Wednesday, August 4, 2010

Tackling the deficit

Neither party really wants a huge deficit or national debt.  The higher the national debt, the more taxpayer money that is used to pay interest payments on this debt. A good chunk of those interest payments goes overseas boosting up the balance sheets of other nations. At the current rate of borrowing, the U.S. could eventually owe trillions to foreign nations.

Even those interest domestic interest payments tend to favor the big banks and wealthy investors, although many pension funds also own U.S. treasuries.  So over the long term, this tends to shift wealth from ordinary taxpayers to the wealthy. With the increasing wealth disparity, consumers were compelled to borrow money like crazy just to pay bills, and now even that well has dried up.

The only real way to solve the deficit problem is to increase revenues. What that means is increasing taxes, and they can start by letting the Bush tax cuts for the rich expire.

Despite all the rhetoric from conservatives, there is nothing inherently bad about government spending.  In fact, the whole idea that government spending is wasteful is never really supported with any evidence.

The government offer stability to an economy as it is a dependable consumer of goods, and a dependable employer.  The nation worked its way out of the Great Depression largely due to a very long period of steeply-increased government spending.

Obama Everywhere

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