About 'definition of good debt'|Good real estate debt vs. bad real estate debt
I am going to try to do some things that politicians won't do in discussing the National Debt, Taxes, Unemployment, Medicare/Medicaid, Social Security, and Federal Expenditures. I am going to discuss these issues: LOGICALLY FACTUALLY First I need to say that I do have pre-conceived notions. I was taught: 1. You get what you pay for. 2. There ain't no such a thing as a free lunch-TANSTAAFL!---(Thanks, Robert Heinlein.) 3. The world owes you a living, you just have to work your butt off to collect it. 4. I have to keep my promises. 5. I have to help others who need help, for one day, I may need help. 6. I have responsibilities to: a. Myself b. My Family c. My community d. My Nation e. The World And I should be judged on how many of those levels of responsibility I fulfill. Let us begin-shall we start basic facts? 1. Like an individual or family-a government has an income-for a government it comes from taxes-for most of us, it comes from work, and for a few of us, it comes from inherited wealth. 2. Like an individual or family-government has expenses-they are for things that it needs to do, or things that it was told, by us, through elections, that it should do. 3. When Income does not keep up with Expenses-Debt is created. Government makes promises for future and spends money now for things that will benefit us over a long or short period of time-like building roads, schools, or educating our children. Debt is not a terrible thing IF the debt is reasonable based on income. Most of us go in debt for things like a House, car, education, or the unexpected like a flat tire, medical expenses, or I REALLY REALLY WANT THAT! 4. Things that have made America great have been our trying to make our society better than the old European societies our forefathers left behind. We tried things like: a. Free Education-this enabled people to learn and be able to invent, create, and improve things-we became one of the most inventive, creative societies in history. b. Services-Fire protection, cheap mail services (I know this is old-but it was communication-sharing of ideas), public roads, and the list goes on. c. Eliminating Child Labor, setting up programs that would allow people to retire and still feed and clothe themselves (Social Security), setting standards for safety in work places, setting up standards for how much junk could go in our drinking water, and the list goes on. 5. TERMS- a. GDP---Gross Domestic Product-the value of goods or services created or made in one year by our country. b. Taxes-What we pay to the government based on i. Our Income from work ii. Our Income from wealth iii. Our Profit from our Business iv. Gifts and Value we won or received OK, now we have some facts, you know my preconceived notions. So let's tackle the issues of National Debt, Taxes, and what should Government do! NATIONAL DEBT---as explained above, the United States has gone in debt for doing things it was told to do by the people who run it. For example we went in debt to fight World Wars-and smaller wars. We went in debt to build highways that allowed for goods to be shipped all over the US, we went in debt to help states with the costs of educating our society. We probably went into debt for doing some things that did not HAVE to be done, but we, as a society thought they SHOULD be done. Our current National Debt is about 70 % of our Gross Domestic Product. (Note: I chose to use the comparison between debt and GDP because it provides a comparative that tries to factor out inflation and changes in productivity and national income) Thirty five years ago our National Debt was 33.3% of our GDP. So, in thirty five years our National Debt has gone up from 1/3 of our GDP to almost 3/4 of our GDP. How did this happen. Well, it happened the way you and I go in debt. We spent more than we received! Not too hard to figure out. Why did it happen? If you or I lose our job, our income goes down. That's one way. Or, I buy a new car or house---I spend more-SO More Debt. What happened to the US?---We cut taxes (lowered our income) and we spent more (raised our outgo). Who did it? What President(s) were responsible for raising our National Debt? And HOW did they do it? When Jimmy Carter (Dem) was President at the end of his term, the National Debt was 33.3% of GDP. When Ronald Regan (Rep) left office our National Debt was 51.9% of GDP an INCREASE OF 55.86% How did it happen-His administration: 1. Cut Taxes (Government Income) 2. Spent More (no wars-but Missile Defense, Lots of Defense Spending) When George H.W. Bush (Rep) left office our National Debt was 67.3% of GDP ANOTHER INCREASE OF 29.67% How did it happen-His administration: 1. Cut Taxes (Government Income) 2. Spent more (First Iraq war, Lots of Defense Spending) When William Clinton (Dem) left office our National Debt was 57.6 % of GDP-A REDUCTION OF 14.41% How did it happen-His administration 1. Did NOT cut taxes, increased them by closing loopholes 2. Spent as much as before When George W Bush (Dem) left office our National Debt went up to 69.3%--The HIGHEST EVER and an INCREASE OF 20.31% How did it happen-His administration: 1. Cut Taxes (Government Income) 2. Spent more (Afghan War, Second Iraq war, Lots of Defense Spending) Does anyone ELSE see a pattern here? Reduce income (Taxes) -Debt Goes up! So, what we see is that every time the Republicans won the Presidency, they 1. Cut Taxes (particularly for Corporate and wealthy, with smaller cuts for working people.) 2. Created Loopholes-Tax Incentives for Corporate America 3. Increased the National Debt. Why, if they just looked back in time, they would see the same thing, WHY DO THE SAME THING OVER AND OVER AGAIN. The definition of insanity is -Do the same thing over and over and expect a different result! The Republicans will tell us that they were improving the country, doing good for the country, they had good intentions. I heard somewhere that the road to a hot place is paved with "good intentions." They also tell us the same thing they are saying today--- IF YOU CUT TAXES-------YOU WILL CREATE JOBS. Sorry GOP-that is NOT TRUE! Let's go back almost 50 YEARS and see Lyndon Johnson (Dem) Average Unemployment during his term---4.2% Richard Nixon (Rep) Average Unemployment during his term---UP 19.05% Gerald Ford (Rep) Average Unemployment during his term-UP ANOTHER 56% Jimmy Carter (Dem) Average Unemployment during his term-DOWN 16.67% Ronald Reagan (Rep) Average Unemployment during his term-UP 16.72% George H.W. Bush (Rep) Average Unemployment during his term-DOWN to 6.3% (down 17.1% from Regan) William Clinton (Dem) Average Unemployment during his term-DOWN 17.46% George W. Bush (Rep) Average Unemployment during his term-UP 2% So, CUTTING TAXES DOESN'T SEEM TO CREATE JOBS, BUT IT CERTAINLY RAISES THE NATIONAL DEBT. "Trickle Down" did not work for Herbert Hoover, "Supply Side Economics" didn't work under Reagan, Bush Tax Cuts didn't work for George W Bush. If it ain't worked in 80 years---why should it work now? SO, THE REPUBLICAN PROPOSALS TO CUT THE NATIONAL DEBT ARE: 1. Cut Social Security (Workers have been paying into this since the 1930's) 2. Cut Medicare (Workers have been paying into this since 1965) 3. Cut Medicaid (let's make sure the poorest have no medical care) 4. Cut Food Stamps (when unemployment is high) 5. Cut Department of Education-Historically one of the things that made us great-EDUCATION 6. Cut the EPA (Environmental Protection Agency) to make them stop trying to cut greenhouse gases, air pollution, water pollution, and stop giving grants to maintain drinking water standards 7. Cut the FDA (Food and Drug Administration) stop wasting money on food safety-only .1% of the food may be unsafe---(But that causes over 128,000 hospitalizations AND 3,000 DEATHS a year from unsafe food.) 8. Here are some more of the proposed cuts a. -- $169 million from nuclear energy b. -- $593 million from the Internal Revenue Service c. -- $74 million from the FBI d. -- $379 million from NASA e. -- $544 million from international food aid grants f. -- $6 million each from the National Endowment for the Arts and National Endowment for the Humanities g. -- $2 billion from job-training programs ---with unemployment high-cutting job training? Makes sense???? h. -- $1 billion from the National Institutes of Health (note, that include Poison Control Centers) i. -- $224 million from Amtrak j. -- $755 million from the Centers for Disease Control and Prevention We are almost at the end of the discussion---So, now I ask a question of the reader-How about cutting loopholes in Corporate Business taxes that the NY Times says amount to ALMOST 1 TRILLION DOLLARS A YEAR in lost Taxes (950 BILLION) Particularly when reports are always coming in about the businesses that have profits in the BILLIONS and pay NO TAXES. When Billionaires, like Warren Buffett pay a lower percentage of their income in taxes than their employees (working people) pay, SHOULDN'T THERE BE FAIRNESS? Think about this--companies - which include household names like eBay, Boeing, General Electric (Msnbc.com is a joint venture of Microsoft Corp. and NBC Universal, which is jointly owned by Comcast Corp. and General Electric) and Verizon - averaged $1.9 billion each in profits. But a variety of shelters, loopholes and tax reduction strategies allowed the companies to average more than $400 million each in tax benefits - which can be taken as a refund or used as write-off against earnings in future years. Verizon, which earned $11.9 billion in pretax United States profits, received a federal tax refund of $705 million. The company's chief executive, Ivan Seidenberg, meanwhile, received $18.1 million in compensation. The online retailer eBay reported pretax profits of $848 million and received a $113 million federal refund. John Donahoe, eBay's chief executive, collected a compensation package worth $12.4 million. |
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