Silly for tax cuts and give-always like debt forgiveness to be compared.
Taking less from someone is not giving them something. The government should always be seeking to take as little as possible and preferably less from its citizens. Government is here to facilitate individual achievement not nanny people.
I say this and I’m not even a fan of tax cuts in our current situation but comparing random freebies to the serious matter of confiscating income makes no sense to me.
This one always gets to me and I just generally don't respond. If someone refuses to acknowledge the difference between allowing a person to keep more of what they earn versus giving money out to someone else then there's just nothing to discuss.
If there was no debt, youd both have a point. In our reality, it seems reasonable to discuss/compare/contrast the vehicles being used to increase our debt. In our current env, both should be condemed but thats not the case apparently. Would either of you like to take a shot at explain why you think growing the debt via tax cuts is "better" than via loan forgiveness?
It's pretty simple, if you expand the debt via a tax cut you can always recoup that by reinstating that tax. If you keep taxes where they are and forgive debt or spend and end up with that same deficit, you have less runway now to add revenues to offset spending. Eventually if you keep spending, you run out of people to tax.
That's the mathematical answer, there's a philosophical/moral one as well as to how much is really right to redistribute, even though we all acknowledge we already have that to some degree. From merely a theoretical exercise,
I'd be willing to pay significantly more in taxes today for some set period of time if I knew that it was going to deficit/debt reduction. We take our medicine and work our way out of it. But we all know that isn't reality, some politician's pet project or entitlement would tout that as a "pay for" and we would end up worse off in the end.
The "IFs" in the first paragraph are inconsistent with our reality, so let's go with our reality which is that when we expand the debt via tax cuts we NEVER recoup the money by reinstating the taxes, at least not completely. So, that' puts you in basically the same place as keeping taxes where they are and forgiving debt. If you want to do hypotheticals (see what I did there
) then your first paragraph should also include the scenario where the debt is forgiven but we raise taxes to pay for it. That's as likely to happen as the one you formulated. So, understanding our reality, I don't really understand how those two are all that different. In my view you're merely arguing about which path to more debt is "better".
To the philosophical/moral one we aren't all that far off..., especially on the bold, but again, that's not our reality and it really doesn't do much to address my question about the two being different in some meaningful way because we both know, fiscal responsibility is lost on both these parties. It's not even worth entertaining the possibility at this point IMO. I find Biden's excuse that forgiveness would have some grandiose impact on our economy as a whole about as laughable as Trump's logic that the tax cuts provided, when they were, would lead to double-digit GDP and they'd pay for themselves that way. Both are nonsensical, so I'm still left wondering why folks see them as meaningfully different approaches.
If you start from a tax saturation level of 50% and you are going to increase your deficit by either a tax reduction or additional spending there can only be one answer. Reducing taxes will reduce your saturation level below 50%. To tread water if you do the same via spending, debt forgiveness, some other vehicle, you would stay at the 50%, thereby having less room between that and the level you cannot tax another dollar.
That was our initial discussion, at least from my viewpoint. We are looking at two options, each with the same deficit at the end of it, one is achieved via a tax reduction, the second being achieved via a spending increase. I don't think mathematically it can be argued which puts us in a worse position because we end up with the same deficit, yet one has now reduced our ability to collect future revenues.
If you want the economic reasons behind it, you must look at things in vacuums and isolate them. The reality is one is rarely tied to the other, we merely spend like drunken sailors. Of course the willingness to pay more to reduce debt is merely a theoretical one, it will never be the case. But again, if you end up with the same deficit, it is beneficial to do it from lower taxes rather than increased spending because proportionally to fix the problem, you at least have that incremental tax revenue to go after to fix the issue down the road because there is going to be more ability to pay those taxes going forward due to a lower saturation point today. If you want to say both are bad, that's fine and I'd agree. But there is definitely a difference in which creates a more recoverable situation, even though we continue to spiral this plane down toward the ground I'd rather have the option with more altitude to try and fix it.