Keep working on your English it and it will improve, but it is perfectly understandable as it is. It is important to use reliable sources for data. Much of the "information" on the internet is wrong, so be careful. That statement you read regarding how much of U.S. debt goes to welfare programs is just flat out wrong. It is likely that the person who wrote that confused "welfare" with "entitlement" programs, and then went on to consider future entitlement obligations of the government as debt. The future obligations are indeed future debt, but they are good debts in that if the entitlement programs are properly managed, and that is a very big IF, the money will be their when the obligation arises. Entitlement programs are not welfare programs. These are programs that you contribute your hard earned money to and are entitled to a return on your money. That's why they are called "entitlements". Besides the entitlement portion of the federal budget, there is what is called the discretionary budget. Although the entitlement programs are protected by law, and their funds can't be legally used to supplement the discretionary budget, in practice the government has a legal way of getting around this restriction. The way this is done is by selling special Treasury bonds to the entitlement Trust funds, then running up big deficits in the discretionary budget. Those deficits are made up by further borrowing,i.e., issuing more bonds. If the total obligations of the government, which includes ever increasing interest payments on money already borrowed, can't be handled by a combination of current revenues and additional borrowing, the difference can be handled by creating money via the federal reserve system. So in this sense the government can never go bankrupt. But creating money like this eventually causes the purchasing power of money to decrease, and this is reflected in the economy as inflation. If this process of devaluing the currency is carried to extremes the money issued by the central bank could eventually become worthless . When the currency is devalued the result is inflation, and both a higher stock market and higher prices result. We are now part of a global market, so the important factor is not the value of the dollar in isolation but rather the value of the dollar relative to the value of our trading partners currencies. In practical terms that means we might not see much inflation from money creation so long as our trading partners are creating money at an equal or faster rate. This is only one aspect of inflation and the increase or decrease in the value of a nations currency. There are other important factors as well. If the entitlement trust funds loan money to the Treasury via bonds at fixed interest rates, as they do, and if inflation results from the mechanism I've outlined above, the money paid back to the Trust funds will have less purchasing power then the money originally loaned to the Treasury. In this indirect way the Government legally steals money from the Entitlement Trust Funds and spends the stolen money on the discretionary portion of the budget. This "stealing" from the Trust Funds is partially offset by actuarial calculations that attempt to take inflation into account. Unfortunately, since about 1980, we have seen how clever the Central Bank and Treasury working together can be in manipulating the inflation estimate by simply changing the formula used to compute the inflation rate. Then too, their is the problem of the Congress failing to act on needed increases in the contribution rates in a timely manner when the actuaries call for them. These lapses, together with bad inflation estimates, will result in future low-wage beneficiaries receiving inadequate pensions and future high-wage beneficiaries having unwittingly and indirectly supported profligate spending in the discretionary budget -- this latter cohort will get cheated in a major way. . This is why it is vital to bring deficit spending under control if the purchasing power of the Entitlement Funds is to be protected, and you are not to be cheated when it comes time for you to draw on your entitlements. For years, the Wall Street investment banks have been trying to get their hands on the trillions of dollars in the Entitlement funds, because as things stand now they are largely cut out of any fees that they might otherwise earn by handling these monies. Misinformation regarding the entitlement programs may be traced directly to Wall Street. Wall Street operates on the principle that a lie repeated often enough becomes the truth. Thus you will hear repeated over and over, even from educated people who should know better, that social security, for example, is a "Ponzi Scheme," and much other nonsense as well. Currently, yet another means to weaken Social Security and cheat future generations is being employed. The payroll tax reduction recently passed by Congress and signed by the President will come out of Social Security contributions. This is a terrible thing and will come back to haunt future administrations. What is needed, according to the actuaries, is a 2 cent/dollar increase [1 cent employee, 1 cent employer] in the contribution rate, not a decrease! Cutting the Social Security contribution rate increases take home pay for millions at a time when that's sorely needed. But that is the wrong way to achieve this desired end. I would encourage you to study the social security and medicare entitlement programs. There is reliable information about them available on the internet, much of it on government websites. Sadly, there is even more unreliable information in the popular media and blogs, and I would caution you to believe nothing that originates on Wall Street regarding the entitlement programs. The Wall Street Journal would not be a reliable source of unbiased information regarding entitlements!
There is no evidence at all of lower rates leading to higher growth in the US. I've shown that in a very simple way. Also, there is no evidence that higher rates lead to lower growth. Also shown by what I did. It's very simple. You can dance around it all you want, but there it is. What is true, as I originally posted way back, is that with higher rates you get more stable growth, for the simple reason that as real incomes rise they are taxed at a higher rate which takes the froth off a boom. Once again, this is easily tested for by running an stdev calculation on the same two sets of data: Pre 1980 : 0.018393115 Post 1980: 0.027824663 So, what we have here is that with higher rates you have higher and more stable growth, while with lower rates you get exactly the opposite. I shouldn't have to say more, but I know I'll have to...
Is capitalism bad? No. Just like not giving to charity is not bad. Is capitalism good? Depends on one's definition of good.
What is true, as I originally posted way back, is that with higher rates you get more stable growth, for the simple reason that as real incomes rise they are taxed at a higher rate which takes the froth off a boom. You're assuming that incomes will rise. If incomes are rising, that suggests that there is an concomitant increase in productivity. How does that relate to the tax rate - high or low? As far as stability is concerned, during the Carter administration when taxes were near an all-time high, inflation kicked in with interest rates exceeding 20%. Is that a stable economy? I think not.
Yes, one assumes incomes will rise in prosperity. That is the usual behavior. If you have any evidence that doesn't happen. please post it. Your Carter paragraph is anecdote, not evidence.
It's not anecdotal evidence. It is fact. You're analyzing your numbers in a vacuum. The numbers do not reflect or provide any evidence whatsoever that the higher tax rate provides either stability or stimulates the economy. It's a disambiguous conclusion. And there was hardly any prosperity during the Carter administration. Real estate tanked, taxes were high and businesses were failing every day. Hardly a stable profile.
You really don't know the difference between anecdote and evidence, do you? The difference is in one case you measure the data and report the results. The other is to take a small slice of the data, in this case four years out of 54, and focus in on that, in this case it appears to attempt to distract from the rest. I stated that high tax rates stabilize the economy. The data shows that to be correct. End of story.
Once again you chose to analyze the data in a vacuum. The data you presented does not show that high tax rates stabilize the economy. It merely compares tax rates to GDP over a 54 year period without taking into account changes in the tax law and other variables which influence the economy. If your data could show a smooth curve demonstrating that increasing tax rates foster stability and economic growth, then you might have something. In essence, you've taken the "data" and used it to draw a false conclusion that can't be supported by the evidence on the ground.