Taxes, debt, spending, bankruptcy, high unemployment — these are some of the top problems the United States faces. Are there easy solutions? No. But are there solutions that make common sense, which can be considered “fair” by a sizable number of people, and which could be implemented in an acceptable way to various interest groups? I think there are.

Taken together, this package of proposals gives a plan that promotes prosperity and jobs, motivates private and public fiscal responsibility, and still maintains a safety net for the vulnerable and weakest among us.

The common-sense approach has four major parts. Here are the details.

• Implement a Consumption Tax:
Economies depend on investments in both physical and human capital to make progress over time. One of the problems with the income tax is its bias toward consumption (spending) over saving and investment. Numerous deductions and credits in the tax code motivate spending, whereas investment returns are sometimes taxed multiple times. A solution is a consumption tax. Here a taxpayer’s income is separated into two parts: one part that is spent, and a second part that is saved and invested. Only the part spent is taxed. The part saved, as well as the investment returns from that saving, is not taxed until those funds are cashed in and spent.

• “Tweak” Social Security:
Social Security is the mandatory national pension program. However, for decades experts have been predicting a “cash flow” problem in Social Security as a result of the rapidly retiring and large (in numbers) baby boom generation. If the program is to be kept in its present form, analysts say two simple changes could substantially extend its life. First, increase the retirement age for full Social Security benefits to 70. Second, use a less generous “inflation adjuster” for calculating the recipient’s initial pension. Importantly, these changes would be “grandfathered,” meaning current retirees and those near retirement age would not be affected.

• “Voucherize” Health Insurance:
Medicare — the federal health care program for the elderly — is one of the fastest-growing government programs. It’s widely thought addressing the national debt will require slower growth in Social Security and Medicare. Although Medicare certainly has user fees and spending restrictions, for the most part there is a fiscal disconnect between the beneficiary of the medical services and payment for those services. Also, the program makes few distinctions between wealthy and poor recipients, Nearly everyone receives full financial support from Medicare. One idea that is receiving much current attention would be to convert Medicare to a premium supported voucher program. Elderly users of Medicare would purchase private-market insurance for their medical and health care needs. However, the government would support this purchase by providing each user with a fixed amount of funds to be spent purchasing this insurance. But the amount of voucher support would be calibrated based on the user’s income.

Such a system would unleash consumer interest in monitoring the costs of medical care, since all users would have some of their own money on the line! Competition between alternative providers would be spurred. And government expenditures for this new program would be more predictable and controllable.

• Cash Out the Safety Net:
We have many programs to assist low-income households, such as Food Stamps, Temporary Aid to Needy Families, and Medicaid, to name only a few. Each has its own rules and regulations and bureaucracy to monitor those controls. A longstanding recommendation has been to convert these programs to cash grants for eligible households, and allow households to decide how best to use the funds. The cash grants would be structured carefully to preserve an incentive among recipients to earn more by working.

Leave your suggestions and ideas in reducing America’s debt in the comments below.