Yeah Obama got a big increase in revenue/ But not enough so now he wants more.
What is the Democratic plan to reduce spending? Ohyeah, they have none. We gotta keep spending to avoid bankruptcy.
Hi, I'm new here. I understand that the issues concerning how to best deal with the debt are a hot button issue. If we had an ideal world, I think the best solution would be to have legislative targets for budget cuts based on economic performance. For example, it would have been better for the economy if we had committed to reduce spending (or increase revenue) by a certain percentage once unemployment falls below X% (fill in your number here, I'd personally say about 6.5%). This would have the effect of telling the world were serious about controlling our deficit, but at the same time it would not have but our economy in further jeopardy while we were still trying to recover from a general global economic malaise.
Unfortunately, we're not in *my* ideal world (I have no doubt, some people would disagree with my perspective of ideal). So the issue is being dealt with today. If we can drop out the rhetoric I think we're more likely to come up with reasonable solutions. As a general principal,
in the short term, tax cuts or spending increase do stimulate the economy whereas, tax increases and spending cuts have an adverse effect on the economy. It is illogical to suggest that tax cuts help the economy and spending increases don't or vice versa, from a budget stand point they do the same thing. To prove this is relatively easy:
If you were making government policy and you wanted to stimulate technological growth and provide better resources to our people, you might very well consider trying to get more smart phones in the hands of the public. You could do this in one of two ways: 1) You could allow a $50 deduction on your taxes for any smart phone you bought, or 2) You could hand out a $50 coupon to people to use towards the purchase of a smart phone.
In one case you're implementing policy via a tax break and in the other your implementing policy via a spending increase. The net effect on the economy will be exactly the same. The net effect on the gov't budget will be exactly the same.
This isn't to say that all tax breaks and all spending increase have an equal effect at stimulating the economy. Also, much of the effect is temporary in either case. In the example above, initially this might cause more smart phones to be bought and get a great number of them into the hands of the population, but eventually the manufacturers of smart phones will increase the price by $50 and pocket the stimulus money.
The real way to solve the budget crisis is to review every single tax deduction, and every single spending program and figure out which ones are the best candidates to reduce or illuminate. Statistically I don't know what the breakdown would be, but it certainly wouldn't be all of one or the other.
