From: mykes@amiga0.SF-Bay.ORG (Mike Schwartz)
Newsgroups: alt.rush-limbaugh,alt.fan.rush-limbaugh,talk.politics.misc,alt.flame
Subject: Re: Clinton Appeals to Hate
Distribution: world
X-NewsSoftware: GRn 1.16f (9/19/92) by Mike Schwartz & Michael B. Smith
Date: 28 Sep 92 21:50:32 PST
Organization: Amiga makes it possible

In article <exuptr.709.717642845@exu.ericsson.se> exuptr@exu.ericsson.se (Patrick Taylor) writes:
> In article <mykes.0e87@amiga0.SF-Bay.ORG> mykes@amiga0.SF-Bay.ORG (Mike Schwartz) writes:
>
> >You forgot to subtract the $400 Billion we pay in debt interest.
>
> Zeroing the deficit does not get rid of the debt, it just stops the
> debt from getting bigger.  Unless you can come up with a budget that pays
> all the interest and "everything else", plus a little extra to pay down the
> debt principal, it will only get bigger.  You can't just toss away the
> interest on existing debt because we're not borrowing any *more*.
>

Agreed, 100%.  However, you can't just toss away ANY of government
spending, or it would have been done.  There are strong public figures
of both parties who advocate the debt as the number 1 economic
problem to be solved.  Leon Paneta, D-CA, is chairman of the house
budget committee and he is one such advocate, as is Phil Gramm, R-TX,
of the senate.

There are several factors that must be considered when addressing
the debt.  First, defecit spending increases the debt which increases
the interest expense.  Note that I differentiate between spending
and expenses - this means insurance deposits (SS, medicare, etc.) are
NOT spending nor is interest on the debt, while defense, welfare,
foreign policy, etc. ARE.

Second, applying 100% of current govt. revenues (of all sources) towards
reducing the debt would take 5 years to pay the whole thing off.  That
means zero spending on any social programs, defense, running the govt.,
etc.  So to assume that I mean cut spending by 1/3 overnight and have
no debt overnight is ridiculous.  Doubling EVERYONE's taxes, not just
on the upper 2% of people, would NEVER ever pay off the debt, even if
you applied all that new revenue towards debt repayment.  It barely
covers the interest on the debt, per year, and doesn't cover the
defecit for the year.  In other words, we are overspending by more
than 2x Income Tax revenues.

Lastly, there are two ways to actually eliminate the debt.  First, you
can cut spending by 1/3 over some period of time (say 10 years) and as
my math proves, we would have $100Billion+ overage to apply towards
debt (this would take 30-40 years to pay the debt off completely).
Second, you can grow GNP and reduce spending at the same time.	This
will generate more revenues for the government, which can be applied
to debt reduction.  Revenues = tax rate X GNP.	It depends on which
camp you believe in, whether raising tax rates increases or decreases
growth of GNP.

You also need to eliminate the defecit as the first step in ANY method
of attacking the debt.	Period.  Whether by increasing revenues and
holding spending, or by reducing spending.  No matter how you slice it,
reducing spending is the ultimate means.

So what do YOU want to do with that $400 Billion in "interest dividend"
that is to be had?

>
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--
Amiga programmer of: GRn, MailMinder, Budokan, Beyond Dark Castle, Dark Castle
Sega Genesis programmer of: Dick Tracy and Marble Madness.
Mike Schwartz  (ames!zorch!amiga0!mykes or mykes@amiga0.sf-bay.org)
1124 Fremont Ave.
Los Altos, CA 94024

Newsgroups: alt.rush-limbaugh