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Economy: Human Hardship

 
 
cicerone imposter
 
  1  
Reply Tue 19 Feb, 2013 10:26 pm
@Kolyo,
Rather than trying to guess numbers, it's more important to set the stage to correct our current economic problems where too many are jobless. We don't need the government to lay off thousands more workers to save money that they believe will reduce the deficit - because it doesn't.

The only way to increase jobs is to a) spend money on our schools and infrastructure, to 1) meet the demand required to have students graduate college in four years rather than the average six years today. This will reduce the loans taken out by students. 2) increase spending on our infrastructure; our roads, bridges, transportation and communication. These added jobs will increase demand for more consumer goods which translates into more jobs for those producing the goods and services. That in turn increases the demand for more workers in all the industries that previously lacked sufficient demand. It will also increase tax revenue at every level of government, because consumer spending will increase. b) increase the taxes for social security and Medicare by eliminating the ceiling these taxes can be applied. Increase the age for both social security and Medicare benefits, and coordinate health insurance with ObamaCare.

The one area that really needs to be revised is the tax code. It's over 40,000 pages long, and no two expert CPA's doing the same tax return can arrive at the same tax liability. Simplify.

I remember reading some decades ago that a flat tax rate on all income at 17% will pay for all government needs. That means government can't be sloppy in how they spend our money, and have constraints written into spending legislation. Both parties are guilty of spending more than tax revenues. They should also disallow using the social security trust fund as part of their general fund revenues. Finally, they need to pay off the deficit by allotting a percentage of the annual budget to pay off the debt in xxx years.




Kolyo
 
  1  
Reply Tue 19 Feb, 2013 10:56 pm
@cicerone imposter,
I agree with a lot of that. I'm a 99-percenter and all for taxing the rich because they can afford it. And who doesn't want a simpler tax code...

However, I can't endorse THIS any more than Republican Sheila Bair would:

cicerone imposter wrote:

2) increase spending on our infrastructure; our roads, bridges, transportation and communication. These added jobs will increase demand for more consumer goods which translates into more jobs for those producing the goods and services. That in turn increases the demand for more workers in all the industries that previously lacked sufficient demand. It will also increase tax revenue at every level of government, because consumer spending will increase.


That is just the old-fashioned Keynesian multiplier argument. It doesn't work anymore. This isn't the Thirties, and we no longer approximate a closed economy like we did then. Our consumer goods come from abroad. The workers who build the roads won't spend money on American goods (thus, supposedly creating American jobs). What will happen instead is those road workers will go to Walmart and buy Chinese appliances, and the fiscal "stimulus" will end up stimulating growth in our already devastating trade deficit with China.
0 Replies
 
Kolyo
 
  1  
Reply Tue 19 Feb, 2013 10:58 pm
@cicerone imposter,
cicerone imposter wrote:

I remember reading some decades ago that a flat tax rate on all income at 17% will pay for all government needs.


Government spending has increased since then, I'm sure.
cicerone imposter
 
  1  
Reply Wed 20 Feb, 2013 11:47 am
@Kolyo,
So has income. Just look at the growth of our GDP.
Kolyo
 
  1  
Reply Wed 20 Feb, 2013 04:39 pm
@cicerone imposter,
That's a decent point, as real income has risen.

But according to the first chart I found using Google, government spending has risen even as a percentage of GDP:

http://www.usgovernmentspending.com/include/us_total_spending_20c.png
cicerone imposter
 
  1  
Reply Wed 20 Feb, 2013 04:44 pm
@Kolyo,
Of coarse it has! Both parties are guilty of spending more than they took in in tax revenues. That's the result of our combined national debt balance.
0 Replies
 
 

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