[Rhodes22-list] 2007 Tax Return

[Rik Sandberg]

Brad,

Clinton did have a balanced budget there for a bit, as you say from the tremendous revenues generated by the dot.com boom. He did not however, pay off the debt ...... far from it.

Other than that I'm right with ya here.

Rik

-----Original Message-----
>From: brad haslett <flybrad at yahoo.com>
>Sent: May 27, 2006 7:05 AM
>To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>Subject: Re: [Rhodes22-list] 2007 Tax Return
>
>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
>> __________________________________________________
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>> 
>
>
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