the core issue is not “debt” in isolation but chronic federal deficits that accumulate into debt.
1) Define the problem objectively
The problem is:
- The U.S. government spends more than it collects.
- Annual deficits add to the national debt.
- Rising debt increases interest costs and can crowd out other federal spending priorities.
- “Solved” would mean, at minimum:
- bringing the budget to balance or surplus over time,
- reducing debt growth relative to GDP,
- and doing so without violating individual rights or crippling production.
2) Goal and standard
Outcome target
A realistic target would be:
- reduce annual deficits to near zero over a defined period,
- stabilize debt-to-GDP,
- then reduce it gradually.
Principle target
Under PCOM, the government should not “solve” fiscal problems by violating rights. So:
- no arbitrary confiscation,
- no destruction of productive incentives,
- no inflationary evasion through money creation,
- no policies that punish production and investment simply because they are productive.
3) Separate the given from the man-made
Metaphysically given
- Scarcity is real.
- Resources used by government must come from production.
- Debt cannot grow faster than the productive base forever.
- Incentives matter: if you tax or regulate productive activity too heavily, you get less of it.
Man-made
- Entitlement formulas
- Tax code structure
- Spending programs
- Budget rules
- Regulatory burdens that slow growth
- Monetary/fiscal coordination that can mask costs temporarily
So the debt problem is primarily man-made, not inevitable.
4) Causal map
Symptom
- Large and persistent national debt
Immediate cause
- Persistent annual budget deficits
Deeper causes
- Automatic growth in entitlement spending
- Politically entrenched spending programs
- Interest costs rising as debt rises
- A tax system that often raises revenue inefficiently
- Weak political incentives for long-run restraint
- Slower economic growth than would be possible under freer production
Root cause
At the deepest level, the state has taken on functions beyond protecting rights, and political culture treats the federal government as a dispenser of benefits to competing groups. That creates constant pressure to spend now and defer costs to the future.
5) Validate the causal claims
If this diagnosis is true, we would expect:
- debt to keep rising when spending commitments outpace revenues,
- interest costs to rise as debt stock rises,
- deficits to persist even in non-emergency periods,
- countries or periods with more spending discipline and stronger growth to perform better fiscally.
That is broadly what we observe.
6) Interventions that target causes
A real solution has to focus on the biggest drivers.
A. Slow the growth of entitlement spending
This is the largest structural lever.
Possible measures:
- gradually raise eligibility ages for retirement programs to reflect longevity,
- means-test some benefits where appropriate,
- index benefits more realistically,
- reform healthcare entitlements to increase price competition and consumer control,
- move away from open-ended third-party payment structures that drive cost inflation.
Why this matters:
If the largest spending categories grow automatically faster than revenues, debt reduction is impossible without massive tax increases.
B. Cut or eliminate lower-value federal spending
Examples:
- end duplicative programs,
- shrink corporate welfare and subsidies,
- reduce unnecessary bureaucracy,
- review defense spending for missions unrelated to actual national defense,
- devolve non-federal functions to states or the private sector.
The key is not random cuts, but cuts based on whether the function is a legitimate federal role and whether it produces value relative to cost.
C. Pro-growth tax reform
The goal is not “tax the rich more” as a slogan, nor “cut taxes” as a slogan, but to increase production and stable revenue.
Possible measures:
- simplify the tax code,
- broaden the base while lowering distortive rates,
- reduce penalties on investment, entrepreneurship, and work,
- eliminate targeted carveouts that channel resources politically rather than productively.
A richer, more productive economy makes existing debt more manageable and raises revenue without higher coercive pressure.
D. Deregulate to increase growth
Economic growth helps debt ratios.
Focus on:
- reducing barriers to energy production,
- easing unnecessary licensing and permitting,
- reforming zoning and land-use barriers where federally relevant incentives exist,
- speeding infrastructure approval,
- reducing compliance burdens that suppress new business formation and productivity.
This does not “solve” debt alone, but growth is an essential part of any durable solution.
E. Enforce hard budget constraints
Political incentives matter.
Useful mechanisms:
- multi-year spending caps,
- requirements that new spending be offset,
- sunset provisions for programs,
- stronger transparency rules,
- fiscal triggers that force automatic review when debt or deficit targets are breached.
Without institutional constraints, promises of discipline usually fail.
F. Avoid inflation as a fake solution
Inflation can reduce the real value of debt in some cases, but it functions as a hidden tax and destabilizes planning, savings, and investment. Under PCOM, that is not a genuine solution because it attacks the productive base.
7) Contradiction check
PCOM rejects self-defeating proposals such as:
- “reduce debt by punishing investment and production,”
- “protect prosperity by expanding deficit spending permanently,”
- “fix overspending without touching the biggest spending drivers,”
- “control debt through inflation,”
- “grow the economy while increasing regulatory and tax burdens that suppress growth.”
These are package-deals that negate their own goals.
8) Operational program
A workable national program might look like this:
Phase 1: 1–2 years
- freeze growth of discretionary domestic spending in real terms,
- eliminate selected subsidies and duplicative programs,
- enact tax simplification,
- adopt a credible medium-term fiscal framework,
- create automatic budget transparency and long-term cost scoring for all major legislation.
Phase 2: 2–5 years
- implement gradual entitlement reforms, especially for future beneficiaries,
- reform Medicare/Medicaid cost structure through competition and consumer incentives,
- reduce regulatory barriers to growth in energy, housing, and infrastructure,
- impose spending caps tied to population growth plus inflation, or another objective benchmark.
Phase 3: 5–10 years
- target balanced primary budgets,
- reduce debt-to-GDP steadily,
- continue repeal of functions outside proper federal scope,
- maintain a stable legal environment favorable to production and investment.
9) Metrics
Track:
- annual deficit as % of GDP,
- debt held by the public as % of GDP,
- net interest outlays as % of federal spending,
- spending by major category,
- real GDP growth,
- labor-force participation,
- investment and business formation rates.
10) Bottom line
The U.S. can decrease its national debt only by doing some combination of:
- slowing the growth of major spending programs, especially entitlements,
- cutting non-essential federal spending,
- removing barriers to economic growth, and
- imposing structural budget discipline.
In one sentence:
The principled solution is to reduce the government’s claim on production, reform the spending systems that drive chronic deficits, and free the economy to grow faster—rather than trying to tax, inflate, or borrow our way out of a debt problem caused by overspending.
In addition:
Here’s a bipartisan realistic plan using PCOM: not an ideal philosophical reset, but a package that could plausibly attract support from moderates in both parties.
Right now, the fiscal backdrop is severe: CBO projects a $1.9 trillion deficit in fiscal year 2026, with debt held by the public at $32.1 trillion at the end of FY2026, and debt rising to 120% of GDP by 2036 under current law. CBO also says the FY2026 deficit is about 5.8% of GDP, well above the roughly 3.8% average over the past 50 years. (cbo.gov)
1) Objective goal
A realistic bipartisan target would be:
- reduce deficits gradually to 3% of GDP by 2035 or 2036,
- stabilize debt first,
- then begin reducing debt relative to GDP.
That 3% target has been advanced by budget groups as a credible benchmark; CRFB says getting there would require roughly $10 trillion of deficit reduction over a decade. (crfb.org)
2) Political reality constraint
A genuinely bipartisan plan probably cannot pass if it is built entirely on:
- only tax hikes,
- only benefit cuts,
- only defense cuts,
- or only discretionary cuts.
So the package has to spread pain and tradeoffs across:
- entitlement growth,
- tax expenditures and revenue,
- health costs,
- discretionary spending,
- and pro-growth reforms.
3) Causal diagnosis
The debt problem persists because:
- the government runs large structural deficits even outside crisis periods,
- major mandatory programs grow automatically,
- interest costs compound as debt rises,
- and discretionary caps alone are too small to solve the problem. (cbo.gov)
So a realistic plan must hit the big drivers, not just symbolic waste-cutting.
A bipartisan realistic plan
Pillar 1: Set a binding fiscal target
Pass a law establishing:
- deficit target below 5% of GDP by 2028,
- below 4% by 2031,
- below 3% by 2035/2036.
Pair it with automatic enforcement:
- if Congress misses the target, a package of pre-set spending restraints and tax-expenditure trims takes effect unless Congress replaces them with equal savings.
This kind of phased target is close to the structure CRFB has discussed publicly. (crfb.org)
Pillar 2: Create a bipartisan fiscal commission with fast-track vote
This is politically realistic because Congress often avoids big tradeoffs unless there is a structured process. A commission should:
- include both parties and both chambers,
- cover both taxes and spending,
- produce legislation by a deadline,
- receive an up-or-down vote without unlimited amendment.
CRFB has specifically argued for a bipartisan fiscal commission to develop a comprehensive package. (crfb.org)
Pillar 3: Slow entitlement growth, mostly for future beneficiaries
This is unavoidable in any serious plan.
A realistic bipartisan package could include:
- gradually raising the Social Security retirement age for younger workers only, not current retirees,
- making high-income retirees receive somewhat slower benefit growth,
- adjusting cost-of-living formulas modestly,
- increasing the taxable wage base in some form,
- and combining these changes with protections for low-income seniors.
For healthcare entitlements, likely options are:
- stronger Medicare payment reform,
- more income-related premiums for affluent beneficiaries,
- tighter anti-fraud enforcement,
- site-neutral payments,
- prescription-drug and procurement reforms,
- and incentives for value-based care.
This is the area where the most money is, because CBO’s long-term outlook identifies aging, healthcare costs, and rising interest costs as major budget pressures. (cbo.gov)
Pillar 4: Raise revenue, but mostly through tax-base broadening
A bipartisan plan usually works better if it emphasizes tax reform instead of just headline rate increases.
Realistic options:
- cap or limit large itemized deductions for high earners,
- reduce or phase down some tax preferences,
- tighten corporate tax loopholes,
- improve tax enforcement and compliance,
- consider modest energy- or consumption-based revenue if paired with offsets elsewhere,
- preserve or improve work incentives for lower- and middle-income households.
This lets Democrats say the wealthy and favored industries contribute more, while Republicans can say the code is simpler and less distortionary.
Pillar 5: Cap discretionary spending growth
Discretionary spending alone cannot solve the debt problem, but it should be part of the package.
A realistic compromise:
- hold nondefense and defense discretionary growth below baseline,
- review obsolete programs,
- reduce duplication,
- protect core national defense while trimming lower-priority missions and procurement inefficiencies,
- and require offsets for new discretionary expansions.
This is politically easier if both defense and domestic spending are included.
Pillar 6: Pro-growth reforms
Bipartisan fiscal deals are easier to sell if they are not just austerity. Include growth measures such as:
- faster permitting for infrastructure and energy,
- workforce participation incentives,
- housing supply reforms,
- immigration reforms targeted to labor-force and skill needs,
- and business-investment reforms that raise productivity.
Growth does not replace deficit reduction, but it helps stabilize debt relative to GDP. CBO’s framework itself measures fiscal sustainability relative to GDP, so faster growth improves the denominator as well as revenues. (cbo.gov)
Pillar 7: Protect against backsliding
A major problem is that Congress often passes one-time savings and then reverses course.
So add:
- PAYGO-style enforcement,
- sunset review for major tax breaks and spending programs,
- honest long-term scoring for new bills,
- a point of order against unpaid-for expansions,
- and public annual reporting on progress toward debt and deficit targets.
What the compromise would look like politically
Democrats likely get
- some revenue increases,
- protections for low-income beneficiaries,
- less severe near-term cuts,
- healthcare savings aimed partly at system inefficiency rather than only beneficiaries.
Republicans likely get
- entitlement restraint,
- discretionary caps,
- no heavy reliance on large marginal-rate hikes,
- structural budget enforcement,
- and growth/deregulation measures.
That’s what makes it bipartisan: everyone gives up something they like.
A plausible savings mix
If the target is about $10 trillion over 10 years, a realistic rough division might be:
- 30–40% entitlement and healthcare savings
- 20–30% revenue from tax reform/base broadening
- 10–20% discretionary savings
- 10–20% lower interest costs from reduced borrowing
- remainder from growth and enforcement effects
I’m presenting that as an inference from the scale of the problem and the structure of bipartisan fiscal discussions, not as a formal scored package from CBO. The reason is simple: discretionary spending alone is too small, and revenue alone is politically unstable, so a blended package is the only plausible route. (cbo.gov)
Operational timeline
Year 1
- Pass fiscal target law
- Establish bipartisan commission
- Freeze or tightly cap discretionary growth
- Ban major unpaid-for tax or spending expansions
Years 1–2
- Commission produces package
- Congress votes under fast-track rules
- Tax reform and enforcement begin
- Some discretionary and healthcare savings phase in
Years 3–5
- Social Security and Medicare changes for future beneficiaries begin gradual phase-in
- Growth reforms on permitting, housing, and labor participation take effect
- Annual deficit target moves down
Years 5–10
- Deficit approaches 3% of GDP
- Debt/GDP stabilizes, then begins easing if growth cooperates
Metrics
Track these every year:
- deficit as % of GDP
- debt held by the public as % of GDP
- net interest as % of outlays
- Social Security and Medicare trust-fund trajectories
- revenue as % of GDP
- primary deficit excluding interest
- real GDP growth
Bottom line
A bipartisan realistic plan is:
gradual entitlement reform + tax-base broadening + discretionary caps + pro-growth policy + binding enforcement rules.
That is the narrow path that is politically plausible and fiscally serious. It won’t satisfy purists on either side, but that is exactly why it has the best chance of being real.
If you want, I can next turn this into either:
- a one-page sample deal with specific policy items, or
- a table showing what each party would have to concede.
Learn more:
- Outlook for the Budget and the Economy | Congressional Budget Office
- The Case for a 3% of GDP Deficit Target-Mon, 05/04/2026 - 12:00 | Committee for a Responsible Federal Budget
- The Budget and Economic Outlook: 2026 to 2036 | Congressional Budget Office
- Break Glass: A Plan for the Next Economic Shock-Tue, 03/10/2026 - 12:00 | Committee for a Responsible Federal Budget
- Long-Term Budget Analysis | Congressional Budget Office