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The Sacramento Bee critiques 13 Bankers author, James Kwak's proposal for debt reduction.
"Here's my solution to our national debt. We have a one-time, 100 percent tax on all wealth (net worth) of all United States residents, with a $10 million per-person exemption. With household wealth at around $60 trillion, that should be plenty to pay off the accumulated debt and shore up Social Security and Medicare for the next century. The government promises never to do it again. Since we only care about future behavior, a one-time wealth tax should have no impact on people's incentives to work, and hence no distorting effect on the economy."
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My reaction? No Way.
ReplyDeleteThe Gross Debt was between 2-3 Trillion during the 80s. Now it is almost 15 Trillion. In our lifetimes the debt has increased at least 500%. By paying down the debt in this way (which would never ever happen - rich people run the country) we are not solving ANY problems. In another 30 years we would be in the exact same situation. There needs to be fundamental changes in the operation of the country before the debt can be decreased.
I completely agree with Jared in that there's no way that this could (or ever will) happen. Let's remember how much political influence these rich people have on government policies and how much money they contribute to politician's campaigns.
ReplyDeleteSay this idea of 100% tax on people making over $10 million was approved, how would these people's companies have the sufficient funds to reinvest in their company for future growth?
This idea might work cut the debt significantly in the short-run but doesn't change/address the main reason why we are in this current financial crisis. In order to eliminate our debt and avoid major crises in the future, the US must change the culture of "too big to fail" companies and greed of CEO's...which is easier said than done.
Rich people and political influence aside I see no benefit of having 0 debt. Having controllable debt now theirs a good argument for that, but as Jared and Andrew said paying off the debt will only make it "appear" controllable in the short run. Budget cuts fix long term debt problems.
ReplyDeleteI'll say also what needs to be said, its not necessarily the top 5% of the population that is responsible for the debt, so making them just pay it is complete BS. A lot of those people, my parents included, work their ass off to have a bit of wiggle money, and now we're just going to make them take all the responsibility for the nation? I'm not totally dissing shared welfare, but that is way to extreme. And it completely invalidates the systems and freedoms that our country was built on.
ReplyDeleteAnd I also agree that its only a short term solution, when what we really need is long term, small payments to cut down the debt. Its clear that we can run our country sufficiently on a deficit, but maybe not on one this magnitude
A novel idea that will never become reality. Unless people truly change their financial behavior, this would only serve as a short term solution at best.
ReplyDeleteI agree with the rest of the comments. A tax like that would be completely unfair because the burden should not be primarily placed on the rich. This tax would also be far too drastic a move because a long term solution that makes significant changes and improvements upon the current system. The fact that we have large financial managers betting that the US will default on its debt (along with S&P's downgrade) isn't helping situations so I think that rushing into a drastic decision would be fruitless.
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