Over the past week, I’ve engaged in some debates surrounding the deficit reduction proposals put forth to bring our spending and national debt in line. While online debates are usually include “less serious” personalities, I did come across a few that either thought about their positions or proved to be useful for me to lay out some ideas for people to consider.
Poster 1: 900 billion added to the debt because of this deal.
Response: The extension of the discounted tax rates do not ADD to the deficit. Spending adds to the deficit. These rates have been in place for almost 10 years now, and both the Republican-controlled Congresses and the Democrat-controlled Congress knew of what the projected tax revenue would have been during those years. They chose to blow through the revenue and run up deficits (not to include the war spending since that is a typical budgetary item).
Poster 2: what spending would you cut ? Are we going a few hundred billion further in debt so that we can ask Social Security recipients for more “shared sacrifice” later ? The tax cuts for the rich that will now be extended do virtually nothing to create demand – and just increase debt. But – unlike, say, Keith Olberman, I am not that incensed about this package. I believe that instead of attacking the rich we should get extra revenue thru tarrifs on the Chinese and we should increase the minimum wage to help the poor. The minimum wage should be raised from $15,080 to $20K with a further $4K for those with a HS diploma. The resulting increased demand means the rich make more money and pay higher taxes – while also paying the workers more. Our problem is stagnation of the middle class – not too much money in the hands of the wealthy. Note that most western countries have a higher minimum wage. Scaled for percent of purchasing power parity GDP – the Canadian minimum wage would be over $20k. Even without scaling it is higher than ours.
Response: Nope, no debt would be needed if people apply some real common sense economics. I can give you a long list of stuff to cut/reform, including Social Security itself. Liberals are all for taxing the “rich” ($250K/year is not rich if your self-employed and have to pay your business expenses out of your income) yet also willing to allow them to receive social security benefits. For starter reforms, convert social security into a need-based insurance program and toss out the income-tax system and replace it with a single-rate wealth-based system. You can lower the tax rate, increase the exempt level and still collect more taxes than you can with the current system (and without all the class-warfare pumped up by the political parties). Of course, neither of these will occur because the political parties won’t do what’s right if it risks their partisan campaigning chips. However, if either party TRULY wants to do what’s best for us, they would LEAD and institute these needed changes without screwing us over year after year.
As far as minimum wage goes, you don’t understand what “minimum” means. It’s not suppose to be a “living” wage. You don’t live by working behind the counter at McDonalds.