Bush Era Tax cuts biggest factor in National Debt? [Archive]

kaiser soze

05-21-2011, 10:39 AM

According to this blog it is - now I'm no economist so I have very little knowledge as to how deep our collective pocket can go and who specifically is burning the hole. But I wager that the man behind this report knows what he is talking about, so this is a start.

If this is true, people need to wake up and smell the fire burning under their feet. Something will have to be lost for someone to gain and it looks like the push to do such is under way.

Jobs are not being created with the tax cuts - considering a rather large percent of wealthy don't get their wealth from running businesses - but rather investment...how does that create jobs?

http://www.offthechartsblog.org/what%E2%80%99s-driving-projected-debt/

The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.

Yes the money may have been spent in other ways - quite possibly on improving our rotting infrastructure (http://www.thedickinsonpress.com/event/article/id/47903/group/Opinion/) would have been a start

The Tax Cuts and Wars are defending quite loyally by those who Profit Politically and Financially from them.

Adam

05-21-2011, 11:39 AM

I don't know much on debt either but I don't think it is a bad thing and I think it get spun too much as a bad thing.

If you think on a very basic level. If you had some spare cash around and wanted to invest and I came up to you with a good idea and asked you to lend it me you'd probably want to know a few things. You might find out I have loads of debt with other people and all I do is service those loans (from what I gather pretty much what the USA and UK do). But if you look at my growth and assets that might be well above what my debt is. I.e. I'm good for it as I have all this other shit going off. You'd probably let me lend that at a favourable rate (say 5%) and it makes total economic sense to lend that cheaply than it would be to cut something that is already earning for me or that I need as I might be making 10% off it.

Thus countries like the united states & UK can run up debt, they are good for it. They ain't gonna go bankrupt any time soon. As we get richer it only makes sense the debt gets bigger.

If however someone came to you with a similar idea but they have no real credit history but the figures looked good, you'd think 'this dude I dunno, shit looks good but if it hits the fan I've lost it all' but you're feeling risky so you go for but set the interest at 20%. (We're talking african countries and such here).

You might see the potential problems, the guy at 20% is gonna have to work harder to make sure he is paying that loan back and it matters more to him because he doesn't have as much shit going off like the other dude. He wants to make sure he can work up to the favourable rates though. However, you're getting itchy and start asking for ya money back as you're not feeling as risky any more which means he has to find repayment amounts to reduce the debt as well as the interest. Now, because of this you're making it harder for him to make money to pay you back and just compound the situation until he defaults. He then loses all your money and any potential future investors, all because you wouldn't let him get his foot properly on the ladder, now that dude is at a worse place than he was before you met (you bastard). But you did it to yourself for not trusting him in the first place so ha!

All the while the guy at 5% though keeps growing and has already paid back way more interest than the guy at 20% as it just ticks along, and keeps lending but keeps growing, might have a few blips here and there (recession) but shit, they've gone for centuries without too much messing up let them carry on.

But they have to answer to their customers (the voters) and if the voters want to reduce the debt because some chump off Fox said we should then to stay in power you've gotta make some headlines that you've done that. Debt isn't a good word to the layman but who is gonna research why countries run up debt? Not me unless I'm an investor. But if the UK and USA stop asking for investors then less money is being created for everyone because less shit is getting done so more people go without stuff to do (jobs).

Well shit. This post is waaaaaaaaaaaaaaaaaaay longer than what I thought it'd be. Sorry. All I want to say is, debt isn't a bad thing and we should concentrate on making stuff by borrowing rather than cutting stuff and repaying.