[Rhodes22-list] 2007 Tax Return

brad haslett flybrad at yahoo.com
Sat May 27 06:05:52 EDT 2006


Dave,

Enjoy the sail, I have to work this weekend.  After
reading your, uh, lecture, I feel like I've been
cheated on my education.  The finance and economics
textbooks I read as an undergraduate accounting
student and in grad school for a MBA painted a
slightly different picture than yours.  Since time
doesn't allow me to go into more detail we'll leave at
this; there is a reason economics is called the dismal
science.  Also, remember what Mark Twain said, "there
are liars, damn liars, and statistics".

I will quickly address a couple of points though.  If
you look at the current national debt as a percentage
of GNP, we have no cause for alarm.  That doesn't
comfort fiscal conservatives like me. When we look
down the road at the looming Social Security
obligations and the recent Medicare increases, doom
and gloom does start to set in.  Looking at the
history of the national debt and what party was in
control, you'll see neither party has bragging rights
on who is the most responsible.  Clinton enjoyed an
unprecidented level of tax collection due to the
dot.com boom (which ended before he left office) and
was able to pay the debt down to zero.  That's a good
thing. But, for liberals to suddenly claim only they
know how to balance a checkbook ignores history.

Brad

--- DCLewis1 at aol.com wrote:

> Brad,
>  
> Regarding getting rid of tax breaks for muni’s and
> Treas bonds - the third  
> largest expense in the budget is interest on the
> national debt, and your  
> proposal will make borrowing to refinance that debt
> and to add to it nominally  20% 
> more expensive (i.e. the govt would have to offer
> market competitive  
> interest rates).  Does requiring muni's and
> Treasuries to pay  competitive (i.e. 
> higher) interest rates really make sense?
>  
> Regarding changes in the tax code: Be careful what
> you wish for.  We  went 
> down this road more than 10 years ago when the tax
> code was  “rationalized”.  
> Many deductions were eliminated and the net level of
>  taxation for many 
> decreased somewhat.  We also got the AMT.  Ten years
>  after the fact many of the 
> deductions, and new deductions, had crept back into 
> the code, but tax rates 
> stayed low.  The result is the current tax  does not
> generate sufficient revenue 
> for current spending - and hasn’t for more  than a
> decade.  If you’re a liberal 
> who thinks income should balance your  spending, it
> doesn’t work.  On the 
> other hand if you’re a conservative  Republican
> that has never balanced a 
> checkbook, it’s not a problem.  It  depends on how
> responsible you are and whether or 
> not you think the current  level of indebtedness is
> going to bring the nation 
> to grief.
>  
> In the meantime, I think a principle reason our
> interest rates are as high  
> as they are - certainly compared to Europe and Japan
> - is that lenders have to  
> be paid more to accept and deal with US dollars. 
> Lenders need the  
> inducement of higher interest rates, otherwise, they
> have more than enough  
> depreciating USDs thank you.  And those high
> interest rates affect you  daily with your 
> mortgage, business, credit cards, a zillion
> different ways  - this debt has 
> adverse consequences that you face daily.  The prime
> rate  in the US is 8%, the 
> prime rate in Japan is 1.38%, Europe is 2%  ( see 
> _www.money-rates.com/keyrates.htm_
> (http://www.money-rates.com/keyrates.htm) )  - how
> would your life be 
> different if the prime rate were 1.38% to 2%?  
> Mortgage? Business loans? Credit 
> cards? New acquisitions? Investments?   You’re
> dealing with a lot of forgone 
> opportunities as a result of our relatively  high
> interest rates, which are at 
> least in part a consequence of our huge  deficits
> and consequent debt and our 
> inflationary monetary  policy.  
>  
> JMO.
>  
> Off sailing tomorrow and Sun, can't wait.  
>  
> Dave
> __________________________________________________
> Use Rhodes22-list at rhodes22.org, Help?
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> 


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