Inflation

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Tax Freedom Day takes into account all taxation, and they estimate it at around 30% of your income. Source. Obviously this changes if your income or consumption is significantly off the average. I believe the estimate for the marginal tax rate is 40%. Sorry, but you're wrong.

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Hmmm possible. I still think its understated when we look at the various ways we suffer under double taxation.

Granted most people don't make 6 figures so if your looking at a broad base you may be right I do think the amount we pay in taxes is underestimated because people never factor in that every single tax that a business pays is not paid by anything that is called "business" but by investors, owners & particularly consumers.

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Of course not, but the highest marginal rate had the biggest percentage drop (4.6%) with the exception of the 15% bracket. As such, it's a good way of evaluating whether the changes were likely to cause significant compliance issues. I think there's no question that tax rates have to be raised on middle class families as well as higher income earners to pay for the deficit, regardless of what Obama says.

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Or we can cut spending. Eliminate sweet heart government employee benefits, reform entitlement spending, freeze pork BS and do not under any circumstances create more entitlements like the Health Care bill.

Both seem politically difficult to do. But eventually you can not kick the can.

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True, but the severity of a recessions can be significantly changes as a result of government intervention.

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Well we'll have to agree to disagree. Government spending creates new inefficiencies and exacerbate problems. See for example congress passing tariffs after the market melt down during the Great Depression. Putting people to work on "make work" projects is not healthy.

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Originally Posted by Lewkowski

Hmmm possible. I still think its understated when we look at the various ways we suffer under double taxation.

Granted most people don't make 6 figures so if your looking at a broad base you may be right I do think the amount we pay in taxes is underestimated because people never factor in that every single tax that a business pays is not paid by anything that is called "business" but by investors, owners & particularly consumers.

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The PDF reported in my source looked at detailed estimates of corporate taxes as well, and found an average tax burden on the individual citizen as a result.

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Or we can cut spending. Eliminate sweet heart government employee benefits, reform entitlement spending, freeze pork BS and do not under any circumstances create more entitlements like the Health Care bill.

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There is no question that significant changes will need to be made in both revenues and expenditures. Current efforts at cutting spending are paltry at best; the obvious issues are an unfunded prescription drug plan for Medicare (thanks, Bush), Social Security issues that can easily be fixed by raising retirement age, structural problems in our healthcare system, and poorly controlled defense spending. Pork is barely a blip in the radar; it's popular to complain about earmarks and the like, but the real issues are far more fundamental.

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Well we'll have to agree to disagree. Government spending creates new inefficiencies and exacerbate problems. See for example congress passing tariffs after the market melt down during the Great Depression. Putting people to work on "make work" projects is not healthy.

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By stepping in to prop up demand for goods and services, the government helps forestall a more dramatic wave of layoffs and bankruptcies. Simple economics. Obviously it's inefficient and should only be done in times of extreme need, but it is most definitely a good stopgap measure. Useless 'make work' as you call it is obviously a poor idea, but most stimulus projects were needed, just not needed immediately. Also remember that said government spending for stimulus wasn't taking any money out of the pockets of citizens *at the time of crisis* - quite the contrary, a good chunk of the stimulus was putting borrowed money into the hands of the taxpayer - effectively moving a big chunk of our country's debt burden from the private sector to the public. Thus, it isn't a choice between higher government spending and higher consumer spending, but between higher government spending and lower short-term deficits. Thus, the advantages of quickly returning to growth will pay off in better medium term deficits. The only question is when to turn off the stimulus, and how to address debt and long-term deficit growth.

Source

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President Barack Obama on Thursday named a bipartisan panel to tackle exploding U.S. budget deficits and promised it broad leeway to put the country on a path to fiscal responsibility.

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Source

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U.S. debt has more than doubled over the past decade to nearly $12.4 trillion, thanks to a combination of tax cuts, wars in Iraq and Afghanistan, an expensive prescription-drug benefit and the deepest recession since the Great Depression of the 1930s.

The government posted a record $1.4 trillion deficit for the fiscal year that ended September 30, 2009, and deficits are projected to remain stubbornly high over the coming decade as costs for retirement and healthcare programs rise.

This could spur investors including China, the biggest U.S. foreign creditor, to demand higher rates for Treasury bonds, pushing the government's borrowing costs dramatically higher and crowding out spending in other areas.

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The amazing thing is that US is having tensions with China. Making war on China would see US deficit soaring.
War is very expensive. No one lets himself to be defeated on the cheap.
And no one likes a budget cut.

US seems to risk to suffer what Argentina suffered in 1989, because of the bill of the war and soaring debt and deficit... which led to inflation.

If dollar falls, less money goes out from US, which adds inflationary pressures.
Oil would become more expensive and chinese goods would be more expensive.
So the average American would suffer raise in prices.

In the macroeconomical level a fall of dollar would bring US a bit closer to macroeconmical stability: reduced trade deficit and devaluated debt.
But the adjustment would be painful for Americans.

Source

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"The jobs picture is still weak," said Jennifer Lee, a senior economist with BMO Capital Markets in Toronto. "It will be a while yet before we can get decent, sustained job growth. And until then, prices will also remain in check, although there are some pressures building in the pipeline."

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This article could be interesting to read

15/12/2009 An Empire at Risk

Let me just add another thought here. Er, I know this doesn't directly relate to this thread, but:

When you have over-paid snow plows in your city going around in pairs at 3AM, and you see sparks flying due to their contact with the bare payment, it should be obvious why we are in such trouble as a country.