Another litany of wise verbiage...

[j2k4]

...from the master himself, Mr. Thomas Sowell.

Rat-make special note to read this, it bears upon U.S. taxes, debt, etc., that seem to interest you.

This is a clarifying piece, to be sure.

A taxing experience
Thomas Sowell
November 25, 2004

When liberals in the media or in politics start being alarmed about the national debt, it means just one thing: They want higher taxes. The thought of reducing spending would never cross their minds.

As we are endlessly reminded, the federal government's debt has reached record levels during the Bush administration. That enables the liberal media to use their favorite word -- "crisis" -- and adds urgency to doing their favorite thing, raising taxes.

Since we have a larger population than ever and a larger national income than ever, it should hardly be surprising that we also have a larger national debt than ever. But what does it mean?

Donald Trump probably has a bigger debt than I do -- and less reason to worry about it. Debt means nothing unless you compare it to your income or wealth.

How does our national debt today compare to our national income? It is lower than it was a decade ago, during the Clinton administration, when liberals did not seem nearly as panicked as they seem today.

As a percentage of the national income, the national debt today is less than half of what it was in 1950 and about where it was in 1940 -- back in those "earlier and simpler times."

If someone were to produce a political dictionary, "crisis" would be defined as a desire to pass a law and "national debt" would be defined as a desire to raise taxes. And the two in combination would mean a desire to discredit the existing administration.

If it seems that raising taxes is the only way to reduce the national debt, at least when so much spending is mandated by "entitlement" programs, that only shows the need for an economic dictionary. "Taxes" is one of those treacherous words with more than one meaning, enabling politicians to shift back and forth between meanings when they talk.

Unless spending is reduced, then of course more tax revenues are necessary in order to reduce a deficit or bring down a debt. But tax revenues and tax rates are two different things, even though the same word -- "taxes" -- is used to refer to both.

What "tax cuts" cut is the tax rate. But tax revenues can rise, fall, or stay the same when tax rates are cut. Everything depends on what happens to income.

Tax revenues rose after the Kennedy tax cuts of the 1960s and the Reagan tax cuts of the 1980s because incomes rose. Incomes are likewise rising during the Bush administration today.

If Congress can just reduce the rate of increase in spending, rising tax revenues can reduce the deficit and eventually eliminate it. But of course that will not give liberals an excuse to raise tax rates or even to denounce "tax cuts for the rich."

There was a time when the purpose of taxes was to pay for the inevitable costs of government. To the political left, however, taxes have long been seen as a way to redistribute income and finance other social experiments based on liberal ideology.

Given that agenda, it is hardly surprising that some of the biggest spending liberals can go into hysterics over the national debt, especially when that debt exists under a conservative administration of the opposite party.

This does not mean that nothing needs to be done about the national debt or about our tax system. A lot could be done about both -- but it would not be what liberals want done.

Promoting the growth of the national economy would be one of the fastest and best ways of reducing the national debt. We could, for example, stop letting little bands of self-righteous activists stifle the building of homes or businesses under "open space" laws or stop the drilling of oil off-shore, on-shore, or anywhere else.

As for taxes, we could stop taxing productivity and start taxing consumption. After all, productivity is what makes a society more prosperous.

Someone who is adding to the total wealth of this country is not depriving you of anything. But someone who is consuming the nation's wealth, without contributing anything to it, is. Yet our tax system penalizes those who are producing wealth in order to subsidize those who are only consuming it.

Tax reform is overdue, national debt or no national debt.

[Rat Faced]

Two questions that would be important here...

1/ What was the International Exchange Rate of the Dollar

2/ What was the price of Oil.


Two seemingly unrelated items, however they have a huge influence on what is "Managable Debt" to a country.


EDIT:

Also, what was the Debt in 1999 compared to Income?

Is the Debt rising or falling?

[vidcc]

oh my..just 2 words to get to the word "liberals"

Tax revenues rose after the Kennedy tax cuts of the 1960s and the Reagan tax cuts of the 1980s because incomes rose. Incomes are likewise rising during the Bush administration today.

tell that to the middle americans that saw their jobs outsourced and had to take lower paid jobs.
i would like to know what percentage of people have higher incomes..well actually in the spirit of this mans essay..i would like to see how many peoples disposable incomes have actually risen after paying increased cost of living expenses such as healthcare...against those that have lost.

If Congress can just reduce the rate of increase in spending, rising tax revenues can reduce the deficit and eventually eliminate it. But of course that will not give liberals an excuse to raise tax rates or even to denounce "tax cuts for the rich."

i seem to remember "the number one liberal" wanting to return to "pay as you go"...you know where we don't spend what we don't have....if he was elected....is that happening now with this administration?...no...because this president is a religious conservative not a financial conservative...

This essay has less to do with what needs doing to fix things and more to do with trying to demonise anyone that is tagged with "liberal".
It suggests that liberals have only one aim in life...to tax... not just the rich (poor rich, they have such a hard time of it) but the poor as well (one of GWs great fear mongering tactics)....

he writes of economic growth as if it is only possible if a right wing government is in power, yet under the last democrat administration we had longer and stronger growth than at any time in our history... i'm assuming Clinton is considered liberal

This is not an essay of wisdom.... it's a rant

[j2k4]

Two questions that would be important here...

1/ What was the International Exchange Rate of the Dollar

Do you mean "is", rather than "was"?

Exchange rate relative to what other currency(s)?

2/ What was the price of Oil.

What has that to do with anything?

Two seemingly unrelated items, however they have a huge influence on what is "Managable Debt" to a country.

"A" country?

Mr. Sowell speaks of the United States, Rat; there are universalities in economics, but this essay does not neatly overlay the situation in the U.K., I'm sure.

This piece caught my eye as it provides a more positive (less negative?) overview of the U.S. situation you found so worrisome previously.


EDIT:

Also, what was the Debt in 1999 compared to Income?

'99? Please don't tell me you want to bring Slick Willie into this?

Is the Debt rising or falling?

Ah...

Better you should re-read the article, Rat.

Vid-

Do you realize how tone-deaf you seem when you dip so easily into your rhetorical catalogue to characterize this piece as a "rant"?

You have merely cemented into place your liberal (rather than independent) status.

I remember your banging on about deciding things on the "merits"?

It would seem otherwise.

[vidcc]

Vid-

Do you realize how tone-deaf you seem when you dip so easily into your rhetorical catalogue to characterize this piece as a "rant"?

You have merely cemented into place your liberal (rather than independent) status.

I remember your banging on about deciding things on the "merits"?

It would seem otherwise.

i am judging this purely on it's merits.
If the piece spoke purely of the need for fiscal responsibility, it would not be a rant...but it is just another "you know the trouble with liberals" piece...therefore a rant

i call what i see.
As to me being a liberal i am because i don't pass the "moral values test"...I.E. i am pro choice
I am a financial hardliner. I believe we need tax to function as a civilised nation, but only tax for the right things. i believe tax should be spent wisely and value for money be the number one priority.... something i am not seeing in this "tax cutting" republican administration

edit:

Is the Debt rising or falling?

Ah...

Better you should re-read the article, Rat.

he says "well we have more debt but we have more money" (that's how i read it)
a person earning $100,000 per anum can afford a bigger morgage than one earning $ 50,000.
Thing is we are still spending over our means, so debt is rising. surely if we are earning more we should have less debt....if we were fiscally conservative.

[Smurfette]

Where are the figures? I mean, I could confide that my disposable income has fallen to just over half what it was three years ago, but the statement is meaningless unless I actually quote some numbers, isn't it?

Conservatives always bleat that the poor are a burden on the wealthy, don't pay their way, pull their weight, don't contribute etc etc et-bloody-cetera. We had 17 years of fearmongering Conservatives over here blabbering on about how "The Labour Socialists" and "Limp Wristed Liberals" (Tory quotes for ya) would raise income tax to 35% and spend everything on lesbian minority help groups purely to distract the populace from the coal mine and steel mill closures, education underfunding and NHS dismemberment. It worked, too, with the help of a little (well, a lot really) disinformation. It still amazes me that they don't recognise that the enormous public spending strain that they were trying to rescue us from in the late 80s was in no small part due to the huge welfare bill from all those out of work miners, steelworkers, teachers and medical staff coupled with the extra administration costs involved in trying to save money in the hospitals.

The piece quoted reads like propaganda to me and, to be honest, I'm surprised that anyone with an education cannot see it as such.

[3RA1N1AC]

he says "well we have more debt but we have more money" (that's how i read it)

if i borrow more money, then i will HAVE more money, but i will also OWE more money? inconceivable! i'd reckon that if trump has a lot of debt, it's because he borrows & spends a lot. and the u.s. gov't has run up an enormous debt because it's been borrowing & spending as if borrowing & spending are going out of style.

trump... trump is such a dubious example. who wants to look at our national economy and think "yeah, this is prolly how trump would manage things"? trump built his fortune out of borrowed money. he told people "i'm the hot new brand, i'm a visionary, so gimme gimme gimme," they believed him and lent him massive amounts of cash, then he nearly went bankrupt when it came time to pay his loans back because he hadn't managed the money wisely. trump rode high through the '80s on credit and then crashed hard during what he called "the depression of 1990" and everyone else called a "recession." it seems only fitting that a huckster such as trump is now having what looks like his final 15 minutes of fame as a glorified gameshow host.

[clocker]

When liberals in the media or in politics start being alarmed about the national debt, it means just one thing: They want higher taxes. The thought of reducing spending would never cross their minds.

Apparently, reducing spending has yet to occur to the Bush administration either, but why bother when simply leaving the spending out of the budget ( as so much of the war expenditure has been) will do the trick?

Donald Trump probably has a bigger debt than I do -- and less reason to worry about it. Debt means nothing unless you compare it to your income or wealth.

Of course the Donald "doesn't worry about it"...he has discovered that declaring bankruptcy will absolve him of the burden that debt imposes on the less fiscally adventurous.
Beginning to worry about you here j2....you really want to use Trump as the poster boy for your fiscal policy?

We could, for example, stop letting little bands of self-righteous activists stifle the building of homes or businesses under "open space" laws or stop the drilling of oil off-shore, on-shore, or anywhere else.

When I see an oil rig in your backyard and a Wal-Mart next to Pete Coors' "open space" then I'll be glad to condemn the "little bands" of activists.
Not holding my breath.

Increasingly, this Sowell guy that you keep holding up as a genius strikes me as a slightly more coherent Dennis Miller...but not as funny.

[j2k4]

Apparently, reducing spending has yet to occur to the Bush administration either, but why bother when simply leaving the spending out of the budget ( as so much of the war expenditure has been) will do the trick?

I am not terribly happy about the Republican spending spree, either.

My point (and Sowell's) is that the economy can grow itself back to a healthy state without more taxes, and that deficits run by Republicans are cause for Dems to scream CRISIS!!!, but if such occurs under a Dem administration, it's business as usual.

Just now, it happens the Dems are doing the ranting, not Mr. Sowell.

Of course the Donald "doesn't worry about it"...he has discovered that declaring bankruptcy will absolve him of the burden that debt imposes on the less fiscally adventurous.
Beginning to worry about you here j2....you really want to use Trump as the poster boy for your fiscal policy?

No, I just didn't feel qualified to take liberties in editting Sowell's column.

Personally, I think Trump is a clown, but while I'm sure it seems he is given extraordinary liberty vis a vis his business dealings, I assure you that his bankers have him properly leashed.

When I see an oil rig in your backyard and a Wal-Mart next to Pete Coors' "open space" then I'll be glad to condemn the "little bands" of activists.
Not holding my breath.

Increasingly, this Sowell guy that you keep holding up as a genius strikes me as a slightly more coherent Dennis Miller...but not as funny.

Sowell is a genius-the fact that (as an economist) his amounts to a third point-of-view can seem intrusive and jarring, but he is a student of history in all it's permutations, and, along with Walter Williams, constitutes the acme of the properly melded economic statement.

That he also thinks liberals are knee-jerk to the core is but icing on the cake.

[vidcc]

J2
the "liberal" term as used today started with the Reagan time, this is where the great demonisation started and liberal became a word used as an insult in right wing circles.
since then just how many "liberal" administrations have we had?.... and just what state were we in economically with the liberal in charge?

deficits run by Republicans are cause for Dems to scream CRISIS!!!, but if such occurs under a Dem administration, it's business as usual.

i'm not sure you/he can justify that statement, if the economy is in a poor state whatever party is in power will try to paint a bright picture.
If a democrat administration was in power and the economy was in the same state as today it is certain that the right will be shouting "crisis" ....you know it and i know it.
it just seems to me that it's the republicans that run up the defecits, then the "liberals" have to be the "margret thatcher" spooning the medicine.