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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (146968)	10/4/2004 3:51:43 PM
From: GST	Read Replies (1) \| Respond to of 281500

Hi -- we have some agreement on Iraq, but perhaps less on some domestic policies as per your "PS". My concern with taxes is that they are lower than the cost of operating the government. Large and chronic deficits do matter -- and this is far more important when the US savings rate is so low that we cannot finance the public deficit with private savings. The seriousness of this issue can hardly be overstated. If there was a high enough savings rate in the US -- say 10% to 20% rather than 1% to 3%, I would be more relaxed about financing government on an ocean of red ink. But it is not the way it is, and the combination of high and chronic government deficits and current account deficits with a low US savings rate is a policy that courts disaster. The purpose of taxes is to pay our bills. Not paying them has consequences. Borrowing from China to pay for the operating expenses of the US government is simply stupid -- bold and underlined.