Present and future deficits

(Ref. 313)
Problem Components
Policy issue area: Economics
Policy issue: Taxing
Description: Annual Federal government deficits in excess of $300 billion per year in 1990 and beyond.
Symptoms: High interest rates, tending to result in inflation, damage to economy (housing, cars), unfavorable balance of trade (decline in exports and indirect subsidies to imports); worsening of the international debt crisis; loss of confidence by allies in American capacity as world leader; United States became the world's largest debtor.
Causes: Insufficient taxation and/or excessive expenditures of the Federal budget; caused by the administration's supply side economic program; political disagreement on how the budget should be balanced.
Cost of problem: Hundreds of billions of dollars in future interest payments.
Solution Components
Resources: Universities and research institutes; business and industry; government policy makers; taxpayers.
Goal: Prevent deficits in excess of levels that jeopardize economic growth and prosperity.
Program area: Financial resources development
Program-remedy: 1. The Common Good Covenant -- the careful balancing of our economic and social needs with the existing and new revenues available
2. Gradual reduction of defense expenditures by a policy of multilateral cutbacks of armed forces worldwide
3. Securing additional tax compliance
4. Reduce spending by $50 billion, and increase taxes by $50 billion per year.
Program-prevent: Moral and transforming presidential leadership, with an on-going foresight and remedial program development capability.
Cost of program: -
Beneficiaries: Taxpayers; business and industry; workers.

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