John Kerry's Bad Economic Ideas

[Silver]

Citizens for a Sound Economy
July 1, 2004


John Kerry’s Bad Ideas: Part 1 in a Long Series


The plan to cuts dividends would hurt the U.S. stock market.




Among John Kerry’s worst proposals is his plan to reverse the dividend tax cuts for top earners. It is no coincidence that, since May 2003, when President Bush signed pro-growth tax cuts into law, the economy has been growing at an annualized rate of over 5 percent. This is the fastest pace since 1984—the year not coincidentally following big tax cuts signed by then-President Ronald Reagan.

In both cases, economic incentives were changed—and people respond to incentives. Reagan increased the incentive to work more by allowing people to keep more of their hard-earned money. He lowered the top marginal rate from 70 percent to 50 percent and then to 28 percent. Having to give 28 cents on the dollar instead of 70 cents on the dollar to the federal government made more people interested in earning extra dollars, and the economy boomed. Working became less expensive.

The Bush tax cuts of 2003, which John Kerry is threatening to repeal, made it less expensive for Americans to invest. The tax cuts lowered the government’s take on investments by about 50 percent. Since investing became less expensive, more investing has been done.

American businesses have responded by reversing a 25 year trend against offering investors dividends. S&P 500 favorable dividend activity, defined as increases and initiations of dividends, has increased by 55.2 percent over the last 12 months. In the month following the tax cut alone, 179 companies increased their dividend—the most since 1979. This sound economic activity would not be happening if the prohibitively high double tax on investments were still in place.

The Joint Economic Committee (JEC) recently reported that since the 2003 tax cuts were passed, the economy has expanded at a rate of 5 percent, after adjustment for inflation. JEC Vice Chairman Jim Saxton says, “A key factor in this acceleration of economic growth has been the recovery in business investment, which has also boosted manufacturing…the more recent turnaround of investment has led to a booming economy.” So far this year, payroll employment has increased by more than 1 million jobs.

And John Kerry wants to reverse this trend. To his credit, John Kerry was in favor of eliminating double taxation on savings as recently as two years ago. But his current stance is clear: soak those who invest in our economy. This message may resonate in some far-left corner of John Kerry’s party, but if this is a politically calculated flip-flop, Kerry’s advisors should be sure to tell him that two-thirds of voters own stock.

John Kerry is known to flip-flop, so there let’s hope he’ll flip-flop again—a flip-flop-flip-flop—when he realizes Americans do not want a president who runs for office promising to do damage to their retirement savings.

[kramsret]

Silver, how many boards have you posted this on today?

[thaanatos]

not relevant, Krammie...the question should be how many times have you responded to it on this board....

[Zan de Man]

Not really relevant either Thaan. This poster takes no part in the life of the board. He posts polemic and pushes off. He doesn't deserve our attention.

[jpn of Seattle]

Silver, your post is so wrong.

It states the bullshit belief that the recession was due to lack of supply--that if only businesses had more money to spend, they'd invest in more production which would stimulate growth. You wrote, or quoted:
The Bush tax cuts of 2003, which John Kerry is threatening to repeal, made it less expensive for Americans to invest. The tax cuts lowered the government’s take on investments by about 50 percent. Since investing became less expensive, more investing has been done.
Unfortunately, this is ass-backwards. The recession was caused by a lack of demand, not of supply. The reason that Bush's attempts to stimulate the economy have been so ineffectual is that his tax cuts for the rich were targetted at the wrong group of people.
Since WWII we've known how to address recessions--stimulate spending. The way to do that is to put more money in the hands of those who will spend it--people with lower incomes. So extending unemployment benefits is extremely effective, but Bush and his GOP buddies refused to do that, opting for more tax cuts for the rich. Also aid to state and local government, and temporary tax credits targetted at low income folks all have a high "multiplier effect" in stimulating the economy.
Tax cuts for the rich have a low multiplier effect.
Think about it:
If the owners of production have lots of cash, but demand is low, would they hire more workers? NO. They wait until demand picks up. Giving more money to high-income earners, like those who benefit from dividend tax cuts, is pissing money away. That's why this recession has been so lousy at generating jobs. All the stimulus was going to the wrong group.

[jpn of Seattle]

Here are some choice thoughts from last week's column by Paul Krugman, Princeton economist:
When does optimism — the Bush campaign's favorite word these days — become an inability to face facts? On Friday, President Bush insisted that a seriously disappointing jobs report, which fell far short of the pre-announcement hype, was good news: "We're witnessing steady growth, steady growth. And that's important. We don't need boom-or-bust-type growth."
But Mr. Bush has already presided over a bust. For the first time since 1932, employment is lower in the summer of a presidential election year than it was on the previous Inauguration Day. Americans badly need a boom to make up the lost ground. And we're not getting it.
When Mr. Bush took office, the percentage of adults who have jobs stood at 64.4. By last August it had fallen to 62.2 percent. In June, the number was 62.3. That is, during Mr. Bush's first 30 months, the job situation deteriorated drastically. Last summer it stabilized, and since then it may have improved slightly. But jobs are still very scarce, with little relief in sight.
Bush campaign ads boast that 1.5 million jobs were added in the last 10 months, as if that were a remarkable achievement. It isn't. During the Clinton years, the economy added 236,000 jobs in an average month. Those 1.5 million jobs were barely enough to keep up with a growing working-age population.
What about overall growth? After two and a half years of slow growth, real G.D.P. surged in the third quarter of 2003, growing at an annual rate of more than 8 percent. But that surge appears to have been another blip. In the first quarter of 2004, growth was down to 3.9 percent, only slightly above the Clinton-era average. Scattered signs of weakness — rising new claims for unemployment insurance, sales warnings at Target and Wal-Mart, falling numbers for new durable goods orders — have led many analysts to suspect that growth slowed further in the second quarter.
What should we be doing differently? For three years many economists have argued that the most effective job-creating policies would be increased aid to state and local governments, extended unemployment insurance and tax rebates for lower- and middle-income families. The Bush administration paid no attention — it never even gave New York all the aid Mr. Bush promised after 9/11, and it allowed extended unemployment insurance to lapse. Instead, it focused on tax cuts for the affluent, ignoring warnings that these would do little to create jobs.

[Fredfredson]

Well said JPN :wave

Anybody who follows the real economic situation will quickly see that Bush's Economic Stimulus hasn't worked as advertized.

F
:pooter

[ninjalooter1701]

The plan to cuts dividends would hurt the U.S. stock market. Just what we need, another overinflated stock market ready to blow up.

[thaanatos]

would be increased aid to state and local governments, extended unemployment insurance and tax rebates for lower- and middle-income families
the three worst things you could do.....government spending is too specialized....it doesn't improve job creation across the board like consumer spending does...extending unemployment insurance simple reduces incentive to seek out a job or start a new self-employment situation....and I assume by tax 'rebates' instead of tax 'cuts' you mean disburse money to people who haven't paid taxes....that turns the tax system into a welfare system....if you mean tax 'cuts' I agree....we need more tax cuts for everyone....

[jpn of Seattle]

the three worst things you could do.....government spending is too specialized....it doesn't improve job creation across the board like consumer spending does...
But thaan, nothing prevents consumer spending more than consumers having no money to spend.
Want to stimulate spending? Give the people some money to spend! They buy things! Businesses begin to see their inventories decrease and start producing more! They start hiring! It's worked time and time again in the past!

extending unemployment insurance simple reduces incentive to seek out a job or start a new self-employment situation....
To some degree this is true, but not to the extent you infer. Unemployment benefits in the US are so niggardly that most people prefer to work. We also have a reasonably stong work ethic and lots of people don't feel comfortable receiving unemployment compensation except for brief periods of time between jobs. THere are exceptions if course, but I'm talking in the aggregate.

and I assume by tax 'rebates' instead of tax 'cuts' you mean disburse money to people who haven't paid taxes....that turns the tax system into a welfare system....if you mean tax 'cuts' I agree....we need more tax cuts for everyone....
That's exactly what I mean. Money to the poor who are going to spend it immediately. The multiplier for this kind of spending is about 1.5 dollars for every dollar spent. The multiplier for dividend tax cuts, in contrast, is less than twenty-five cents on every dollar spent.
Your final statement, imho, is one that doesn't do your intellect much credit. We always need more tax cuts? Always? No matter what? Is there some bottom line beyond which we should not cross?
Are deficits of any concern to you at all? Will they be a drag on the economy at some point?
Do you run up every credit card you have to the max? Why do you apparently think the US can?
Do you have parents who are on Social Security and Medicare? Should we just stop funding those programs?
Should we just disband the military?

[Silver]

jpn, you are focusing as evidenced by your last statement on one part of an economic upturn........the creation of new jobs. By giving the top earners tax breaks more money is being fundled into the pockets of the majority of people who are either small business owners or who hold positions high enough in larger companies to influence the creation of new jobs in these companies. This will lead to more job creations. How is removing this incentive going to help the entrpreneur who is looking for more capital in order to expand his business and thus add more jobs?

If we had not voted in NAFTA and most of our manufacturing jobs had not gone to Mexico or overseas in search of cheap labor how many more jobs would be available here now? And how many more new manufacturing jobs would be created each year? For the first time in the history of our country we are now becoming a country of service-oriented and high-tech jobs rather than maufacturing jobs. That in itself has done more to inhibit the growth of new jobs here than anything else.

It is short-sighted though to look at the economic picture based only on the number of new jobs created. Overall, the economy is growing and that is what is important.

It is no coincidence that, since May 2003, when President Bush signed pro-growth tax cuts into law, the economy has been growing at an annualized rate of over 5 percent. This is the fastest pace since 1984—the year not coincidentally following big tax cuts signed by then-President Ronald Reagan.

Sorry, my reply took so long, but I type slowly due to tendonitis in my right hand.

[jdanton]

I wonder how many remember when the interest you paid on a car loan or a credit card was tax deductable?

How many remember who changed that?

How many think it was better to have those things as a deduction than not have them as a deduction?

[thaanatos]

nothing prevents consumer spending more than consumers having no money to spend
agreed, but government spending doesn't put money into the hands of consumers.....what do consumers have that the government buys?....nothing....the money goes to a limited number of defense and road construction contractors.....better that the money be spread across the entire spectrum of tax payers.....

[thaanatos]

Unemployment benefits in the US are so niggardly that most people prefer to work
duh?!?....you would prefer they be so high that people would prefer to be on unemployment?

[thaanatos]

Money to the poor who are going to spend it immediately
fine, do that then.....just don't pretend it has anything to do with taxes....be honest and admit its welfare and be done with it.....

[thaanatos]

Your final statement, imho, is one that doesn't do your intellect much credit. We always need more tax cuts? Always? No matter what? Is there some bottom line beyond which we should not cross?

as long as the government can afford 50 million dollars to build a rain forest in Iowa, they don't need another $50 from me.....taxes can go down a long way before the government is hurting......

[matthew6]

We always need more tax cuts? Always? No matter what? Is there some bottom line beyond which we should not cross?

I agree with Thaan on this one, only I might be a bit more radical. The bottom line beyond which the federal government should not cross is levying any tax on income. I think the federal government has absolutely zero right to forcibly confiscate a person's legally earned property. We did fine without an income tax and without a massive federal bureaucracy for well over a century.

We don't need government to regulate every damned thing. Are we human beings or are we sheep? Can't we do anything for ourselves? Can't any of us be free to use what is ours as we see fit instead of as bureaucrats see fit? If you insist on creating a police/mommy-state to look after every little detail, keep it confined to the borders of your own state. The Federal government is not supposed to be as powerful as it is. The constitution put strict limitations on it for a reason. But it has become corrupt. It is now the plaything of corporate agendas, of "moral busybody's," of politicians who have learned they can buy votes by promising voters that they'll extend federal power to do good for their group.
It's been said before and I'll say it again: Government is FORCE. Government's sole function is to force people to do something they don't freely conceive of doing. It is coercion. There is no way of getting around that. And if you continue to give government more and more money and more and more license to force people to do what they don't want to, you are making it more and more corrupt. It becomes a more and more attractive target to use to get others to do your bidding, which you may think is great if it's you or your buddies, but what if it isn't?

I agree with a constitutionally limitted federal government, ie: is limitted almost exclusively to protecting the country from foreign aggression, regulating trade between the states and other countries, and dealing with foreign relations. You don't need an income tax to do that.

[Jayne B]

State versus Federal power is not an exclusively American issue by a long shot, and there is no magic balance between the powers of the two. It's all an experiment, in the United States as much as the rest of the world, just a bit longer than some and bit shorter than others.

As with any experimental design, there have to be recognized ways of altering the balance when necessary. And there have to be ways to keep either side from gaining too much power. (For how NOT to alter the balance, look at the former Yugoslavia: a previously strong central government got the wrong leader, who promptly made hash out of 40 years of relative stability and roused a whole lot of sleeping separatist tendencies.)

I don't, however, subscribe to the theory of the above posters that the solution to a growing imbalance of power is to starve out the federal government by depriving it of tax dollars until it shrinks down to size. The state governments need to loudly protest the downloading of federal services into state budgets, which force THEM to raise taxes, and the taxpayers need to become very much more informed and vocal about where their governments (both state and federal) are spending those tax dollars.

And the galloping herds of professional lobbyists (who now have their OWN lobby, to counter the negative PR they naturally garner from all their meddling in government - thank you Jon Stewart!) need to be reined in, if not rounded up and sent to the glue factory.

THEN you can start re-negotiating the balance of power between state, federation, and individual.

Simply decreasing federal taxes, especially when it ends up costing you decreased state services and increased state taxes, isn't going to do any of you a bloody bit of good.

[jpn of Seattle]

jdanton wrote:

I wonder how many remember when the interest you paid on a car loan or a credit card was tax deductable?
How many remember who changed that?
How many think it was better to have those things as a deduction than not have them as a deduction?

Welcome to the board! I don't know who/when that change was made. I'll guess 1986 as part of Congress's simplification of the tax code?
I think it's better NOT to have personal interest be deductable. Here's why:
1) It's a further complication to an already complicated tax code.
2) It's difficult to police and thus would encourage cheating.
3) It's regressive--it would help the richest the most, and the poorest the least. Most people don't even itemize their deductions. You almost have to be paying off a mortgage to make itemizing worthwhile and that leave an awful lot of low-income folks who rent out in the cold.
4) It would be a tax cut. In this age of Bush's deficits, we need to explore ways of INCREASING tax revenues, not decreasing them.

[jpn of Seattle]

Silver wrote:
jpn, you are focusing as evidenced by your last statement on one part of an economic upturn........the creation of new jobs. By giving the top earners tax breaks more money is being fundled into the pockets of the majority of people who are either small business owners or who hold positions high enough in larger companies to influence the creation of new jobs in these companies. This will lead to more job creations. How is removing this incentive going to help the entrpreneur who is looking for more capital in order to expand his business and thus add more jobs?

Silver, first of all, thanks for replying. You were getting a really bad reputation (at least in my mind) as someone who merely dropped posts and then ran without defending them at all. I'm glad to see you join in in the give and take.
Per your post, it's almost as though you didn't really read mine. You say that tax breaks for job creators will lead them to create jobs. But the whole point I was making is that this logic is unreasonable. No company, big, little, or in between will begin hiring when the DEMAND is not there. The way to stimulate economies is to stimulate demand.
Once demand is there, companies respond with alacrity.
Your logic is ass-backwards.

[jpn of Seattle]

If we had not voted in NAFTA and most of our manufacturing jobs had not gone to Mexico or overseas in search of cheap labor how many more jobs would be available here now?
Few economists, including many conservative economists would support your statement, (although I'm sure you can find one or two). But there is precious little evidence to support your statement. Please link to any study or report analyzing (as apposed to speculating or pontificating) the current jobs picture in terms of jobs lost to outsourcing.

It is short-sighted though to look at the economic picture based only on the number of new jobs created. Overall, the economy is growing and that is what is important.
Not at all. Job creation is key to a healthy economy and society. Unemployment in poisonous.
And as Krugman points out, there is much to still be concerned about regarding the current state of the economy.

[jpn of Seattle]

I wrote: nothing prevents consumer spending more than consumers having no money to spend
thaan responds:
agreed, but government spending doesn't put money into the hands of consumers.....what do consumers have that the government buys?....nothing....the money goes to a limited number of defense and road construction contractors.....better that the money be spread across the entire spectrum of tax payers.....
By government spending, as Krugman wrote, which I printed in bold, I mean that most effective job-creating policies would be increased aid to state and local governments, extended unemployment insurance and tax rebates for lower- and middle-income families. The aid to state and local governments goes to hiways and schools and low-income programs.
So you see, government spending, when it's the right kind of spending, does indeed put money into the hands of consumers--and into the hands of the consumers most likely to immediately spend it.

[jpn of Seattle]

fine, do that then.....just don't pretend it has anything to do with taxes....be honest and admit its welfare and be done with it.....

Call it whatever you want. The point is not what we call it, the point is what works to pull the economy out of the doldrums and start creating jobs.

[jpn of Seattle]

as long as the government can afford 50 million dollars to build a rain forest in Iowa, they don't need another $50 from me.....taxes can go down a long way before the government is hurting......

Aggressive denial such as this doesn't just hurt government, it hurts all of us. As the deficits mount, and the accumulated debt metastasizes, the need to finance the debt becomes a larger and larger drag on the economy. Even some conservative Republicans are recognizing this uncomfortable fact.
I find bland statements that lower taxes are needed to be silly. It's so easy to say "cut taxes" without specifying the huge spending cuts which need to accompany them. If you don't support raising taxes to try to bring the budget into balance, then specifically what programs do you think we should--and politically could--cut?
Here's a hint: Cutting a $50 million program in Iowa is going to leave you short by over $300 billion.

[jpn of Seattle]

I agree with a constitutionally limitted federal government, ie: is limitted almost exclusively to protecting the country from foreign aggression, regulating trade between the states and other countries, and dealing with foreign relations. You don't need an income tax to do that.

Right Matthew, we could have won WWII with bake sales. Do you know any elderly folks? Ask them how important Social Security and Medicare are to them.
Let us know what you find out.

[jpn of Seattle]

And the galloping herds of professional lobbyists (who now have their OWN lobby, to counter the negative PR they naturally garner from all their meddling in government - thank you Jon Stewart!) need to be reined in, if not rounded up and sent to the glue factory.

Jane--I try to never miss The Daily Show on Comedy Central. Superb!!!

[matthew6]

Right Matthew, we could have won WWII with bake sales. Do you know any elderly folks? Ask them how important Social Security and Medicare are to them.
Let us know what you find out.

What was the income tax like during WW2? I don't actually know, but I'm sure it was nowhere near what it is during modern peacetime. In any case, there are plenty of ways to fund a war (especially one the people believe in) besides income tax. War bonds were a big part of funding the war effort, for example, and I love your bake sale idea :). You could also institute a sales tax, tariffs, taxes on specific goods, etc. But, if you cut the government down to a constitutional size, you will find that the vast majority of what you collect can go directly to defense and the government would have very little trouble defending us from evil people everywhere, and totally without being mafiosos and confiscating income.

Social security is, imho, one of the biggest snafus our government has gotten involved in. I'm all for people investing for their future, but forcing people to fork over their income into a program that gives them almost no return on their "investment," coupled with the risk, that as the program wears on, they will get absolutely nothing back, is not only foolish, but completely immoral.
If I were allowed to keep the money I earned which is confiscated "for SS", for example, I would put a good deal of it into investments that would return, over my lifespan, several times what I put into them. And, in so doing, that money would not be flushed into a vast and inefficient federal bureaucracy, but it would be put to productive use by industry, creating jobs, fueling innovations, developing drugs, technologies that could better all of our lives.
In any event, I think SS and medicare are fine as long as they are funded at the state level or by similar voluntary charitable organizations, but the federal government has no real constitutional authority to be involved in either.

[jpn of Seattle]

In any event, I think SS and medicare are fine as long as they are funded at the state level or by similar voluntary charitable organizations, but the federal government has no real constitutional authority to be involved in either.

The "no constitutional authority" proposistion has been presented to federal courts time and again and failed every time. Simply put, the federal courts believe there is indeed a constitutional authority.
Sorry.

Yes, if you were smart and lucky, you probably could invest over your life time and get more out of it than what your social security benefits will total. Of course if you were not smart, not frugal, and/or not lucky you probably wouldn't.

In any case, the choice was made for us several generations ago. Now we are stuck with a pay-as-you-go system in which we today are paying the benefits of the current SS recipients. Transitioning away from this system will take over a trillion dollars since we need to keep paying the current retiree's benefits at the same time we start building up our own private retirement accounts.

Things are complicated, aren't they? We pine for simple solutions, but reality is just a little more difficult than that.

[matthew6]

The "no constitutional authority" proposistion has been presented to federal courts time and again and failed every time. Simply put, the federal courts believe there is indeed a constitutional authority.
Sorry.

That's okay, you don't have to apologize.
I said "no real" consitutional authority. The judicial branch has overlooked the constitution when this has come up because it is impractical to follow the constitution on this matter. Similarly, I wouldn't expect the supremes to rule that federal reserve is unconstitutional any time soon. That doesn't mean that it ISN'T.


Yes, if you were smart and lucky, you probably could invest over your life time and get more out of it than what your social security benefits will total. Of course if you were not smart, not frugal, and/or not lucky you probably wouldn't.

If you aren't smart or lucky, you may also get cancer or get hit by a bus. I don't think that means everyone should be forced to buy health insurance if they don't want it or don't need it, just because some people do. And you don't have to be that smart or lucky. For jimminy's sake, you could put some money in a savings acount and it would be less risky and have a higher return than SS. Besides, young people, smart, frugal, lucky, or otherwise, cannot expect to get their money back on SS. The spicket has to be turned off sometime, or it'll bankrupt us (not that we aren't bankrupt already -- i mean, we've been operating on monopoly money for the last ninety years or so).


In any case, the choice was made for us several generations ago. Now we are stuck with a pay-as-you-go system in which we today are paying the benefits of the current SS recipients. Transitioning away from this system will take over a trillion dollars since we need to keep paying the current retiree's benefits at the same time we start building up our own private retirement accounts.

First, nobody chooses anything for you. You are only as stuck as you want to be. I don't know about the figures, but I do know a trillion dollars is probably a bargain compared to what we'll be up against if we continue.

[jdanton]

Government regs:

If we did not have a government setting and enforcing regulations for businesses, there would be far more "enrons", and we'd likely have are that no one could breath.

Anyone who would trust non regulated industries is a fool.

Interest deductions:

While it is true that most lower/modest income people don't itemize, the standard deduction is fairly generous, and would be adjusted to account for credit card interest, car note interst and such.

In this way, this change hurt many. The homeowner could borrow money against the house, and it would be tax deductable; even if actually used to buy a car. That option wasn't there for the guy who didn't own a home.

My suggestion for making the system work better is not to tax the first $15,000 in any way shape or form. Then, have a progressive social security tax with no maximum of taxible income, and a progressive income tax.

Neither necessary needs to be dramatically progressive.

INcidentally, I believe 1986 is correct; under Reagan.

[thaanatos]

Here's a hint: Cutting a $50 million program in Iowa is going to leave you short by over $300 billion.
and here is another hint.....rain forests in Iowa are only a summer shower compared to the flood of overspending that goes on in government....

50% of the budget of the Department of Education never leaves Washington because it finances a beauracracy that has given us nothing except non-permforming school systems....take the budget of the Department of Education and give half directly to the states and put the other half back into tax rebates.....no child would be deprived of a cent....then tear up every federal form that a school adminstrator has to fill out to stick in a filing cabinet and never get read and save billions more.....

[jpn of Seattle]

Similarly, I wouldn't expect the supremes to rule that federal reserve is unconstitutional any time soon. That doesn't mean that it ISN'T.

Uh, yeah. It does.

[jpn of Seattle]

First, nobody chooses anything for you. You are only as stuck as you want to be. I don't know about the figures, but I do know a trillion dollars is probably a bargain compared to what we'll be up against if we continue.

What planet do you live on? Nobody chooses anything for you? Come on, grow up. We live in a democracy which means that sometimes decisions are made you don't agree with. Deal with it.
Five people on the Supreme Court chose my president for me, and I've had to live with that obnoxious choice for 3.5 years.
In democracies, sometimes you have to live with inconvenient realities. Sometimes the votes don't go your way. Sometime they do and you lose anyway.
So you fight on. But don't play the petulant fool, closing your eyes to reality and pouting when things don't go your way.
Social Security and Medicare are reality. They aren't going away because one of the largest and most powerful voting blocks in America are the "grey panthers"--the retired folks who depend on these two programs in order that they can live a decent life in their waining years.
I think Social Security and Medicare, for that reason, are two of our most treasured programs and proudest achievements.
Let's work on securing them, not pull the rug out from them and the millions of elderly folks who depend on them.

[jpn of Seattle]

....take the budget of the Department of Education and give half directly to the states and put the other half back into tax rebates.....
You could eliminate the entire Department of Education spending and still be short by about $250 billion.

[jpn of Seattle]

Here is a wonderful, interactive way of getting familiar with the realities of the federal budget. Enjoy.
http://www.kowaldesign.com/budget/

And here's what happens when tax-cut maniacs like Bush, Dick "Reagan proved deficits don't matter" Cheney and thaan get their way:
http://www.kowaldesign.com/budget/images/debt.gif

[jpn of Seattle]

http://www.kowaldesign.com/budget/images/interest.gif

What's fascinating is that almost everything we think of as government...the Coast Guard, the CIA, FBI, IRS, the Freeway system, the boarder patrol, regulating utilities, regulating business, etc. is all in that 30% "other" catagory.

Oh, and take a look at the interest portion of our budget. As interest rates rise, and our national debt rises, what do you suppose is going to happen to that slice?

[jpn of Seattle]

Here's another good budget site (or, at least the opening graph is good):
http://www.federalbudget.com/
They write:
Last year (FY03) the U. S. Government spent $318 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $15 Billion, Education at $61 Billion (thaan's favorite), and Department of Transportation at $56 Billion. So far in FY04 the interest on the National Debt has already cost us $190 Billion, more than ten times what NASA spends in the whole year!

[jpn of Seattle]

Wow. Found another great site. You can control the budget. Add, subtract to your heart's content.
http://www.budgetsim.org/nbs/