15 September 2009

National Debt Revisited

The national debt roughly doubled during the eight years of the Bush administration. It has multiplied almost 10 times what it was when Reagan took office. I blogged about this many times. It is now estimated that it may double again in the next decade. Is there a solution to this?

This article lays out a reasonable series of measures that could control this:
- Reinstate the President's power of impoundment (removed in Budget Control Act of 1974). This would give similar power as a line-item veto, which Reagan was always asking for.

- Start an independent accounting board that would set the rules of accounting for the government. Give it the power to monitor programs and their cost effectiveness. Congress now monitors itself and this is the problem.

- Adopt a limit on total spending so that it could only increase with inflation and growth, unless 2/3 vote to suspend the limit in crisis situations. California had a law like this that they repealed in the early 90's and look what happened to them.


Anonymous said...

No, no, no. On a personal level, sometimes debt is good. When you want to buy a house. When you want to "buy" a college education. In other words, when you are working toward increasing your wealth.

Something similar goes for government. Sometimes debt is good and even necessary. When you're trying to stop the economy from imploding, for example.

The problem isn't that the federal government takes on debt, it's what it takes on debt for. Some things, like our current two stupid, unnecessary and counterproductive wars, are bad uses of debt. Other things, like rebuilding our infrastructure, would be good uses of debt, because they would help increase our wealth as a nation.

And now I'm going to do something I've never done in a comment before, all caps: ALL THAT SAID, DEBT ISN'T THE ISSUE. THE ISSUE IS WE HAVEN'T TAXED RICH PEOPLE ENOUGH FOR MANY, MANY YEARS.

Go google how much George Bush's tax cuts cost this country. Then add on to that lost revenue all the interest we're going to have to pay to China for the money we borrowed to make up for all the money we let the ultra-ultra-rich keep.

Somehow or other, the ultra-ultra-rich managed to be just fine during the Eisenhower era, when there was something like a 90% top marginal rate. I think they'd do just as fine if the top rates were raised again. And the rest of us would do even better.

Blue Ash Mom

CityKin said...

I like you more every day, BAM.

kid-cincy said...

Blue Ash Mom,
I'm not sure what you've been smoking, but it must be some good s**t. You should put the pipe down for a minute and educate yourself. And where exactly does the constitution define how much "money we let the ultra-ultra-rich keep?"

I hope your kids are getting a better education out there than you got.

CityKin said...

"The reality of the contemporary United States is that, even as income inequality has exploded, the average tax rate paid by the top 1 percent has fallen by about one-third over the last twenty-five years. Again: it has fallen. The rich have gotten unimaginably richer, and at the same time their tax burden has dropped significantly. And yet conservatives routinely describe this state of affairs as intolerably oppressive to the rich. Since the share of the national income accruing to the rich has grown faster than their average tax rate has shrunk, they have paid an ever-rising share of the federal tax burden. This is the fact that so vexes the right."
-from The New Republic today

CityKin said...

"Most of the right-wing commentary purporting to prove that the rich bear the overwhelming burden of government relies upon the simple trick of citing only the income tax, which is progressive, while ignoring more regressive levies. A brief overview of the facts lends some perspective to the fears of a new Red Terror. Our government divides its functions between the federal, state, and local levels. State and local governments tend to raise revenue in ways that tax the poor at higher rates than the rich. (It is difficult for a state or a locality to maintain higher rates on the rich, who can easily move to another town or state that offers lower rates.) The federal government raises some of its revenue from progressive sources, such as the income tax, but also healthy chunks from regressive levies, such as the payroll tax.

The sum total of these taxes levies a slightly higher rate on the rich. The bottom 99 percent of taxpayers pay 29.4 percent of their income in local, state, and federal taxes. The top 1 percent pay an average total tax rate of 30.9 percent"

Anonymous said...

Thank you, City Kin, I like you too.

And thank you for your research showing that in effect, we already essentially have a flat tax in this country.

The rest of this comment is for you, kid-cincy: Warren Buffet has said many times that if he had been born in a third-world country he would not be the very wealthy man he is today. He simply would not have had the kinds of opportunities he needed to in order to succeed the way he did.

Since he benefitted so mightily from this system, he owes this system back, mightily. He admits he should be paying more taxes and has pointed out that because of various loopholes, he actually pays a lower rate (I suppose on his federal taxes) than his secretary.

And, now for some sarcasm: if you're going to reduce this conversation to sound bits, where in the Constitution (proper spelling requires capitalizing the C) is the Air Force mentioned? Better close that branch of the military down.

Finally, you don't have to worry about my kid. Much to my dismay, the Ohio Standards economic currriculum is filled with neo-liberal propoganda. You'd love it.

Blue Ash Mom