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The Pros And Cons Of Government Debt

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Apportioning the debt for greater transparency The stark reality for all citizens is that governmental debt, although created by prior generations, must nevertheless be serviced by the current generation. It serves no purpose to argue where the repayment burden should be but government should make an effort to categorize the source debt. I would recommend the following categories:
• Foreign wars
• Economic security
• Medicare
• Medicaid
• Affordable Care
• Homeland Security (National Guard, FBI, CIA etc.)
• National Defense (Armed forces Maintenance) It is a problem of the current generation because no matter what we do either we or the next generation will have to deal with it but fixing the cost enables the current generation to be wary …show more content…

Most philosophies regarding this aspect of government dictate that the tax system and the Federal Reserve are the vehicles for an equitable apportionment, actually they are not. The tax merely provides a redistribution of wealth that never really gets redistributed and the Federal Reserve supplies monopoly money to cover a redistribution Ponzi scheme. Under the present tax system, fair distribution is often debatable but arguably, most learned economists consider it illogical to espouse any other methodology. The Federal Reserve, on the other hand, has been more successful at least in curbing inflation in a rich capital market. This leads me to believe that an even more direct management of the debt as leverage for expansion can be more of a political …show more content…

The first way is by reducing the actual government debt and the second by eliciting marginal capital in a broader securities market. It is also anticipated that these instruments themselves will enhanced growth by creating a secondary capital market and will promote the movement of otherwise retrenched capital. Broader income tax bases are then expected to emerge by effectively whirl pooling the marginal block of capital infused from the private sector and from the debt capital released by debt reduction. This should also offset any possible negative impact from accelerating revenue. In examining this model it is useful to ponder more simplistic alternatives. For example, what would be the difference if the government merely enacted a tax surcharge for the discounted interest? All this would achieve would be to fund and fuel debt growth rather than debt management. In such a case, capital would not be moved as efficiently through the entire working population the taxpayer has no market options to recover the tax, let alone any discount that he or she would pay in the Dretaco model.
Options market and tax

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