I’m sorry but this just does not make sense. Bush is crazy.
Their is no way this is going to help our economy and help pay off our huge debt.
I think you’re looking for discussion, which belongs in another forum.
I’ll answer your title anyway: you can easily have a surplus and a national debt at the same time. The debt is the accumulated stock of deficits.
I know, this messageboard doesn’t allow you to delete your posts 
Let’s make an analogy to personal finance. You make more income in a month than you spend in a month. Good for you. That is your surplus income. However, you still have a $6,000 credit card debt. That is your own national debt. See how you can have both?
Yeah well, that doesn’t mean I give the extra money away. I use it to pay off my freakin debt!
Otherwise, I am still in debt, and am likely to accumulate more debt.
Off to Great Debates by request of the OP.
bibliophage
moderator GQ
Welcome to the wonderful world of deficit spending. A government that has a good enough credit rating can still manage to operate in the red, just like Walloon’s example of a comsumer spending money even though she’s in debt. The question is: should we? We talked about this two years ago when the first batch of tax “rebates” went out:
Tax refunds based on projected surplus - fiscally irresponsible!
But it’s a good time to talk about it again.
I agree with half of this. The tax cut will increase the government’s huge national debt. However, it will help the economy, which is not the government’s, but the people’s. In general, leaving more money in private hands is good for the economy.
Note that in the quote above, the word our is used twice, but it refers to two different groups. "Their is no way this is going to help our [the private sector’s] economy and help pay off our [the government’s] huge debt
That’s a stretch even for you, december. This is supposed to be a government “of the people”. We elect these guys, therefore we are responsible for their decisions and any negative outcomes that occur.
Are you suggesting that the people are not responsible for any decisions made in Washington?
Well, I was going to sign my refund check over to the DNC, just out of spite. But then I thought better of it and signed it over to some other spineless bastards. My bank.
Its healthy to have some national debt. The debt is held by private persons in the form of Gov. bonds which pay interest or dividends. A certain ratio of debt to GDP to taxes is acceptable. The number escapes me, but Im sure we`re over the “safe” limit.
However, the debt is still under control at this point.
The POTUS thinks the tax return will stimulate the economy causing an injection of new money into the free-market thereby naturally reducing the national debt.
Your personal debt is good for the credit holder and all its stock holders. It may not benefit you directly but it does benefit others somewhere. Take that to a national level and spread it out.
Oops! I forgot to include the OP-relevant part of my post!:smack:
A tax refund is well and good, but I really don’t see how going down to Wal-Mart and buying some lawn furniture, or whatever, is going to help this economy that much. I believe the better solution would be to act to spur business investment and hiring HERE, to try to reverse the trend of layoffs and moving business offshore. That’s hurting us more than people not buying enough consumer goods.
If the money stays here(in the hands of the people) the people will spend it here(in the US) and the hiring here(as is your concern) will occur.
You cant make jobs out of the thin air. (unless youre the Gov., then you have to raise taxes to pay them - still screwed)
Not at all. I’m making a point about economics.
The OP appeared to fall into this trap of equating the economic well-being of the government with the eonomic well-being of the country. It’s an easy mistake to make. We use the same word, the United States, for both. But, the country and the government are separate entites from an economic POV.
The country could be prosperous while the government was going deeper into debt. This is the economic condition that existed for much of the 1950’s, 1960’s, and 1980’s. Or, the there could be a recession, but the government might have adequate tax revenue to pay its commitments.
Note that deficit spending is the normal economic medicine for a recession. Deficit spending is expected to help the country’s economy, even though it hurts the government’s economy.
december wrote:
Not just any deficit spending, but the kind that stimulates the economy (which, I guess, is debatable).
and
whuckfistle wrote:
As I stated before, I don’t think going down to Wal-Mart and buying lawn furniture is all that much of a stimulus, say in comparison to business incentives that create enough jobs for people to make a bunch more trips to Wal-Mart.
Well you could give the money away or you could go buy a TV or you could pay off some of your debt. There is nothing inherently wrong with carrying some debt.
:smack: Oops again!
I should say that Govt. actions during a recession are kind of moot, as they tend to kick in not in the down cycle where they’re needed, but in the beginning of the up cycle, where the subsquent increase in demand>inflation can dampen the growth.
An Arky’s comment reminds me of something that’s been spinning in my subconscious mind for a while. Is there any proof that tax refunds do absolutely anything at all? I mean, where’s the control sample?
It always seemed sort of dumb to me that a petty 600 dollars (by average American standards) would do much at all to affect the psychology of spending. I can’t even remember what I used any past tax refunds on since the money just sort of sank into our general family economy. And not for one second did I or my wife think: hey let’s go out and have a Wal-Mart party!!! Am I an aberration or something?
Does anyone know where this theory of economic stimulation stems from? It sounds like some totally unproveable “many small streams turn to a river” asbtraction disassociated from anything in reality.
The idea (one of them) is that either you or the government will spend the money. The question is of how effectively government spending is when compared to individual actor’s (you) spending. Which is more efficient, 1 million American’s buying lawn furniture at $200 a set ($200 Million total) or the government spending $100 Million on 500,000 sets and “losing” $100 Million due to internal inefficiencies? The fine makers of lawn furniture would rather sell 1 million sets than 500,000; and those extra 200 people (WAG) who would be hired to ensure those extra 500,000 get produced would see immediate wages.
Then there’s the added benefit of Government having less money to “loose” to begin with, but that’s a separate OP.
Remember, this is the second round of refunds. The first round didn’t seem to work very well.
Say you’re a lawn furniture maker, sitting on tons of inventory. An Arky goes to WalMart and buys some, which cuts down your inventory, which is good. However you know he does this because of the one-time refund, so you don’t expect him to buy more next month. So, there is no reason to add capacity, and workers, to make more lawn furniture until the economy improves and your sales go up over the long run.
Giving money back to the rich is supposed to increase investment in new production. But that isn’t our problem - during the bubble we over-invested in production capacity! What we need to do now is to increase consumption, which will make the capacity we have already fully utilized, which will add to employment, which will make things better. Bush has one answer for every question, and keeps giving it even if it didn’t work the last time.