National Debt : The Hamilton Proposal

1309 WordsAug 11, 20146 Pages
Nicholas Kasper Professor Badri Jawad Economics 201 August 10, 2014 National Debt: the Hamilton Proposal. Ever since the 1970s, increased government spending has lead to a $17.6 trillion debt. The government can alter this debt by the use of fiscal policy. Politicians are given two ways to do this, either increase taxes or reduce government spending. The Hamilton project proposes 15 different ways to reduce the deficit, which are broken down into four sections; social safety nets, tax reform, new sources of revenue, and establishing a budget for a modern military. The first component of the Hamilton proposal is establishing a social safety net. This is estimated to reduce the federal debt by $265 billion in the next ten years. This is done by 4 different ways. The first is transitioning to bundled payments in Medicare. Which will intends to establish a global payment system where providers are paid a fixed fee to cover all spending. This will provide incentives to treat diseases and encourage improvements in quality all while cutting costs, an expected $100 billion over the next ten years. The second part is reforming federal support for risky development. This calls for the reform of federal disaster programs which will reduce risk in public and private investments in disaster prone areas, and is expected to reduce the deficit by $40 billion. Next is restructuring the cost sharing and supplemental insurance for medicare, this is expected to save $125 billion over ten years.

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