Harry Brown: “Can someone explain how there can be a surplus when we have a national debt? It’s like saying you have an extra $100 in your savings account while owing your $1,000 on your credit card.”
The surplus refers to this year’s budget — like a guy who manages to have $3,000 left over after paying all his bills. The debt is the sum of all our accumulated deficits from years past — like a guy who’s racked up a ton of credit card debt, car loans, and a mortgage. (Remember that year he earned $43,000 after taxes and spent $140,000 to buy a house? It was not necessarily imprudent to do it, but that was a particularly deep deficit year.)
The question on today’s political table is how much of the hoped-for future annual surpluses to put in each of four main pots: (a) debt reduction (like paying down your credit card balances when times are good); (b) tax cuts and credits for low- and middle-income folks; (c) tax cuts for those best off; (d) other extra spending, like beefing up the military.
The fundamental difference between the two candidates is that Governor Bush uses a big chunk of the hoped-for surplus for (c), leaving that much less for (a), (b), and (d). Vice President Gore uses none for (c), leaving that much more.
Which approach is fairest and/or best for the economy? That’s what we’re all being called upon to decide next Tuesday.
Quote of the Day
In 1800, 75% of [an American's] working man's expenditures went for food alone. By 1850, that had dropped to 50%. Today it is a little more than 11%.~The Wall Street Journal, September 20, 1996
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