It seems to me that you all give the present administration and its supporters too much credit when you postulate a plan to increase spending and reduce taxes in order to pauperize the federal government and render it impotent. Rather, there is a fair argument that this administration is too short sighted to have such an ambitious plan. The administration’s objective is to create conditions where the ability to accumulate wealth is without hindrance by the national government. That means cutting taxes, lifting business and environmental restraints.
We have already seen this administration announce that tax cuts weighted toward the most prosperous is the appropriate response both to good times and bad times. When it looked as if the federal government was going to have a positive balance of income against expenses when President Bush first came into office the administration pushed for and got income tax reductions. When the rosy fiscal scenario went south with the terror attacks, the invasion and occupation of Afghanistan and the invasion and occupation of Iraq the administration argued that income tax reductions for the most prosperous were appropriate in order to simulate the economy. On one hand we have the contention that it’s our money and if the government isn’t going to use it they ought to give it back without regard to what the future might hold. On the other hand we have the same tired old trickle down theory.
Now faced with even more unanticipated expenses for the recovery of the Gulf Coast, obscene prices for petroleum, an insurrection and civil war in Iraq with no sign of a happy ending any time soon and a national debt of inconceivable proportions the knee jerk reaction on the part of this administration is not only to protect the tax reductions already in place but to demand more tax reductions.
It’s almost like my poor old grandmother who was a great advocate of that sovereign remedy for any complaint, cod liver oil. No matter what it was, from sun burn to chicken pox to a broken leg my grandmother administered cod liver oil. So it is with these guys. Tax reductions, income, estate, social security, medicare and medicaid, you name it, is the way to fix all our problems, be it too much revenue or not enough revenue. Of course the administration wants to cut taxes in the face of the expense of the reconstruction of the Gulf Coast. They want to cut taxes because that way they get to cut taxes. Cutting taxes is for this administration and end unto itself and any circumstance provides a pretext to do so.
These guys may call them selves fiscal conservatives. Their opponents my decry their claim as disingenuous and dishonest. In the last analysis they lack the insight or vision to be fiscal conservatives. They are just cheap skates with an eye on the next quarterly profit statement. The first priority is that next profit statement.
Well, bully for you. But, the fact is that the argument was used to sell the first round of tax cuts…and that Greenspan’s inexplicit endorsement of this idea (and his expressed concern at paying down the debt too quickly) played a large role in this.
And I wasn’t for the first round of tax cuts. Not much I could do about, though.
My point is, I hate this “we had a surplus” canard. We had no surplus and I don’t like it when people throw it out there in yet another bit of unthinking criticism.
What on Earth are you talking about? The federal budget surplus was real. Care to point out an example of a “real” government budget surplus for us and explain the difference?
I must point out that the idea that “our children will have to pay for it” is far far too simplistic. Yes, our children’s tax bills will be higher. But, at least individually and on average, that’s not necessarily any better or worse for your children. That’s because the money that is borrowed now (that they will have to pay later in taxes) is also money that you keep (because it isn’t taxed away from you). Presumably, you aren’t going to just burn that money or buy concrete to pour into your car. You are going to invest it in things that will either increase your children’s income, their living standard, or allow you to give more money to them upon your death.
Which is not to say that passing on huge deficits to your kids is good policy. But keep in mind that the situation is not as black and white as it seems. There are all sorts of complications (another interesting one is that government debt costs the public far less in interest than, say, credit card debt, meaning that if you are taxed to the degree that you end up putting more debt into your credit cards or other high interest loans, you and your kids are actually getting a WORSE deal than if the government simply borrowed the money and then taxed your children.)
I think the confusion here is what surplus is being talked about. The surplusses in the last few years of the Clinton Administration were indeed real. (Admittedly, in all but the last year, the surplus was due to the surplus in the social security program more than offsetting the deficit in the rest of the budget. In the last year, things were good enough that even the rest of the budget was essentially right in balance.)
The projected huge surplusses into the future were based on a variety of optimistic projections and many were warning at the time that they were exaggerated. Of course, Bush’s foolhardy policies (along with a recession and additional defense and security costs after 9/11) turned these exaggerated surplusses into large deficits.
Good point. I’d forgotten about that aspect. But as you rightly say, it isn’t free. Employers can indeed avoid paying health premiums, but the money has to come from somewhere. The most obvious solution would be to raise taxes on companies and individuals. I’d go so far as to say the taxes should equal the amount of money that is currently being paid to insurance companies as premiums.
One may wonder where are the savings, if the same amount is taken from employers and employees. First, health care providors would be doing business with the government so costs can be managed by law. Second, people would no longer have to search for an ‘in plan’ doctor. They would be covered no matter which doctor they visited. Finally, people’s health care would not be dependent upon weather or not they have a job. That’s the most important part: keeping people healthy so that they can become re-employed and productive.
There’s also apparently a fairly significant efficiency gain; Americans, in fact, pay just as much or more tax money towards health care (e.g. Medicaid and Medicare) than do Canadians, or residents of many European countries.
A surplus only lasts as long as it isn’t spent. And it always gets spent. That’s why politicians love telling us there is a surplus. It’s not to bankroll a huge savings account, it’s to get re-elected. Once D.C. has a “surplus” (which is dependant on future tax collections) they can justify the money they send home. And if the money falls short? There’s always more.
Anyone remember the calls of America’s downfall and imminent bankruptcy during the mid-80’s? Reagan was the original suXXor!1!1!!!one!
Yet, the country went from uncontrollable, unmitigated, guaranteed downfall to surplus in about 15 years. Now, we hear the same calls of America in dire straits because of deficits. Defecits can be good, not always, but in some cases. They can really be good for a nation that has proven it’s economic power.
You. No, not that Doper, YOU. Would you be willing to extend credit to General Motors? Toyota and Honda may have larger year-end profits, but a share of GM stock is a pretty safe bet in long-term investment. You know why? I’ll tell ya why. It’s because GM will, over the long term, be a reliable debtor. It’s not going under, and over a span of years, will be worth more than it is now. Same with the credit of the US. We’re not filing Chapter 11 anytime soon. And you all know it. So does the rest of the world. Which is why we can carry debt.
Johnny L.A., I know what you’re getting at in your OP about the housing prices. It’s absurd where we are now. Frankly, I’m surprised we don’t have the same people comparing our housing cost to Europe’s the way they do gas prices. The housing costs will fall. Mark my words right here. I’m calling for the bubble to burst before August 2011. It just can’t keep up this level. There are houses here in town that can be had at the same price as a comparable one in a good suburb of Chicago.
One other thing, I know it’s a fall-back to mention all the people losing jobs that are outsourced. Mine wasn’t. It was created in small part because it *couldn’t * be done by non-native English speakers. Outsourcing is a job threat, granted, but out of 300 million people how many does it affect overall? I know if it’s your job, it matters. And I feel for them. But overall, it’s a rather minor gripe.
We pay for more than medicaid & medicare when it comes to taxation based medical spending though. Those are the big ones but there are other government sponsored medical things like NIH, CDC, gov sponsored research, health insurance for government employees (firemen, police officers, teachers, post office workers, etc) and arguably tax credits for people buying private insurance. All in all I think tax spending comes to close to 8% of GDP in the US.
Young man, you are evidently too junior to remember the notorious federal bailout to save the Chrysler Corporation from bankruptcy in 1979. If you are imagining that a major American automaker can’t possibly ever be mismanaged or outperformed to the point of actual bankruptcy, you’ve got another think coming.
However, as noted in a parallel thread, the federal debt that those high deficits created hasn’t gone away. It started to go away a little bit when we began to pay it down during the surplus years of the '90s, but it’s back and way bigger than ever. A sizeable chunk of your federal taxes is being used simply to service the interest on that rapidly-expanding debt, and will be for the rest of your life.
We didn’t “bounce back” from the high-deficit years of the '80s: we temporarily shed the deficits, true, but we remained stuck with the additional debt those deficits accumulated, and we’re still stuck with it, plus the additional debt contributed by the huge deficits of recent years. We still have to pay interest on that debt, even if we’re no longer attempting to pay down the debt itself. And the more that interest costs us, the more that weakens our “economic power”.
The Canadian government pays for all that kinda stuff too, though. Government employees need dental, drug, etc, and so on and so forth.
The actual per-taxpayer cost is quite close; it undulates up and down depending on how the currencies are valued. The big difference in GDP dedication to health care is in private spending.