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Politics : Formerly About Advanced Micro Devices

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To: RetiredNow who wrote (320991)	1/16/2007 5:54:53 PM
From: TimF	Read Replies (1) of 1576600

Ignoring the pain doesn't make it go away. It just makes it get worse, until the consequences are much worse than if you'd just dealt with the problem early on. Assuming the debt is at a sustainable level the primary pain of deficits is that money is taken out of the private sector. But taxes do the same thing. I guess your arguing that the deficits and debt are so large compared to the economy that they are leading to a fiscal disaster. I don't really agree with that, but I don't think the idea is a silly one that should just be dismissed out of hand. If we assume that is true, my response would be the same as Tench's. It would be better to cut spending. You replied "but not being able to cut spending should not be an excuse for doing nothing.". I would reply who says we are not able to cut spending? How do you measure that? By the fact the spending has not been cut during our current period of relatively large deficits? Well taxes haven't been raised either, so can I argue that we can't raise taxes, and we must cut spending because the inability to raise taxes "should not be an excuse for doing nothing"? It just makes it get worse, until the consequences are much worse than if you'd just dealt with the problem early on. If the economy grows faster then the interest on the debt, and esp. if raising taxes reduces the growth of the economy, then it could be worse to deal with the problem early on through tax increases. I'm not saying that we shouldn't deal with the problem early on, but rather 1 - It would be better to deal with it through cutting spending, 2 - Not raising taxes doesn't automatically mean that the problem will get worse (compared to the size of the growing economy), and 3 - Raising taxes might have more of a negative effect than a positive effect.

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