Obama's new budget

[Lynnie]

Idlewind, I learned a little bit about the fair tax today. Evidently, while the sales tax will increase and be fair for all, the concept is to consider the embedded tax, which in theory would reduce the tax. I could be on board with this.

I'd have to dig a little deeper to see what consumer expenditures are each year as well as break it down by demographic. However, first I'd to see Obama balance the Budget if that's even an option these days.

 

[tsutcli]

Spend more. Tax more. Borrow more. Sounds like the Three Stooges School of Economics.

 

[Lynnie]

I've actually become quite interested in this. In theory, if there is no corporate tax, this will spur healthy competition and we will see prices drop a bit, such that when we buy and pay the 23% sales tax (currently proposed figure), we will only feel a slight increase; however, no we would be paying no income tax, which increases our disposable income.

How much does it take each year to operate the IRS? Take that savings and reduce the deficit. The only issue I see is that this will be sluggish for the first two years and we have to find jobs those at the Dept. of Rev. who are suddenly out of work.

I think our sales tax now is 8.5% and we are looking to increase that 1%. Many urban counties in the US are well over 10%.

 

[ASH]

Clearly we must stop the maddness of spending more than we take in. And higher taxes will cripple the economy. So the only thing to do is cut spending. I applaud Obama for the start but we must encourage him to do more. Going back to the 2007spending levels on domestic items would be a start. Pulling our troops home should also be looked at. Foreign aid should be suspended. The fair tax should be enacted. There are many other ideas to consider but the bottom line is we must make tough choices now to prevent unbearable choices tomorrow.

You touched on something that I keep thinking about. What if we actually did bring all of our troops home? Or even half of them. What would they do other than add to an already huge unemployment number. Let me put it another way.
Is it possible we are fighting wars because wars have historically been good for the American budget? Building tanks and planes and guns...
It is a serious question when discussing the budget.
There are about 100,000 jobs available in the US because those troops are in foriegn countries.

 

[idlewind]

You touched on something that I keep thinking about. What if we actually did bring all of our troops home? Or even half of them. What would they do other than add to an already huge unemployment number. Let me put it another way.
Is it possible we are fighting wars because wars have historically been good for the American budget? Building tanks and planes and guns...
It is a serious question when discussing the budget.
There are about 100,000 jobs available in the US because those troops are in foriegn countries.

If these troops were stationed in the US we would not incurr the expense to deploy them overseas and our local communities would reap the benefits of more troops stationed in them. Sort of BRAC on steriods.

 

[Bob]

to worry about our debt in the middle of economic catastrophe is to ignore the problem at hand. to criticize the current administration as if they were operating in a vacuum ignores the inertia of everything causing our predicament. inaction in the name of fiscal responsibility is a path only available to the the upper class, and for a limited time. we are going to have to creatively incentivize banks to help small businesses that have recently shown profit but cannot currently borrow. until this happens, nothing changes. wall street has been made whole, the speculation cycle is running again, and americans are going without.

 

[Bob]

No Job Growth for Small Business Spurs Recovery Doubt (Update1) - Bloomberg.com
By Michael McKee

Feb. 8 (Bloomberg) -- Small businesses are becoming the Achilles heel of the U.S. recovery by limiting growth and job creation.

Companies with fewer than 500 employees, such as Phoenix Technologies Ltd. and Sonic Corp., helped lead the economy out of the four recessions since 1980. This time, they continue to cut capital spending and dismiss workers, eliminating 3,000 jobs in January, according to Roseland, New Jersey-based Automatic Data Processing Inc., the world?s largest payroll processor.

Improvement in the unemployment rate, which fell to 9.7 in January from 10 percent in December, may stall later this year if these firms aren?t hiring, and growth likely won?t meet the median 2.7 percent annual rate forecast for 2010 by 67 economists in a Jan. 14 Bloomberg News survey.

 

[30ashopper]

small businesses have no reason to borrow even if they could, they have no customers.

 

[30ashopper]

You can replace "consumer" in the equation with "government", but that's just forced consumer spending through tax and spend. You can borrow all the money government spends from china, but that's just screwing future generations who have to pay the debt and interest - a totally selfish act imho. None of these "solutions" are, well, solutions.. you're just kicking the can down the road.

 

[scooterbug44]

Who's going to be the first to actually volunteer to either pay more or get less and ACTUALLY solve the problem?

My generation has pretty much written off getting anything FROM Social Security - even though we continue to pay into it.

Also thought someone's suggestion that we stop borrowing money just to give it out again as foreign aid was a good one.

Would also love to see some of our elected representatives cut, refuse, or donate some of their benefits/salary to pay off the debt. Though I still think taxing their campaign contributions is a better (and more equitable) way to go.