Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (25939)	12/14/2004 2:39:56 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

I didn't say they were successful at redistributing wealth from the rich to the poor. Mostly they aim for the rich and hit the middleclass. The rich have a large enough incentive to deploy tax avoidance schemes that would be too costly for someone in the middle class. How did the government get into debt? Some of the national debt is from WWII, some is from Korea and Viet Nam but in the last 30 years the fastest growing portion of the budget is transfer payments and health and human services, both in nominal amounts and as a percentage. That is what I refer to when I refer to redistribution of wealth. The primary activity of the government, in it's present form, has been to facilitate transfer payments and conduct non-defense related spending. Payments to individuals constitutes 60% of all government outlays or 12.5% of GDP. Back in 1940 it was around 2.4% or 1.7% of GDP. Defense (which used to be the primary purpose of the federal government) was 59% of the total outlays in 1954. In 2003 it was 18.8% of outlays. In GDP terms, it went from 13.3% to 3.7% of GDP. I've referenced a spread sheet from the OBM in another post if you want to check this first hand: Message 20837730 Notice with the decline in the rate of inflation and interest rates the public debt is now far easier to service than it was when inflation and interest rates were higher (interest payments are lower both as a percentage of GDP and as a percentage of the budget). Increasing inflation would make the public debt harder to service, not easier.