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Where was I? The Usual Will the uKTAS Come to Order! Year of the Whopper Life in Retail pt. xxii ..and put up a parking lot Finger Pointing Step One: Grab the Stick; Step Two, Pull Up Your Point? On To Iran? Justin Oldham - Politics and Patriotism
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7.28.2004
Tax cuts are great aren't they? Its like free money. Except that we all know that nothing comes for free. So you have to be wondering, where does it all comes from? Well, from Sept of 1997 to Sept of 2000 the public debt increased by 261 Billion dollars. That's alot of money isn't it? From Sept 2001 to the present the public debt has increased by almost 1.5 Trillion dollars. A nearly five fold increase for the same time frame. So what happens to this money that we spend? You can think of the total debt as accumulated deficits plus accumulated off-budget surpluses. The on-budget deficits require the Treasury to borrow money to raise cash needed to keep the Government operating. We borrow the money by selling Treasury securities like T-bills, notes, bonds and savings bonds to the public Yeah, its a transfer of wealth. The government can issue tax cuts out the front door and borrow money out the back door. Its a great little system especially if you own some of that government debt. You know they're good for it right? Even better? Wage a war, wherein you pay large public companies billions to supply food, equipment and services with that borrowed money. Any profits will be paid out in dividends. You do own defense stocks right? Imagine, the money that the government borrowed from you is now being paid out back to you in dividends AND tax cuts? What could be better? A reduction in the rate at which that money is taxed for instance? Bling! Bush is my personal lord and savior! Seems like a pretty good system until you realize that the government has to pay off these loans with interest, meaning that they pay for the privilege of borrowing that money, just like you do on your credit cards. Current Interest YTD? $ 274,948,205,291.57. I wonder what the minimum monthly is on that? So we pay out nearly 300 billion dollars a year for the privilege of spending more money than we collect? Whose bright idea was this? Those tax cuts are looking more and more like those checks I get every month from the credit card companies informing me that I can write myself a check for $5,000 to fix up my home or take a vacation. I would, but I know that in the long run I'll have to pay alot more for that vacation than what I would if I just saved for it. Don't get me wrong, borrowing can be a useful tool in managing finances, but you know as well as I do that if you carry too much constant debt your income will be sapped by all the interest you're paying on that debt. It works the same for the government as well. But in this case, that debt is owned by the investor classes that are politically well connected and want the government to borrow more money from them. Its a safe investment. Unless you own some of that government debt, or stocks in companies that benefit from this rash of overspending, you will be paying for your own tax cut with interest. How nice, if you want to pay it down early you can send one of those credit card checks to: ATTN DEPT G BUREAU OF THE PUBLIC DEBT P O BOX 2188 PARKERSBURG, WV 26106-2188 "In the memo section of the check, make sure you write 'Gift to reduce the Debt Held by the Public'" SPECIAL NOTE: For you conservatives that are confused, this is the difference between Fiscal Conservatism, where you reduce spending to counterbalance tax cuts and Cronyism, where you spend like crazy and shift the burden to the middle class in some future time period. Those loans are guaranteed you know? |
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