Tuesday, April 29, 2008

If you pay me now, someone will have to pay for it later

I'm not an economist nor the son of an economist. I come from a long line of just pay your bills and avoid debt the best you can kind of people.

I understand our national debt to be the total amount of money owed by the government. The federal budget deficit is the yearly amount by which spending exceeds revenue. Add up all the deficits for the past 200+ years and you'll get the current National Debt.

Somehow our national debt has made it to $9,340,380,921,058.13 as of this morning. I can't fathom numbers that are in the trillions, but that's what we owe. Who do we owe? I don't completely understand this either, but somehow we owe foreign governments and individuals 23% of this money. That's bad enough, but what is worse is the money we have been taking from our own "reserves" (money collected through taxes, SS payments, etc.) to fund ongoing budgets to the point that we owe ourselves 41% of this total national debt! Good grief. I don't know what it all means, but I can tell you it ain't good. It's one thing to stiff the Chinese government money, but if we fail to replenish our own "reserves", some hard times are certain when people don't get there Social Security checks, medicare benefits, etc. The ripple effect of that kind of shortfall will hit everyone.

According to Ed Hall, based on the estimated population of the United States (303,897,709), each citizen's share of this debt is $30,735.28. The National Debt has continued to increase an average of$1.44 billion per day since September 29, 2006!

O.K., here's where I just don't get it- why is the government sending me a check for $1200? I understand it's part of a stimulus package that is supposed to jump start a slowed economy, but should we really be writing checks at such a time? Now I know the reaction of many will be- "You better believe they should give me the money...with all the taxes they charge me!". O.K., I understand that perspective, but there's tons of us who pay very little federal income tax, yet we're still getting a check. As a minister I have my salary divided where 1/3 of my salary is designated as "housing" and is therefore not taxable. This is an appreciated tax advantage for ministers and it helps the churches that pay them also. This also makes my taxable income lower and based on that, plus my dependents and deductions, I pay very little federal income tax, yet I'm getting a $1200 check from a government that owes over $9 trillion big ones. Makes little sense to me. There are many others who do not pay $1200 in federal income tax each year, yet they'll also be getting a check.

I know the idea is for me to go out and spend it to stimulate the economy, but when our nation is $9 trillion in the hole, I think it's high time we start enacting some immediate, painful short term spending stops that will keep our grand kids from hating us in the long run. Spending our way out of a recession with no regard to the burgeoning debt is just plain short-sighted and stupid. We have created an entitlement mindset that has trained several generations to depend on the government to provide for many things. It seems to me this expectation has helped produce the fragile house of cards feel our economy seems to have. At some point, some generation is going to get stiffed as it relates to what it thinks should be coming to it. It's going to be ugly, but it's going to happen. There's no way you can pay me now without someone else having to pay for it later.

All you economic experts, fire away, I'm hoping I am way off base here. In the mean time, I can't wait to spend my check.
Ah, I think I see the problem....


Frontier Forest said...

I don’t understand any of these high-finance perceptive perspectives! Way beyond my pea-sized brain. But this I do know, Cheri and I plan to tithe on what ever amount we get back. Giving unto the Lord may not solve our countries humongous, ever mounting depth, but trusting Him with what we have been given, will for sure, make us better stewards.

Reepicheep said...

Excellent plan Woodster!

becca joy said...

The only think I can think to input is that with the economy in recession a lot more people begin to rely on the government benefits- ergo, our debt begins to increase at an even higher rate; whereas, if you pay a little out to the people to stimulate the economy there's a shot that the recession will itself recede and these checks will pay for themselves in the money the government saves by not having to pay out as many benefits such as housing for all those already low income people who are being foreclosed on because the government encouraged banks to grant high interest loans to minorities in hopes of putting the stops on the housing slump...and so on :)

Qayaq said...

I am not fortunate enough to even be getting a check, the government says I we make too much money. However I did hear that if you get a check now you will not get a refund next year and I would rather get it then than now. By the way the reason I get such a refund is because of the exorbitant taxes I pay in the "Dotte."

Rick Calohan said...

We received our Stimulus Check of $846.00 today, the joys of having an SSN# ending in 08. Our total tax for 2007 was $846. Since we paid more than that throughout the year, Uncle Sam was nice enough to give back to us interest free $1,291 we overpaid in payroll taxes. Therefore 2007 my wife and I had a Federal Tax Free year. Considering I work for the Federal Government every year is really a tax-free year for me.

I still believe we ought to abolish all income tax. Our founders placed tariffs on imported goods that supported this country up until the Civil War when the first Income Tax was instituted in order to fund Union effort. The reason why income, savings, and investments are taxed If these tariffs were in place we could buy back our loans from China, Japan, the EU, and other foreign debts. We should return to the Gold Standard, and we should be fiscally responsible.

Obviously, we must retain a standing military if we are to retain our Empire Republic.

If we are to retain the present Income Tax system, the tax rate should be lowered across the board to a 10% flat tax. If 10% is good enough for God, it is good enough for Caesar. If the government cannot support itself with the 10% then non-Essential Government Agencies that, again if they are not essential should shut down or placed on standby reserve. We can start by abolishing the Infernal Revenue, if we are only going to pay 10% how hard is it for the Department of the Treasury to collect by automatic deduction like the Kansas City Earnings Tax of 1% that is automatic deducted if you live or work in Kansas City. Therefore an automatic payroll deduction, along with a full Presidential pardon to Wesley Snipes.

Department of Education, sorry Brother Matt Staples, but you know as well as I that Public Education in America is farce. Having worked there for four of my eighteen years in government service, we should return that responsibility to the states, better yet to the parents. Let the VA can handle the GI Bill, if students need a Government Loan let them go to the Treasury for it based on their credit worthiness. Maybe the cost of a College Education will return to normal levels since these Universities know the more the raise tuition the more the Government will pay. Hmmn, sounds like we could solve the Medicaid and Medicare Health Care crisis by removing the federal government in funding it.

Third, abolish the Social Security Administration. The Department of the Treasury can still pay those retirees, disabled, dependent children who have earned it by reinvesting the revenue stolen by us and give people Individual Thrift Savings Accounts like we who are Civil Servants have.

The National Archives and Department of Homeland Security are self-sustaining. Therefore, they shall not be abolished.

Of course, we should also impose a 100% tax on illegal alien who has been captured, detained, and deported. We shall collect the tax from the home country of the Illegal Alien. If that home country can not pay us then we shall impress these Illegal Aliens to Iraq and Afghanistan. For every illegal alien sent overseas, a US Soldier can come home.

To squash any rumors that whatever check you receive this year will be used against you next year these answers were found at the IRS web site which I will also abloish along with the agency.


Q. If my stimulus payment is not going to affect my 2008 tax refund or increase the tax I owe next year, why is it I need to retain the letter that lists how much I received?
A. In the event you do not qualify for the full amount on your 2007 return but you do on your 2008 return, you will need to have the letter as a record of the amount you previously received. [New 4/11/08]
Q. Will the payment I receive in 2008 reduce my 2008 refund or increase the amount I owe for 2008?
A. No, the stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 return.