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Debt and Deficit Revisited January 15, 2009

Posted by shwaldman in Politics, Society.
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Watching that the documentary the other night has made me want to revisit the national debt discussion. I had a previous post on our debt and our government’s deficit has been in the news again lately. Just like your own budget, it is a fairly simply equation really, how much your bring in has to be more than how much your spend. But in the case of our government, the amout of taxes our citizens pay is not enough to cover the amount money we are spending for war, education, healthcare, roads, government officials…etc, etc, etc. And now we are bailing out the banks, the auto industries, and we will probably get another economic stimulus package… where is all this money coming from?

Our government is taking on more and more debt and in case you haven’t heard, the rest of world is having financial troubles too. Most of our debt is owned by China. At this point, they don’t want to buy more debt. What are we going to do when they say, “Sure, we will bail you out by lending to you, but in return, send your taxes directly to us.” The world would turn absolutely upside-down. It honestly isn’t far from possibilities. I know there are books out there about the rise of China – I suspect their projections are likely close to this.

Right now, we have over 11 Trillian dollars in loans outstanding. And we are adding that at a rate of over 1 Trillan dollars per year. The only way to reverse this is to pay down the debt. And to do that, we have stop spending so much AND AND AND take in more taxes. The fact of the matter is for years, the balance of financial power has swifted way too far to the rich and the only way to shift the balance back is to increase taxes against the wealthy. If they are making a lot of money, they can afford to help the entire country get back on top.

As I said before, true free-market capitalism does not work. I don’t think we have ever looked at this way, but would you accept Darwinism as a reason for letting people just die? But that is what capitalism is. The rich get richer until the poor have nothing. Then the rich get richer until the middle class has nothing. Are you ready for that?

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Comments»

1. smellytourist - January 15, 2009

If we take in more taxes, our economy will fold. CUT taxes, CUT spending and revenue will increase.
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http://www.smellytourist.wordpress.com

2. shwaldman - January 15, 2009

I am unclear how you can justify that statement. How does revenue increase if you cut taxes? Who is going to pay for education, healthcare, roads? After visiting your site, I think you have a closed view of YOUR world and do not realize what government agencies do for you, your neighborhood, state and country.

3. smellytourist - January 15, 2009

How does revenue increase when you cut taxes? Investment increases, entrepreneurs take risks, people spend money–and tax revenues increase. When taxes are raised, businesses give more money to the government, and less to employees and less to growing their business. In turn, joblessness increases and consumer spending decreases (you won’t buy an ipod if your wages are cut and/or your taxes increase).
It’s basic, proven economics. Here’s a link http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

The problem with Bush is that he didn’t reduce spending. That’s one reason the federal debt still increased.

And who will pay for those entitlements? Well, private education is superior to public, and public healthcare is inefficient. Government is grossly too big.
Government agencies inhibit my life. Social security takes my wages, and gives them to someone else. Let ME invest that money in MY Roth IRA.
The government does not take care of me–the Founders feared a large government. Everything the government touches gets messed up. Buying up banks, bailing out failing businesses–that’s not the government’s job. It’ll only mess things up more.

So much for old American individualism.

Viva la socialism!
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http://www.smellytourist.wordpress.com

4. shwaldman - January 16, 2009

I respect your input and facts and I appreciate being able to converse about this. Just curious, what would you expect to happen to you when you run out of money in retirement and are not capable of working? You aren’t working and therefore have no healthcare insurance. What then?

I am afraid we are going to have to agree to disagree. With respect to having people spend money to increase revenues which help raise corporate revenues, in turn increasing tax revenues – I think that is in part what got us into this mess. Telling people to spend what they can not afford got individuals and our country and in turn, the world, into a credit crisis. Our tax percentiles are quiet low compared to the rest of the world – paying only 20% compared to 40% and up in other countries, I can not believe people are still looking to pay less and expect to have roads to drive on, schools, public health… you want to reduce government funding even more? There are schools in our area that are asking students to bring their own toilet paper!


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