Need some talking points - Why do budget deficits matter?

[FuriousMNDem]

On the campaign trail, it's nice for the candidates to talk about how they will try to balance the federal budget within a few years. However, the average Joe Sixpack will probably not care one bit about the budget, unless budget cuts hurt them.

Most states require that their budgets be balanced, but not the federal budget. So, why should Joe Sixpack care?

[Davis_X_Machina]

1. In the long term, deficits matter....

...because you have to borrow money to pay for stuff, and that money is borrowed at interest.

When taxes are used to pay the interest, you're essentially shovelling money from all of us to some of us -- the some of us who own Treasury debt instruments, that is. Now I have a safe-deposit box with some Series EE bonds in it, so I do see some of that stream of interest -- but guess who owns the majority of US debt instruments? It's not Joe Sixpack.

And when a tax dollar is used to pay interest on money already borrowed, it's not available for other purposes, like actually finding bin Laden, or Headstart, or whatever your favorite Federal program might be.

[madrchsod]

2. why joe six pack should care

the next time he goes to buy his big v-8 pickup truck the interest will be alot more than before. buying a new house or remortage,that interest won`t be 5%,it will be alot higher.

[papau]

3. Gop says rates are low - but rates are low when economy is lousy

- deficits make those "low rates" a bit higher - not a large amount unless the world has given up on us ever getting our house in order - but that small amount higher that the interest rates stops a small amount of investment which stops a small amount of growth -

and the whole thing feeds on itself until you get the Reagan/Bush41 years of a 14 month disaster caused by the non-drop in interest rates in 1981 after the Tax cut became known (10 year rates become sticky in following the Fed short term rate down), followed by huge stimulus of 3 trillion added to Carters 1 trillion National Debt getting us no real increase in growth - Reagan's 8 year 3.33% average annual compound GDP growth over 8 years being just about what Carter achieved - Carter had 3.25% average compound growth over 4 years.

So the only result was that the rich were given 3 trillion dollars via lower taxes over the 12 years.

Clinton raised taxes, deficit projections dropped, and interest rates were thereby just a little bit below where the current econ activity level could have set them, so we got a little more investment, a little more growth - and then the feed back of the prior good year into the new year made down cycles small and gave us the best GDP growth since JFK.

[roguevalley]

4. Because they steal the future. They dry up money, raise interest

rates and make sure that you and I and our parents and kids don't have __________________________ <fill in the blank>

It strategically weakens America. If we are a borrower nation, then
we have to owe someone don't we.

[ramapo]

5. Beholden to foreign investors

We NEED foreign investors to buy our bonds because we don't buy enough of them. We are very vulnerable. We depend on the rest of the world to finance our debt. What if they find a better investment?

[stevebreeze]

6. A simple analogy

Say you have gainful employment of modest means. You owe on you house and car, but little else. Next you get several credit cards, the National debt card and the trade debt card. The interest payment are small at first, but as you continue to pay interest only, and then at time not even all the interest, interest payments roll into the principal. As you debts get ever larger the people who loan you the money, start to demand a risk premium since you don't have enough to pay what you own now the principle keeps growing at an ever accelerating pace. This not only drives up the portion of the budget nessicary for debt payment, it tends to drive inflation. This is how Banana Republics end up with 500% inflation rates.

No I don't think inflation is the misadministration’s aim. I think they fully intend to force out any spending on social programs. Keep in mind that high payment on the national debt is a bonus to those who are net lenders and a burden to those of us who are net debtors.

:kick:

[begeegs]

7. This article should be used to Joe Six Pack...

Articles that Joe Six Pack will understand will go far. This being an example of a long list of social programs that we all take for granted that was slashed.



http://edition.cnn.com/2003/EDUCATION/11/07/four.day.school.ap/

DIXON, Kentucky (AP) -- Webster County High senior Zach Cato spends his Mondays mowing lawns and watching football game films. He is not cutting class -- he is taking advantage of his school district's move to a four-day week.

"The only ones who are complaining are the ones who don't want to be here at all," the 17-year-old Cato says.

By using the shortened schedule, the district of 1,900 students in this western Kentucky farming and coal mining region hopes to save about 2 percent of its annual spending -- or $200,000 -- on bus service, substitute teachers and utilities. It is the first district in Kentucky to go to four days.

Mostly rural school systems in at least 10 other states have made the switch to save money: Arizona, Colorado, Kansas, Louisiana, Arkansas, New Mexico, Oregon, South Dakota, Wisconsin and Wyoming, according to a 2002 survey by the National School Boards Association.

"It's the easiest way to cut to get a quick result fast, to get more money," said Linda Embrey, a spokeswoman for the association.

The verdict is still out on whether students perform as well, and whether schools save enough money to justify the switch. But Webster County Assistant Superintendent Rachel Yarbrough said it appears to be a success here so far in its first year.

Students are encouraged to make dentist's and doctor's appointments on their Mondays off, so that they miss fewer classes. Another benefit to having no school on Monday is that teachers have more time for planning and faculty meetings, said Webster County High Principal Carolyn Sholar.

And the students "really feel like they're not as burned out," Sholar said.
Added stress for families

Rachel Yarbrough, assistant superintendent for Webster County school district, talks about the advantages of a four-day school week.


To meet state guidelines, the school day was extended by 30 minutes. In addition, schools will be in session on Mondays in eight weeks of the year -- the last four weeks of each semester -- to help student prepare for Kentucky's end-of-the-year assessment exams.

Tabitha Daniel, an education professor at Western Kentucky University, said many parents might not be able to afford additional child care if their children are off on Mondays. She questioned whether the money saved is worth the additional stress to families.

"I just think there are going to be a lot of children that are unfortunately going to be alone on Monday," Daniel said. "I just think that's very, very sad."

To help parents find day care on Mondays, the Webster school system put together a pool of baby sitters who could be called -- some of then high school students. The sitters were given training in first aid and CPR. Churches are also offering programs to watch youngsters.

Around the country, school systems are being squeezed simultaneously by budget cuts and by more stringent federal education standards.

"Right now, you can't afford to do anything that will slow the progress of student achievement, but you also can't operate at a deficit or print your own money," said Brad Hughes, spokesman for the Kentucky School Boards Association.

The Webster school system decided to change its schedule rather than cut extracurricular activities.

[many a good man]

8. Long term deficits weaken the country

I would tell Joe that deficits hurt him today and even more tomorrow. Every year the government has to pay interest on that debt. That's billions of dollar wasted because it takes away from things like maintaining highways, inspecting meat-packing plants, supplying our troops, fighting crime and terrorism, health care for old folks, etc.

We also see the feds cut back on subsidies to states so you see all your state and local taxes and fees going up.

A lot of that debt is held by foreigners, especially China. That gives them leverage over us. They can pull out and dump their bonds and send our economy into a tailspin.

It also sucks a lot of investment money out of the economy that could otherwise go into expanding businesses. Expanding businesses create jobs and generates new tax revenue.

Short term deficits are OK if its for investment in America, if its spent on things that improve the economy and make the country a better place. If the deficit doesn't stimulate the economy to generate enough tax revenue, then eventually they're going to have to raise taxes. It guarantees it.

Its been proven that tax cuts don't stimulate the economy enough to pay for themselves. Especially since all the tax cuts we've seen over the past twenty years favor the rich guys who don't need the extra money in the first place. This is how the rich get richer and the poor get poorer. Proportionally, the wealthy are now twice as rich and pay half the taxes compared to what they used to.

We've run huge deficits over the past twenty years, almost all of it during Republican administrations. Look at how the quality of life has deteriorated for middle class Americans. It takes two jobs to live the same lifestyle that one job provided twenty five years ago. That's how it hurts you, Joe. One year's deficits doesn't mean much but look at what's been happening to us in the long run.