Don’t get me wrong. I would love for my taxes to be lower. I am not saying that the tax break is unfair to the poor, or more benificial to the rich.
BUT,
We, as a nation, are incredibly in debt. Our outsanding balance is so high that the intrest payments alone are a significant percentage of our annual budget. I would think that, instead of giving back the current surplus through temporarly lower taxes, we should pay off some of the principle so that we can have lower taxes for much longer time in the future. I’d rather forego a 10% break for the next ten years and gain a 25-30% break for the decades to follow.
I just got a new loan for a car. If I happen to get a wind fall, I am going to do everything that I can to lower my debt load so that my monthly expenses will be less. Jeez, I can can figure that out, why the hell can’t the people who have been elected to serve me do the same?
Every 100 billion we spend now on the debt is 8-10 billion a year forever we don’t have to pay in interest.
And every dollar you spend on preventative social programs saves several times its worth in future reactive social costs. But you never see the fiscal responsibility people going on about that…
And you also don’t see the fiscal responsibility people hijacking threads on preventative social programs to complain about how the tax situation in a different country is being handled either, do you?
To get back to the OP which was so rudely interrupted…
::ahem::
I agree.
(I can be a jackass and leave it at that, but I won’t).
You have to keep in mind, Revedge, that people as a whole are very short-sighted. Chris Matthews discusses this in his book Hardball… he calls it something like the “What have you done for me lately?” complex. The basic idea is that people want something, they want results, NOW. “Ten years from now? Who cares about that?”
Politicians are smarter than you think. They know what will get them elected.
And, to address the hijack… “Fiscal Responsibility People” dislike the notion of throwing money around.
:shrug: It’s what, about 45-47% of GNP? It’s a lot of money, but it’s not that high. As a homeowner my debt is much larger than my annual income. It’s not a problem as long as I can service it. Compared to the net worth of the US economy, it’s not a huge debt.
So what?
Well, because it would be stupid. [ul][li]The long-term bond rate is the lowest interest rate around, it’s not like you’ve borrowed on a credit card. []Sure, using a bit of the windfall to pay down debt would be a good idea, but why would it be such a high priority? Making sure that during the good times of the past few years you have improved your fiscal position is a good idea, but given that the government is not in any serious danger of default, making debt retirement a very high priority would just be squandering resources.[]Current income is not a windfall.[/ul][/li][quote]
Every 100 billion we spend now on the debt is 8-10 billion a year forever we don’t have to pay in interest.
[/quote]
This is like the dumb ads we have on tv in Australia that tell you you can “save years and thousands of dollars” by paying off your mortgage quicker. It’s crap: in present value terms, the cost of paying off debt now, paying it off bit by bit until it’s gone or servicing it forever is the same.*
No no no. You are showing somewhat of a lack of understanding of finance and a massive lack of understanding of investment. Government debt is good. Without government debt there would be very little in the way of financial stability. Government debt is also a powerful economic tool.
Rather than rehash the argument, I’ll just point you here.
Goddammit. While I was buggering about trying to figure out how to link to a particular post, picmr got in there first. Obviously my rebuttal was referring to those claiming that the debt should be paid off, not to pic’s excellent answer.
And do you have a guarantee of this large tax cut somewhere down the road? Nope. Never happen. But as long as we are wishing for the impossible, I’d much prefer the federal gov’t never spent that cash. That’s as futile a wish as your 25% cut.
The federal government is, simply put, totally incapable of true spending cuts. And that’ll never change until we reform campaign financing.
Points I’ve made before, but wotta hey, I’ll make 'em again:
1 - There is no surplus. There’s also no deficit. As of right now, we have a balanced budget. Every week Barron’s publishes the latest figures from the Daily Treasury Statement on the total outstanding government debt, and compares that figure to last year’s. As of the last ish, the latest figure was 5,735.9 billion. Last year’s figure was 5,725.6 billion. The diff between these two figures is too small for anyone to notice, and it’s been that way for the last few months.
2 - If you take the total government debt figure above, and add it to total outstanding Consumer Installment Debt, at 1,525 billion, you get a total of 7,250.6 billion. Personal income amounted to 8,504 billion in January, meantime. In other words, we could pay off the entire outstanding government debt, PLUS all of our outstanding installment debt with a SINGLE YEAR’S INCOME, and still have change in our pockets. So the debt is not a serious problem.
3 - Campaign finance reform is a crock, as long as we’re on the subject.
Simply put though, subsidies are the major reason. PAC’s donate money to tame politicians, with the expectation of gaining an advantage for their cause. Which they receive from the tame politicians in the form of subsidies. Because politicians wanna be re-elected and to be re-elected it requires a vast amount of money, they gladly spend your tax dollars subsidizing the contributors to their campaigns. It doesn’t matter which party, they all subsidize their supporters according to their professed interests.
It’s a vicious circle which can only be broken by reforming campaign finance. If you are interested enough to spend $25, I highly recommend the book being hawked at http://www.federalsubsidies.com The author, Brian Finnegan, spent 9 years reviewing nearly 2000 documents from such sources as the GAO and CBO in writing this book. I know that sounds kinda dry, but the result is actually very readable.
Yoiu put it in terms I can understand and I see the point. In electronics, there’r several analogies, one being a closed-ended feed back system. We’ve pretty much done away with it in the industry.
I’m curious though- what, if any, are the refutations to this argument, and what solutions are proposed?
-You explained it well, and I ain’t got the dinero for the book- so I’m asking you…
I dunno about refutations, check GD, or ask pantom. He doesn’t seem to like the idea of reform. I’m sure there’s more than one fairly recent thread on campaign finance reform.
My idea, however, is simply this. If you cannot vote for a person, you cannot donate to their campaign, or to their party. And then an individual can only donate a maximum of, say, $1000 for a federal candidate, perhaps $500 at the state level, maybe $250 at the local/county level, and $1000 again to any political party. You’ll notice that this automatically eliminates all PAC and coporate contributions. They can’t vote; they can’t doante. This also eliminates much of the so-called “soft money,” that is given to a party rather than a specific candidate. We’ll also put a limit on how much of his own money a candidate can spend.
Since we’ve reduced the amount of cash involved, we’ve leveled the playing field a bit, thus providing a more even basis for a viable third- (or -fourth) party. It also has the effect of reducing the time spent campaigning. Maybe we can even do away with the presidential primaries and go back to the old system of letting a party choose it’s own candidate at their national convention.
The unforutnate downside of all this, is that the Supreme Court has ruled political contributions are the functional equivalent of free speech. So we have a big roadblock in that a constitutional amendment would be required to implement this plan.
It’s what the Supremes said: an abridgement of free speech. I’m not normally ideological, but on this, I don’t see any way around being this way. If you like a particular candidate or a particular cause, then you give money to further either the candidate or the cause. What are you pro-reform guys gonna say when you can no longer give in unlimited amounts to Greenpeace or the NRA or the ACLU or the Christian Coalition, to name some favorites of the left and the right? Or when any of these groups is prevented from running an ad because its campaign season and they might, heaven forbid, influence the election process? Mable, keep the kids from the TV. Somebody is advocating something. Yikes!
Anything that prevents a citizen from exercising his rights to free speech is, simply, wrong.
In the eyes of the law, a corporation is treated as a separate person. Therefore a corporation is allowed to give money to the candidates or causes of its choice.
All you have to do to see how ineffectual and silly reform is is to see how the first wave of reform panned out: the laws we currently operate under were passed immediately after Watergate with the goal of preventing that from happening again. Now these laws were passed by a Democratic Congress, and presumably were not meant to be particularly friendly to the Republicans. But since the law was passed we’ve had two Democratic presidents and are now into our third Republican president. Both houses of Congress are controlled by the Republicans, and have been since 1995.
Law of Unintended Consequences, anyone? Or, a clear illustration of what happens when you attempt to control something as inherently uncontrollable as free speech and access to politicians.
(This has to be the most egregious instance of hijacking I’ve ever engaged in. But then again, this is the Pit.)
There are lots of reason not to fret over the debt as descibed above. But the primary reason I think a tax break is better than any other option is the flexibility it affords. If we were to spend the “surplus”, which I think most would agree is mirage, there would be no way to unspend that money. At least, if we hafta we can raise taxes later if needed.
The real problem, IMHO, is that there seems to be two entrenched ideas: collect all the money, then spend it vs. don’t collect the money, then don’t spend it. I would respect any politician 100 times more if they just acknowledged that the economy is fluid and taxes/ expedictures requires constant tweaking. Which is why both parties tick me off. What’s with these 5,8,10 year plans?? I appreciate you trying to look beyong tommorow, but what if the projections aren’t correct (and they never are!)?
At least GW has the balls to tell congress that this money will be sent to the people and they will determine how it be spent; on their homes, their food, their clothes, their children. And not on some dumb ass pork barrel project in another state.
