grl@charm.UUCP (George Lake) (10/29/84)
The following is only meant to be suggestive of the REAL cost of the deficit and the real meaning of Reagan's "tax cuts". The deficit is ~175 billion. There are roughly 50 million families in the US. This is $3,500./family. Since the median family income is rougly $25,000., we are talking about an as yet "hidden tax" of nearly 15%. Are you really happy with that extra $50 you take home every month?
tan@ihu1e.UUCP (exit) (10/31/84)
George Lake, of AT&T Bell Labs Physics Research, submitted the following: ________________________________________________ The following is only meant to be suggestive of the REAL cost of the deficit and the real meaning of Reagan's "tax cuts". The deficit is ~175 billion. There are roughly 50 million families in the US. This is $3,500./family. Since the median family income is rougly $25,000., we are talking about an as yet "hidden tax" of nearly 15%. Are you really happy with that extra $50 you take home every month? ________________________________________________ Unfortunately, George makes a mistake that no physicist should ever make. He is comparing two quantities with different units, hence his 15% figure is nonsensical. The deficit per family is roughly 3500 dollars. The median family income is roughly 25000 dollars PER YEAR. The ratio is ~0.15 years, or about 2 months. This figure is not a tax rate, but the amount of time the average wage earner would have to work to pay off his/her share of the deficit. A valid computation of the "hidden tax" due to the deficit would use the annual interest on the deficit, so here goes: The interest on the deficit per family is approximately 400 dollars per year($3500 * 12%(a guess) interest rate). The median family income is 25000 dollars per year. The hidden tax is about 1.7% of the income of the family. I have no idea if the above input figures are accurate. I am just using George's own figures. By the way, I am not for Ronnie. I think that, on balance, Mondale is by far the lesser evil. There are enough valid reasons to dispose of the Gipper that we shouldn't have to make up spurious ones. But, if my own short-term personal economic well being was the only issue, I would vote for Reagan. Bill Tanenbaum
schachte@ittvax.UUCP (Peter Schachte) (11/01/84)
> George Lake submitted the following: > The following is only meant to be suggestive of the REAL cost of > the deficit and the real meaning of Reagan's "tax cuts". > The deficit is ~175 billion. There are roughly 50 million families > in the US. This is $3,500./family. Since the median family income > is rougly $25,000., we are talking about an as yet "hidden tax" > of nearly 15%. > ________________________________________________ > Bill Tanenbaum responded: > Unfortunately, George makes a mistake that no physicist should ever > make. He is comparing two quantities with different units, hence > his 15% figure is nonsensical. The deficit per family is roughly > 3500 dollars. The median family income is roughly 25000 dollars > PER YEAR. The ratio is ~0.15 years, or about 2 months. This figure > is not a tax rate, but the amount of time the average wage earner > would have to work to pay off his/her share of the deficit. Oops! The deficit is the difference between what the government spends and what it takes in IN A GIVEN YEAR. This year it was ~$175 billion. Bill Tanenbaum is thinking about the national debt, which is ~$1.7 TRILLION. If George Lake is right about the number of families in the U.S. and their median income (I'm not doubting him), then the national debt divided by the number of families is $34,000 per family. And if we divide that by the median income per family, we come out with a pay-off time of 1.36 years, or more than 16 months. THIS is the length of time the average wage earner would have to work to pay off his share of the debt. Does this mean anything? I think George Lake's number is more meaningful, although it's not really a tax. A tax is something you pay NOW (or soon). Think of it as a sort of negative escrow account, added to annually, to be paid off after we're all dead (we hope). Certainly it won't be paid off until after Ronnie's dead. Anyway, we can safely state that we (the USA) are deeply in debt, and we are getting in deeper all the time, and the rate at which we are getting in deeper is increasing. I think we are a pretty bad credit risk. I wouldn't give us a credit card :-). And Ronnie, despite his campaign promises of a balanced budget, has not made the situation better. Maybe voodoo doesn't work after all :-). -- Peter Schachte (decvax!ittvax!schachte)
david@fisher.UUCP (David Rubin) (11/02/84)
Recognize, though, that Bill assumes that the national debt is never changed by pay back or further deficit, i.e. all future budgets are balance. It's the compunding of the interest that'll kill ya! :-) David Rubin