Throughout history, all wars were financed with and increase in taxes. However, the Bush Administration, has used tax cuts to help finance the current war on terror. This ideology has help create large deficits and fears of baby boomers without Social Security benefits and other domestic programs. Personally, I feel Budget surpluses, and or, deficits are merely projections and cannot be calculated precisely over X amount of years. Since the outset of the war, the markets and the economy have flourished. Equities have continued to set new highs and the unemployment rate continues to drop. Ironically, tax cuts create greater tax revenue which seems contrary to common logic. Setting your opinions on the war and Bush aside for a moment. What is you opinion on tax cuts for economic prosperity and war financing. How concerned are you about the current account deficit and a declining dollar?
I think the evidence is plain that tax cuts create a more prosperous economy. Whether the economy that results is good for the people who constitute it is a slightly different question. In simple terms, we'd all agree a skyrocketing economy would be of little interest to us if only one person in the economy benefited from it. The way economic growth is marketed to us today, though, it's hard to avoid getting the impression that the economy's performance is interesting simply for its own sake, rather than being important because of its impact on our lives. Kind of in a "Hey, what's your problem man? The economy's growing!"way.
Point well taken. You often hear people complain how the current tax cuts only help the rich. Or, you hear, "The bush tax cuts are merely corporate welfare". However, if indeed it's corporate welfare, the extra capital corporations have is used for production and other capital investment. Which leads to greater employment and higher wages.
I recognized immediately after Bush was GOP nominee, his persistence in proposing cross the board tax cuts would lead the US into war. The war may have been a mistake, but, I'm not sure the use of tax cuts were. He surely couldn't have raised taxes, nor could he allow taxes to remain the same due to a slowing economy. Which ultimately went into a recession of course precipitated by 911. Clearly, the deficit and a declining dollar could be a problem. But, I don't feel we're anywhere close to a currency crisis currently.
A few thoughts.... Around 40% of wage earners pay ZERO Federal income tax. (mostly part timers, low wage earners ect.) As a % of GDP the deficits are not worrisome by historical yardsticks and in fact Japan has about 2.6 times the per capita public debt as the U.S. The dollar is a long way's away from "crisis" mode.
Good point Pa(b)stPrime! So why then do we continue to hear of troubling account deficits and collapsing a dollar. It seems liberals, primarily, feel a coming crisis with not only the US dollar, but, also Government entitlements. I think if this were still a manufacturing economy, deficits and a declining dollar would be a greater problem. People seem to think government surpluses and a appreciating dollar is the best indication of a flourishing economy.
Liberals hate America, capitalism, Christianity and thus they hate politicians i.e. Bush who promote conservative economic and social policies. One hears incessantly of the dollars weakness against Europe but little of the Dollar's strength in Asia. We hear every day about deficits but we hear little about a cynical Treasury market that prices the long bond below 5% in yield. We hear about America ignoring Kyoto but nothing about gluttonous China being exempted by Kyoto. Liberals yak about economic equality yet who squawks more than the Left over the emergence of competitive global economies. Places that once lived in squaller are now rivaling New York as centers of wealth and glamour. Rather than say hooray "a formally starving guy in New Delhi has a job in tech" they's rather lament, "we're losing jobs because greedy capitalists outsource." Liberals suck.
Its pretty obvious the entitlements can't be paid post 2010 or so, at least not with money worth anything near what it is today. Anyone want to argue? Just tell me where the money will come from. Don't bother telling me they will borrow it, because that would imply they will do so additionally for the next 40 years as boomers all get on the dole. And don't bother arguing that we already paid for it and therefore are entitled to it, because even though its true, it doesn't matter. That's why our parents and grandparents have and are getting back much more that they put in. But again, it doesn't matter because none of that wealth we put in was actually saved. It was all squandered and wasted. Someday, someone has to pay, and Murphy's law says it will be the boomers that paid the most. If we still had manufacturing capability, we wouldn't have the problem of the trade deficit because a lower dollar would divert orders to those plants. Without that, our only outs are to get a lot more for what we do sell, or reduce imports dramatically, meaning a much lower standard of living.
Well, I'm not here to argue with you but, your assertion that by 2010 entitlements can't be met is highly exaggerated. Social Security benefits are funded by payroll taxes which americans have over paid for during the last 25 years. The excess revenues has been placed in gov. Social Security trust funds which the government will cash in when "payroll taxes" no provide "full benefits" to retirees. In addition, in a flourishing economy, an increase in revenues will also generate a higher "income tax" which will also help payout out social security benefits. The collapse of Social security System is greatly exaggerated and a outright lie. This myth is perpetuated by the doomsday "projections" of slower growth and a weaker economy.
But the trust fund is empty -- all that is there is a 20 year old I.O.U http://www.ssa.gov/OACT/ProgData/fundFAQ.html