The Truth About the Deficit and Taxing the Rich


moneyThe United States of America is poised to spend about a trillion and a half more dollars than it will receive in 2011. That’s more than three times the deficit in 2008, when big spender George W. Bush left office, just in case you were wondering.

The national budget isn’t much different than our household budgets. Money comes in, and money goes out. Granted, it’s on a much larger scale, but it’s the same concept, nonetheless. When we don’t have enough money to cover all of our expenses, we either have to cut costs or use credit – same thing with the government. 

We may borrow from different sources (Uncle Sam takes loans from China while most of us use Visa or MasterCard) but we have similar rules. We borrow money, pay interest on it, and hope to pay it all back someday. We also have a cap on how much we’re allowed to borrow. For us, it’s called a limit, but the government calls theirs the debt ceiling.

Occasionally congress will vote to raise the debt ceiling so that we can borrow more money for our children and grandchildren to someday pay back. Because we need money to study shrimps on treadmills and other important things like that.

President Obama (who hasn’t passed a budget in over 800 days, by the way, even though the House passed one in April) says that we have to raise the debt ceiling or else kids won’t get college loans and other bad stuff will happen. He did not, however, explain why it is my responsibility to pay somebody else’s tuition. 

Once the debt ceiling is raised, they can figure out how to pay back some of the $14 trillion plus we owe. Democratic leadership would like to raise taxes on the rich (aka job-creators) to help close that deficit gap. In a town hall meeting in Maryland on Friday, President Obama said, “If we’re going to reduce our deficit, then the wealthiest Americans and the biggest corporations should do their part…”

He’s been into the ‘shared sacrifice’ rhetoric recently. Which is really sort of odd considering that nearly half of all Americans don’t sacrifice at all. Maybe it’s time for those Americans to start feeling the squeeze from the IRS. Maybe when part of their money is being spent on corporate jet tax credits, they’ll be more likely to vote for people that want to cut the spending and get our financial house back in order.

Image via JollyUK/Flickr

airplanes, barack obama, corporations, discrimination, economy, in the news, media, politics, taxes


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shelb... shelbykarelynn

President Obama (who hasn’t passed a budget in over 800 days, by the way, even though the Housepassed one in April) says that we have to raise the debt ceiling or else kids won’t get college loans and other bad stuff will happen. He did not, however, explain why it is my responsibility to pay somebody else’s tuition. 

:::gets out the crayons to draw a picture:::: LOANS have to be repaid by the borrow (student) therefore YOU are not "paying for someone elses education!!  If you don't understand how student loans work, perhaps you should STOP trying to *educate* other people how the *debt celling* works --- JUST SAYING!! 

nonmember avatar Bundy

"Democratic leadership would like to raise taxes on the rich (aka job-creators) to help close that deficit gap."

The rich have seen their piece of the pie get larger and larger in the last decade. Where are all the jobs that these so called "job-creators" have been creating with all their money? We have been told to give the rich tax breaks, help them get even richer, and they will create jobs. We've been hearing this since Reagan with his trickle down effect, but it is a total failure. The economy was best under Clinton when the rich paid more taxes. It didn't hurt them to pay more taxes, business was booming, people were working. With the rich tax cuts, jobs have disappeared, but the rich are still raking it in. They don't want to just get richer, they seem to prefer to get richer while watching everyone else get poorer in the process. I guess when everyone else is homeless, they will feel even better about themselves and all they have accumulated.

Haven't you noticed that the rich can make money even off of disaster? Yes, they will tank the economy but just like with mortgage derivatives they will be shorting bonds and debt, betting on the disaster (that they have created) and profit by it.

butte... butterflymkm

Agree with the above comment. There is a big difference between some silly science grants (the kind that don't work to did cures for disease or work to improve peoples quality of life) & student loans which must be repaid (with interest) so we can have more college educated people in the workforce. When you balance a budget (as you say) you have to sit down with your family (in this case all the big wigs) and look at what furthers the quality of life for people and what doesn't. Certain science grants are just silly and need to be cut. Pensions need a living wage ceiling. There is a lot of disagreement over what is fluff & what isn't but I think the bottom line is looking at what creates more quality for people in this country & what doesn't. We also need to look for ways to create revenue such as with raising taxes but there are other ways such as legalizing marijuana and taxing it. These things seem like a drop in the bucket but added together add up to a lot. There are ways to fix things without leaving people in the dust if we (they) would just look harder and work harder to find them and cut the red tape. But I also know that ALL politicians are bought and cater to the one holding the pursestrings not the average person

angev... angevil53

although i like the tax refund i get, it's not necessary and if we did away with that sort of thing it might help with all these people that don't seem to want to get off thier butts and work. BUT it wont go into stimulating the's all very hard to say, i don't think there is a clear answer. everyone suffers except for people getting constant PA and i'm not talking about those with disabilities.

purpl... purpleducky

Yeah the deficit is bigger because the programs Obama has enacted (that Congress passed) are supposed to cut the deficit in the long run. They aren't short term solutions. Whereas Bush's plan was to just keep spending onwar shit no matter what.

Fancy... Fancy-Schmancy

If the 'trickle-down' idea (which the Republicans have been peddling for 40 years) really worked, we'd all be employed, well-to-do and healthy.  But those ideas haven't worked.  It's time to stop trying the 'same-old, same-old'.

I'm feeling very 'mom-ish' about this debt ceiling thing. I want both parties to stop bickering --- I don't *care* who started it -- and come to an agreement through fair compromise.  It's the old 'one kid slices the cake, the other one chooses which piece' solution.

starr... starrsitter

This might just be the largest collection of demonstrably false conservative talking points ever assembled in one blog post...congratulations.

nonmember avatar Anon

Love the concept that the people who already pay most of the taxes need to "do their part." Since when are we not doing our part? When is the other half of the USA going to start doing its part to carry the common load? Never, if some of you have your way. ... FLAT TAX! FLAT TAX! FLAT TAX! If I gotta pay most of my earnings out in taxes, you should too! And if you don't work, do community service to pull your share. Shame on everyone who doesn't contribute to the pot yet expects to get more and more out of it.

hotic... hoticedcoffee

Demonstrably false, eh?  And when will you be suppling the demonstrably true democratic talking points?  Because personally, I would be thrilled to hear how this democratic math works, where spending more than you can pilfer doesn't equal a spending problem.  Or how taxing the "rich" is the solution, when we could currently tax every single working American at 100% of their wage and STILL not have enough money to pay off our debt. 

Or, my personal favorite simply because of how clearly this illustrates the absolute ass-backwards mentality that keeps Obamanation all hopped up on hope and change.....where are these American households that are well above their earlobes in debt, sitting around the table prioritizing what improves  quality of life, instead of figuring out how to not go bankrupt.  Ya know, because that's the way you do it.


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