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when folks classify tax cuts as debt. you tell me?
when folks classify tax cuts as debt. you tell me?
Tax cuts mean less income which means more debt...
That plus the fact that revenue soared after the '03 tax-cuts:...that chart is total BS, healthcare and SS are going to go way up over the next 10 years and that doesn't seem to be represented...Suuuuure.
How about defense spending (wars) and social spending (welfare, SS, medicare, etc) being the reason?
I would have a hard time convincing a financial adviser that my family has a debt problem due to my low income. He would certainly point to our spending and lecture us about living within our means. The government gets to set its own income, to some extent, but they need to cut spending and set a reasonable tax rate.
Could the upper tax rate stand to increase a bit? Absolutely. Could the social spending programs that are doled out to the lower income folks of our nation stand to be cut? Again, absolutely!
Too many folks want to say its one or the other. Either the Democrat line or the Republican line but the reality is its a bit of each. Both major parties are dooming this nation to live in debt and eventually we will be crushed by it.
Some top deficit hawks from the left and right are flashing a warning sign: Making too many federal spending cuts now will hurt the economy. These are the same folks, mind you, who have been preaching the perils of debt long before the cut-now-or-else Tea Party came to town. And their message comes at a time when Republicans are pushing for trillions in federal spending cuts -- with as much in the near-term as possible -- in exchange for raising the country's debt ceiling.
The hawks' warning was backed up Tuesday by Federal Reserve Chairman Ben Bernanke. "A sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile recovery," he said in a speech to bankers. Part of the GOP's reasoning for calling for big cuts: It will bolster business and investor confidence, and that in turn can help create jobs and spur economic growth.
Deficit hawks don't dispute that general trajectory, but the effect can be realized by agreeing to a long-term plan today that takes effect over time. And, they say, today's deficits aren't really what keeps them up at night. "The short-term deficit isn't the problem," said former U.S. Comptroller David Walker, who notes that recent annual deficits are the result of temporary problems such as slow economic growth, high unemployment and the cost of various stimulus measures.
Walker favors cutting some discretionary spending -- he recommends roughly $80 billion to $120 billion over the next two years. But that's a far cry from cutting $380 billion, which is something the House Republican Study Committee said it wants to do in 2012. Those cuts would amount to more than what was spent last year on the departments of agriculture, homeland security, veterans affairs and transportation combined. It's also is 57% of what was spent on defense.
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Politically, the Boehner parameters aren't likely to fly. President Obama and other Democrats have already made clear they want to reduce debt through a combination of spending cuts and increased tax revenue. But practically, can the country live with a regimen of spending cuts alone? It's unlikely, since the changes could end up being too severe to be palatable, fiscal experts say. Just to keep the country's total debt where it is now -- around 60% of GDP -- without tax increases, lawmakers would need to cut spending today by 35% or about $1.2 trillion, according to the Government Accountability Office.
That's almost as much as what the country spends on defense and other discretionary spending -- i.e., nearly everything Americans expect their federal government to do outside of providing Medicare, Medicaid and Social Security benefits. Keep in mind, too, that stabilizing public debt at 60% likely won't be enough because it's still well above the country's historical average -- which is under 40%. Translation: Even more cutting would be necessary in subsequent decades. Another reason that a spending-cuts-only debt-reduction plan may not be the best option: It likely would require less of a sacrifice from the wealthy than from everyone else.
And any plan lawmakers agree to has to be seen as credible by the markets since the push to bring deficits down is driven by a fear that bond investors at some point may turn tail on U.S. Treasurys. A Reuters survey this week suggests that spending cuts alone wouldn't fly. A majority of bond firm economists and fund managers said that tax increases, in addition to spending cuts, must be part of the solution. It's not clear how many trillions Boehner and the GOP will aim for in spending cuts or over what time period.
Capitol Hill aides believe lawmakers will seek a $2 trillion increase in the debt ceiling, and Boehner has said spending cuts will need to exceed any debt ceiling increase. If the GOP's demands for spending cuts end up in the $2 trillion range over 10 years, that would be on par with the amount of spending cuts called for by President Obama's bipartisan debt commission, not including interest savings.
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when folks classify tax cuts as debt. you tell me?