Ronald Ernest "Ron" Paul (born August 20, 1935) is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes Galveston. Paul serves on the House Committees on Foreign Affairs and Financial Services, and on the Joint Economic Committee. He is the chairman of the Financial Services Subcommittee on Domestic Monetary Policy and Technology, where he has been an outspoken critic of American foreign and monetary policy. -Wikipedia


Nice man, he proposed congressional pay cut. As stated in the letter, by a 5% cut, it will safe 50M in 10 years. Greet idea since the congress members do earn a lot, and there is a threshold for salary. Once the salary reaches that threshold, the money over that line will not increase the quality of life. Moreover, don't need to mention all other kinds of revenues they can get. However, it would be hard, since most people don't want to have a salary cut. On the other part, Ron Paul could get a huge support from the Americans; it will definitely help him for the election. Being said, 50M will not make a huge difference, there must be other ways to reduce the deficit. For example, increase GDP.


To decrease the deficit, we can use this formula:
GDP = (Export - Import) + (Infrastructure Investment + Government expense + Consumer spending)


-Export/import = can't really change it.
-Invest on infrastructure
-Decrease Government expense, of course, it is had to cut military expense, USA is a huge target. And the education is expense enough, hard to squeeze anything out of that without affecting education. Only fields they can cut are public service and pay checks.
-Consumer spending is fairly easy to control by changing control bank's interest rate. But now, the interest rate is already 0.250%, how low can they go?


To conclude, the only way out is to increase infrastructure investments, and cut on public services (salary, medical care, public transport, etc.) and pay check (take away pensions if necessary) Obama's medical care plan might get delayed as well. Well, good for democrats, because people will start blaming Republicans if the medic care plan get aborted.


Ref:
Wikipedia
http://www.thestatecolumn.com/texas/ron-paul-calls-for-congressional-pay-cuts-signs-letter-to-debt-committee/
http://www.global-rates.com/interest-rates/central-banks/central-bank-america/fed-interest-rate.aspx