J.K. Galbraith: "It is more conservative to tax and spend, then borrow and spend". True or false?

Seems true to me. Until 3 years ago deficit financing was purely in the domain of liberal politics.

False dichotomy, assuming that government must always grow. There's no need to do either. Rather than borrowing or taxing, cut spending, and let the private sector grow instead of government.

True

Yes, that would be great. Neither of our two major parties favors cutting spending. Government is growing at a faster rate under Bush than any President since LBJ, and it is not all related to defense either.

The problem with that statement is that there can never truly be a balanced budget. Since budgets are based on projected revenues and spending (the budget) is based on these projections, it is nearly impossible to "balance" them.

In an economic slowdown, tax revenues fall, therefore in those times there will always be an acutal defecit, but not necessarily a "budget" defecit.

In an economic upturn, revenues exceed projections, and there is a surplus.

The problem in our current political climate is that any surplus is not returned to the private sector, it is spent. Paying down past defecits (the debt) is usually only a small portion of where surplusses go. It is fiscally irresponsible and both parties subscribe to this attitude.

Obviously true. And even truer in practice than in theory since the people who put conservatives in power (and keep them in power) are never going to pay much tax anyway - whereas with borrowing, we all pay.

Of course the ideal, conservative and liberal, would be to do neither - but until we find a few new political parties, that is not going to happen in the US.

There is an easy solution to the "projections" dilemma. All expenditures for the following year should be paid by revenue which came in the previous year. There is no need to guess at revenue as it will be definitive.

And yes, there can truly be a balanced budget.

Why not cut military spending and reduce our foreign policy profile a bit? Than raise taxes back to thier pre-bush rates and re-allocate spending to better benefit the poor?

Even if the new tax money is not redirected for domestic use, perhaps we wouldn't run up such a large deficeit? What is bush doing anyhow? Its never the right solution to cut taxes when you are billions of dollars in debt.

But the Laffer Curve is real. Sometimes the best way to increase revenue is to to cut the tax rates.

Not that I think increasing the revenue would be a good thing, since long experience shows that any extra funds raised are invariably spent on increasing programs, not on reducing the debt, and I don't want to see government grow any further.

It is more fiscally responsible to tax and spend than to borrow and spend. Many local and state governments are required to have zero deficits.

If fiscal responsibility is a conservative goal, then it is conservative to tax and spend--with lots of restraint, though.

I agree that our military budget is much too large. I don't see a way out of this until we give up our Only Standing World Power status. Unfortunately, this has never happened voluntarily in history. It usually is accompanied with lots of internal and external war/strife.

I, too, would like to see a greatly shrunken federal government. We can start with the war on drugs, if only we can get off the addictive notion that all hell will break loose as a result. Then take away all manipulations of the free markets by the feds--dump corporate welfare. I could go on, but if any of us is really serious about shrinking the federal government, I'd suggest reading Harry Browne's book, "The Great Libertarian Offer." Although I'm not a member of the Libertarian party, I sympathize with a lot of the ideas Browne talks about.

There you go, Jaimie--a free plug

I would just about to mention that...if you dont want a fed. government, you should deffinately be a libertarian. I, personally, would prefer to keep the federal government in its current power...bah, I'm no confederate.

How does this tie into hugo's original question?

My ole Dean of Economics, a staunch conservative, told me once in conversation that Reagan's advisors never expected taxcuts to balance the budget, they did expect them to slow the growth of government spending.

How about we tax everyone 100%, take this enormous wealth and divide it equally among all US citizens after deducting what it takes to run the federal government. Kill all social programs, welfare, and handouts...they wouldn't be necessary.

That way the greedy people who think they have to be paid 100's of thousands of dollars would lose their key motivation, that being unnecessary wealth.

Who are these people? Concrete examples, please

Why would anyone work except in the underground economy?