What's the difference between raising the national debt, and raising taxes?

Question

In 2006, the U.S. added almost 600 billion to the national debt. The 2006 portion of the "tax cuts" amounted to 170 billion. By my calculations, this amounts to a 430 billion tax increase. That 430 billion will accumulate interest each year, and will have to be paid by American tax payers Please tell me how I am wrong here ?

Point is that Bush gave us a 170 billion tax cut and turned around and borrowed 600 billion. So he really did not give us a tax cut at all.

And, we will have to pay the debt off. Some of that debt is owned by foreign countries, but lots of it is owned by Americans that bought the debt. Are you saying that Americans that invested in our debt will lose their investment???

Wow,
Some of your answers have shown me just how warped the conservative mind is. I mean really....Buying a bond does not create debt, it just means that you own that debt instead of somebody else. Spending creates debt.

And if revenues were up because of the tax cuts, then why are we still borrowing 600 billion. The answer is that we are still 600 in the hole after those revenues you speak of. That was a very uneducated statement.

Answer 1

It's cutting taxes now for us and making some other president down the road raise them so our kids have to pay them.

Answer 2

Such a misunderstanding about what the national debt even is.

so a definition.

The national debt is comprised of principal & interest that is owed to the investor's of the US Government's Treasury Bills, Notes, and Bonds. In a given year the Government can either have a surplus or a deficit. If the Government spends more than it makes the US incurs a deficit. The National Debt is the sum of all US deficits.

So you go buy a bond. You just contributed to the national debt, because now the US Gov owes you money.

There is a lot of misconception. Inventment in the US via bonds notes and bills can imbalance things making it look worse or more alarming than it is.
Of course there is a problem of spending dont get me wrong.

But people need to understand better what the national debt is.

Answer 3

I don't get what you are doing. If 600 billion is added to the debt, but 170 billion is given back, the debt is then 770 billion. Less tax revenues. The net is added to the debt. So where are the revenues?

Math is not my strong suit, and I am probably way off. But even I can see there are no revenues in your formula.

Answer 4

Basically, you are right - part of that borrowing (about 186 billion dollars last year) consists of borrowing from the social security trust fund. - President Bush has been trying to convince the public that Social Security needs to be reformed, because tax increases would be necessary to pay the money back.

This borrowing has masked the true size of the federal budget deficit. President Bush has stated that the fiscal 2006 budget deficit was 248 billion dollars.. But this figure does not include the 186 billion borrowed from the social security trust fund last year, nor does it include the approximately 100 billion dollars per year cost of the war. From Fiscal 2002 to Fiscal 2006, the Federal Government borrowed approximately 2.4 trillion dollars, including borrowing from social security trust fund. That 2.4 trillion dollars in borrowing means that from fiscal 2002 to fiscal 2006, approximately 1/4 of non social security government spending was financed with borrowed money. (See www.ctj.org/pdf/def0706.pdf)

I agree with Thomas Jefferson who said that "the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”

Answer 5

You are so wrong because you think arithmetically. Our world does not operate that way. You forgot to mention that tax revenues have skyrocketed following the tax cuts. Dems will never get it. Dems are economically dyslexic. They will never understand how to manage tax policy. As for the economy, they just need to get the hell out of the way and let it do its thing.

Outside of tax cuts, all politicians can do to the economy is screw it up. That is why they are politicians and not businessmen. Their business would be bankrupt in short order.

Answer 6

What makes you think anyone has any intention of EVER paying off the national debt? Hell, we can't even seem to collect on those debtors owing us. You're not wrong, just naïve.