Editor's Note: The following is a transcript of a Q&A with Fareed Zakaria.
Amar C. Bakshi: What lessons do you draw from Greece's economic crisis?
The situation in Greece highlights for me how different America’s economic crisis is from Europe’s economic crisis.
America’s economic crisis is one that is actually economically soluble but politically very difficult to solve.
If we were to repeal the Bush tax cuts, we'd get $4 trillion of revenue over the next 10 years. If we were to enact Simpson-Bowles, we’d get $1.5 trillion by closing various tax loopholes. With a few simple economic decisions, we can solve America’s budgetary problem.
Now, of course, you have long-term healthcare costs to deal with. That’s a huge problem and I don’t pretend it isn't. But in every other respect you can bring down America’s budget deficit to what would be among the lowest levels of any Western country.
Greece faces a much more fundamental problem. There isn't an easy economic solution.
Greece is simply not going to be able to pay back the loans that it owes. If you do the math, it is inconceivable.
That is what people like Alan Greenspan are pointing out. There’s simply no reasonable set of projections that will get you to a place where Greece is going to be able to pay back its loans.
So you can entirely understand why there is a great, great fear among European policy makers about a Greek default. If Greece defaults - and remember it would be the first rich country to default since 1939 - there would be a huge danger of a kind of Lehman Brothers-like spillover effect.
The question then is: What happens to all the money and investments in the Portuguese financial system, the Irish financial system and the Spanish system the hour after that default?
Everybody might get scared - thinking that all these countries are going to default too. Investors who thought that countries in the Eurozone would never default would get spooked. They would have just been proven wrong.
The financial systems of Portugal, Ireland, Spain and others would start hemorrhaging money. You could have a collapse of the European financial system because these economies are so intertwined.
Many of the banks holding all this Greek debt, of course, are German and French banks. So there’s this huge contagion effect.
So what should Germany and France do?
The Germans are trying to extract the best terms that they can before they provide yet another huge infusion of funds for a bailout. They will probably have to provide more than one more bailout.
In this way, Germany can kick the can down the road, so that a few years from now when the markets aren't watching or are less obsessed by this issue, Greece can do a kind of soft default.
That’s the best case scenario. It’s not a great scenario and it has highlighted the precise weakness of the euro, which is that it has combined monetary policy without combining fiscal policy. So you have, in effect, German monetary discipline without German fiscal discipline in places like Greece.
It is worth pointing out here (and this is why I tend to think that the American debate is so frustrating and tragic): America is not in that same place as Greece.
People keep saying, "We’re Greece." But we’re not Greece. We actually are in a situation where a few simple steps would be able to rectify the American economy.
What are some of those steps?
Returning us to tax rates we had under Bill Clinton hardly seems the most punitive thing in the world. If you look at Simpson-Bowles, a lot of what they’re dealing with is not deep, painful cuts. In many cases you’re going back to levels of spending you had in departments only five years ago.
And yet we can't get our act together.
The Europeans are generally dealing with a very complicated situation with no easy answers. We’re not. We’re dealing with a situation with actually a series of very simple answers and we’re just unwilling to deal with them because of our completely dysfunctional political system.
What do you think will happen in Europe?
If I had to bet money, I would bet that the Germans go kicking and screaming to provide another tranche of money to Greece in the hopes that they don’t have to do so again and again. I think that the Germans and the French will come together on the idea that they can't really let Greece default. They’re going to exhaust every last possibility to avoid it.
Eventually, the market will have so anticipated that Greece is going to default that they will be less threatened because there will be a kind of slow-motion collapse rather than an abrupt one.
What global impact does this have?
There are really only two world currencies other than the dollar - the euro and Japan's yen.
The euro has all these problems we’ve described. There is uncertainly about what the future of the currency itself will be five to ten years from now.
With the yen you have an economy that is demographically declining, hugely challenged by 20 years of stagnation and now the earthquake and tsunami. Japan has a debt to GDP ratio closing in on 200%.
In the land of the blind, the one-eyed man is king. The dollar is the one-eyed man.
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Yet another CNN editorial that acts like raising taxes is the only way to solve a budget problem. Journalism is supposed to be non-partisan and unbiased. Have your writers ever considered that the government is a bloated, monstrous, wasteful mess, and that we could cut $1 trillion out of the budget and no one would even notice? Let's cut some lard out of the pork barrel.
1) Raise taxes to Reagan era levels.
2) Cut all non-constitution specified federal spending. Eliminate associated departments.
3) Bring ALL the troops home.
4) Regulate Wall Street – bring back Glass-Steagall.
Sorry, rich folk: you're going to have to have to take some cuts. It's up to you on whether it's your necks or not.
How many times do we have to tell the "soak the rich" folks that the top 10% of the income earners in this country pay almost 70% of the taxes. Your remark about their "necks" is disgusting; yeah, let's kill the golden goose. I'll tell you what; let's tax them at a 100%; they won't miss it! They're rich!
If a presidential candidate ran on the platform you just desribed I would vote for him in a nanosecond!
History tells us the rich aren't paying their fair share.
Do a quick search on tax rates over the last 100 years then come here and lie to us with your 70% comment.
I agree.
I have a dog named Rex and he's a lot smarter than you.
Sorry Ken, When Warren Buffett says to raise the taxes on the rich I believe him over you. He knows along with the rest of the rich they`ve had more then enough of a free ride.
If the government took the assets of everyone who had over 1 million dollars it would run the government for only 6 months.
The top 5% of rich people pay over 50% of your taxes. Maybe the rest of you should start to ay your fair share.
"Ken from FL", boy you really need to get some new numbers. It's entirely untrue that the richest 10% pay 70% of taxes as you so broadly claim. It's possible the richest 10% pay 70% of Federal INCOME Tax, but that is only a very small part of the equation. In reality... and this is the congressional budget office speaking (you know, facts) the richest 10% pay around 27% of TOTAL federal taxes. http://thinkprogress.org/economy/2011/04/20/173905/house-gop-tax-lie/
But hey, we can throw numbers around all day, it still isn't getting anything done
They may pay 70% of the taxes but they own ~90% of the wealth...
If the people who currently pay no income taxes were paid more, they would pay income taxes as well.
You know what's worse than communism and socialism? A plutocracy and oligarchy!
@Ken,
The top 10% pay 70% of the taxes (according to your sources on FOX News), and you think that's too much??
Consider that the top 10% control 90% of the wealth in this country. Shouldn't they pay 90% of the taxes, not "almost" 70%?
Please, please, give some examples of the specific pork you would cut. I bet you can't, because there really isn't as much as you suggest.
The tax increases you bemoan are not going to hurt the rich. My evidence is this: the increases merely return tax rates to those before Bush. The rich were not going broke under Clinton - we had a vibrant economy with lots of jobs. Bush's tax cuts did not help America. So why, if we repeal them, is it so bad?
You hit it right on the head. If we just raise taxes, everyhting will be hunky dory, and then we can spend lots on federalized health care, too! Fareed is so freaking far out of touch, it's not funny.
How come anybody that is not as stupid and blind as you are the ones out of touch. I bet you didn't even graduate from High school. Be honest What is your educational level.
What do you consider waste and pork. I bet it is
not in your backyard!
I agree with you completely Marc, but his statement about the one eyed man is spot on.
There is no currency yet able to replace the dollar on the world scene
hey mark...
an editorial is usually an editors opinion, not a journalistic story. thus it will contain biased opinions. also this was an interview with the guy, not him writing an article. have you ever considered you don't know what you are talking about?? people like you are whats wrong with this country, you think everything you see on tv or on the internet is news...
As a Canadian observer I am a huge admirer of your country, but why are the rich not taxed? It seems that only your middle class gets hit with high taxes. And why does the military always seem to get a free ride? Even though I think that perhaps other countries than yours should carry the load in places like the Middle East , Korea and the like.
Because the rich have spent the last 40 years buying the political system in the United States and having laws passed that only benefit them.
For a Married Couple filing jointly:
Annual Income - Tax
$7,900 —$24,900 . . . $0.00 plus 10%
$24,900 —$76,900 . . . $1,700.00 plus 15% over—$24,900
$76,900 —$147,250 . . . $9,500.00 plus 25% over—$76,900
$147,250 —$220,200 . . . $27,087.50 plus 28% over—$147,250
$220,200 —$387,050 . . . $47,513.50 plus 33% over—$220,200
$387,050 . . . . . . . . . . . . . $102,574.00 plus 35% over—$387,050
The top tax bracket in Canada is taxed at 29% of income. The assertion that the rich are not taxed as heavily as the middle class is false. If you include the fact that small businesses are owned by many people in the top tax bracket, the amount becomes higher if you include corporate taxes on their businesses.
Interesting to note is that from 1944-1963 the top tax bracket was taxed at over 90%. That's how we got out of our last great depression...
source: http://www.irs.gov
Why does the military get a free ride? Are you suggesting are problems financially are because the military is treated too well?
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." -George Orwell.
I really hate it when people who should know better say, "All you have to do is raise taxes to close a budget shortfall". Really? And raising taxes won't have any negative impact on the economy? So why not raise taxes to 100% of income, then? Maximum taxes, maximum revenue, right? There is some point where raising taxes will actually decrease revenue. I don't pretend I know where that is, but Zakaria should not pretend that point doesn't exist.
The economies around the world are imploding and yes, there is a reason for all of this mayhem. One World Government. It's all planned people. Look where the U.S. is heading. Just enjoy your freedom while you can. God speed.
This is happening so fast my head is starting to spin,all this going on in Greece,other euro countries has been planned..for awhile,read Shock Doctrine by Naomi Klein
to Mark.....
hey stupid... it is OPINION, NOT Journalism!!
Wake up!!!
Let's call it like it is – both parties are full of morons looking to sell their own little piece of the big picture. Republicans refusing to talk about revenue through tax increases or closing tax loopholes are just as bad as Democrats refusing to make cuts in entitlement programs. Neither plan will work by itself. If we keep cutting, eventually we'll cut into muscle instead of "trimming the fat." If we just raise taxes, we haven't solved the problem of sky-rocketing entitlement program costs. So what? We just delay the same problem another few years with the additional revenue? How is that a solution?
Both parties need to face the facts – we need to generate more revenue, but NOT cripple economic growth. Since people are having less children these days, there are fewer younger folks to support the old families of 7+ children that are now at retirement age through social security – as such we NEED to reduce entitlement benefits and reform the system.
The time of political posturing and highlighting your own piece of the puzzle is over. Pull your heads out, look at the big picture, and compromise. That is, unless you think we can rely on China to keep bailing us out with no strings attached?
Justin – well said. We need a balanced approach to solving this problem. Red Team – you are correct, just raising taxes doesn't solve the problem, we need to control spending. However a reasonable tax rate that isn't easily dodged must be part of the solution. Blue Team – we can't afford to continue with entitlements as they are currently structured. We have enough of a surplus to take care of the truly needy in our country, but we are currently supporting far too many people who are more than able to work. We all need to pay our share of tax, not just the richest among us. These are tough decisions, but we need to stop putting them off by way of deficit spending. Let's come together as Red, White, Blue, and every other color we are made up of to solve this America!!!
look, why don't you get rid of the loop holes and keep the tax rates low. The main thing is we need jobs jobs jobs. I would rather work 2 jobs a day than to live on welfare. Because it sucks to have to wait on disinterested government workers, who clock in and out and don't give a crap about you!
The reason why I lean toward conservative ideas is because, I can set my own path in life, but with the liberal view, I feel like l I would have to rely on the government whether i like it or not.
Look lets subsidize the people that can't really take of themselves, but I am so tired of seeing able bodied people asking for money, when they could get some kind of work. Why is it that the undocumented workers can get more work than lazy americans?
Agree, the world spends $1.5 trillion on military related expenses. America is repsonsible for half that amount. Do we need to spend $750 billion a year?
Have you ever considered what would happen to our economy if you cut government spending during a recession when the Paradox of Thrift is in full effect and the federal reserve has set interest rates as low as they can go. For Gods sake learn the basics of economics before you go blurting out the word "government' like a paranoid schizophrenic ponderind what happened to his hat.
Whoever instilled in you that raising taxes or using taxes to generate revenue is a partisan activity should be gagged. To claim that Americans shoudn't pay more taxes is to say you want the whole system to collapse over a few measley extra dollars a year. It's ludicrous and uninformed to suggest that taxation is a partisan activity. Raising taxes to pay for our infrastructure and social support systems will happen, you'll see.
Mark, I completely agree with you but we need to make a list of what specifically needs to be cut, meaning the lard out of our govt. The fact of the matter is, anyone who proposes any cuts will be very unpopular and will not get very far in their proposals. Why, because of a very corrupt and greedy system. It all comes down to excessive spending, and supporting stupid, waistful wars in both Iraq & Afghanistan. America needs to be better producers not excessive consumers.
Look, moderate wealth taxes wouldn't hurt the rich. They wouldn't leave America for another country just to have a better tax-deal. Britain, France and Germany have relatively high taxes,yet lower compared to the Nordic countries, the rich in Europe don't want to move to Italy, out of political reasons. Swiitzerland, Monaco and Lichtenstein are small and crowded countries. At the end of the day, it's not about saving a few % of tax money that counts, it's the quality of life. I bet the rich in America are quite patriotic and want to stay in the country.
The news is biased! The news is biased! The solution is for it to adopt my biases instead!
Dude. learn to speak clear english before advising on how to fuck America even. You and George Soros need to get out America asap before
Learn how to form a complete sentence before spewing useless rhetoric; otherwise you come off as ignorant and childish with no real substance. Not all political and financial solutions are found in the pages of a pop up book...
I am laughing so hard at your comment!
Awesome
Both Zakaria and Soros are Americans, they are immigrants (legal ones), and as such can offer a perspective that the native born may not see.
And yes, learn how to spell so that we can respect your opinions.
oh i get if you are illegal your opinion does not count.
You and people like you are the biggest problem in America. You Fox News zombies really need to be taught a lesson. Ignorant @sshole.
do you want a slurpee
Stay away from slurpees - they've frozen your brain
I impressed with the scholars remarks.
It s becoz of people like you with an amazing shortsightedness, lack of understanding of the global environment that the USA will fall like the roman empire did. Make room for India and China!!!!
The only problem I see are the republicans who don't want to play ball - they are fixed to perform the type of cuts that they want to gain political points.
Raising taxes does nothing to solve the problem until you learn how to control spending. You'll be in the exact situation later if you go about it that way. Only when you can learn to produce a surplus for a few years do you even talk about raising taxes. We have a spending problem! Not a revenue problem!
Don't raise them - just take away the bush tax-cuts
What would be the point if you haven't controlled the constant increase in spending? You would do nothing to solve the problem. An increase in spending would put you at your same predicament about a year later. CNN needs some basic budgetary education.
how can you decrease your debt by decreasing your income? Get a clue.
Well, here's an idea.
Pay the average person a living wage.
Then the taxes can truly be collected because the average person doesn't have a billion accountants hiding their money offshore.
You are so obsessed with cliches that you are missing the author's point: there are several ways to solve the problem, just not the political will. Yes, spending cuts are another way. Which means that there is even one more way to "solve the problem" as opposed to Greece, thus you have just proven the author's point that "we are not Greece."
Showing we can cut spending and produce a surplus for a couple of years is the only way to solve the problem. It's a shame there are people who feel otherwise.
I agree with the first comment that we need to cut the pork BIG, before raising the taxes on the citizens, or at least compromise and have both sides help towards the solution. We have to quit ignoring the problem before it gets even worse!
One of the least intelligent comments by Fareed that I have read. Socialism is the problem in Europe. More socialism here will not help us. It will destroy us.
One of the least intelligent comments by Fareed that I have read. Socialism is the problem in Europe. More socialism here will not help us. It will destroy us.
Socialism is the problem? Someone needs to take their blinders off. In case you didn't notice, all the "isms" are the problem. All of them depend on "good" people to work properly. Capitalism in it's current state is just as bad as communism. Only instead of having a small group of "government" leaders telling us how to live, we have a small group of unelected criminal investment banksters and corporations controlling us from behind the scenes.
Socialism-however you define it-didn't put us here.De-regulating the banking industry did.That's capitalism.Wasting effort fixing the wrong problem only makes the real problem worse.
repealing bush tax cuts wouldn't be socialism – why do cons label anything and everything socialism?
Fareed:
The only specific thing you would change is raising taxes, i.e., soak the rich. Are not you in that category now as a CNN show host? You presented no specifics about dealing with the major expenditure programs Medicare and Social Security. Why don't you suggest that the 47% of Americans not paying any federal income taxes do so? Your piece is a joke, but what more can I expect from a liberal globalist?
the tax rate for the rich was over 90% in the 50's and have decreased to today's 35%. Are you saying that we were communists or socialists back then?
Ok, so poor people pay no income taxes. Imagine that! You barely make a living wage (or minimum wage) and you pay no income taxes. The logic kills me... lol
Even though that 47% pay no income taxes, we sure as hell pay a ton of other taxes.
What about the social security tax?
medicare tax?
Gas tax?
Sales tax?
Drivers licenses tax?
Property tax?
Cell phone tax?
Toll road tax?
Marriage license tax?
Internet tax?
I can go on and on.
The only taxes those 50% americans don't pay are INCOME TAXES. And that's cause they got no income to tax thanks to cheap abused slave labor overseas.
Take a look at the list of taxes the "poor" people in America pay, as listed by OP below. Based on the taxes paid the "poor" in America are driving cars, own property, cell phones, and computers with internet access. That's not poor. Look at the areas in the world where families are living off less than the equivalent of $1 a day – that's poor. There are very few poor in America. If you are feeling poor, how about prioritizing a little better? Get rid of the cell phone, put the money in savings, and start pulling yourself up by your own bootstraps.
OP
Ok, so poor people pay no income taxes. Imagine that! You barely make a living wage (or minimum wage) and you pay no income taxes. The logic kills me... lol
Even though that 47% pay no income taxes, we sure as hell pay a ton of other taxes.
What about the social security tax?
medicare tax?
Gas tax?
Sales tax?
Drivers licenses tax?
Property tax?
Cell phone tax?
Toll road tax?
Marriage license tax?
Internet tax?
I can go on and on.
The only taxes those 50% americans don't pay are INCOME TAXES. And that's cause they got no income to tax thanks to cheap abused slave labor overseas.
Please see three comments above as to why America cannot put its budget into order. The illiterate unwashed masses run the place while those of us with an education and mind to comprehend and correct the situeation are ignored. Our nation is a large ship headed towards an iceburg. The moronic majority are either praying the ice melts or too stupid to understand the ramifications of staying on course or coming up with smart solutions. We are headed to serfdom and they masses cheer as the shackles are placed on by their corporate, religious, and wealthy masters. Truely pathetic.
Bwahahaha! I love somebody castigating the "illiterate unwashed masses" who cannot spell "iceberg" or "truly." Truly I love 'em!
People like "@kl" need to learn how to form a complete sentence before spewing useless rhetoric; otherwise you come off as ignorant and childish with no real substance. Not all political and financial solutions are found in the pages of a pop up book...
So do a bit of both but do something
Now, I'm no economist or CNN talk show host, but the tax increases that Zakaria and Simpson-Bowles call for amounts to $5.5 trillion over ten years or about $550 billion a year. I don't agree that increasing taxes will necessarily, dollar-for dollar, increase revenues to the Treasury (nor do I believe that increasing taxes won't reduce economic activity), but for the sake of this exercise let's say that those numbers are correct - $550 billion dollars more per year.
The 2011 federal budget was $1.65 trillion out of balance. That makes the "magic" of getting rid of the Bush tax cuts and Simpson-Bowles about $1.1 trillion short by my count.
Obama's own budget for fiscal 2012 increases federal spending by about $500 billion, once again destroying the "magic" of repealing Bush's tax cuts and Simpson-Bowles.
As you (barely) note a mere eighteen paragraphs into your piece, cuts in spending are needed. Cuts that will take us back to spending levels of the mid-2000s.
We do not have a revenue problem; the U.S. federal government takes one out of every seven dollars in this economy. After taking one out of every seven dollars out of the pockets of the rich, the middle class, and the poor, the U.S. federal government then very inefficiently spends that PLUS another fifty percent, amounting to one-fourth of our GDP. We don't have a revenue problem. We have a spending problem.
you should have stopped after "I'm no economist or CNN talk show host" - you were doing good.
and let me guess, the spending problem is on welfare programs for the poor, medicaid, and medicare?
God forbid we talk about the real spending problem, you know.... anything the government "private contracts" out to friends. They overpay these contractor friends with our tax dollars, and then these friends give the money back to the politicians for their campaigns. So we are basically overpaying for EVERYTHING thanks to the contracting scheme our politicians run.
Fix that, and the spending problem will be ZERO.
Even better
- repeal bush tax cuts
- raise taxes another 50% above that
- that will generate $50 trillion
- profit
$4 trillion savings over 10 years sounds awesome, projecttions have us with a $1.8 trillion per year deficit, so with this plan we go deep into debt a bit slower? that's the big takeaway here? are you on crack?
somehow the US was in a better place before the bush tax cuts – his proposal isn't idiotic like you
What part of we are spending going into debt an additional $1.8T per year do you now get?
I am not against letting bush tax cuts expire, that does not mean victory, it only means we spend $1.4T per year we don't have.
Do spending cuts ever come into your view of how to solve this?
Your suggestion sound like you prefer tax rates under Reagan. I do not recall a lot of rich people going bankrupt then, do you?
Sarcasm buddy – look it up.
The point is $4T in 10 years may sound like a lot, but compared to the obama deficit rates, it's does not even get us back to bush deficit rates, which by the way were crazy already.
And for the love of [deleted by nbc] do not say obama's deficits are bushes fault, think up something new.
Fareed, go back to Stinkistan and help out your 3rd world countrymen....
I think your name says it all. People like you are why we are in the current mess - you would rather attack the other side of the political spectrum than try to actually work with them to solve problems.
Um. Ignorant fool, he is from India, which btw will be kicking USAs butt soon. I advise you to go back to school.
This is what happens to your brain if you don't got to school and watch too much Fox News.
Tack on the $30b of spending reductions from mobama and man, we should go to denny's.
I have a better idea.Let's start another war and pay for that with tax cuts like we did the other two.I mean,if it made sense then it should now.
You want to end slavery then you best get rid of the elite's system that suppresses the masses and hoards all the money and resources for the elite. You better dismantle the IMF, UN, World Bank, Federal Reserve, etc.
This is where your slavery is coming from, because those on top have wrecked the system and blocked anyone from being free and helping themselves to get ahead. This is always where slavery comes from: wealthy elitist exploiting less fortunate people.
But yea, keep blaming the poor guy on the bottom for wanting healthcare, a roof over his head, and food in his belly. God forbid we pay people a living wage so they don't need so called "government social programs." Remember, the government is covering the difference of what companies should be paying us.
Unfortunately the government is also wasting money on things like: the war on drugs, the overbloated jail system, almost anything with private contractors (leads to crony politics). The private contractor thing is probabably where you can find the biggest amount of fraud.
The fact that the gop is standing in the way of every common sense reform being put out by democrats and any republican that has the guts to buck their party's strategy of holding the economy hostage is what will sink us.
The belief that one side has all the right answers while the other is standing in the way of a solutions is the real problem. There are so many raving ideologues in elected office (on both sides) no one (or close to it) is willing to make practical decisions. Republicans need to realize that at least in the short term, taxes need to be raised and defense spending needs to be slashed. We can't continue to fight other's wars while our financial situation spirals out of control.. Democrats need to realize that entitlements need to be cut and that people need to stop going to Uncle Sam with open hands asking for everything from food to health care. Some entitlements are necessary, but they need to be run efficiently so tax payer money isn't wasted.
If everyone continues to bicker and posture on ideology, nothing will get done and the situation will continue to spiral out of control.
I'm fine with cutting all spending but raising taxes is irrelevant until the government can prove it can create a surplus for a few years during both bad and good economic times.
What are you talking about, the democrats only want to raise taxes. It requires raising taxes and cutting the budget to get the government fixed, which neither party is willing to do.
When you say "raise taxes" do you mean absolutely or do mean mean simply discontinuing current tax cuts.There's a definite distinction.
Why is it everyone talks about "over the next 10 years"?
Is it to make the number sound big?
$4 trillion over 10 years $400 billion next year, or enough to reduce the annual deficit to $1.4 trillion.
But, that does not exactly help you make your point does it?
Can we hear from a liberal ? Do you all buy what Fareed is selling here ?
Great article Fareed, I do not think America has the fortitude what is right. Greed, Ignorance, Religion and Bigotry was the downfall of so many empires.
The fall of every empire was the decline of the innate ability of it's people. Evolution going forward or at least standing still is necessary for a great empire to survive. It's one of the things your great great etc grandchildren will understand and think you were a caveman for being totally clueless on.
Everyone need to return to the Clinton tax, not just the rich. I am a po, man workin for moinimum wage an am willing to pay my fair share. Why are the repugnat ant filty rich so damn greedy. The more they have the more they want. We are not going to becpome a third world country. If that is what you want then pack up you stuff and go to one that already exist. Need I say it. Get the hell out of my country and us keep America a great place to live. GOP extinction in 2012.
They don't want to pay more in taxes because, simply put, they don't need to. If the U.S. economy fails, they can move elsewhere. In fact, if our country collapses, they probably stand to make out like bandits, because everything will be going to the highest bidder.
My dear Fareed: You of all people shoul know better. The ups and downs are inevitable because we have supperimpose sun shine benefits (socialist benefits) to capitalistic system. In doing so we have also created another unproductive segment of the labor force by having governmets becolme bigger and bigger employers. After all you need people to administer these sun shine benefits. Whe computers came into being the government shoujld have reduce its labot force by at least 2/3 and this because computers reduced labor hours by at least 2/3. To add to the insult our government has even added employees instead of reducing them.
That the hell are you talking about lady. Get a clue.
It really sounds like the only way we can get out of debt is to completely change our government system... Because whatever this is.. it ain't democracy. It's aristocracy.
Good luck getting the rich to give up power. Historically, it has never happened without bloodshed. And it usually doesn't turn out great for the rest of us, anyways - half of the rich are booted out, while the other half simply pretend to be innocent victims, or help someone else achieve a "democratic" form of government as their puppet.
And guess what the rich are invested in..... private armies.
They know full well the regular military wouldn't defend them.
So they hire "retired" military officers to command their private mercenary armies.
I think Zakaria was right on about one thing: partisan politics is so petty in the United States that we probably WON'T fix the crisis at hand, even though it might be easy.
Under Reagan, under Bush Sr., under Clinton, we had upper tier tax rates much higher than now. The rich thrived. And the country thrived, too. Clinton actually balanced the budget - in retrospect, that was a mistake, because that fiscal strength was squandered to get a lower tax rate and pay for two wars.
Re: all the snide comments about socialism, two points: A. Repeal of the Bush Tax cuts would not be "socialism". Some of you folks need to break out a dictionary at some point in your life. B. The US was in a fiscally MUCH healthier place before the Bush tax cuts. I think the man is right. Repeal the tax cuts. This would impact me, but unlike some of you, I actually care about my country. And btw slashing the EPA (as suggested by that great mind – Michelle Bachmann), US Dept. of Education, and all entitlement programs isn't a long-term path to prosperity. If we're going to start slashing, I'd say start with the US Military.
Too bad more people don't think like you. Most people, it seems, are far too concerned about their own pocketbook. I really think most of the rich in this country would prefer a U.S. economic collapse rather than pay more in taxes. After all, they can afford to move to another country or two.
The top 1% pay 40% of the tax.
The bottom 40% pay 0% of the tax.
I say let the postal service hire the bottom 40% so they can join a union and sit in no-work rooms.
Also, make the top 1% pay 80% of the tax (that will teach them).
Wait till the bottom 50% pay no tax, no libs can be elected until the country becomes third world.
Steel underwear.
Profit.
lame – yet somehow the rich get richer and richer – they can afford to pay – they use the resources of this country to acquire their wealth – they can give back their fare share, based on the proportion of that which they make – any student of economics knows that once you have, it's easy to acquire more
So how much should the top 1% pay?
And what percent of the bottom should pay?
What are you magic numbers here?
@lame: The top 1% do not pay 40% of their income in taxes. The highest marginal tax rate is 38%. This does not mean that people pay 38% of what they earn in taxes because this is the 'marginal rate', it is the amount that is paid on each additional dollar of income. Also if you add all the personal deductions for business expenses, etc., the percentage of taxes that is paid is much much less. So get a clue before you open your fat mouth.
Hey New Yorker – did say they have a 40% tax rate
I said that 4 of every 10 dollars in tax revenue the goverment is from that 1%.
I say 4 of every 10 dollars to dumb it down for ya
What a dumb article. The US is printing worthless money and taking out new debt to pay old debt coming due.
I agree with Zakaria! I don't think he means increase taxes and not do anything about the social welfare schemes we have in place. As he stresses this is something that needs to be addressed as well. But increasing taxes and decreasing the tax loops will provide the US with the much needed breather it requires to put its fiscal house in order. The reason the taxes were decreases for the wealth was for a) they would invest in domestic bonds, stocks and commodities. This was a good idea maybe 20 years ago. But with the emergence of countries that are growing at a faster pace, with higher return most of the money provided in tax breaks is being invested abroad. ( Studies have done to show that this is the case) So the only people benefitting from this are probably some businessmen in India, Brazil or China! I think we should promote entrepreneurship, cut government costs and promote growth. But to blindly support tax breaks that is not benefitting our society doesn't make any sense WHAT SO EVER!
Raise taxes, we will address the cuts later, right after we create some new entitlements and agencies with all the cash that's coming in, after all, since $1.8T/year deficit is the new normal, anything under that is now considered savings.
I actually enjoyed the article. Thought provoking in fact. If I were to believe all the news, I would no longer be here in America and would have moved to Thailand some time ago.
Most of you seem to want to cut the federal debt. And I think the author makes it pretty clear those decisions are in fact “easy” yet politically difficult. Consider:
Raising Taxes…hurting the ‘rich’. Poor people don’t create jobs. “rich” people focus on two things: wealth generation and wealth preservation. In simple terms, how to I create more money and how do I protect the money I already have. Everyone hates the rich…yet all of us desire to have their lifestyle.
Cutting Medicare, Medicade, SS, etc.
Everyone has grandparents and no one wants to see them suffer. Leave them alone, this is non discretionary spending…it’s the pet projects that has gotten us in trouble.
DOD: As a vet this hurts to say but you have to cut and 400Bil isn’t much. Bring troops home (some, not all), close bases in Europe (we’ll have to open more in the Pacific sooner or later, make some room for those…) R&D is great…but it take 10 years to make something to serve 5 years before its outdated. Cut that time in half and you’ll actually get crap at a fair price.
Oh yeah…flat tax…21% on everyone…and put a 25% tariff on all imports from China.
First off, we don't hate the rich. I think the category of "rich" must be broken down into actual job creators and the criminal investment bankster elite. Creating those two categories let's us define who the real criminals are. The bankster elites are the ones who create nada. They are nothing more than a paper trading profit mill.
And not everyone wants the so called lifestyle of a rich person. I simply want a living wage, healthcare, affordable food on my table, and some kind of care in old age. How many companies are truly offering that? ANd with the rapid inflation, who can afford to save nowadays?
With our politics, the only way to ever do this is with a 50/50 split, so no one's feelings get hurt, and no one side feels like they lost.
$1 in spending reduction for every $1 in tax hikes
or said another way to be fair
$1 in tax hikes for every $1 in spending cuts
Truly a cop out, but no one goes home a looser.
OK, what about "pork". Do you consider Social Security,Medicare and Medicaid as pork? Those are the big pieces that people want to cut to reduce spending. Everything else is chicken feed. If not these, then what "pork" do ,you want to cut that would make any difference?
I think you are confusing the wants of the average "person" with the marketing schemes of the investment banksters.
The only ones who truly want those cut are the people who would benefit most from it.... the banksters.
As for what we can cut, here's an idea....
God forbid we talk about the real spending problem, you know.... anything the government "private contracts" out to friends. There is little oversight. They overpay these contractor friends with our tax dollars, and then these friends give the money back to the politicians for their campaigns. So we are basically overpaying for EVERYTHING thanks to the contracting scheme our politicians run.
Fix that, and the spending problem will be ZERO.
Yo Fareed ~ Go back to wherever you came from, even if just from California. You have no clue and your globalist views are not welcome. Get a real job, you are no journalist!
You don't like 'globalist views'? What views do you like? Near-sighted and narrow minded Fox News and Teabagger views? Makes sense because you are a total moron.
The solution to spending too much money is not "get more money".
Very enlightening post.... so tell us what we are spending to much money on.
Let me guess, "entitlement" programs are the problem because the corporate news told you so.
And define entitlement?
If companies paid a living wage, we wouldn't need the governmetn to cover the difference for our basic needs. But yea, keep spouting your bumper sticker slogans. Plenty of dummies love those.
You want jobs and you hate companies, I have never understood that.
Probably why so many libs just want to work for the government.
Another person who confuses real job producing companies with criminal investment banksters. Two different beasts, although a job producing company can be detrimental to society when it becomes a monopoly of sorts.
Fareed Zakaria is just another Keynesian talking head. We are in this situation b/c gov't is far too big–in terms of size and scope–whether we're talking about foreign policy, taxation, regulation, warfare, and welfare.
When the housing bubble and our phony economy was being formed, only Austrian economists (like Ron Paul) called it and were warning of the damages that were going to be caused by artificially low interest rates (stimulus), Fannie Mae and Freddie Mac (targeted stimulus in the housing market), endless wars (fiscal stimulus paid for w/ borrowing), tax cuts not balanced w/ spending cuts (fiscal stimulus), etc, etc. STIMULUS IS THE PROBLEM.
Back in 2002-03 when Democrats and Republicans were touting the amazing actions of the Fed, Fannie Mae, and Freddie Mac, Ron Paul predicted the bubble and the ensuing hangover. While Keynesians such as Fareed Zakaria, Paul Krugman, and Robert Reich had virtually no idea about what was coming.
If Congressman Paul called it (before it was cool) maybe we should listen to what he says for a way forward.
If you don't believe me he called it go on Youtube and find out for yourself.
You honestly believe those people you listed didn't know what was coming? They were paid to look the other way.
Wait, Ron Paul is Austrian? What is he doing running for President of the US then? Idiot.
Austrian Economics is the school of economics (like the Chicago School of Economics or the Keynesian School of Economics) that gave Congressman Paul the foresight to see the inflating housing bubble and predict it's inevitable steep economic hangover.
Listen up: the difference between Greece and the US is that the US is a superpower with military might to back its currency and debt. In Europe they have to play by "old school" rules which state that you can't borrow more than you can pay back. Greece doesn't have the luxury of printing money while a huge military stands guard.
I just watched, In the Arena. Ben Stein summed it up very well. We need to manage our economy as repercussions will be severe in the near future.
Some of you are missing the point. Fareed has also pointed to spending cuts in past articles. His point in THIS article was that our Federal deficit could be fixed by simply passing one or two laws. It's easier to write laws to roll back tax cuts and close tax loop holes then it is to sit down and figure out what to cut. It isn't that we CAN'T or SHOULDN'T cut the budget, it would just take more effort and more laws than those two laws.
His whole point was that Greece could pass dozens of laws, but the money simply isn't there. The laws would be ineffective. Greece is in real trouble, our trouble is all in our minds.
At least some of Zakaria's readership have some grasp of what he is saying.
Fareed appears to be a graduate of the Obama School of Wreckonomics.
You are a total knucklehead. Take a freshman course in Economics before you open your mouth.
One man's pork is another man's gravy train.
This article is horrible. If there is one thing that Fareed did not read during schooling, it was obviously the constitution.
And where exactly in the constitution does it say that you can't increase taxes, you moron? I suggest you read the constitution first before you spew your diarrhea.
Something Fareed said I think we all can agree upon & that is our political system is broken. Partisanship politics is strangling all of us and no one has a solution. Let's sabotage each other so nobody wins...the new togetherness. Do you feel the love?
Easy solution vote for Ron Paul
He is probably the only politician in history to not flip flop and not change his message during the course of a campaign.
Here come the PAULTARDS and PAULBOTS!!!! Right on time to make a quick comment and then to finish the other 1048124 polls in which they must vote for Ron Paul.
Greece: retire at 50; don't work; don't try; get money from government for everything; cheat on taxes; THAT IS WHAT SOCIALISM IS!
at the left idiologs want the same here!!!! The lesson is that Socialism does NOT work.
If we all do nothing, make nothing and pay no taxes out of nothing ... that's what we get ... NOTHING!!!!
That is the lesson here you idiots!!!!!
Ameirca: retire at 100: work you productive little rump off; beg endlessly; get money from the goverment to cover basic needs the companies won't pay for; cheat on taxes. THAT IS WHAT CAPITALISM IS!!!
And both party idealogues want the same here!!! The lesson is unregulated capitalism DOES NOT WORK.
If the criminal investment banksters steal everything, make nothing, and pay no taxes... that's what we get... NOTHING!!
That is the lesson here you idiots!!!!!
hey chavez, post your smart comments on blog in caracas ... capitalism is the only thing that works; just not for you ... you my dear need to move to Cuba ...
Thanks to CNN for having the guts, to have some intellgent minds speak on this subject. The notion that cutting government spending WITHOUT paying down the deficit won't work! Greece found that out. Americans look for the easy way, the free ride, which makes us the laughing stock in the world.
FYI – you don't "pay down" the deficit, you can just reduce it.
The deficit is $1.8T per year ADDITIONAL we are going in the hole.
Now you can pay down the total debt, which is around $13T, but that's hard to do when each year you are adding $1.8T to it.
Guts?? Are you kidding me? Guts would be actually going through the tax code and simplifying it. Guts would be actually going through the budget and throwing out programs that are not needed anymore...that is guts.
Guts would be to stand up to the economic royaltists who created the fiasco in the 1800's and are recreating it again today. History repeats itself.
Maybe, when The Muslim Brotherhood triumphs in Egypt, CNN's resident Islamo-fascist bobble-head ,Zakaria, will unplug himself from the boob-tube and walk away in shame? Naw! Bonehead Obamatron fascists have no shame.
And bonehead white Teabagger racists have shame then? Get bent.
The point is we need both tax increases and spending cuts. The former first because the economy right now is too weak to withstand massive spending cuts. Taxes are at the lowest level they've been since 1930. Raising them won't solve all our problems by itself but it is an essential part of the solution. Refusal to do this is simply ideological fantasy without any connection to the real world in which we have to live.
Notice this LIBERAL didn't mention actually SPENDING LESS. The government spends ridiculous amounts of money for lazy employees, 50 year old programs that are not needed, and pay union wages for any "project". How about a little fiscal discipline to go along with any tax increase.??? Oh, I forgot, a liberal can't do that.
Yea, these programs truly would not be needed if we were paid a living wage and democratize the working environment where actual workers have a say in company decision. Why is it always the lazy criminal bankster investors deciding for us?
Hint... you want to cut those so called social programs, then you better start promoting a LIVING WAGE, not minimum wage. Then we can truly get government out of our hair.
Pay no attention to this blathering idiot. This is the same illiterate knucklehead who's said for the last 3 years that America has no financial problem.
When did Zakaria say America has no economic problem? Are you sure you are using your marijuana for medicinal purposes? Idiot.
Umm, apparently you have never watched his show? ever?? He's said it constantly for the last 3 years that America does not have serious financial issues (used some silly percentage GDP argument in comparison to Haiti's or somesuch nonsense to try to make his point every time). This guy is a lying slob.
and I said "financial" not "economic". Nice slight-of-hand there though.
The people who argue that taxes shouldn't be raised on the rich have the mistaken belief that rich people should earn as much as they deserve to. This is completely false. Even if you look only at people who became rich through their own hand, as opposed to those who simply inherited their money (and these are the same folks that want to eliminate the estate tax – even though they didn't earn a penny of it), you will see plenty of people who do not work all that hard (if you think playing golf counts). My point is that once someone becomes rich, they do not have to work all that hard to earn their money. A person that earns $20,000 has to work a much harder to earn each dollar than someone who earns 2 million. This is why the rich be obliged to pay the bulk of the taxes. In fact, the tax rate should be set at closer to 100% for people who earn over, say 100 million dollars.
A few are still stuck under the assumption that wealth is earned through hard work, and people who are wealthy are generally good, hard working job creators. In a fair world I'd agree, but how is it fair when these so called criminal banksters lobby for laws that benefit only themselves at the expense of all others?
I think once the 65+ year old generation finally dies off, this country might change for the better. That generation is still stuck with the mindset of the late 50's and early 60's when companies actually cared for their workers and true hard work meant something.
The people that say that it's ok that 40% of the population to not pay taxes are under the mistaken belief that these people are trying their hardest and are just victims of all the meanies out there.
Compared to the rest of the developed world we have some of the lowest tax rates – in fact our tax rates are the lowest they have been since 1992. Spending however has continually increased. I would like to know where exactly the government is bloated? Because every government is bloated and that statement is actually very misleading. In every government you will have waste and there is a proportion to %waste of spending that will yield a more efficient bureaucracy. Having 0 Waste could actually hurt government more than say having a 5-10% waste (just hypothetical numbers). Waste is just a part of the equation and as much as we might not like it, we have to live with it. Screw ups happen and government is not immune.
I do think that getting rid of the Bush tax cuts is a very good option but for some reason Americans just have the notion that taxing is bad for us. No one likes to pay taxes however running a country as large as our has some pretty high costs. Especially with our defense spending as high as it is.
Secondly we need to cut defense spending and stop with all the "wars". If we had a consistent foreign policy and our actions were in line with what we preach then I would have a harder time to argue this point. But year to date our foreign policy has been atrocious.
Thirdly I do think we also need to have better regulation on industry. Industry with no checks is not good. Im not saying hand cuff them completely but have some checks in place. Checks and balance are a part of life, they can be a part of business and government interaction as well.
I agree fully. Republicans hate government spending anytime a Democrat is President. They have no problems when even a moron like GWB nearly destroys the economy through excessive military spending, tax cuts to millionaires and billionaires and the elimination of financial and environmental regulations.
Rule number 1 – the government will send every dollar it can in the belief that it will insure the relection of the governement
Rule number 2 – increased tax rates doe not increase tax revenue (the Laffler curve)
The combination of rules 1 and 2 say that increasing taxes will not reduce spending or deficits in and of themselves.
Well, we don't only have to raise taxes.
One of the major cuts needed is anything dealing with tax dollars spent on PRIVAT CONTRACTORS. It's never mentioned as one of the biggest frauds perpetuated against all americans. Our tax dollars being funneled to the friends of politicians who then "contribute" the money to their political campaign funds.
The funds are then kept by these politicians.... so basically our tax dollars are being given to crooked politicians through backdoor contracts and lobbying nonsense.
I am not a fan of Bush. However, your opening statements regarding Bush tax cuts and not enacting the Simpson Bowles fail to consider job creation (read: more tax revenue via payroll and expenditures from people having jobs). My sister's cat, Harold, has more common sense, defined as economic rationale, than your pathetic conclusion of more money for the government via tax receipts. Ever heard of elasticity? Less spending money (read less tax receipts). If Harold ran CNN he would fire you on the spot!
In the land of the blind, the one-eyed man is king. The dollar is the one-eyed man.
The Washington High-speed Printer of US$ is the ultimate Weapon of Mass Destruction, now with Euro and Yen in these uncertainty. On the extreme, we can export devalued US$ by a massive supply of US$, hurt foreign investors' US$ loan portfolio. With a weak US$ in hand, foreign import are deemed as expensive. So we have to go back to some frugal spending that we should have done many years ago.
If he dollar is the one-eyed man in this land of blind. The Washington High-speed Printer of US$ will be the ultimate Weapon of Mass Destruction, now with Euro and Yen in these uncertainty. On the extreme, we can export devalued US$ by a massive supply of US$, hurt foreign investors' US$ loan portfolio. With a weak US$ in hand, foreign import are deemed as expensive. So we have to go back to some frugal spending that we should have done many years ago.
Makaria can go straight to h e l l! he is an idiot!
Brilliant analysis and I concurrent with most of it. My only comment is that I believe most of the solutions proposed will not solve out economic issues quickly, but they will decrease our deficit in a long run. Hope politicians drink tea together more often and discuss these issues in a macroeconomic way (long term).
Indeed there will have to be a compromise. We are a democracy and all sides eventually compromise after a lot of bickering and stubborn attitude from the two side extremes. There will be tax increase and there will be budget cuts(big cuts). That is the only solution of shared sacrifice to secure this nations future and set the country back on stable financial footing. All of all citizens will have to share the burden. There are no good solutions or choices but to try and work together and put everything on table. Defense has to be cut for the next 3 to 5 years to save trillions. Unnecessary wars costs billions, which we do not have. We are borrowing money from China to fight wars all over the world. That is STUPID. Americans need to wake up and shake up the congress. No poor person dependent on government wants to get a cut from his benefits and no rich person wants to depart from hard earned money to apy in taxes. But the middle class has to decide what kind of society we are going to build for our children's future.
How do you cut the cost of health care for a growing old age population that has no financial resources and fully depends on government.
Where is this tax revenue going to come from when the rich take their businesses elsewhere? We are an over spoiled country clamoring for more handouts and claiming they are our rights. Look at how states like New York, California, Vermont, etc. are doing thanks to their high tax policies. Vermont will soon be the least populated state and do some research on their beloved Ben and Jerrys.... you'll see how just enough of their ice cream is produced in Vermont to keep their Made in Vermont label. Most of the production has moved out of that over taxed state. Water takes the path of least resistance....the more you dam it up the more catastrophic the failure will be.
if re-enacting the Bush tax cuts are so important why wasn't it done during the two years the democratic liberals controlled both houses? Now all of a sudden it is just a political talking point when it could have been accomplished with ease before last years democratic bloodbath. Oh wait, we were enacting a health care plan so flawed we see today you can make $64,000 couple combined income and the govt will pay your insurance. But this health care debacle gets even better when you see how many unions and friends of Obama who have waivers. even the congress is exempt. All I can say is keep pushing those Pelosi – Reid ideas and we'll have another replay of the midterm elections.
Man, this guy is so logical, its scary ppl like this exist. This is exactly what I was just wondering myself, how are US/Germany/France and to some extent British economies different from Spain/Greece/Portugal etc. Fareed hits it right on the head. The former economies are fundamentally strong with strong industrial base and strong and well qualified workforce. Also they have fewer spending liabilities. The latter on the other hand have very weak industrial base and huge govt spending.
Trickle down economy as advocated by Republicans has not worked in the last 10 years, why should it suddenly start working now. Repeal bush tax acts and I'll put another proposal on the table. Add a war tax to pay for the wars. WHy should the soldiers and their families be the only ones to suffer?
IS that why the price of Gold and Silver metals is up and up? Who will accept these "gold coins" after our own U.S. economy defaults? Why do we care about the Greeks and their financial downfalls ? Didn't they choose this path of theirs with their "greed" and "selfishness" ?
Get lost, idoits!
The author's point crumbles when you consider Greece's economic issues were once easy to fix too; reform entitlements, plug the tax loopholes, etc. Point is they didn't, and now there's a great big mountain of debt from which default seems every bit inevitable. If the US stays the current course, we will end up like Greece x10. Quit punishing the people, and punish those responsible: the political pawns who made it possible for financial engineers to systemically erode the economic foundation of so many sovereign nations.
Zakaria, so Greece teaches us that we should blame fiscal problems on not enough taxes but little blame on out-of-control spending.
Be careful, your agenda and bias are showing....
Greece teaches the United States whats to come in the near future..
So all of you who are into class warfare do realize that all of the "rich" people in america only have a few billion dollars combined, right? If you took all of their money, 100%, it would pay the interest on the national debt for a little while. Do you understand trillion with a T? And if you raise the capital gains tax and corporate taxes, it will drive even more jobs out of this country when we need them most. The only way to get back to being balanced is to cut spending dramatically, raise taxes moderately on people who can afford it and make this country an inciting place to do business for foreign countries. Give tax breaks to foreign companies to open offices here. We sent jobs overseas. Time to bring some back here.
Bold cuts must be made to save the USA.....everyone will just have to deal with it.....major budget cuts across the board, keep tax rates the same for everyone accept those earning over $1million per year...their new bracket is 43%.......you can't cut social security or medicare....people pay into that and depend on it....so there there.....not the ideal plan but not the ideal situation either.
Yes, it is very frustrating. The Bush/Cheney tax cuts are the primary cause of the current deficit blowout, and restoring the levels to what they were beforehand would go a long way towards getting it within bounds now. But the unscrupulous politicians on the right have created a situation that makes doing that simple and equitable thing a political impossibility.
"How many times do we have to tell the "soak the rich" folks that the top 10% of the income earners in this country pay almost 70% of the taxes".................................................Those are figures. You know what they say about figures.
Zakaria, why don't yu go back to Pakistan and do your non sensical reporting there?
Whether you want to cut taxes or cut spending its all about whether you believe in trickle down or trickle up. Both have their merits and work to an extent. But you have to realize the wealthy have been increasing their slice of the pie for 40 years (look up the GINI inidex). Trickle down increases the proportion of total wealth that the wealthy have, and that has been going on for far too long. We need tax increases.
Most arguments here are just based on opinions and feelings. I don't see much facts. First off our corporate tax rate has gone from 38.7% in 1990 to 39.2% in 2010. Not exactly a huge increase. Albeit today we have pretty much the highest corporate tax it still doesn't show the whole picture. The corporate tax, like the income tax, has so many loopholes I don't know anyone or any company that comes close to paying their true and actual tax rate.
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html
Our tax system is a joke. I actually want a flat tax with no deductions. Make taxes 15% across the board, with exemptions for anyone making below lets say $5000. Get rid of ALL DEDUCTIONS. There – we not only make our tax system easy but now we can cut the IRS budget by 75%. Same thing for companies – make an optimal flat tax that works for business 15% – 20% and get rid of the loopholes. Get rid of all breaks and incentives. You cut down on corruption, waste, and you save a lot of time. This is not something new either as or system needs massive overhaul. Americans would rather pay $.40 on the dollar and get back $.20 than pay $.15 and get back NOTHING. Psychologically we are easily fooled and manipulated.
@joeyATL – We did not "send jobs overseas". A little bit about supply and demand (although global migration of jobs, manufacturing, and other economic items is a bit more complicated) but lets keep it simple. America wants a Job done for $10/hr. however most Americans that do this job WILL NOT accept anything less than $25. Some will, and of these that do some are novices but we won't get into that either. However there is a country that has plenty of people that would love to do this job at $10/hr. What do you think America does? Does it (A) Wait in line for the few in its own country to do the job (B) Increase what it is willing to pay or (C) Pay the workers in this other country. I'll let you answer that.
Cutting spending blankly across the board is not also very wise. Our education system needs to be strengthened – we are loosing more and more skilled jobs that require education overseas yet we keep spending less and less to train our work force.
Secondly our economy is shifting from one based on Manufacturing to more and more Service oriented. These service oriented functions are costlier and provide jobs that are not exactly blue collar. This drives up the national average for labor. Its been a gradual shift over the past 40+ years but this is just how it works. Eventually China will not be the manufacturing capital of the world but some other country will. It's how economic cycles go.
So saying taxes will scare businesses away isn't true. Business' want to be here – Americans spend the most and they want our money. Why should oil companies get $4.4B per year in tax credits especially when they are recording RECORD profits? how does Google save $60B thanks to some stupid loopholes.
What MORE do you want to give companies? We bail them out, offer them tax credits and breaks, give them loopholes to drive trucks full of money through, don't tax them when they are doing well, cut their taxes when they are doing poor, and for what? So some CEO can get a $50B bonus? How much do you think really trickles down? Because from what I have seen, read, experienced it gushed up top but almost stops to a drought once it gets past the CEO/CFO/COO. The only ones who want these tax breaks, loop holes, credits ARE the wealthy/greedy because enough is never enough. That is why we lose jobs and that is why we wont lose businesses. Like I said above they want to be here and they need to be here. We have the highest rate of suckers per capita in the world.
I agree with pierre's comment made at 8:26 ET... I've been telling myself in my own mind that america is at its empire.... we arent immortal and we will fall eventually unless we fix OUR FREAKING PROBLEMS!!!! To play in the government as old people, now thats experience... but now its turned to airheadedness....XD Really old people, your kinda killing us here........... W.W.F.
We don't even have to raise taxes, just go back to sensible trade practices. Trade Tariffs would not only reduce the debt but spur true economic investment (read jobs) here in the United States. Free Trade has not been free! And, there will be no recovery until we extricate ourselves from the current trade agreements.
Just a general suggestion to Fareed and the GPS staff. I think it might be valuable to produce a segment describing what would happen if the unthinkable happens and the dept ceiling is not raised. I'm reasonably certain that aside from the impact to credit markets, the Federal government also has no more money to spend and everything comes to a screaching halt; only this time no one gets paid in government, even the military and the politicians. Since this a sort of artificail construct impossed by Congress it would seem Congress would take the heat...entirely. Thoughts?
What Greece teaches us is that their economic turmoil is a very slippery situation.
Why always people talk only with stigmas either raise the tax or rich people already under big taxes. Other thing % of rich peoples, some giving the numbers 10% other 5% …
According to speeches of Obama rich people have income more than 250K a year, according to wiki % people with this income 3%. No some of those people paying 33-40+ % tax include Fed, State, and Real Estate, the reason they working and have W-2. Other people paying 15% tax because most of their income comes from capital gain.
Plan Simpson-Bowles proposed to streamline taxes so even rich people will pay equally. Make corporation pay equally not with incentives to old industries. I’m as “rich person” who shops in Ross and never been travel in first class agree.
What Greece tech us is that Germany for 3rd time 20 century dig her into the hole. First two times Germany tried to take over Europe by force this time it’s tried economic integration. Puff… History never teaches anybody lessons.
You're right. Because events in history aren't so simplistic and similar to analyze and learn in a matter that would actually benefit the present or the future.
At home, in the USA, we need to ignore the traditional party positions on the economy. Our first priority should be to reform the system of taxation. Model: (1) Flat tax rate for *every* single wage earner [rate=TBD] and (2) absolutely no itemisations, deductions, or exemptions for anyone. Everyone carries their weight. Tune the tax flat rate to the rate of deficit reduction as expressed by the will of the people [Poll this after the plan is accepted].
Bottom line: overspending and tax cuts (which is another word for spending) have landed us in this mess. Anyone who is serious about addressing the deficit understands that cuts in spending AND tax increases will have to be part of the solution. Nothing – not Medicare, Medicaid, Social Security, Military Spending, or Tax Rates – can be off the table.
Simplistic. Sure, the USA "could" solve the budget issues in theory, just as Greece "could have" solved them 20 years ago, if they'd acted. But they didn't act, and neither is the USA. We are on the same track, with no agreement on how to get out of it, in sight.
I recommend taking the homeless, the life-term/death row inmates, and prisoners of war and processing them into various pet foods. That way it lowers the cost of maintaining your sweater-wearing dog's health so that you can dye his fur too!
AHA , let me start with a disclosure. I am neither a US citezen nor do i live in the US (Thank god). Yes , however i am well informed and I read a lot about what goes on in the world. Reading these posts in response of the article i undesrtand more why america is going downhill so fast.
Havent we all heard the comment – "americans are spending their childrens money" enough times – clearly pointing to the shameless way they have abused the credit system for sonsumption and greed. Well wake up folks, you have been saying that for 30 years and when 30 years pass a generation has turned. Which means, you arent spending from your sons, You now are the generation who has to pay your pop's exsesses. Times up. now Pay up.