Your World Wish List

[NUKE_CLEVELAND]

OK, skip the foreign angle, make this easy.

 

Why do we pay taxes?

 

Are we better off owing $7.3 Trillion and paying almost $400 million in interest every year?

That's not million there killer, thats Billion, with a B.

[southsider2k5]

OK, skip the foreign angle, make this easy.

 

Why do we pay taxes?

 

Are we better off owing $7.3 Trillion and paying almost $400 million in interest every year?

Deficits have a role in government. Go back and read economic history of the great depression. Before it was Great or a depression, it was a recession like any other. The mismanagment, increasing interest rates, and spending cuts, on top of the bubble bursting is what crippled this economy. When the private sector stops spending (which is what happens in a recession) there has to be someone start spending otherwise the economy keeps contracting until the supply dwindles to the reduced demand. In other words people lose jobs and it becomes a cyclical mess. People aren't working, people don't buy, companies lay off, less people work, more people don't buy, more layoffs... etc. And if you increase government spending by increasing taxes you nullify the the increase in speding because you are taking money out of the tax payers hands, so that you can pay the government to put it back in peoples hands. There must be a new spending stimulus to spark new investment.

[sox4lifeinPA]

I have to add a #4 to my list...

 

the removal of cwsox from the soxtalk hall of fame...

 

...er, yeah.

[Texsox]

Deficits have a role in government.  Go back and read economic history of the great depression.  Before it was Great or a depression, it was a recession like any other.  The mismanagment, increasing interest rates, and spending cuts, on top of the bubble bursting is what crippled this economy.  When the private sector stops spending (which is what happens in a recession) there has to be someone start spending otherwise the economy keeps contracting until the supply dwindles to the reduced demand.  In other words people lose jobs and it becomes a cyclical mess.  People aren't working, people don't buy, companies lay off, less people work, more people don't buy, more layoffs... etc.  And if you increase government spending by increasing taxes you nullify the the increase in speding because you are taking money out of the tax payers hands, so that you can pay the government to put it back in peoples hands.  There must be a new spending stimulus to spark new investment.

So we pay taxes to stimulate the economy? There is no relationship to what we pay in taxes and what lavish benefits we can receive?

 

If $7 Trillion and $450 Billion in interest is OK, is $10 Trillion in debt? Can we just allow the deficit to grow and grow and never pay it down?

 

Which is better, spending $450 Billion in interest or being out of debt and spending $450 Billion on infrastructure or health care, or education, or against terrorists, or more police, or any number of programs?

[southsider2k5]

So we pay taxes to stimulate the economy? There is no relationship to what we pay in taxes and what lavish benefits we can receive?

 

If $7 Trillion and $450 Billion in interest is OK, is $10 Trillion in debt? Can we just allow the deficit to grow and grow and never pay it down?

 

Which is better,  spending $450 Billion in interest or being out of debt and spending $450 Billion on infrastructure or health care, or education, or against terrorists, or more police, or any number of programs?

You seem to be forgetting something... the economic benefits of that $7 trillion that was spent. Take approximately 3 years worth of GDP out of the economy and tell me how it looks.

[Texsox]

You seem to be forgetting something... the economic benefits of that $7 trillion that was spent.  Take approximately 3 years worth of GDP out of the economy and tell me how it looks.

So we pay taxes and the government spends money for the benefit of the economy? Does it have any relationship to what the government needs to run, or the amount of taxes being paid?

 

If I understand what you are saying, each year we should decide how much spending would help the economy and spend that, regardless of what we take in.

 

Do we ever need to pay this back or could we let the debt escalate to $10 Trillion? $15 Trillion. Is $450 Billion in interest enough or would $650 Billion, taken out of programs, help the economy more?

 

You talk about government waste on hammers and such. How about we buy a hammer for $5 and then pay interest in the purchase for 100 years, how much does the hammer cost then?

Edited October 13, 2004 by Texsox

[southsider2k5]

So we pay taxes and the government spends money for the benefit of the economy? Does it have any relationship to what the government needs to run, or the amount of taxes being paid?

 

If I understand what you are saying, each year we should decide how much spending would help the economy and spend that, regardless of what we take in.

 

Do we ever need to pay this back or could we let the debt escalate to $10 Trillion? $15 Trillion. Is $450 Billion in interest enough or would $650 Billion, taken out of programs, help the economy more?

 

You talk about government waste on hammers and such. How about we buy a hammer for $5 and then pay interest in the purchase for 100 years, how much does the hammer cost then?

So what you are telling me is jobs and people be damned we're balancing the budget?

[Texsox]

So what you are telling me is jobs and people be damned we're balancing the budget?

You can still have the jobs and growth without borrowing.

 

What is so magical about the dollars we borrow vs. dollars we do not?

 

The government spends $100 and takes in $90 and you believe that helps the economy.

Does it hurt if the government takes in $100 and spends $100? It's the same $100.

[Texsox]

This is were I have a problem with those big government, free spending Republicans. They want to spend all this money they do not have and be like Reagan.

 

Somewhere down the line the growth in the economy will pay for all this, they claim, but during the years we should be paying down the debt, they are busy spending even more.

 

Plus where are the new workers coming from? Not just population growth, that wouldn't be enough. We need immigrants, but of course the GOP is trying to stem immigration and H1B Visas for foreign, skilled labor.

 

Spend, spend, spend, big government conservatives will bankrupt this country.

 

Where do we go when we cannot borrow more money? Print it?

[southsider2k5]

You can still have the jobs and growth without borrowing.

 

What is so magical about the dollars we borrow vs. dollars we do not?

 

The government spends $100 and takes in $90 and you believe that helps the economy.

Does it hurt if the government takes in $100 and spends $100? It's the same $100.

I guess I missed the class on government's role in economy...

[Texsox]

How solid is our economy when the only way for it to grow is the government borrowing money?

 

Currently we are borrowing money to pay the interest on the money we borrowed. I think it helps our economy more if we could spend those hundreds of billions of dollars on stuff instead of interest payments.

 

MOst recent budget numbers from the CIA Factbook

 

Budget:

 

revenues: $1.782 trillion

expenditures: $2.156 trillion, including capital expenditures of NA (2003)

 

Are you telling me $1.782 trillion does not grow the economy, but $2.156 trillion does? What if we raised revenues, would we need to raise spending?

Edited October 13, 2004 by Texsox

[southsider2k5]

How solid is our economy when the only way for it to grow is the government borrowing money?

 

Currently we are borrowing money to pay the interest on the money we borrowed. I think it helps our economy more if we could spend those hundreds of billions of dollars on stuff instead of interest payments.

 

MOst recent budget numbers from the CIA Factbook

 

 

 

Are you telling me $1.782 trillion does not grow the economy, but $2.156 trillion does? What if we raised revenues, would we need to raise spending?

$400 billion? What kind of affect would taking 20% of your budget away have?

[Texsox]

$400 billion?  What kind of affect would taking 20% of your budget away have?

$400 billion. That's the interest we are paying on the national debt. So banks the world over would have lower profits for the year.

 

The government would still deliver the same programs. In fact, they would have an extra $50 billion to either add to the programs or give tax relief to those hard working millionaires. And do not forget Republicans claim that tax cuts to the wealthy will result in more jobs.

[Texsox]

Now back to foreign investment on the US debt. Current government numbers places half of the privatly owned debt, about $1.7 trillion, in the hands of foreign investors. Those foreign investors are typically other countries who use it as part of their monetary practices.

 

http://www.washingtonpost.com/wp-dyn/artic...9-2004Jul5.html

 

Couple of highlights, or low lights from the article.

 

The statistics show that foreign and international investors account for the entire increase in privately owned Treasury securities since George W. Bush took office. Issuing those securities is how the Treasury covered federal budget shortfalls. Privately owned Treasury securities are those that belong to investors, as opposed to those owned by federal government trust funds or the Federal Reserve Board. Private investors own about half our $7 trillion-plus of national debt; the Fed and federal trust funds own the rest.

 

According to Treasury data -- table OFS-2, if you want see for yourself, on the Web at www.fms.treas.gov/bulletin/ b24ofs.doc -- when the Bush administration started, we had $2.88 trillion of privately held national debt, of which $1.03 trillion was owned by foreign and international investors. As of March 31, the most recent data available, privately owned debt had risen to $3.5 trillion, of which foreigners owned $1.71 trillion.

 

[Texsox]

And finally a note from Congress

 

TANNER'S LETTER TO THE EDITOR

IN 'JACKSON TODAY'

AUGUST 12, 2004

 

As I travel throughout the district, I have been discussing with Tennesseans a growing and potentially catastrophic threat to our country, a threat that is not receiving the attention it deserves. It is the fiscal policies of the Bush Administration and the Republican Congress that have resulted in a colossal increase in the federal debt. More than $1.6 trillion of the current $7.3 trillion federal debt was accrued since one-party control of government began in 2001.

 

This reckless increase in federal debt has also exposed a very troubling aspect of the Administration’s budget plan passed by a Republican House and Senate: foreign countries are purchasing our debt in record amounts, with China registering the most rapid increase. These developments not only adversely impact our economy, but also leave our country susceptible to a potential national security threat.

 

According to the Treasury Department, major foreign holdings of U.S. Treasury securities total $1.75 trillion. Right now, Mainland China and Hong Kong have accumulated $217 billion of U.S. debt. Since 2001, the amount of federal private debt owned by foreign interests has increased by 73 percent. This means that foreign investors, not U.S. residents, are funding our government’s runaway deficits and are increasingly the beneficiaries of the interest we must pay on that debt.

 

Federal interest payments amount to a tax on Americans because they must be paid each and every year. These growing interest payments are now 10 times what we pay each year in foreign aid and could be considered our country’s largest foreign aid program.

 

The high level of foreign holdings of U.S. securities could have a debilitating impact on our economy and foreign policy. If China threatened to sell large volumes of U.S. Treasury securities, it could easily fuel higher inflation and put pressure on the Federal Reserve to increase interest rates, putting our economy at risk for a large-scale recession.

 

Furthermore, the mere threat made by the Chinese to sell U.S. debt could reduce our negotiating position on long-standing issues of disagreement such as national security and trade. The United States should not be put on the defensive when issues of conflict arise with China simply because the U.S. dollar can be held hostage by the Chinese government.

 

We cannot be the world’s leading economic and military power if government financing depends on funds from foreign countries, many of which oppose our policies. This breathtaking financial recklessness means we are literally mortgaging our country to anyone on earth who will buy our IOUs. No country in history has ever been strong, free and bankrupt.

 

Financial journalist Allan Sloan recently wrote in the Washington Post, "Whose bread I eat, his song I sing.'' We are in debt all over the world, and we had better stop it now or our children and grandchildren may not enjoy the freedoms established by our representative democracy.

 

Congressman John Tanner

Tennessee’s 8th District

[southsider2k5]

$400 billion. That's the interest we are paying on the national debt. So banks the world over would have lower profits for the year.

 

The government would still deliver the same programs. In fact, they would have an extra $50 billion to either add to the programs or give tax relief to those hard working millionaires. And do not forget Republicans claim that tax cuts to the wealthy will result in more jobs.

So who do you fire to get the $400 billion? What programs do you cut? What countries do you cut off?

 

Or are you just advocating that the US default on its loans?

[Texsox]

So who do you fire to get the $400 billion?  What programs do you cut?  What countries do you cut off?

 

Or are you just advocating that the US default on its loans?

I am painting a picture of how nice life would be if we got serious about paying off the national debt and how that is prefered to spiralling interest payments. That is why I favor balancing the budget except for extraordinary circumstances.

 

The first step towards that goal is making politicians accountable for spending more than we sent them not. Not buying into the myth that we can have all these goodies from the government and someone else is going to pay for them.

[southsider2k5]

I am painting a picture of how nice life would be if we got serious about paying off the national debt and how that is prefered to spiralling interest payments. That is why I favor balancing the budget except for extraordinary circumstances.

 

The first step towards that goal is making politicians accountable for spending more than we sent them not. Not buying into the myth that we can have all these goodies from the government and someone else is going to pay for them.

Paint a picture all you want, I am just curious how you plan on getting from point A to point B. Its nice to point to what we could do with an extra $400 billion, heck I like to dream what life would be like if I won the powerball. But the fact is the government doesn't have that money, and unless they plan on crippling the world economy to do it, that isn't going to change anytime soon.

[Texsox]

Paint a picture all you want, I am just curious how you plan on getting from point A to point B.  Its nice to point to what we could do with an extra $400 billion, heck I like to dream what life would be like if I won the powerball. But the fact is the government doesn't have that money, and unless they plan on crippling the world economy to do it, that isn't going to change anytime soon.

You set up the scenario of taking away that $400 billion in deficit. I thought you meant what if we didn't have those payments to make. I misunderstoof your question.

 

We start by balancing the budget every year. That was way back in post 10 and what started this debate. We start by not spending surpluses, but by paying down the debt.

 

You never did answer me,

 

How large of a debt are you comfortable with? $10 trillion?

 

Why is borrowing money better for the economy than spending what you have? Last year we took in $1.7 trillion and spent $2.1 trillion. If we took in $2.1 should we have spent $2.4?

 

Why does our economy only grow when the US government goes into debt?

 

If a $400 billion deficit is good, is a $800 billion Grrrrrrrrrrreat!!

 

Can the US ever have too much debt?

[southsider2k5]

And I still haven't heard what you plan on doing to balance the budget. How do you plan on saving almost $400 billion?

[Texsox]

And I still haven't heard what you plan on doing to balance the budget.  How do you plan on saving almost $400 billion?

You first. How large of a debt are you comfortable with? $10 trillion?

 

Why is borrowing money better for the economy than spending what you have? Last year we took in $1.7 trillion and spent $2.1 trillion. If we took in $2.1 should we have spent $2.4?

 

Why does our economy only grow when the US government goes into debt?

 

If a $400 billion deficit is good, is a $800 billion Grrrrrrrrrrreat!!

 

Can the US ever have too much debt?

[southsider2k5]

You first. How large of a debt are you comfortable with? $10 trillion?

 

Why is borrowing money better for the economy than spending what you have? Last year we took in $1.7 trillion and spent $2.1 trillion. If we took in $2.1 should we have spent $2.4?

 

Why does our economy only grow when the US government goes into debt?

 

If a $400 billion deficit is good, is a $800 billion Grrrrrrrrrrreat!!

 

Can the US ever have too much debt?

 

 

Deficits have to be in an acceptable ratio to current GDP. Unless the entire economic system was collapsing, there is no way to sustain borrowing at incredible ratios of GDP. Debt is an inevitable accumulation of those deficits.

 

I never said that the economy only grows when the government spends. I am not quite sure where you got that from. When the private sector is contracting, the government needs to step in and provide growth either through spending or tax breaks. Tax breaks are the most cost effective way of putting money into the private sectors hands, as it means the government doesn't get a chance to waste your money.

 

The most important factors are current economic conditions. There is no exact answer as economic conditions are perpetually changing. I would use deficit spending as a tool to stimulate the economy when an inordinate amount of people are losing their jobs. When the tax base starts to shrink the government is going to run a deficit, unless the government runs itself like a company and starts to fire people. Personally I don't want the government firing people and tightening spending at a time when a stimulus is needed to revive the private sector. That is what the great depression was all about. The government raise interest rates, and cut spending at a time when it needed to stimulate things. That is why the new New Deal was key to reviving the economy. It put money in peoples pockets at a time when the private sector was unable to do so. If the private sector is healthy, there is no need for government stimulus, see the 90's economic policy of the Fed for further evidence there. People weren't going to lose there jobs to pay down the debt. I am saying pretty clearly that the overall health of the American economy is more important than deficits.

 

Approximately 2 million people lost jobs as a result of 9-11 and the stock market bubble bursting. If we would have said sorry, this isn't a big enough occurance to merit deficit spending, we would still be in a recession. People don't work, people don't pay taxes. The government would have had to shrink to meet that. You do understand the mulitplier effect right? Taking money out of the economy has a ripple effect. If you have two million less tax payers, that is two million people who aren't supplying money for things like SSI, education, homeland security, etc. We can't just fire those people because a terrorist group attacked us. Because the government put itself in the business of managing the economy in the 1930's, it has a responsibilty to make sure that a small group can't cause a world wide depression. And if the government doesn't make up the slack of those lost tax payers, and instead starts cutting spending and services to stay within its smaller budget, more people, not less will lose their jobs. We had 25% unemployment in the 1930s from an economic scenario that was remarkably similar except it was sans the terrorist attack. That is history. You can go back and read what balanced budgets during economic crisis do to our economy.

 

Yeah the numbers are big and intimidating. It is easy to toss out numbers and say ooooh $400 billion. Every one of those dollars has a real person behind it. Those are people's jobs, that is people's education, that is people's health care. $2.1 trillion is a number that you or I can't fathom, and it is easy to say well $1.7 trillion should be enough. The economic reality of what happened in the stock market crash saids something completely different. People of the pyramid effect that the stock market wealth created on our system, the pullback was going to be huge and ugly. The overvaluations in the markets were reminisiant of the tulip bulb craze in Holland where people were selling their brewerys for a field of tulip bulbs. When everyone planted tulips, the price crashed and people lost their livelihoods. The samething was going to happen, and did to some extent, here. People bet their retirements, they bet their kids college funds, and many jobs were involved in this industry, and the effects of that spending created many other jobs. That is why our unemployment levels fell through numbers that many had deemed impossible. That is why we were able to run surpluses is because everyone possible was working. Once that bubble burst the return to deficits was inevitable unless the government exaserbated the problems by firing more people to balance thier own budget. Or cut services to people who depended on the government for whatever.

 

If we hadn't deficit spent there would still be a pile of rubble sitting on the WTC site, because no private sector companies would have paid what the government did to get everything done. There would still be rampant unemployment in the financial industry, especially in NYC.

 

If we as simple as saying poof the budget is balanced and everyone has free health care, don't you think someone would have done it by now?

[Texsox]

How large of a debt are you comfortable with?

 

Why is borrowing money better for the economy than spending what you have? If we took in $2.1 trillion, should we spend $2.4 trillion?

 

Can the US go bankrupt?

[southsider2k5]

How large of a debt are you comfortable with?

 

Why is borrowing money better for the economy than spending what you have? If we took in $2.1 trillion, should we spend $2.4 trillion?

 

Can the US go bankrupt?

I spent a half hour to type that, and you seemingly ignored everything I said. Thanks.

[Texsox]

I spent a half hour to type that, and you seemingly ignored everything I said.  Thanks.

You are most welcome. I read what you typed and it was very good, I just couldn't find specific answers to some of my questions. I dropped those questions from the next post.

 

Let me ask the question this way.

 

Which was more important, spending $2.1 trillion or having a $400 billion deficit?

 

If a $400billion deficit is good is $800 billion Grrrrrrreat!!

 

Should there be any relationship between income and expense?

 

Can you US go into bankruptcy, or do we have the capacity for unlimited debt?

 

Do you see a day when we have a surplus, or will we continue to run deficits every year?

 

Is big government the answer?

 

Currently we have both parties trying to outspend the other with no one complaining.

 

Vote for me and I will give you $500 of my money -- illegal.

 

Vote for me and I will have the government borrow $500 from China and give it to you, legal!