Originally Posted by Villages Kahuna

I do disagree, Cashman, and for one simple reason. We have never had a national debt approaching $13 trillion, or anything anywhere close to it. On top of that, our deficit-spending is increasing that debt at the rate of about 10% a year. There is no possible way that further reducing taxes will create sufficient increases in economic activity to result in sufficient increased revenues to either balance the annual federal budgets or begin to repay the national debt. In not too many years, there will be fewer people working and paying income taxes than there will be old, retired people expecting to live off the entitlements paid for with those taxes.

Reducing taxes used to work, but that was when our debt was only a fraction of what it is now, and our annual deficits were small and controllable, and when entitlements made up a much smaller proportion of the federal budget.

Combine the arithmetic of our current revenues and expenses with the rapidly growing proportion that entitlements (Social Security, Medicare and Medicaid) represent in the federal budget--entitlements paid to our rapidly-aging population--and you have a formula that cannot be solved using the economic theories that worked in the past.

Our political leaders are either going to pass the career-ending legislation for them--to dramatically cut entitlements, other federal spending and raise taxes--or the Chinese, Japanese and Saudis, our principal creditors, are going to do it for them (and us!).

Just to put all of what I have said in perspective, remember what the recent report of the independent Government Accounting Office said..."double-digit GDP growth would be required for the next 75 years to create a balanced federal budget; GDP growth averaged 3.2% during the 1990s." GDP growth in the U.S. has never been in double digits for any one full year in history.

So, yes, I do disagree. Taxes will have to be raised. There is no alternative that I can think of.

On this discussion of tax rates and various Liberal schemes to raise taxes we could not disagree more. We agree that we must reduce the National Debt.

You do not agree that increasing tax rates reduces revenues when it interferes with the private sector by draining it of resources needed to create jobs and more income.

You do come up with so many good ideas it is amazing how you insist that by raising tax rates we will create revenues. This is and has always been a Liberal myth.

and the ways of politics, it is the only way to be. I believe based on history there is NO HOPE!!!!
Example: the energy crisis of over 40 years ago...lots of arm waving and talk....since then absolutely nothing has been done to back one single commitment. Instead our dependence on foreign oil has doubled in magnitude from 40% to over 75%. And recently when gasoline was over $4 per gallon all the same WORDS and rhetoric.....result nothing being done to allay the ultimate disaster for America just waiting to happen....and it will happen...if we the people and the politics and the politicians they talk about dis liking has never resulted in any action to fend off the obvious.....just why would anybody have any faith some how magically the light will be allowed to shine through...it is not going to happen.

Maybe....MAYBE....HOPEFULLY.... by re-electing no one in 2010 and getting Obama out of office in 2012 or sooner.....MAYBE there COULD be a course correction.

Remember it takes 10 to 20 years for some of the energy salvation programs to effect their impact. I think it is too late to stop the USA we all love from becoming a second tier, also ran country.

btk

Originally Posted by cashman

...it is amazing how you insist that by raising tax rates we will create revenues. This is and has always been a Liberal myth.

OK, let's agree to disagree. Spending cuts alone cannot create a balanced budget.

My conclusion is based on the arithmetic of our current situation. Taxes will be increased, I guarantee you. The only question is whether that will happen as the result of action by our Congress, or the demands and refusal of our creditors to extend any more credit to fund our deficit spending.