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From: schachte@ittvax.UUCP (Peter Schachte)
Newsgroups: net.politics
Subject: Re: Re: taxes and the deficit
Message-ID: <1528@ittvax.UUCP>
Date: Thu, 1-Nov-84 10:48:53 EST
Article-I.D.: ittvax.1528
Posted: Thu Nov  1 10:48:53 1984
Date-Received: Sat, 3-Nov-84 05:10:11 EST
References: <534@charm.UUCP> <340@ihu1e.UUCP>
Organization: ITT-ATC, Stratford Ct.
Lines: 44

> George Lake submitted the following:
> The following is only meant to be suggestive of the REAL cost of
> the deficit and the real meaning of Reagan's "tax cuts".
> The deficit is ~175 billion.  There are roughly 50 million families
> in the US.  This is $3,500./family.  Since the median family income
> is rougly $25,000., we are talking about an as yet "hidden tax"
> of nearly 15%. 
> ________________________________________________
> Bill Tanenbaum responded:
> Unfortunately, George makes a mistake that no physicist should ever
> make.  He is comparing two quantities with different units, hence
> his 15% figure is nonsensical.  The deficit per family is roughly
> 3500 dollars.  The median family income is roughly 25000 dollars
> PER YEAR.  The ratio is ~0.15 years, or about 2 months.  This figure
> is not a tax rate, but the amount of time the average wage earner
> would have to work to pay off his/her share of the deficit.


Oops!  The deficit is the difference between what the government
spends and what it takes in IN A GIVEN YEAR.  This year it was ~$175
billion.  Bill Tanenbaum is thinking about the national debt, which is
~$1.7 TRILLION.  If George Lake is right about the number of families
in the U.S. and their median income (I'm not doubting him), then the
national debt divided by the number of families is $34,000 per family.
And if we divide that by the median income per family, we come out
with a pay-off time of 1.36 years, or more than 16 months.  THIS is
the length of time the average wage earner would have to work to pay
off his share of the debt.  Does this mean anything?  I think George
Lake's number is more meaningful, although it's not really a tax.  A
tax is something you pay NOW (or soon).  Think of it as a sort of
negative escrow account, added to annually, to be paid off after we're
all dead (we hope).  Certainly it won't be paid off until after
Ronnie's dead.

Anyway, we can safely state that we (the USA) are deeply in debt, and
we are getting in deeper all the time, and the rate at which we are
getting in deeper is increasing.  I think we are a pretty bad credit
risk.  I wouldn't give us a credit card :-).  And Ronnie, despite his
campaign promises of a balanced budget, has not made the situation
better.  Maybe voodoo doesn't work after all :-).

-- 
				Peter Schachte
				(decvax!ittvax!schachte)