[Rhodes22-list] Politics: Tax or Borrow?

[Brad Haslett]

Bill,

Here's a point for point stab at your comments.



>
> *I missed the part about WHY you have to look at average debt as a
> percentage of GNP, and just exactly what the answer means.*


The total amount of debt means nothing, you have to compare it to income
productivity (GNP).  My current debt load, both personal and business, is
well within my means.  The same debt load would crush my son (because of his
limited income).


*FDR not only faced a rather large war, but also a rather large depression,
> and an unemployment rate around 25%.*


*When you throw war spending into depression earning you obviously create an
> abnormally high ratio.  When you then throw this huge anomaly into an
> average you deliberately skew the average*.


True!  And, you are welcome to search the archives to find me criticize FDR
for borrowing record amounts of money. Desperate times call for desperate
measures. Most of the social programs he started during the Depression were
needed at the time as well, they just never ended.


> *If you look at budgets after FDR's term, you get a much different
> picture, one of Democrats taxing to reduce deficits, and Republicans
> borrowing to finance social aims.*


Not true!  Eisenhower borrowed little money.  He didn't need to, the economy
was great. Reagan, the biggest GOP borrower till the current President,
certainly didn't borrow for social aims.  His goal was to outspend the
Soviet Union.  It worked. Our economy was already going through the downside
of a business cycle and suffered an enormous hit on 9/11.  Desperate times
call for desperate measures.


*So that's where we are now.  Reducing programs won't work.  Nobody is going
> to dismantle Social Security, or reduce Medicare benefits.  We're going to
> have to replace all the equipment that got blown up and used up in
> Iraq--it's going to cost a lot of money, and there is no way around
> it--ending the war won't produce the money to pay off the debt.*


Actually, there's ton's of programs that can be eliminated.  Social Security
is a sacred cow.  You can't even discuss it without people going nuts.
Nobody is talking about dismantling SS - just adjusting for the massive
numbers of baby boomers who are nearing retirement.  Bush
*increased*Medicare benefits! That was unnecessary and unaffordable.
War costs a lot of
money, yes.  Losing one costs more, in fact, you can't put a monetary value
on losing.

*What's left?  Borrowing or Taxing*.
>
> *Which will you pick?*


We'll end up taxing, it is inevitable.  That doesn't mean I like or
approve it, it is just reality. I'm uncomfortable borrowing more, especially
who we're borrowing from (China).  Bush did the right thing by making supply
side tax cuts to move the economy after 9/11  Social tax cuts (what is
coming) do very little to stimulate the economy.  We'll discuss the
difference tomorrow.  Right now I'm watching the Tennessee-Arkansas game
with my oldest son.

*PS -- Just taxing the rich won't work, either.  Everyone is going to have
> to pay for the fiscal fiasco of the past 6 years.*


A record stock market  is hardly a fiscal fiasco. Remember what JFK said, "a
rising tide raises all boats."And exactly why should we just tax the rich?
Everyone should pay a *fair* share. Just what is *fair *and who is rich? I
can't speak for you but I have a target on my forehead.  And I'm not rich!

Brad

Brad Haslett wrote:
> > Rummy,
> >
> > Saying the national debt is at record levels based on raw numbers
> ignores
> > inflation.  You have to look at the debt as a percentage of GNP. Could
> > you,
> > or anyone, please show me the numbers on how bad the economy is doing?
> > Saying the economy is bad defies reality.  If you find the numbers,
> > I'll go
> > out and kill my own crow for a pie.  Is Haliburton still a buzzword?
> > They're damn good at what they do in the oilfield.  Some of their other
> > units haven't performed so well.
> >
> > Brad
> >
> >
> > On 11/10/06, R22RumRunner at aol.com <R22RumRunner at aol.com> wrote:
> >>
> >> Philip,
> >> Economically he failed by increasing the national debt to record
> levels.
> >> Normally a war time economy is considered good, but there were so that
> >> profited
> >> (Haliburton comes to mind) that it didn't create jobs or fuel the
> >> economy.
> >>
> >> Rummy
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