THE REPUBLICAN DEBT
Jeff Covey: ‘Seeing it has a bigger impact than anything you can say about it.’
☞ And this is just now. By the time we have a chance to right things, beginning in 2009, the National Debt will approach $10 trillion – nearly $8 trillion of it racked up under just three Presidents: Reagan, Bush and Bush.
THE INTEREST WE PAY ON THAT DEBT
Scott Obeck: ‘So, if my math is correct, does about 15 cents of each dollar we send to the federal government go to pay interest on the debt?’
☞ Not exactly. The interest on our National Debt – currently around $350 billion a year and headed higher – amounts to nearly 40% of the $893 billion we paid in personal income tax this year.
(Total federal revenue for the fiscal year just ending is estimated at just over $2 trillion. In addition to the personal income tax there will have been $773 billion in Social Security tax taken out of our pay – but that’s all supposed to go to pay benefits and store up a surplus for the future. Bringing up the rear: the corporate income tax, at $226 billion, and smaller items like excise taxes and the estate tax.)
THE ILLUSORY TAX CUTS
Well, we may have borrowed $8 trillion, but at least we’re all rolling in tax cuts.
Institutional Investor’s Alpha magazine (as quoted in the June 5 New York Times Sunday Magazine) reported that the average pay for the top 25 hedge fund managers in 2004 was $251 million. They can be nothing if not happy about the tax cuts. Your own cut may not have been quite as large . . . you may have earned only $10 million in 2004 or even less . . . but who can fail to favor tax cuts?
Yet tax cuts, this author argues – as much as those hedge fund managers may have needed them – are illusory. (And not just because you’re increasingly likely to get hit up for the alternative minimum tax, if you’re a working stiff.) In tiny part:
Just remember, to spend is to tax. Not for nothing did the very, very conservative economist Milton Friedman once pen a column for the Wall Street Journal entitled ‘The Taxes Called Deficits.’ (April 26, 1984) . . .
Quote of the Day
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.~H. L. Mencken
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