Help! I don’t understand government economics. How can the government have a surplus and be trillions of dollars in debt? The last account, on Nov. 29, it amounts to over $5.6 trillion. This debt costs us millions of dollars daily in interest.
Apparently, the economic laws which apply to government are different from those which apply to the rest of us. It has been stated that a large portion of this “surplus” will be used to reduce taxes, but taxes are the main source of governmental income.
How can you pay off debt and run the government by reducing its source of income? Does this mean the debt will increase and cost us more in interest? Maybe they plan to increase other taxes rather than “income taxes.” Corporate taxes is one that comes to mind. Wouldn’t this mean corporations will increase the cost of their product to cover this increased cost of doing business? Who do you think is going to ultimately pay these increased costs?
Creating a surplus, or the illusion of one is easy. All you have to do is overestimate income and under estimate expenses in your budget and you have created a budgetary surplus. However, it is only an illusion. If the government can run its business and pay off debt by reducing income through taxation, maybe we can all apply these same economic principles to our own finances. Please, someone show us how to do this. I must be missing something.
Maybe American Express, Providian, Visa, and other credit card companies could join together and issue the government a Gold plated Platinum card to use. John C. Ferriday Sedgwick