Economics Teacher has a plan

Greg Mankiw, Economics teacher at Harvard has a plan to reduce the budget deficit.  The essence of the plan is the federal government writes him a check for $1 billion.  The plan will be financed by $3 billion of tax increases.  According to my back-of-the envelope calculations, giving him that $1 billion will reduce the budget deficit by $2 billion.

Now, you may be tempted to say that giving him that $1 billion will not really reduce the budget deficit.  Rather, you might say, it is the tax increases, which have nothing to do with the handout, that are reducing the budget deficit.  But if you are tempted by that kind of sloppy thinking, you have not been following the debate over health care reform.

Health care reform, its advocates tell us, is fiscal reform.  The health care reform bill passed last year increased government spending to cover the uninsured, but it also reduced the budget deficit by increasing various taxes as well.  Because of this bill, the advocates say, the federal government is on a sounder fiscal footing.  Repealing it, they say, would make the budget deficit worse.

So, by that logic, giving Professor Mankiw $1 billion is fiscal reform as well.  He says that he doesn't need the money, but if he can help promote long-term fiscal sustainability, He is ready to do his part. And so am I. I volunteer to be the next billionaire. The national debt now stands at a little over 14 trillion dollars, so we only need 6,998 more people to step up and take on this burden of becoming a billionaire under this plan to wipe away the debt. Who else is interested?