Convoluted logic

[SoCalDem]

I heard a guy on c-span this morning about to blow a gasket because people were saying that the deficit was soooo high.. He INSISTED that it had to be figured using a percentage of the GDP, because that was the ONLY way to get an accurate take on it...

BUT....


when anyone tries to explain that same process to them when they are saying " 'Murka's the most generous nation on earth... we give more money than any other country (actual dollars)..." They go ballistic :):)

[unblock]

1. it's not entirely unreasonable...

at least, a greater economy could support a greater debt/deficit if the larger/growing parts of the economy were reasonably taxed.

however, in this recovery, growth has not been even, and the growing parts -- corporate wealth, especially outsourcing companies, are not taxed like the rest of us.

the result is that the increased debt is largely shouldered by the non-increasing and decreasing sectors of the economy -- labor in particular. that makes for a big problem.


(as to your point that foreign aid needs to similarly be judged as a percentage of gdp, i am largely in agreement)

[Eric J in MN]

2. You make a good point, but another issue is the national debt.

It's one thing for a person with lots of savings to spend more in a year than he takes in during that year. If he wants to, then fine.

It's another thing for a person in debt to spend more in a year then he takes in. If he does that, he may be increasing his problems.

Similarly, because the US is trillions of dollars in debt, we should be paying down that debt each year (as when Clinton left office), not increasing it every year (as with George W.)

Those pundits who defend Bush just focus on the budget-deficit, which isn't yet historically huge, instead of relating it to the national-debt, which is horribly big by any measure.

[humble truth]

3. I believe the current deficit is the 3rd largest ever

as a measure of the GDP. Let's all take comfort in the idea that it's only the third highest ever.

Oh yeah, the two higher deficits occurred under Reagen and the Chimp's dad. So much for fiscal conservatism.

[camero]

4. It is illogical

Probably a better way of looking at it would be to look at the deficit like household debt. How much is it as a percentage of the paycheck? (Paycheck meaning tax revenues).

I keep telling my mom when we talk about taxes that you can't pay the bills if you keep giving your paycheck back to the boss.

Which is pretty much what the pubs are doing when they hand out tax breaks to the wealthy.

[Philosophy]

5. I calculated that the other day

Can't remember where I got the figures from, but the debt is 7 trillion and projected total 2003 tax receipts are $1.9 trillion. This is like earning $75,000/year and trying to pay a $275,000 mortgage. Except the government borrows even more money to make the payments.

[camero]

7. Yep, constant refinancing

And tax reciepts have been going down since 2000. I think it was about $2.3 trillion before Bush took office.

I don't know, just thought it might be a better way of looking at it.

[kentuck]

6. Just what does the GDP have to do with the deficit ???

The GDP is the Gross Domestic Product? Does that belong to the government?? If so, then the government would have the potential to tax the GDP more to pay off the debt, but what else and how else does the GDP have anything to do with what we owe?? Could someone please explain?

We have a national debt and a deficit because we prefer to borrow rather than tax for what we spend. Which is even worse in some respects, because we have to pay the interest also, when we borrow.
However, if we are not willing to tax enough now to pay off the deficits, how will we be able to do that with a higher GDP, since most economists say these deficits today are structural in nature, that is, they are like a permanent tax on the people. But, in my opinion, one may as well be talking about the ol' grey mule as to talk about the GDP. I do not see the connection????