OK… I listened during both debates. One hot issue seems to be what to do with the projected government surplus. Seems they got so much money piling up they can’t even find a place to sit down, so they need something to do with it.
The Republicans keep talking about tax relief to all taxpayers. What’s “Tax Relief?” That’s a refund, right? Money back?
If all taxpayers get it, where the hell is it coming from?
This is not a joke… what am I missing here? 
It’s coming from the fact that either (a) we’re not spending as much money as we were before, or (b) we’re generating a larger amount of tax revenue from business and industrial sectors (as well as from people).
Personally, I hate both their viewpoints on the budget surplus. They should use all of that surplus to pay down the debt. After ten years, then we would really have a surplus.
Sorry to sound like I’m over in GD.
LL
See, taxpayers give money to the government, and the government spends that money. It just so happens, that right now, taxpayers are giving money faster than the government can spend it.
Yes, I know, that’s some cold snap that Hell must be having right about now. I keep checking to see whether or not the Cubs are in the playoffs.
In any case, the hippie-pinko radical tax-and-spend liberal Democrats want to use that extra money to reduce the public debt, plus fund a few more social programs. Tiny programs, to help starving children get a better education. Costing almost no money, I’m sure. Please ignore that man behind the curtain.
Meanwhile, the neo-fascist cold-blooded money-grubbing conservative Republicans want to reduce the public debt by a bit less, and reduce the amount of money that taxpayers will pay to the government. Folks won’t get any money “back”. They’ll just pay less taxes in the future; a few percentage points less of their income than they currently do. So, a person making $20K a year will have $200 more to spend, and a person making $200M a year will have $300K more to spend. Fair, no? Oh, plus they’ll get the US military back into fighting shape so that we can actually win a war on the off chance we get ourselves into one.
Does that clear things up?
sdimbert is worried about the “free lunch” aspect here. A lower surplus means slower debt reduction. Accumulated debt necessarily has to be paid off by future taxation (assuming they don’t default). Lower surpluses mean higher future taxes. Don’t get confused about paying off debt - it doesn’t matter as such, as long as the debt isn’t increasing at an unsustainable rate. The cost of paying off the debt now and paying interest on it forever is approximately the same.
picmr
[sub]Sorry if this is a bit terse - I wrote a very long post on this and lost it when I got disconnected.[/sub]
Have to disagree with you there, Laz.
Let’s say Joe Blow is living in a $200,000 house and has a $125,000 mortgage at 7.25% APR.
One day, Joe is digging in his garden and uncovers a cache of $125,000.
Should Joe use that money to pay off his mortgage?
Answer: He would be a complete fool to do so. It would be much smarter for him to continue making minimum payments on the mortgage and put the $125,000 into one or more mutual funds, many of which easily have yields of 10% of more. I think we can all agree on that.
Same goes for our national debt. Giving most of the yearly surplus back to the rightful owners is much better investment (and will yield a much higher payoff) than trying to pay off a low interest loan.
And let’s try to clear up the issue that was not fully resolved the other night.
Bush is promising tax relief for all Americans.
Gore points out that the greatest cut of all goes to the wealthiest one percent of Americans.
They’re both right. Let’s have a story time, shall we?
Let’s say there are three people, Moe, Larry and Curly. Moe is filthy rich, Larry makes a modest income, and Curly is poor. All pay a different percentage of taxes. Moe pays 33% of his income, Larry pays 25%, and Curly pays 15%.
So Shrub comes along and says, "I’m gonna wave my magic wand in your face and reduce taxes for all of you.
“Moe, [wave, wave, wave] you now pay 29% of your income!”
“Curly, [wave, wave, wave] you now pay 12% of your income!”
“Larry… um, Larry, you’re going to have to bend a little lower so I can wave this other wand in your face.”
Larry’s “relief” is going to be a pittance, to compensate for the grandiose favors that Moe and Curly received. As a result, Larry will pay less tax, but he will shoulder a higher tax burden than what he carried before.
Now imagine that there is one Moe, twenty Curlys, and seventy-nine Larrys. Algore comes along and says, “hey, all you Larrys–that’s not a wand!”
Then he invites everyone to bend over. “See guys? THIS is a wand!”
I know this should probably be posted in “great debates”, but oh well…
If I hear another Democrap talk about how Bush’s plan will benefit the “richest 1%” I think I’ll puke.
Now we’re certainly not wealthy. We have two children, live off one income, and I drive a 1985 4-cylinder Mustang with 150,000 miles on it.
Having said that, I’ll be the first to say that every millionaire needs a tax cut. While we are all paying way too much in taxes, it is especially true for the rich. I would much rather see the wealthy keep their money than give it to Washington. Because they’ll use their money to buy stuff, which in turn employs more people. It’s the 'ol “multiplier effect” in action.
I have a few thouhts on Crafter_Man’s assertion that it’s better to continue paying a small amount on the mortgage but spend the surplus.
The reason that logic works for the average taxpayer is that having a mortgage gets him a large bonus from the goverment in the form of a tax break. The government itself doesn’t have that advantage.
In addition, the average taxpayer has the option of investing the extra money into the market and getting that 10% return. Unfortunately, the government doesn’t have that option – how many of us would approve of the federal government buying up parts of companies stock issues, thereby driving up the price for the rest of us among other effects. As a last note on this aspect of the argument, it’s not at all guaranteed that the market will continue to produce those high returns as it has for the last few years.
Finally, the argument requires (to paraphrase) ‘continuing to pay a small amount on the debt’ which assumes that we have been making payments. However, over the last X number of years, we haven’t made any payments on the debt – that’s what deficit financing is all about, we’ve kept getting further an further behind. At some point, you have to start making payments or you enter into a colossal economics experiment – just how far into debt can a country go before it loses its economic credibility
The so-called “bonus” doesn’t really matter. It would still be smarter to invest in a good mutual fund than pay off your mortgage early even if you couldn’t deduct your interest.
That’s not what I was getting at. I would certainly not be in favor of giving government the power to invest our money in company stocks. Instead, the government should not be taking the extra money in the first place. Letting people keep more of what they earn is an investment; it is no different than investing in a “company.”
I agree me must make a concerted effort to pay the debt, just as you would make a concerted effort to pay your mortgage. And we should do our very best not to add to it. But we should also not fool ourselves into believing that we should use hard-earned budget surpluses to pay it off. We will effectively “earn of much higher interest rate” by letting people keep more of their own money than by paying off a low interest debt early.