Monday, 4 December 2017

Quote of the Day: "The compromise between the party of spend more, and the party of tax less..."


"The [US] Senate just passed a 500-page tax reform bill. Assuming it lives up to its promise, it will cut taxes on corporations and individuals... The root of our problem [however] is spending... The government spends more than it takes in tax revenues. A lot more. The federal debt today is over $700 billion more than it was a year ago. The reason is simple. The people may love spending, but they hate taxes. So the government makes it up by borrowing... It is the compromise between the party of spend more, and the party of tax less: the policy of borrow more.
    "A reduction in tax revenues necessarily means an increase in net borrowing. Borrowing, of course, does not generate revenues. It is merely an addition to the debt... Borrowing is not a magic perpetual motion machine. It is not a way to spend above your revenues. It is not a way to consume without first producing. It is a just a way to deceive—to consume without the taxpayer realising it."

~ economist Keith Weiner, from his post 'The Party of Spend More vs. the Party of Tax Less'
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