Word out today says the national debt rose this month, for the first time ever, to over $13 trillion dollars.
Say it again: thirteen trillion dollars.
Yowza.
That's a lotta salami.
One analyst describes us as likely going into a "super debt cycle", where we continually owe more and more, due to interest rates and compounding debt.
Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.
“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”
Most of us have heard this before and it's surely getting a lot of coverage.
And we can agree that one day we have to take care of this, sure, absolutely. Further, we can agree that now would be a particularly bad time to attack the problem, what with the Great Recession we're plodding though.
But it seems there are at least three good--and easy and smart--things we could do about this, if only we get smart.
First, would it be so tough to, right now, do away with "earmarks" Congress creates? I wouldn't think so.
These are rather arbitrary costs we give ourselves, through these legislators.
Let's get rid of these things and the sooner the better.
And it could happen, we could get rid of them, if we make enough noise.
The second easy and intelligent thing I would think we could and should do would be to take away any and all tax breaks--whatever exists--for firms to take manufacturing offshore.
If that ever made sense, it surely doesn't now.
This would have two positive effects, too: First, it would raise income for the country, possibly. Sure, people and corporations would scream that it's a tax increase but so what? Why should we reward firms for producing elsewhere?
The other good effect is that it could, possibly, bring some manufacturing back home, here to the States, of course.
And what would be bad about that? More jobs, back here in our country. Who could be against that?
Finally, the third thing we could and should do for our country is put in place, as I've written before, a minimum 10% (or some figure) tax for any and all companies and corporations to pay, regardless of deductions.
This way, no matter what a corporation deducts, they would pay at least a small amount for access to this country's markets, infrastructure and all that entails.
No person or company should be able to operate in this country as a business and not pay any taxes. That makes no sense at all.
These 3 options seem simple, intelligent and beneficial for the country.
So my question is, do we not have the will, as a people and a country, to do even the most simple, obvious and, again, helpful things in order to start down a better and more intelligent path to fiscal responsibility?
I hope we do. I hope the answer is, yes, we do have that will.
Link to original post:
http://preview.bloomberg.com/news/2010-06-04/u-s-s-13-trillion-debt-poised-to-overtake-weigh-down-gdp-chart-of-day.html
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5 comments:
Earmarks are a symptom, and not a significant percentage of our budget woes. I'm all for eliminating them, but that's a bandaid on a papercut when we need open-heart surgery.
Tax breaks to take jobs overseas is another symptom, rather than a primary cause. As long as our tax system is complex, big business will lobby for and exploit loopholes-the only thing that changes is which loopholes.
We need to get rid of the mindset "TAX BUSINESS NOT PEOPLE!!!"--those costs are ALWAYS passed on to people. When you make something expensive, you get less of it. Instead of taxing production, we need to tax consumption, whether as a VAT or at the retail level. If this was done revenue-neutral, it would encourage jobs, encourage factories to locate here, encourage investment, encourage recycling and re-use, and ensure that imported products pay their fair share of the tax burden.
Sure, I agree, earmarks are a small fragment of this out of control spending but you--and that point, then--make my point. If we can't even cut out this small bit of ridiculous spending, have we no willpower at all? Can we not even cut this out?
Giving tax breaks to countries that take manufacturing overseas makes no sense, period, especially now, with our manufacturing base shrunk so much. Let's help to bring the work back here.
Finally, the fact is we should be able to tax a business for doing business here. Corporations got recognition as "citizens" so, by gosh, they can pay taxes just like us.
And if, as you say, a new tax structure could be set up that was truly "revenue-neutral" but is also not regressive and tougher on the middle- and lower-classes than on the upper-, then, by all means, let's do it.
How can we get that started?
mr
The fact is, I don't think there is a way to tax consumption that isn't tougher and way imbalanced on the middle- and lower-classes, compared to the wealthy. If there is, it would be a perfect system and I'd have to say bring it on.
Otherwise--and this is a very rare occurence, I'll quote Ronald Reagan: "There you go again..."
lol
mr
A proposal that I like gives everyone a rebate, based on the taxes paid by someone at whatever threshold income is selected. This would mean below the threshold you'd get back more than you paid, and the effective rate would be progressive.
See? We do have common ground.
It sounds possible, workable and intelligent.
Now if only Congress would get off their collective butts and propose such a thing, without special interests, lobbyists or corporations injecting input.
As if.
mr
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