Yes, but if you do that, you’ll get accused of holding out on woking families and giving tax breaks to the rich. You can’t win.
I must take exception to Whuckfistle’s point that tax refunds and tax breaks put money HERE and generate jobs HERE.
A fair amount of the soccer balls, women’s clothes, and lawn furniture that we are buying is NOT made here, and generates NO jobs for Americans.
A tax break for the general citizenry WILL dump more money into the economy, sure, but it’s a short-term thing, as has already been pointed out.
There are two possibilities that will generate jobs HERE:
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Tax breaks for companies that operate HERE, as opposed to tax breaks for companies in general. If my company is getting a tax break just for existing, why should I not save even more money by moving my computer information dept. to India and my factories to Bangladesh?
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Crush the working class, economically, to the point where an American waitress makes about the same as one of those little kids that sits in a hut somewhere making Kathie Lee clothing and accessories. Under such circumstances, it would be cheaper to simply make the clothes here than to outsource the work and materials to Bangladesh or somewhere.
Now, which of these two possibilities do YOU see more of during the current administration?
Something didn’t work right there… the last quted statement was from An Arky. Sorry for the confusion.
True enough, but with the Bush tax cuts, we now have deficits out as far as the eye can see, even using the Administration’s own projections. And, some people think the actual deficits will be considerably higher than forecast because revenues due to economic growth won’t meet forecasts, because there are certain tax cuts (like to the alternative minimum tax or extending sunset provisions) which are not in the projections but which will likely be implemented, and because some spending items have been low-balled or not included in the budget.
You make some good points. I would add two others:
- Congress and the President have the power to hold down the deficits by reining in spending growth. Unfortunately, I don’t think they’re prepared to do that. They’re supposed to be budgeting for 4% growth, but the actual growth is likely to be more than that.
To address the question in the heading for this thread: the national debt is different than the national deficit.
If there is a tax surplus–that is, if more revenue is being taken in as taxes currently than is being spent, the government is, by definition, not operating at a deficit. The national debt, however, is the cumulative deficit–all of those debts the government incurred through borrowing when it operated at a deficit in the past and hasn’t, as yet, paid off. Since the government shows relatively little will in paying down that cumulative debt, choosing instead to merely service it, surpluses have relatively little to do with reducing the debt.
As for the idea that cutting taxes is going to help balance the government’s books, add me to the list of people who say “huh?”
This was tried on a massive scale during the Reagan presidency. In fact, Reagan’s years in office saw the national debt quadruple, as he spent three times as much money he didn’t take in as taxes as all of the past presidencies combined.
Conservative pundits have insisted for the past few years that Reagan presided over some sort of “economic miracle” which did the nation a great deal of good. A week or two ago I heard Hannity of Hannity and Colmes say with a straight face that Reagan presided over the longest economic expansion in U. S. history. No: that was Clinton. In fact, Reagan presided over two devastating recessions with record unemployment and soaring bankruptcies, then left office as another one was impending. And then there was that little savings and loan embarrassment.
As noted by a previous poster, Bush’s last try at a tax cut manifestly did not improve the state of the economy.
What it did instead is exacerbate a condition which has been one of the outstanding trends in American life in recent decades: the increasing division between an increasingly wealthy minority and an ever-expanding lower class.
In fact, from what I saw in the late 1990s, surplusses have nothing to do with reducing the Debt at all.
In 1998, 1999, and 2000, the Federal government operated at a surplus. They received more money in revenue than they spent in expenses. Yet, the national debt still went up! (It didn’t go up nearly as fast as it had during previous “deficit spending” years, but it still went up.)
Why? In part, because of how the numbers are cooked to make the budget come out looking like a “surplus”.
The Federal budget is divided into two broad categories: on-budget items, and off-budget items. Revenue from on-budget sources (such as income and excise taxes) can be spent on just about anything, including paying down the national debt. Revenue from off-budget sources (such as social security and medicare taxes), however, can only be spent on narrowly-defined, specific things (e.g. social security taxes can only be spent on social security benefits, and any “windfall” left over must be reinvested by buying Federally-backed investment securities). Off-budget surplusses can never be spent to pay down the national debt. In 1998, 1999, and 2000, the Social Security system enjoyed surplusses of over $100 billion per year.
However, when it comes time to tell the public whether the budget is “balanced” or not, the Federal government reports the total revenues and expenses of both on-budget and off-budget items combined. So if the Feds have a $95 billion on-budget deficit but a $100 billion off-budget surplus, they get to say that “we have a $5 billion budget surplus.” And that’s what gets reported in the newspapers.
Thanks for explaining it in such easy terms 
Yeah, well, I would argue that it is easy to shower people (mainly the wealthy) with tax cuts and then wring one’s hands about the inability to hold down spending. What is harder is to make the decisions about what spending to reduce. Then the public might actually notice that there is a trade-off…that tax cuts don’t come for free…and one of your most potent weapons in your re-election arsenal would become much less powerful.
Such undertakings in a Global economy are very sticky and sometimes hit or miss. You may have to take two steps backwards now in order to take the three steps forward later. No-one likes to take the two steps back even if they know it will lead to gains in the future.
My personal belief is that we should reduce the size of government and its role(s) - thereby lightening the load on tax payers and corprate America. Too many branches on the government tree - time to trim some off.