Sunday, January 20, 2013

Solving the Public Debt Issue for Dummies

OK, everyone, please pay attention:

Raising the ceiling on our public debt is about paying bills already incurred.

By all means: Cut future spending. Raise future taxes. Do what Bill Clinton did to turn budget deficits into budget surpluses. It slows the increase of, then stops the growth of, and - eventually- reduces the size of the public debt.

Deficit budgets lead to burgeoning debt. They are solved by surplus budgets.

The public debt is a particularly stupid crow bar with which to try to pry future spending cuts out of the budget writers at both ends of Pennsylvania Avenue.

The cure (diminution of trust in the Full Faith and Credit of the U.S. government) is infinitely worse than the disease (a level of public debt that's about the same, as a percentage of GDP, as at the end of WWII).

Now, can we please talk about:

Things on the taxation side of the ledger like:

corporate welfare,
incentives to expatriate profits, and
special treatment for capital gains,


Things on the spending side of the ledger, like

earmarks for pet projects,
means-testing for public benefits allocated to people with incomes over $250K, and
legalization, regulation and taxation of marijuana.

This stuff ain't brain surgery, folks.


PeedroPaula said...

I absolutely agree!

dmarks said...

Bill Clinton never turned budget deficits into budget surpluses. If you check the Treasury Department figures, you will see that Clinton ran a deficit every year all the way to the end.

You can only get a surplus if you intentionally "cook the books" and leave a lot of the expenditures out. Which is what Clinton and his supporters have done. Incidentally, Newt Gingrich uses the same deceptive accounting when he tries to take credit for the budget surpluses of this same time period... surplus which never existed.

Now, regardless of who you want to thank, the deficit at the end of the Clinton administration was very low, even if it was not a surplus. I can look up the exact amounts if you want me to.


I also would think that "corporate welfare" belongs on the spending side, not taxation side. Taxation policy does not involve anything like welfare at all. It simply involves the question of whether or not to plunder more or less of someone's property. Choosing to take less from someone is not welfare, is not a gift.