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Why not deal with the budget deficit sensibly:

July 27, 2012

1. Why not deal with the budget deficit sensibly?

It is not as though we are faced by an armed and dangerous Soviet Union spending itself into bankruptcy in a futile attempt to match us militarily. Do we need to spend ourselves into bankruptcy also in order to defend ourselves from a few ill-equipped terrorist?

How about if we just spend as much as all the other countries combined? I would think that would still keep us safe from armed invasion while also having the benefit of paying off the national debt.

2. Why not deal with the budget deficit sensibly?

One must keep in mind that both plans maintain the existing middle class tax cuts. The Democratic Plan would allow the rates on the wealthiest Americans to return to what they were during the Clinton era. The Republican Plan retains the Bush tax cut for the wealthiest American’s.

The first thing to note however, is that the Republican tax plan would

United States deficit or surplus percentage 19...

United States deficit or surplus percentage 1901 to 2006 (Photo credit: Wikipedia)

remove the Obama stimulus tax cut for the middle class and effectively redistribute it to the wealthy. Therefor, under the Republican plan the American middle class will experience a rise in their taxes.

The second, is that since the first $1 million in value of an estate is already exempt from taxation, the Republican plan adds additional tax relief for the very wealthy. This relief is not available to almost anyone else.

US annual federal deficits 1901 to 2006 redblue

US annual federal deficits 1901 to 2006 redblue (Photo credit: Wikipedia)

The Republican tax plan not only maintains the tax relief for the wealthy that had a lot to do with turning a budget surplus from the Clinton years to a deficit, but it actually increases tax breaks for the wealthy while reducing it for the middle class.

By providing so much tax relief to the wealthiest of Americans, The Republican plan increases the national debt substantially.  So much so that governmental program cuts cannot balance it without eliminating almost all current governmental programs including national defense or forcing the nation to engage in massive inflation.

The Republican plan is premised exclusively on the belief that those who are most benefited by their plan will invest and spend it in America thereby raising tax revenues. This has not worked in the past.

As usual, those who publicly support the Republican plan (pundits, some economists, political consultants and the like) who are not generally included in the class that are rewarded by it, are nevertheless most often those who receive financial benefit from those actually directly advantaged by the plan.

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