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Originally Posted by pan6467
Yes, at first there maybe a hit to government, however, if companies hold up their end, better paying jobs, increase in jobs, etc. then the tax base from income taxes increases without any new tax burdens, thereby more money flows in.
And again, as these "T-Bill" babies pay off their principles early, and invest more money enters into the system and companies can expand. Also, those that open new shops (because they have the T-Bills paid off and a little saved) that will add to the tax base, not just federally but locally and statewide.
Right now, the system is squeezing the worker and causing the death of the middle class and it is also telling the workers there isn't much to look forward to in retirement (as far as paying 12% into a bankrupt system). This system allows the middle class to grow, companies to grow, a man to help himself without government handouts, and tells the worker after 50 years of hard work, you will achieve a well deserved decent life.
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If those are your assumptions, you just went from having me sold to having me vehemently against it. First off, you can't expect that people are going to pay off their T-bills early because they can and it's a financially sound decision. I'm sure most people (esp. the lower and middle classes) are going to going to put off payment as long as possible to improve their immediate quality of life. This would then put an even HEAVIER strain on the government as they are paying even MORE interest on money they don't have. To put a number to it, in your proposed system, even if the T-bill was payed IN FULL on the individuals' 20th birthday, the governement would be eating an additional cost of $64,945 - more than the initial value of the T-bill. If the individual payed in full at 30, the cost to the government would be $124,281. In reality, the person would likely start paying it off beforehand, but many would likely not have it paid off until they were 60+. The average cost to the government could easily be over 3 times the principal. And you're going to tell me that the ones that pay it off early and the reinvestment that fosters is going to cover this? I think that's a pretty hefty leap of faith.
Sorry, pan, but I'm finding that your system is based more off of belief and (hopeful) circumstance than facts and analysis, and I don't buy well into belief and circumstance.