What are solutions to America's debt crisis?
Bret Baier calculates 'The Cost of Spending'
- Duration 5:47
- Date Dec 21, 2012
Bret Baier calculates 'The Cost of Spending'
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Cameron tonight Karl thanks so much all week we've taken a look at the problems of the government spending more than it takes an in depth.
From a variety of different angles tonight the fifth -- final part of our series the cost of spending looks it solutions.
-- -- -- The urgency we hear about our country's fiscal situation from politicians sounds.
Well urgent Washington's got -- spending problem not a revenue -- What is -- by the revenues that there has to be -- additional cuts this deficit could crush the future generations.
Our nation has been on an unsustainable fiscal path.
For some time the clock is ticking and we're running out of time.
And then there's that national debt clock again.
Always in the background.
Reminding both parties that whatever -- illusions.
They do need to happen pretty quickly.
And they need to be -- Because for many and it's hard even get their head around how big a problem we face.
Experts agree that drastic changes are required to actually eliminate the deficit pay off the debt.
And return America to a fiscally sustainable path.
But how much would some of the most talked about solutions actually save.
Shutting down the post office on Saturday this would help save about three billion dollars.
Changing Medicare eligibility from 65 to 67.
Would bring back six billion.
A plan proposed by senator Tom Coburn that cuts nonessential defense programs well that would save seven billion dollars.
Cap and tax deductions at 25000.
Would keep 68 billion dollars safe.
And proposed additional taxes on the top 2% of income earners.
Well that would bring in 82 billion dollars so hypothetically if all of these propose solutions were to be enacted.
-- spend 166.
Billion dollars less a year.
That seems like a lot right.
What -- it is but not when you compare to how much we spend a year which is roughly 3.5 trillion dollars that's -- we spent in 2012.
And it's even less when compare -- to our total debt.
Sixteen trillion and runs.
So enough about the problem and how small the possible solutions far.
How do we as a country start at least start to deal with this massive issue.
Economist John Taylor wrote the book first principles five keys to restoring America's prosperity.
Well the problem was created in Washington it can be fixed in Washington -- -- to -- in terms of the economics what's the best thing to -- -- the economics and for me.
That stood gradually.
Reduce spending -- this year GDP that -- reduce the growth rate as you pointed out.
Just go back a few years before the crisis that shouldn't be that hard to do that's what a -- would be doing if they were borrowing too much they just go back to where they were.
Before the problems began -- -- Really number one number two we have an opportunity now for to reform our tax code that will also stimulate economic growth and and in work on this high unemployment rate and longer term there are some reforms and so security Medicare this particular.
They couldn't we do ultimately what does it expected to be an explosion of spending.
It is something that's more sensible more sustainable.
Former democratic senator Evan -- narrows the solutions down to two categories.
Getting -- -- future rates of entitlement spending under control protecting the health care arena.
Those -- the big numbers secondly even modest increases in the rate of growth of the economy.
Even half a percent more per year compound that out over 1015 years.
That generates huge money which makes it so much easier to solve this problem in a way that's politically palatable.
Alice Rivlin Bill Clinton's budget director is one of the only people to be on both of the most prominent deficit debt commission's Simpson Bowles and Rivlin -- -- Where she was a co -- We actually hammered out a report it turned out to be very similar to -- Simpson -- report because the arithmetic -- -- there.
You have to slow the growth of the health care entitlements you have to put Social Security back on a firm foundation.
And you have to raise more revenues through a reform tax -- everybody -- looked at it comes out that way.
Now I think a very.
Substantial number of members of congress on both parties understand that.
But they're caught in this political game of blaming each other.
In order to do it you'll have to cut government's cost on public programs either direct government spending.
Or regulatory compliance expenditures -- -- told -- unfortunately.
At least in the regulatory compliance area.
We're moving in the opposite direction -- Arthur Brooks president of the American Enterprise Institute.
Now says he's actually optimistic.
I'm actually convinced that now's a better time than ever we have a golden opportunity to use some of the things that we should had done.
A really long time ago we have an opportunity to actually shape the entitlement crisis or turn the entitlement crisis around.
In ways that we couldn't have three or four years ago even though we needed to do that three or four years ago.
The key thing that we have to remember is not to let this slip away the fact there were in this crisis today presents a miracle with an opportunity to help save itself.
The question is whether lawmakers on both sides of the aisle will see that as well.
In Washington -- there Fox News.