Thursday, December 08, 2005

Another Child Tax Hike

Republicans are exacerbating the budget deficit with another round of "tax cuts." This one will amount to an additional $94.5 billion dollar deficit. Somebody will have to pay back that money. Once again Republicans consider it appropriate to finance voodew economics on the back of our children.

Then there is the issue of compound interest. Lets assume that we will be paying 4.5% interest for thirty years on the debt for this "tax cut." In that case we will pay over $249 billion dollar interest. And that is the price sticker for merely one year.

That's not a tax cut. It's taxing our children.


Blogger doug said...

Are you actually concerned about the children or young people of this country?

Then why not abolish the world's biggest Ponzi scheme and eliminate Social Security? Why should "the children" be forced to pay from older generations?

And how about the older generation give up their free/discounted health care (Medicare) so that the children don't have to pay for it?


Blogger Hellmut said...

I agree with you, Doug, that the Bush prescription drug plan, aka Medicare Type D, is an irresponsible disaster. I didn't support it. It's an expensive give away to the drug companies and for profit insurances.

The United States has the most inefficient health care system in the world. We are spending more than anyone else per capita and our child mortality rates are almost as high as Cubas and our life expectation is lower than in any other developed country. The Bush prescription drug plan will make per capita health care in the United States even more expensive with no guarantee that seniors will actually get the prescriptions, which their physicians consider necessary.

Social security, by contrast, is one of the most successful programs ever. Before social security one out of two American senior citizens lived in poverty. In the United States, social security survived World War II, the Korean and the Vietnam Wars, the oil crisis, stagflation during the second oil crisis, and the escalating debts of the federal government and American families. The savings and loan scandals and bursting stock market bubbles illustrate the superior stability of social security over private alternatives.

It is a common mistake to view social security as a savings program because benefits are calculated according to payments. If you look at it from the perspective of the generation contract, then contributions merely repay the older generation for paying for our childhood. Social security is not about saving. It's about paying our debt to our parents' generation. The intergenerational nature of social security is the source of its reliability.

By the way, if we had modelled Medicare Type D on social security, like every other developed nation, we would have saved a lot of money.


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