Republicans and Debt

If you look at the way they talk you would think republicans are in favor of reduced government debt.  After all they want to reduce Government spending and return the money to tax payers.

Now it is true that in this country, the tax system theoretically makes wealthier people pay at higher tax rates so any reduction in taxes benefits the wealthy the most.

This is pretty simple math, taxes on a million dollars, all things being equal will be much higher than taxes on a thousand dollars.

Now some of this money needs to be invested in something nice and safe.

The Government conveniently has to issue bonds and notes to finance itself without the tax money it just gave back.

So wealthy people can pay taxes or preferably loan the Government money for with interest to pay its bills.

I know what I would prefer.

Now of course the system is more complicated than that, banks and brokers get a piece of the profits but that government debt is nice and reliable.

Of course it doesn't do much for the economy.  Money has been very cheap for a long time and any expansion would have been fairly easy.

A lot of big companies with extra cash simply bought back their own stock instead of building new factories.  We already have plenty of supply and the ability to generate more.

You don't build a factory to make something you can't sell.

So giving them more cash when they have more than they need now is simply not going to change much.

Except keep the bonds and notes available, at least until the bubble pops.