Friday, March 26, 2010
The Perils of Pay Less, Get More
This article discusses the budget deficit in America, and the trend we are moving in concerning our debt. The main point in this article is that even though we are experiencing extreme budget deficit problems, Americans want lower taxes. Furthermore not only do we want lower taxes we are asking more of our government. Americans want, "a military to protect them, good schools for their children, comfortable retirement for the elderly, medical care even when it isn't profitable." All these amenities are unreasonable to ask of our government if we aren't willing to increase taxes to pay for some of them. In 2008 taxes fell to only 15.1 percent of GDP which is a 60 year low for this country. The biggest portion of government spending is because of Medicare and Social Security.
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Very often, when something happened in government side like the budget deficit problems, they will always find a way to pour the dirty water to others instead of looking for problems themselves. Sometimes they say it is because of other country, and this time, they say it is because of the so-called excessive request from its citizens. That's just so ridiculous. That is a government's natural responsibility to protect its residents and to make their life better, otherwise, why do I still need this useless government? Because of the ridiculous policies and other redundant things, they put their poor financial decisions on its poor people. Although, to some extend, increase tax is a way to increase saving. But, to increase tax to compensate the endless stupid policies, it is obviously not a wise decision.
ReplyDeleteThe article clearly suggests that spending needs to cut and taxes need to rise. This anology is similar to what we know about America's steady state. The capital per worker is well below the the golden rule level of steady state. So a rise in tax and decrease in spending can cause the national saving to rise. This will eventually cause the steady state to reach golden level.
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