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1. Cancel Government Debt to the Federal Reserve

Over $1.6 trillion of the US national debt is owed to the Federal Reserve, which is a government sponsored enterprise created by an act of Congress. The Fed even returns any profits from its activities to the US Treasury anyways. Its assets are assets of the federal government. This is money the government essentially owes to itself. Last year, Ron Paul suggested that Congress knock all that money off the national debt (and thereby create some breathing room between Congress and the debt ceiling) by instructing the Federal Reserve to forgive all those debts by destroying the government bonds on its balance sheet. Why not?

2. Sell Government Assets

Back in 2009, a pair of creative Minnesota lawmakers recommended the state government close its $6 billion budget deficit by selling off Minneapolis-St. Paul airport to private companies to own and manage. It’s a creative solution for a quick shot in the arm of needed revenue that also creates a systemic fix by taking mismanaged government programs out of the budget and putting them in the hands of private businesses to manage and improve.

A good place for the federal government to start with a solution like this would be the US Postal Service. Washington’s postal service is poorly-managed, inefficient, and unnecessary in the era of email, FedEx, and UPS. The USPS fleet of more than 250,000 vehicles, its massive staff (as the third largest employer in the US), its infrastructure, and its operational expenses cost the taxpayer billions every year. Selling these assets off to the private sector would put them to more productive economic uses, raise a quick round of revenue now, and take some of the pressure off the federal budget year after year.

3. Legalize and Tax Marijuana

In 2010, Philadelphia decriminalized marijuana with the SAM (Small Amount of Marijuana) program. Before the SAM program, Philadelphia spent thousands of dollars on every drug case. DA Williams said “We were spending thousands of dollars for when someone possessed $10 or $15 worth of weed. It just didn’t make sense,” estimating just 12 months after the SAM program started, that decriminalization had already saved the city $2 million. In addition to court costs for prosecuting marijuana offenders, consider the fiscal impact of US incarceration of so many non-violent drug users. Then there’s the opportunity cost of foregone tax revenues that government could be collecting on marijuana if it were legalized. America is both spending and missing out on raising billions of dollars at every level of government at a time when its finances are at the point of crisis.

4. Normalize Trade with Foreign Countries

As recently noted at IVN, lifting sanctions on countries like Cuba would open up valuable economic opportunities and help grow the US economy, meaning a wider base of taxable wealth to boost federal revenues without even raising taxes:

“Moving to ease sanctions on foreign countries and establish permanent normal trade relations with countries currently under economic blockade could go a long way toward fostering international good will while opening up valuable markets and economic opportunities for trade, stimulating growth and job creation in the US. It would be like a multi-billion dollar economic stimulus package that taxpayers wouldn’t have to pay for and the US government wouldn’t have to borrow money to finance, and its effects wouldn’t be temporary, they would be permanent, systemic, and structural.”

5. Privatize Social Security Accounts

The net present value of privatizing Social Security is estimated to be as great as $20,000,000,000,000. Fifteen years after Chile privatized its own version of Social Security in 1980, the results were stellar:

“Pensions in the new private system already are 50 to 100 percent higher–depending on whether they are old-age, disability, or survivor pensions–than they were in the pay-as-you-go system. The resources administered by the private pension funds amount to $25 billion, or around 40 percent of GNP as of 1995.

By improving the functioning of both the capital and the labor markets, pension privatization has been one of the key reforms that has pushed the growth rate of the economy upwards from the historical 3 percent a year to 6.5 percent on average during the last 12 years. It is also a fact that the Chilean savings rate has increased to 27 percent of GNP and the unemployment rate has decreased to 5.0 percent since the reform was undertaken.”

While the national debt is technically at $16 trillion, the total outstanding obligations Washington has over the next few decades as a result of programs like Social Security is a much more harrowing number. Social Security is at a point of crisis, and Americans already have, in Chile, a working model for successful reform.

6. End All Corporate Welfare

Conservatives and Republicans can get on board with eliminating corporate welfare– that is federal handouts to corporations in the form of subsidies, credits, and bailouts– because it’s a form of wealth redistribution. Progressives and Democrats can get on board because it’s a regressive distribution of wealth from working class Americans to wealth businesses. Why should companies worth billions ever be on the government dole? Writing at Forbes in 2008, Russell Roberts, noted: “Corporate welfare rewards those corporations that excel at lobbying rather than serving their customers. Eliminating it will save $100 billion annually.”

7. Bring The Troops Home

With Osama bin Laden dead, the Taliban crushed, and Al Qaeda’s top leaders killed or captured along with most of the organization destroyed or out of Afghanistan, it’s time for America to declare victory in the War on Terror and bring the troops in Afghanistan home to a hero’s welcome, rather than leave them in the region to fight foreign, ethnic civil wars and guard poppy fields while borrowing money by the billions to pay for it. With Saddam Hussein dead and a new regime in place in Iraq, it’s also time for Washington to withdraw from that region, curtailing federal spending by billions more. Defense hawks should consider that there is arguably no greater, nor more imminent threat to America’s national security than its unsustainable and rapidly exploding national debt. Unless policymakers can get it under control, future generations of Americans will be left vulnerable by a government simply unable to afford national defense.