Who's going to pay the piper? Bush doesn't want us to know

You fail to understand that this tax cut is going to make the economy grow at a 2000% annual rate so the new tax revenues will easily be able to cover all these new debts. Tax cuts are greeaaaaaaaaatttt! At all times, in all circumstances. If we keep cutting taxes, we can get 5000% annual growth rates and 0.01% tax rates and all will be perfect.

 

Major,

I detect some dripping sarcasm.




I just want the government to start cutting back like the rest of America, and I think Tax cuts will force them to do it.

Our government is bloated, and wasteful, it needs a good cleansing.

A culostomy bag the size of Dallas is needed...STAT !

DD

 

Is okay if we just flush Dallas the city away like a culostomy bag?? Is this a viable option? I am DEFINITELY down for that!

 

I just want the government to start cutting back like the rest of America, and I think Tax cuts will force them to do it.


I wish that would work, but I just don't believe it will happen. Deficit spending is easy because the curent Congressmen and Senators likely won't have to deal with the repurcussions (same with tax cuts). I have no problem with tax cuts - if they are matched with spending cuts NOW. Expecting those cuts to come later, though, is a disaster waiting to happen in my opinion. The 80's and early 90's demonstrated that I think. It took a LOT of things coming together to even pay back a portion of the debt - a commitment by both parties to cut spending, a strong economy, etc and we undid all of that progress in about a 2 year period. The likelihood of getting back to even without a tax increase of some sort is very low at this point.

 

DD-- Where and what programs do we cut if Defense spending is set to increase?

 

DD, regarding the above post, I heartily agree with everything to the left of the comma, and heartily disagree with everything to the right of the comma.

The only thing that will force the government to start cutting back like the majority of middle and lower class America would be an overthrow of the government.

 

Yeah, I agree with you about SS and Medicare. The problem is the first person to suggest major reforms to either of these will face a major backlash.

The only viable solution I've heard is privating Social Security. Or raising the age of elibibility as a temporary bandage. When the program started, people only collected for 5 years or so. Now that we live longer, people can be collecting Social Security for well over 10 years.

 

That gives me a headache.

Eliminating it would be financially the best idea, and the economy would be MUCH better off. But how do we tell people they have to keep paying all those taxes to support current Seniors, but they will get 0 when they turn old?

I'm guessing the country will get serious about this issue around...2025 or so.

 

Why are the revenues on that chart straightlined? Assuming You have an increasing population and a growing economy, why wouldn't revenues rise?

I'm sure outlays would rise in a disporportionate amount to revenues, but the graph isn't logical.

 

As I posted in another thread the way to get the govt. to cut back spending isnt' a tax cut, it's by paying off the debt. Since almost 15% of our national budget goes just to pay down the interest on the debt, one of the most sound ways to cut spending is to reduce that debt.

The tax cut of course actually increases the debt, thus the intrest payments will go up, so in effect the tax cut actually increases govt. spending

 

How does a "return" of unspent tax dollars further increase government spending? Are you saying a tax refund is an expense?

 

Wonderful. I turn 65 in 2026. WalMart, here I come!!!

 

Basically, the money being returned was earmarked for spending. Because that spending is not being cut, we are basically having to borrow money to pay for it rather than use tax revenues. Consequently, we have a greater debt and thus pay more in interest.

 

Sam Fischer, I think that you should realize that just like you can find many conservative think tanks that always explain why cut tax for the rich are the greatest thing since sliced bread and that this type of analysis frequently makes its way into mainstream thinking, the same is true with social security.

Before you as a self described liberal buy the anti- social security arguments, at least consider the point of views of those economists and policy wonks who support the program. There are great financial incentives to privatize as reflected in the money invested in the privitization thrust (and the Bush campaign) by the mutual fund industry. The defenders who argue that the program is basically solid and can be tweaked to last indefinitely can't make money off of defending the program. The disparity in resources makes it somewhat harder to acces the info and arguments supporing the system

See
social security

 

A Phony Crisis Fed by Deception

by Dean Baker and Mark Weisbrot

We now know that a good part of President Bush's public support for the Iraq war has been based on false or highly misleading information. While polls have shown that 53 percent of the public believe that Saddam Hussein was "personally involved" in the massacre of Sept. 11, no evidence of this connection has ever been produced.

The war against Social Security has been fueled by similar, wide-ranging deceptions. Mention Social Security to anyone under 50 and the most likely response will be something like "I'm never going to see any of that money."

Yet there is no evidence to support this belief. According to the Social Security trustees' projections, the program is able to pay all promised benefits for the next 40 years. Even those who campaign against Social Security accept that this is true.

That should be the end of the story - 40 years is a long time for any program to be able to pay for itself. But since the trustees make projections for 75 years, opponents of Social Security have seized on a projected shortfall after 2043 to claim that the system is in trouble. And that we must act now to "reform" it.

In reality, the projected shortfall over the whole 75-year period is relatively small. As a share of our national income, it is about three-quarters of one percent. The tax increases that might be needed to close this gap are less than those implemented in the 1940s, '50s, '60s, '70s, or '80s. And we have to remember that the average real (inflation-adjusted) wage 40 years from now will be about 45 percent more than it is today. So if people have to pay a bit more to support a system that keeps most of our senior citizens above the poverty line, they probably won't complain. Their after-tax income will still make them a lot better off than the average employee today.

In short, the whole idea that Social Security needs "reform" is nothing but hype, the product of military-style disinformation. The "coalition of the willing" in the war on Social Security is led by the financial industry, which stands to earn hundreds of billions of dollars in fees and commissions if it can hold Social Security funds in individual accounts. They are joined by wealthy taxpayers who view any government dollar that is not paid out in corporate subsidies as a potential tax break in their pockets.

The reality is that Social Security has never been needed more. As a result of nearly 30 years of wage stagnation for the typical employee, most Americans have found it very difficult to save for retirement. Many who did succeed in saving have now seen much of their retirement funds disappear in the recent stock market crash. And these savings will be further eroded when housing prices decline, which is inevitable given the unprecedented runup in housing values over the last seven years.

But we have not finished with the "sky is falling" predictions, and we will surely hear more as President Bush and the Republican Congress turn their sights toward domestic policy. They will be aided by a group of academic economists who have joined the war effort, lending it legitimacy. These thinkers have devoted endless tracts to Social Security's relatively minor long-term problems, while ignoring such serious crises as an $8 trillion stock market bubble, a collapsing health care system, and decades of stagnating wages for the bulk of the work force.

Social Security's detractors have deployed a series of verbal and accounting tricks to create a false impression of its finances. For example, they point out that while there are now three workers for every person drawing benefits, in 2035 there will be only two. This is technically a true statement, but it is like reporting one-half of a baseball score. The other side of the story is that productivity and income grow year after year, and this growth compensates for the demographic changes.

Another trick is to pretend that the bonds held by the Social Security Trust Fund, now amounting to $1.5 trillion and growing by $200 billion a year, are somehow less "real" than other US Treasury securities. They are often disparaged as "IOUs" - even by financial reporters who should know better - and it is claimed that the government has "raided" the trust fund and "spent all that money." But all bonds are "IOUs," and all Treasury bonds are sold so the government can spend the money. The bonds held by the Social Security Trust Fund are backed by the full faith and credit of the US government, and it is a bit ridiculous to suggest that our government would default on them.

With little wealth accumulated for retirement and traditional pensions rapidly disappearing, tens of millions of baby boomers will be relying on Social Security to provide the vast majority of their retirement income. Fortunately, the system is financially solvent and will remain so - unless its detractors can succeed in deceiving the public enough to carry out their "reforms."

Mark Weisbrot and Dean Baker are Co-Directors of the Center for Economic and Policy Research, in Washington D.C. (www.cepr.net)

social security