In 2009, the US spent about $700 billion on national defense. There have been a wide range of proposals to either shrink the size of the military, or to shrink the amount of money the military spends on defense goods (think: airplanes or ships). Some reports have raised concerns that too steep a decline in military spending could put our national security at risk.

A total spending freeze would require setting an acceptable level of government spending in advance, and then adjusting spending on all federal programs to meet that level. One Senator has put forth a plan to freeze all federal spending at 2007 levels; others have suggested freezing all federal spending other than entitlement programs (e.g. Medicare and Social Security).

Commonly referred to in news stories as a Value Added Tax (VAT), a new 10 percent national sales tax would be paid to the federal government by businesses and ultimately passed on to consumers through higher prices. In some European countries, for instance, restaurant patrons see the VAT reflected in the final total on their bill.

Americans contribute a percentage of their paycheck to fund the Social Security entitlement. Only income up to $106,800 is currently taxed. Some have proposed amending this tax so that it applies to all earned income.

Americans born between 1943 and 1954 are eligible for full Social Security benefits starting at age 66. The “retirement age” rises gradually to 67 for those born after 1954. Republican and Democratic legislators have suggested that a further increase in the retirement age would reduce Social Security’s fiscal burden on future generations.