Returning to debt and taxes, I don't think we're ready to accept defaulting as the option yet; our American pride is still too strong for that. And I think that the quantity of debt we are currently buried under is too much to debase. So the question is: how do we go about paying it back?
Even if it's not an immediate concern, if we don't start being more careful about our fiscal policy we could follow in Greece's footsteps. In the words of the great Lao Tzu, "If you do not change directions, you may end up where you are heading."
Call me a liberal, but I do see tax increases as the only realistic way out of the deficit. Re-raise the taxes on the wealthiest 1% of Americans who got a break from Bush that they can live without. Raise taxes on commodities with indirect costs like cigarettes and gasoline and carbon so that those products are simultaneously discouraged and revenue is created. Some of the revenue could be invested in alternative energy technology so that it is more affordable. But it seems to me that the bottom line is that we are a society of intense consumers: we believe in the principle of economic growth and dismiss the fact that all growth has a limit. Why not learn to start making do with a stable economy, have less loose income, get the government out of debt (and debt reduces national saving and long term growth so it does need to be dealt with).
Alright, those are my thoughts on American consumerism, socialism, debt, and Lao Tzu. What are other ideas about getting us out of debt?
Tax increases may help lower the national debt, but they would make a lot of people who are already struggling to make ends meet upset with the government. Doing so could cause people to lose faith in the current administration, which means raising taxes might cost people elections. Also, while they did contribute to the debt, I don't think we can place all of the blame on tax cuts during the Bush administration. There were plenty of other factors contributing to the national debt, like the housing market bust.
ReplyDeleteNobody has suggested tax increases for the average American. While raising taxes on the top earners might encourage them to pass the burden on too those below, this country functioned and prospered at tax rates enormously higher than they are today. I would love to post that cartoon on the subject again, but Blogger is apparently horribly limited. The Bush tax cuts that are set to soon expire have been extended for everyone below $250k, and the Democrats are being wishy-washy about letting the rest expire.
ReplyDeleteAlso, regardless of anti-Socialist mania on the Right, Obama either does not care about the middle class or is just profoundly incompetent because his health care bill favors the industry over the average American, because his criticism of the financial industry has been all bark and no bite, and because he has given significantly harmful concessions to Republicans in the name of "bipartisanship" while getting nothing out of it. It's probably a mixture of the two.
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ReplyDeleteI don't think that trying to eliminate the budget deficit now, while we are just pulling out of a terrible recession(hopefully) is the best idea, as extra taxes or cuts in government spending could setback economic recovery. Ideally, we should have run a budget surplus during the boom years, as this would have left government able stimulate the economy without running up such a large deficit. However, thanks largely to the policies of a certain former president and his party, this wasn't the case. With this in mind, I feel that it will be best to bear with our enormous debt for now, then, once the recession is well behind us, take steps to eliminate it.
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ReplyDeleteIn class we learned that a national deficit is a result of when government spending exceeds income revenue. There is a debate between Americans in whether or not former president Bush was correct in implementing the stimulus and if Obama should go about the implementation of the health care reform. It is split between people who say that the government should continue increasing government spending and those who say that government should cut back on government spending and raise taxes. I'm no expert but I think there is long term and short term risks either way you go. (A,T)
ReplyDeleteI defintiely agree that we are a soceity of intense consumerism. While I don't really that much about the whole tax ordeal, however, at this point I'm going to trust the Obama Administration. I figure that at this point these isn't much else to do, but be supportive and patient. This recession is not just going to go away it'll take time.
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