Quote:
|
Originally Posted by C4 Diesel
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.
|
First I want to appologize for being late into replying.
I understand your problem with the system I described. I am sure there will be a lot of people that wouldn't pay off their principle until later. Just as I am sure there would be enough to pay it off early to start their own businesses and investment accounts. Thus feeding the economy and raising the tax base for the community and state. Plus, the companies with their new found tax cuts and raising wages, developing new jobs also increases tax base, immensely.
If the state's and localities tax bases rise (along with the Fed's) there is less need for the states and localities to take Fed. funding. Thus less money spent for those areas.
This plan may start slowly, but in the end the tax base rises in every aspect, the elderly are better taken care of, and companies grow. All this means that the Feds can spend less money and maintain the needed programs.
The downside is there would be a hit at the beginning and the transition would be tough but, if someone more knowledgeable about economics could work the numbers I'm sure it could be done.
But it's a dream that I don't think we will never have to worry about as this program will never move farther than here.