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Do you equate government health with economic health?

Discussion in 'BBS Hangout: Debate & Discussion' started by Joshaaronb, Feb 25, 2009.

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  1. Joshaaronb

    Joshaaronb Member

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    It seems that a lot of people look at the government and a seemingly insurmountable debt but never look at the other side of the balance sheet. We have 10 trillion in debt and 60 trillion in GDP, that by any means is a good ratio.

    Regardless, why do we worry about the national debt and confuse it with our economic health?

    I also don't understand why people look at tax cuts so negatively. Under Bush spending definitely increased, something I never agreed with, but the tax receipts did also and this was with his tax cuts. If he hadn't have had the war and the medicare drug coverage he would have run a big surplus. It seems when certain taxes are lower, especially capital gains, that the amount of taxable events increases exponentially just in smaller chunks.
     
    #1 Joshaaronb, Feb 25, 2009
  2. MartianMan

    MartianMan Member

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    Where did you get 60 trillion GDP? Better check those numbers again.
     
    #2 MartianMan, Feb 25, 2009
  3. Joshaaronb

    Joshaaronb Member

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    I made this mistake on another post, GDP is not 60 trillion but Capital assets are. It didn't sound right when I typed it because GDP wouldn't be on a balance sheet.
     
    #3 Joshaaronb, Feb 25, 2009
  4. Mr. Clutch

    Mr. Clutch Member

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    I'm not against tax cuts, I just think they are at a reasonable level and we can't afford anymore. Sure, if we could cut spending to match the tax cuts that would be great, but the politicians (and voters) have shown they wont stand for spending cuts.

    And yes, I do equate our government's debt with out economic health, because at some point foreigners will stop funding the massive debt, then we won't be able to spend like crazy. And if we default on debt, the dollar will collapse.
     
    #4 Mr. Clutch, Feb 25, 2009
  5. rocketsjudoka

    rocketsjudoka Member

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    That's basically what I think. I don't equate government health with economic health in the short term but in the long term they are tied.
     
    #5 rocketsjudoka, Feb 25, 2009
  6. Joshaaronb

    Joshaaronb Member

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    But the reality is that it all relates back to the balance sheet. If we grow to a 20 trillion debt with capital assets of 100 trillion and a GDP of 25 trillion what is the issue. No country will call our loans because it just doesn't make any since in this scenario. The debt of the government and what I would call a healthy deficit (3-6%) is actually beneficial if used for things like infrastructure and research.
     
    #6 Joshaaronb, Feb 25, 2009
  7. pgabriel

    pgabriel Educated Negro

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    you can't look at it like their lending to the country. the US debt is paid off by tax revenues, which are directly tied to the health of the economy.
     
    #7 pgabriel, Feb 25, 2009
  8. Mr. Clutch

    Mr. Clutch Member

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    But the problem is we no longer have a healthy deficit of only 3-6%. On top of that, we aren't using correct accounting rules for Medicare and SS. Our deficit is actually much higher.
     
    #8 Mr. Clutch, Feb 25, 2009
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