$5.6 trillion federal budget surplus

[WriterDom]

Is that the Government's money or is it our money?

One private economist estimated in September that the Bush tax cut would represent about 1.2 percent of the overall economy when fully enacted, compared with more than 4 percent for the Reagan cut and 1.6 percent for a tax cut engineered by former President John Kennedy.

Yes, it's true, John Kennedy also cut taxes. A collective shiver runs down the backs of liberal generation Xer's backs. And each time taxes are cut revenue to the government goes up, not down. True, the wealthy will get the most money, but Duh, they paid the most in. And money returned to the people isn't burned, or buried under a mattress. It is reinvested in companies or used to buy goods and services which provide growth.

 

[Guest]

Bush is an idiot who stole the election. He's nuts to think his views are shared by most americans when they didn't vote for him.

 

[Thumper]

Not exactly.

Is it possible for someone that makes several million a year to have to do "without" until he/she can afford it?

The rich (who will get most of the tax cut simply because they pay most of the taxes) will not spend it on goods and services. Why? Because if they want something they already have it. Will they buy new cars, or washers and dryers, new carpet, more food, take vacations, or any other thing you can think of? Not likely because they already have those things. Will the CEO's and shareholders raise the workers wages after they get their windfalls? Nope. Trickle down doesn't work. If someone who makes 25,000 a year gets a raise, it goes right back into the economy since we do need those things. Most investment is just lateral trades of stock already issued. Money is made and lost as the price fluctuates but it doesn't create new jobs and new construction. Spending does. You own ABC widget company. The more people buy widgets the more money you make. This is a market economy. No sell widgets no makee money. Workers (consumers) make less money, workers no buy widgets.

Reagan cut taxes and the economy still went into the crapper. Why. Because he didn't cut spending. He tripled the deficit and that drove up the interest rate and that costed the populace more than the tax cut was worth in the long run. This tax cut will be more beneficial as long as spending is controlled. Americans get skittish when we(the Guvmint) are spending more than we are making.

Only difference between Democrats and Republicans on finaces:
Democrats are "Tax (as in pay for it now) and Spend"
Republicans are "Borrow (as in let those who come later pay) and Spend"

How about tax incentives to companies that close the widening gap between middle and upper class wage earners.

I pay rent...if my wages went up at the same percentage rate the top 25% of earners had I would own a house. Thereby paying taxes on it and buying things for it. Durable goods. I would be spending money on vacations and all sorts of other items. And guess what? The wealthy would get wealthier because of it. Probably more so than if they just horded it as they are so often inclined to do.

It is the Government's and hence our money. Why the constant view that the government is a separate entity. You are the government.

Rant over

 

[CreamyLady]

Not that I'm a conspiracy theorist or anything, but I haven't seen a solid bit of evidence that the surplus is anything but a shifting of entries in the bookkeeping.

In short, I'm not sure there really is a surplus, not after such a tremendous deficit. Is that really clear, interest payments and all?

I don't know. Until I see the bills stamped "paid in full" and filed away, I just don't think we have the money.

 

[RonG]

The Laffer Curve is the favorite toy of tax reductionists. It proposes that there is a strong inverse relationship between tax rates and net government income. The problem is no one knows the exact shape of the Laffer curve, least of all Art Laffer who so modestly named it.

The problem is most things that impact government income are discrete mathematics (unexpected shocks to the economy like oil prices, war, spending bills, natural disasters, etc.), rather than predictable continuous curves. Government income did rise substantially during the Clinton years without any real change in tax rates due to a sharp decrease in a number of pork barrel spending projects, relatively peaceful times and stable oil, and relatively good weather. For what went right with government spending, give some credit to Greenspan/Rubin, the Contract for America, and the general lack of cooperation of the last 6 years. As long as Congress was investigating the president and worrying about stained dresses, they weren't spending a lot of money.

Personally, I would rather that we ended up with another investigation than a tax cut. Until we totally pay off the debt, it will suck down way too much of our net income over the next few years. If we get the debt paid off around 2010, that will work out nicely for my early retirement so we can legitimately reduce taxes to a pay as you go approach.