deficit is financed.  The government barrows money
by selling bonds to make up the deficit.  We taxpayers then make the principal
and interest payments. 

Therefore, our tax return resembles a credit card bill.  There is a minumum
payment which we are required to pay, an outstanding balance, and interest 
charges.  However, unlike a credit card bill, we do NOT individually have the 
option of paying off our unpaid balance early.  The government forces us to 
finance a portion of it.  

As a consumer, I make decisions every day on how much of what to buy, and 
whether to pay up front or to finance.  I don't like to charge up my credit 
cards.  I like to pay them off each month.  It is bad enough that my voice is 
so small as to how my tax money is spent.  What really bugs me is that I can't 
even make the simple decision as to how much of my share of the tax burden to 
pay this year, and how much to pay over time with interest.  Instead, the
government decides, so that it can fool us into thinking this year's income 
taxes are lower than they really are.  At tax time, we forget that part of our 
payment is to pay interest, and that we will be paying interest for years to
come due to continued financing of deficit spending. 

Collectively, our nation's unpaid balance totals to over 2 trillion dollars.  
Currently, we are paying off past debts at interest rates that reach as high as 
13%.  The highest rates reflect barrowing Uncle Sam did around 1981, selling 
30-year T-bonds at over 13%.

Therefore, I have a simple request.  Congressmen, Senators, Mr. President,
fellow tax-payers: figure out how much of this debt is mine, and LET ME PAY OFF 
MY PORTION EARLY.  This way I could pay less later.  Change the income tax 
return so that it appears like the credit card bill that it is.  Indicate my 
unpaid balance and a minumum required payment (which I am already assessed each
year).  Give me the option to pay however much of the unpaid balance I want 
above some minumum.  

Three figures would be provided to each tax-payer: his or her unpaid balance,
minimum payment, and effective interest rate.  Each taxpayer's minimum payment 
would depend on his or her income level, just as it is now.  The unpaid balance 
would amount to the given tax-payer's share of the national debt, also by 
income level.  The current interest rate we are all paying is actually the 
result of debt that is distributed amoung a variety of instruments yielding 
different rates and coming due at different times.  Therefore, some equivalent 
composite interest rate would have to be devised.  The unpaid balance and 
effective interest rate that apply to any given tax-payer may not be easy to 
define.  But, as things are now, WE DO PAY THEM.  THEREFORE, THEY OUGHT TO BE 
CALCULABLE.  

Provisions would have to be made to protect tax-payers wishing to pay off debt.
Such a tax-payer should be entitled to recover some or all payments made above 
the minumum if he or she subsequently suffers a loss of income.  

My plan has far-reaching benefits.  For one, control of the deficit would be
put in the tax-payers' hands.  Congress could stop wasting time on hopeless 
plans to reduce the deficit.  For another, the harmful affects of the remaining
deficit would only fall on those who choose to continue financing their share.
The rest of us would be freed.

Deficit reduction may not be the most important reason to impliment my plan.  
My plan would open up a whole new mechanism for controlling federal spending.  
Under my plan, tax-payers would be far more aware of increased spending because 
their unpaid balance would reflect it at tax time.  Atlast, we would be as 
conscious of our federal spending as we are with our personal and corporate 
spending.  Tax payers who open their annual mailing from the IRS to see a jump 
in unpaid balance would find a reason to boot out elected officials who sponsor
pork barrel projects, even in their own districts.  A veritable posse of tax-
payers might assemble to hunt these officials down. 

Individuals and corporations have been rational enough to steadily lower 
personal, corporate, and local governmental debt over the last two years.  The 
reduction of total debt is what allows new purchases to increase, which brings 
the economy out of recession.  My plan would cause federal debt to join this 
trend of reduction.  Fortunately, the federal government's debt is only about a 
third of the total.  But we may not be so fortunate in the future.

President Bush offered a plan whereby tax-payers could check off a box to divert
10% of their taxes to deficit reduction.  A corresponding decrease in government
spending would be required.  This plan is hopeless.  If everyone checked the
box, then the government would have to reduce the budget by 10% in a year. 
This would wreak havoc, assuming the government could decide in a year where
to cut!  If the Republicans really do want Washington's spending to be held  
accountable to the taxpayers, they should impliment my more reasonable plan.

The Democrats shamelessly promote more taxes and more spending.  They criticize
the President for allowing them to.  If they really aren't the wasteful 
tax-and-spenders they are accused of being, then they should support my plan.

Today, the government decides how we finance it's spending.  It makes us pay
off some debt over 30 years, other debt in 5 years, etc.  There is a different
interest rate for each time period.  The governemt decides how quickly or slowly
we pay off our share.  My proposal is to let tax-payers make these decisions
individually.  The new tax form would force our elected officials to reveal to
each of us how much we are being being made to buy.  The result will be voters
with the power to do what's right instead of officials who can't.

DISCLAIMER: The views expressed here are solely the private opinions of the 
author.  They do not necessarily represent the opinions of anyone but the 
author.

-- 

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Stan Mohler			|     phone: 216-826-6629
NASA Lewis Research Center     	|    
Cleveland, Ohio  44135         	|     email: tostan@bert.lerc.nasa.gov 
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