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So your "solution" is to do nothing, allow the debt to reach unsustainable levels, and allow anarchy to occur, or the break up of the US? That seems to be the liberal "plan". How about Obama's magical $10 trillion coins?
The idea that the debt is unsustainable is hogwash. The U.S. debt is well below that of other nations and the U.S. currently pays the same outlay in interest as it did six-years ago. Moreover, investors have voted with their wallets are willing to assume U.S. debt at below inflation -- meaning that the U.S. is borrowing for less than free.
But I will let economist Brad DeLong weigh in too:
Quote:
if you want to argue that issuing debt in a time of deficient aggregate demand burdens the future, you need to make that argument that there is crowding-out of investment--and you need to recognize that both forms of crowding out, both crowding out via expanded government purchases and crowding out via expanded consumption driven by wealth effects, are smaller and perhaps much smaller than at full employment.
...
Seems to me it would be much more productive right now to worry about how do we maintain normal levels of net investment in a high government debt post-interest rate normalization environment than to propose sending the economy back into recession in order to reduce government debt accumulation. Recession and high unemployment in the short- and medium-run are problems. Low investment in the medium- and long-run are problems. Government debt is a tool to avoid the first and a source of risk of the second. But it is better to keep your mind focused on the things that are real problems.
Oooh.... Hawkeye can't get anyone to bite on his toss of the race card.
This is not me. This is a white supremecist who gets banned here all the time. He, as you can see, is a new user today and has the name "Hawkeyee2009", rather than "Hawkeye2009".
The idea that the debt is unsustainable is hogwash. The U.S. debt is well below that of other nations and the U.S. currently pays the same outlay in interest as it did six-years ago. Moreover, investors have voted with their wallets are willing to assume U.S. debt at below inflation -- meaning that the U.S. is borrowing for less than free.
But I will let economist Brad DeLong weigh in too:
I am well aware of the argument that debt levels are immaterial, as long as interest rates are very low and we are in a low inflation environment.
However, we have historical precedent of the consequences of massive debt, which will ultimately result in higher interest rates and currency devaluation. What do we do? Keep spending indefinately? If not, when? Use Obama's magical $10 trillion coins? If $22 trillion when Obama is done with his second term is okay, is $30 trillion okay? How about $50 trillion? How about $200 trillion?
I am well aware of the argument that debt levels are immaterial, as long as interest rates are very low and we are in a low inflation environment.
However, we have historical precedent of the consequences of massive debt, which will ultimately result in higher interest rates and currency devaluation. What do we do? Keep spending indefinately? If not, when? Use Obama's magical $10 trillion coins? If $22 trillion when Obama is done with his second term is okay, is $30 trillion okay? How about $50 trillion? How about $200 trillion?
As I've said many, many, many times, high interest rates parallel a robust economy where businesses and consumers are demanding money to borrow so that they can spend. Robust economies coincide with full employment. With full employment income tax revenue rises and that diminishes the deficit. A robust economy couple with slightly higher taxes has proven to create surpluses, as was the case between 1997 and 2000.
Personally, I think we all need our taxes hiked somewhere between 0 and 5%. Obviously that would be graded at a progressive rate. I also think that there should be a cap on deductions for the wealthy. Guys like Romney should not be able to pay 14% tax.
If we are not willing to put some skin in the game, we should shut up about the deficit.
Cuts should be in the mix too, but since most cuts will spike public sector unemployment, huge cuts are not a viable solution right now.
The population has grown along with the needs of the population, while taxes on the upper class have gone down, and military spending has skyrocketed. Increased funding of earned benefits, yes. Increased tax rates for the upper class, great. I would be willing to pay more taxes to fund the social safety net.
I am a liberal and I think we should raise taxes on everyone within the next year or two, but we can start with the wealthiest Americans because our economy is still recovering and I don't think raising their taxes would hurt the economy as much as raising them on the middle and lower class.
No one out there doesn't think we should reign in spending, it's just a question of timing. Do we do it now and risk doing damage to our economy, or do we wait a year or two and lessen the risk? I think the debt problem is greatly exaggerated and isn't going to start screwing us for another decade or so, and thus we can wait on fixing it until our country is better. And the real-life example of European countries shows that austerity can cause a catastrophic economic depression.
The biggest thing we can do now is to reign in medical spending. It's an absurdity and a disgrace how inefficient our current system is, and it's the biggest thing we're currently wasting money on.
Liberals love high taxes for everyone to fund an even larger government and more welfare programs. I never understood their faith to a failed economic system, but that is how they operate.
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