Actually Henry, I do believe there is a surplus, especially in FICA tax revenues, which would be difficult to finagle.
The quirky aspect is that, unless they directly apply that surplus to buying out current holders of the public debt, they are forced to temporarily park it in short term government debt.
Thus, despite the fact that we have a surplus, the mechanics of "parking it" somewhere forces an increase in national debt.
Example: At a 3 percent growth rate, the US is expected to run a $200 Billion/year surplus for the next 10 years.
Each year, $200 billion will be taken in than spent at current funding levels, or $2 Trillion over 10 years. But unless that $200 Billion is applied each year against the current public debt, it will have to be parked in T-Bills, thus increasing the US government held debt, money it owes itself down the road. (which our kids will have to be taxed for).
That means, if we did not pay down any publicly held debt over the next 10 years, we'd have expanded the national debt by $2 Trillion, and the SSTF money obviously would be p@ssed away on pork barrel projects and additional entitlement spending.
Now I'm all for tax cuts because that surplus, if not applied to the public debt IMMEDIATELY, is tantamount to giving Uncle Sam an instant budget increase that the politicians will spend.
And furthermore, and most importantly, any surplus is effectively a DRAINING of liquidity from the private economy, to be spent on things politicians deem necessary, as opposed to the taxpayer.
Regards,
Ron |
