chinaco
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Feb 14, 2007
- Messages
- 5,072
I was listening to a political commentator discussing the economy the other day.
The nature of the discussion was the economy. The specific issue was how to get it going. There were two ideas being debated.
The proof that was presented for cutting taxes was that the Reagan Administration tax cut in the 80's. We had a pretty nasty recession and some have attributed tax cuts as pulling us out of it.
But in the 80's. The spending levels were maintained... maybe even increased because of the defense build up at the time. The funding was just shifted to spending FICA. IOW - General taxes reduced and FICA was increased and spent. It seems to me that the out of pocket funding remained the same... the only thing that changed was whose money was being used to fund government programs like defense, etc. (but not SS or Medicare... since they were fully solvent). The expense was shifted to the middle class.
But go forward to today. Workers are one of the biggest group of investors (DC plans and IRAs).
It seems to me that the net effect of any sort of tax cut would be, in effect, neutral to most people that earn a wage and are preparing for retirement or are retired and living off the resources they have paid into and acquired.
I think we are all going to be asked to give up something (take on SS and Medicare cuts). Basically that $2.1T in FICA trust debt.
Anybody have any thoughts about this.
In effect, when it is said and done, who is going to get that tax cut?
The nature of the discussion was the economy. The specific issue was how to get it going. There were two ideas being debated.
- Stimulus Spending - Basically Bridges and Roads in hopes of getting the sputtering economy going.
- Tax Cuts - The notion cut taxes and leave the money in the hands of tax payers... they will spend it.
- There was a 3rd idea... more of what might go wrong... any cut in government spending right now might not be matched by private spending in the short-term and cause a recession.
The proof that was presented for cutting taxes was that the Reagan Administration tax cut in the 80's. We had a pretty nasty recession and some have attributed tax cuts as pulling us out of it.
But in the 80's. The spending levels were maintained... maybe even increased because of the defense build up at the time. The funding was just shifted to spending FICA. IOW - General taxes reduced and FICA was increased and spent. It seems to me that the out of pocket funding remained the same... the only thing that changed was whose money was being used to fund government programs like defense, etc. (but not SS or Medicare... since they were fully solvent). The expense was shifted to the middle class.
But go forward to today. Workers are one of the biggest group of investors (DC plans and IRAs).
It seems to me that the net effect of any sort of tax cut would be, in effect, neutral to most people that earn a wage and are preparing for retirement or are retired and living off the resources they have paid into and acquired.
I think we are all going to be asked to give up something (take on SS and Medicare cuts). Basically that $2.1T in FICA trust debt.
Anybody have any thoughts about this.
In effect, when it is said and done, who is going to get that tax cut?
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