In a speech to the Libertarian Party in Indianapolis, Michael Munger gives three things the government has to do to deal with the debt crisis:
1. Cut defense spending by by at least 15%. More than 15%—even better!
2. Sell US bonds in the Social Security trust fund. Also raise the Social Security minimum age requirement and introduce means testing.
3. Reform taxes and close loopholes.
Watch the entire speech to the Libertarian Party here. He makes some wonderful points — calling the Administration’s bluff on default by citing the activity of the bond markets and the term structure of interest rates (around the 9:30 mark). At the 15:10 mark he makes the argument that U.S. policy is DAFT.
For a shorter clip, you can listen to Professor Munger on unemployment benefits and the debt here around the 2:09 minute mark.