I balanced the budget. And it wasn't too difficult
The Economist magazine had an article about various options how to balance the 2014 budget. Normally such articles run like along the lines: "Option 1: tax charity organizations proving free soup to the hungry - Savings: $30M; Option 2: Allow Medicare to pay for involuntary euthanasia of certain groups of patients - savings: 50M". But this article was more reasonable than that, so I tried to find the missing $726 billion using the options available.
I rejected the proposals to raise retirement edge to 70 because that was too drastic for my taste; I felt sure I'd find some fat to trim someplace else. I indignantly threw away the option to change benefit inflation index because that was clandestine theft. If you take money from someone, you should do it openly. You should never make inflation appear lower than it is, the only result of such lies is loss of credibility. Similarly, I rejected proposals to eviscerate Medicare/Medicaid in one way or the other (by raising Medicare age, or converting Medicaid shares to block grants, or reducing Medicaid to wealthy states). This doesn't mean that I don't think there's no savings to be realized there, but I rejected it because they didn't mean sensible cuts like eliminating fraud, instead, they just wanted to cut services across the board. That was unacceptable to me because such savings would be illusory. In the end these services would still have to be purchased, only from the private system and at even higher cost. But I accepted the proposal to reduce highway funding because I think the roads will survive it; meanwhile, we get $8 billion of savings.
Then I chose to eliminate tax deductions for employer-provided health insurance. This saved me $215 billion. I said earlier that I don't think cutting medical services was a good idea. But tax deductions is a different matter. First, they distort prices and discourage market participants from behaving rationally. Second, they provide a way for the HMOs to raise premiums by the same amount that you subsidize. So I felt that nothing very horrible would happen to healthcare if we remove the deduction. HMOs would have to swallow the larger part of the losses, and even though they want you to think otherwise, they have enough resources for that. Then I eliminated the mortgage interest deduction for similar reasons. This deduction is not helping home buyers at all. Lower effective interest does not make anything more affordable if you pay that lower interest on a higher principal. Besides, it means that the more you overpay for the house, the more the taxpayers will sponsor you. I eliminated the deduction of state and local taxes because this tax deduction makes the tax system less progressive, and, perhaps just as important, more complicated. I eliminated the deduction for the capital gains on homes because I feel that all capital gains should be treated equally. If you earned a capital gain, you can well afford to pay the tax. I then got rid of the deductions for property taxes and muni bond interest. Now I had a total of $560 billion of savings. Then I raised fuel tax by 50 cents a gallon to get additional $62 billion. Now I had saved as much as $622 billions - not so bad. But I needed another $104 billion. With a deep sigh I agreed to the introduction of a VAT. The Economist was proposing a 5% tax to save $324 billion. Fortunately, I did not need that much. A 2% tax would be fully sufficient for my purposes.
So now I had the 2014 budget fully balanced, and I had nothing to blush about except that part where I showed weakness and agreed to the VAT which I generally think is a bad idea. But heck, I accomplished the mission and the playing field was stacked against me. After all, they didn't give me the option to cut military spending even by a cent, or remove farm subsidies, or remove the tax deductions of education expenses and capital losses, or cut the salary of government bureaucrats by 10%. If I had a more level playing field, I could balance the budget without introducing the VAT, and maybe even produce a surplus. This exercise served to reinforce my belief that most economic problems are self-inflicted and are easy to solve if only you have guts and can ignore the screams of special-interest groups. Unfortunately, the current holder of the top government job lacks both requirements. When he hears a lobbyist cry, his eyes stream with tears...