The USA are no longer “AAA” and that is affecting countries all over the world. An interesting story line from CNN Money-”President Obama and lawmakers should seize the opportunity to start making real changes to reduce the debt, budget expert Maya MacGuineas argues.”
Put a multiyear plan in place: Congress must pass and President Obama must sign a plan this year that generates these trillions in savings. Not next year when more downgrades may have come. And not after the election when politicians will have dug themselves deeper into unworkable promises and a full-blown market crisis could have kicked in.
Your money in a AA-rated world
“We have to fix Social Security once and for all. Let’s start with the obvious: Raise the retirement age, fix cost-of-living adjustments and add a “means testing” component to how benefits are calculated so benefits are better apportioned according to need.
We need multiple layers of health care reforms starting with a stringent budget for spending and a willingness to try different structural reforms, including premium support and opening up traditional Medicare.
Discretionary spending does need to be cut overall, but some major areas of public investments need to be increased. And we should adopt more performance measures so programs that aren’t working can be quickly eliminated.
And, of course, we have to consider revenues. Tax reform is a no-brainer. Getting rid of the hundreds of billions of dollars in regressive tax breaks would allow us to lower rates and generate more revenue to close the deficit.”
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