Economics #2: Deficits and Debt

In October, we are talking about Economics. Last week, we talked about Unemployment and Compensation. This week, we will talk about Deficits and Debt.

Our country has a schizophrenic relationship with money: we have one party which wants to spend lavishly in order to improve peoples' lives, and we have another party which wants to let Americans keep as much of their paycheck as possible after taxes. The party which likes to spend has been unsuccessful at raising taxes, and the party which likes to keep taxes low has been unsuccessful at reining in spending. This has led to some major debt issues in the past ten years.

Because Clinton wants to increase spending, she has a tax plan to counter-balance it. The Wall Street Journal says that Hillary Clinton's economic policies would increase deficits in the short term, but lead to economic growth which would eliminate those deficits within her first term. Clinton has said that our current debt levels pose a "national security threat". The Committee for a Responsible Federal Budget says that Clinton did a good job paying for her proposals.

When Gary Johnson was governor of New Mexico, he followed through with a campaign pledge to veto any bill which did not pay for itself, eventually vetoing almost 750 bills in 8 years. Though the budget of New Mexico grew under Johnson, he slowed the growth from 10% per year to 5% per year. A large portion of the increased spending in New Mexico was due to federal mandates, over which Johnson had no control. Johnson believes in small government, and wants to eliminate the income tax.

Jill Stein wants to reduce spending by ending the expensive "wars for oil" in the Middle East, which are major drivers of our debt. Even if we were to end all spending in Iraq, Afghanistan, and Syria right now, though, that would only save about $130 billion per year. Our current deficit is almost $600 billion per year, and Stein has proposed raising taxes to compensate for this. The Green Party proposes a wealth tax of 50 basis points (half a percent) per year, and also raise income taxes on the wealthy.

I apologize on the delay in publishing this week's discussion of the candidates' views on the economy. Next week, I really hope to be on time in publishing a discussion of Poverty and the Social Safety Net.