Both political parties have consistently and unsustainably run up our national debt because well-connected lobbyists persuade them to spend our hard-earned tax dollars and much more.
You're falling prey to a pervasive fallacy of composition: because something makes sense for one entity, that the same thing will make sense for all entities.
The financial situation of the Federal Government is *not* like a household or business. In fact, it is closer to the opposite.
The simple equation is: Government spending = private sector income.
Reducing Government spending reduces private sector income.
Having the Federal Government balance the budget would be bad, but to run a surplus is even worse: that reduces the overall wealth of the private sector by requiring asset sales to cover the additional tax burden. (Running a federal surplus has directly caused a depression/recession in every instance since the founding of the United States).
BTW, taxes have gone down consistently since the 80's for everyone across the board. It is true that the top 1% have seen their tax rates plummet, but that is not because the other groups are paying more per se. The top are paying more of a percentage of *total* taxes but only because income inequality is increasing. https://www.brookings.edu/blog/up-front/2012/04/13/just-how-progressive-is-the-u-s-tax-code/
Thank you for your comment. When you say “private sector income,” you mean private CORPORATION income.
Middle class businesses most often consist of small, brick-and-mortar operations (eg gift shops, gas stations, eateries, convenience stores) and small-scale service industries (eg bakery, plumber, electrician, accountant, doctor’s office). The majority of their clients are ALSO middle class people who need to run their households.
All these middle class people work their jobs so that they can pay the taxes that fund federal government spending. There are also lower income patrons who may not have jobs and instead spend government subsidies (like food stamps and welfare) to run their households. So from that respect, yes government spending ends up in the private sector.
However, the feds spend BILLIONS on defense contractors (either directly through pentagon purchases or indirectly via foreign aid that launders back into the defense contractors’ coffers), as well as BILLIONS via Medicare on brand name prescription medications to pharma when generics would do just as well for a fraction of the cost.
These corporations are notorious for minimizing tax payments by exploiting loopholes created by the politicians who receive lobbying dollars. Furthermore, the corporate profits must first filter through the CEOs and the shareholders before the crumbs work their way down to the middle class employees, who still get their FULL taxes cut by way of the W2 mechanism. The CEOs and other wealthy shareholders have their armies of tax attorneys who minimize their tax burden.
All of this might be acceptable, were it not for the fact that the federal government spends our taxes AND MUCH MORE EVERY YEAR, leading to loans owned by China, whose interest payments are ALSO shouldered by the taxpayers.
So although the corporate profits fall when government spends less, the loss of income hits primarily the well-connected, who then persuade everyone that government must spend spend spend.
The interests of the middle class (with whom I identify) are front and center in my campaign.
No, I mean that "Private sector" = *all* private citizens, businesses, organizations. It's very simple.
You're creating a very complex conspiracy around the basic misunderstanding.
To further blow your mind: China doesn't lend a dime to the US Gov. Not even one cent.
China accumulates $USD via trade and instead of spending those $USD, they hold them. Why do they do that? Because if they turned around and spent all the $USD they earn, their currency would go up in value and make their products more expensive for US consumers. So they hold their $USD in a US Treasury Reserve account. You and I can do this too (go to TreasuryDirect.gov). It's the very safest place to hold your $USD savings (safer than any bank)! Once you have your savings in a Treasury reserve account, wouldn't it make sense to earn some interest while it sits there? Sure! So transfer some of the cash into bonds. Is that lending the US Gov money? No!
Logically, the US Government *can't* borrow $USD. The US Gov *creates* $USD at will - we all know this - people even say it in a derogatory fashion: "the Government prints money". If you are sole creator and source of something, then technically how can you borrow it?
The US Gov does a favor to savers of $USD everywhere: it offers them a risk-free way to earn interest on their savings: US bonds. (Which is completely against the tenets of capitalism by the way! There should be no returns without risk!)
Alex,
You're falling prey to a pervasive fallacy of composition: because something makes sense for one entity, that the same thing will make sense for all entities.
The financial situation of the Federal Government is *not* like a household or business. In fact, it is closer to the opposite.
The simple equation is: Government spending = private sector income.
Reducing Government spending reduces private sector income.
Having the Federal Government balance the budget would be bad, but to run a surplus is even worse: that reduces the overall wealth of the private sector by requiring asset sales to cover the additional tax burden. (Running a federal surplus has directly caused a depression/recession in every instance since the founding of the United States).
BTW, taxes have gone down consistently since the 80's for everyone across the board. It is true that the top 1% have seen their tax rates plummet, but that is not because the other groups are paying more per se. The top are paying more of a percentage of *total* taxes but only because income inequality is increasing. https://www.brookings.edu/blog/up-front/2012/04/13/just-how-progressive-is-the-u-s-tax-code/
Thank you for your comment. When you say “private sector income,” you mean private CORPORATION income.
Middle class businesses most often consist of small, brick-and-mortar operations (eg gift shops, gas stations, eateries, convenience stores) and small-scale service industries (eg bakery, plumber, electrician, accountant, doctor’s office). The majority of their clients are ALSO middle class people who need to run their households.
All these middle class people work their jobs so that they can pay the taxes that fund federal government spending. There are also lower income patrons who may not have jobs and instead spend government subsidies (like food stamps and welfare) to run their households. So from that respect, yes government spending ends up in the private sector.
However, the feds spend BILLIONS on defense contractors (either directly through pentagon purchases or indirectly via foreign aid that launders back into the defense contractors’ coffers), as well as BILLIONS via Medicare on brand name prescription medications to pharma when generics would do just as well for a fraction of the cost.
These corporations are notorious for minimizing tax payments by exploiting loopholes created by the politicians who receive lobbying dollars. Furthermore, the corporate profits must first filter through the CEOs and the shareholders before the crumbs work their way down to the middle class employees, who still get their FULL taxes cut by way of the W2 mechanism. The CEOs and other wealthy shareholders have their armies of tax attorneys who minimize their tax burden.
All of this might be acceptable, were it not for the fact that the federal government spends our taxes AND MUCH MORE EVERY YEAR, leading to loans owned by China, whose interest payments are ALSO shouldered by the taxpayers.
So although the corporate profits fall when government spends less, the loss of income hits primarily the well-connected, who then persuade everyone that government must spend spend spend.
The interests of the middle class (with whom I identify) are front and center in my campaign.
No, I mean that "Private sector" = *all* private citizens, businesses, organizations. It's very simple.
You're creating a very complex conspiracy around the basic misunderstanding.
To further blow your mind: China doesn't lend a dime to the US Gov. Not even one cent.
China accumulates $USD via trade and instead of spending those $USD, they hold them. Why do they do that? Because if they turned around and spent all the $USD they earn, their currency would go up in value and make their products more expensive for US consumers. So they hold their $USD in a US Treasury Reserve account. You and I can do this too (go to TreasuryDirect.gov). It's the very safest place to hold your $USD savings (safer than any bank)! Once you have your savings in a Treasury reserve account, wouldn't it make sense to earn some interest while it sits there? Sure! So transfer some of the cash into bonds. Is that lending the US Gov money? No!
Logically, the US Government *can't* borrow $USD. The US Gov *creates* $USD at will - we all know this - people even say it in a derogatory fashion: "the Government prints money". If you are sole creator and source of something, then technically how can you borrow it?
The US Gov does a favor to savers of $USD everywhere: it offers them a risk-free way to earn interest on their savings: US bonds. (Which is completely against the tenets of capitalism by the way! There should be no returns without risk!)