From: gross@eric10.rtp.dg.com (Gene Gross)
Subject: Re: Fiscal Responsibility
Date: Thu, 10 Sep 92 19:31:17 GMT
Organization: Data General Corporation, RTP, NC.

In article <1992Sep4.172259.24539@ncar.ucar.edu> gary@colossus.cgd.ucar.edu (Gary Strand) writes:
gg> Gene Gross
gs> Gary Strand

>gg> How about cutting all programs, on and off budget, by 40 percent and
>gg> increasing the income tax to 50 percent!?
>
>gs> Uhh, let's try something that's part of planet Earth first, OK? Is the ob-
>gs> ject getting rid of the debt, or wiping out the economy (and a goodly chunk
>gs> of the global economy as well)?
>
>gg> Considering that currently it takes all of the taxpayers money from tax-
>gg> payers west of the Mississippi just to cover the interest payments on the
>gg> national debt right now, how is it that things aren't that bad!?
>
gs>  Things *are* bad; I've never said otherwise. I simply believe your "cure"
gs>  to be worse than the "disease"?

Gary, I offered it as one possible solution that has been suggested.
Frankly, I would oppose any attempts at raising taxes that high without
some very tight and inescapable restrictions on Congress and the
President to prevent them from merely spending more money or keeping
taxes at that rate for longer than necessary.

What I would like to see is a flat tax rate, no deductions, for
individuals and business alike.  This way we could eliminate most of the
IRS, which ought to be a nice savings. ;-)

>gg> The only way to keep it from ending in collapse is to take drastic
>gg> measures now.
>
gs>Your idea is a little too drastic for my tastes, and I don't see how it will
gs>solve the debt problem. It very well could make it much worse. For one thing,
gs>you'll be dumping millions of now-unemployed people into a weak economy, and
gs>you'll be wiping out a lot of capital (via the 50% income tax) that will be
gs>needed to create jobs for those people. In essence, you'll strangle the cap-
gs>ital markets when they're needed most, and you'll have 10%-15% unemployment
gs>on top of that. Sounds like the ingredients for massive civil disorder to 
gs>me.

I personally think that this is going to happen regardless.  I doubt
that we have the courage to take the bitter medicine necessary to cure
the ill.  We spend far more time trying to pin the blame for things on
one group or another.  Fact is, everyone is to blame.

Do you have an FHA loan on your home?  Then you are part of the problem.
Do you have any student loans backed by the government?  Then you are
part of the problem.

There is more, but the point is that we have become used to having
government's milk bladder between our lips.  We think that government is
supposed to solve all our problems.  And many in government want it that
way.  This is what the liberal side of things has worked on promoting
for years now.  The conservatives have fostered their own brand of
idiocy with the megabucks spent on weapons systems that often don't meet
the needs of the military in the field -- but heavens above, we must
have it if the other side does, more if they don't!

>gg> When the amount of On Budget debt reaches $12 trillion (a very conservative
>gg> estimate of the amount owed by 2000), there will simply not be enough money
>gg> coming in to the national treasury to pay even the interest payments and
>gg> pay for all the wonderful government services we have come to depend upon.
>
gs>The federal government owns $100s of billions in property. It can help re-
gs>duce the debt by selling it, as well as privatizing "public" services. A
gs>number of other countries whose debt problems were *worse* than ours is now
gs>have been able to get rid of a large part of it by these methods. I suggest
gs>trying these sorts of measures before we go destroying the economy with your
gs>ideas.

You are one of the few that I have known who has suggested this.  May I
congratulate you on your insight and courage.  Selling off the land is
certainly one way of doing it.  Further, I like the idea of privitizing
public services -- provided that there is still public oversight.  I
would also like to see NASA get out of the space business and turn space
over to business.

There is a lot that we can do.  The problem as I see it is the clock
that is ticking away right now!  Each day the debt grows and the
interest mounts.  Whatever actions we take, we must take them very soon.
I don't say all of this merely to scare people or get in endless
debates.  I can live without the debates.  And if I wanted to scare you,
I could just send you a photo! ;-)

Americans are a wonderous people.  But often we are some of the biggest
ninnies and procrastinators in the world!!  This time, we can't afford
any qualms nor to wait.  Action now!!  And I agree with you.  Let's
start by selling off government property.  Next, let's take some public
services away from government and let private businesses take over.
Next, let's end the current tax structure for a flat tax rate for every
individual taxpayer and business, no deductions for anything.  Turn over
the space program to private enterprise.  This won't give us utopia, but
it might go a long way toward ending some of our economic woes.

>gg> So, prepare for some serious hyperinflation by the turn of the century
>gg> (less than 8 short years from now).  That is not merely a prediction, it
>gg> is inevitable.
>
gs>I'm leery of determinism. Given the lack of political will to deal with the
gs>debt problem, I'd agree that the odds are quite good that we're looking at
gs>some sort of financial disaster on the part of the US government. On the
gs>other hand, it doesn't *have* to be that way. There are a few people who do
gs>see the problem in its proper light, but it's the American people who need
gs>some massive education to force our "representatives" to Do The Right Thing.

I agree with you assessment above.

Regards,

Gene

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