Reply #4: Ending free trade would be great. [View All]

[JDPriestly]

But Federal Insurance and Compensation Act taxes (FICA - Social Security taxes) are not part of the ordinary tax revenue. The government has borrowed the surplus of FICA taxes that have been paid since about 1985 or so.

Your analysis appears to simply count the accumulated FICA (Social Security taxes) in with other taxes. That is where the Republicans err. That is why Americans mistakenly think that Social Security is a cause of the deficit.

If you drastically cut Social Security, Americans will rebel against the FICA taxes. That is because they are extraordinarily regressive. If you earn $16,000 per year, you pay the same PERCENTAGE OF THAT $16,000 on FICA taxes as a person who is earning $16 million per year. The FICA tax on the first approximately $106,000 is paid by everyone who is subject to the tax -- that is pretty much all who receive their wages as "income." And those who are self-employed pay that tax as self-employment tax. (Employers prior to Obama's recent budgets paid a similar, matching amount of FICA-like tax for each employee.)

So, actually if you cut Social Security way back or did not pay out Social Security, the program would end, and the government would have even less revenue to do its accounting tricks with. So we would appear to be in worse shape than we are now.

The only solution is to end free trade and return to reciprocal trade agreements. Countries should agree to buy goods from us that equal in value what they sell to us.

Otherwise, other countries should agree to never call their debt. (They won't.)

Because, one of the "benefits," if you will, of defaulting would be that other countries might be less ready to extend credit to us. That might force us to stop buying so much from them. We buy on credit, after all. If China, say were to call our debt.

Americans would have less money to spend on junk imported from China. I can think of very one prominent American retail chain that would probably have a lot of empty shelves and close some stores.

Another possible benefit would be that our currency would be devalued. Again, that would mean that foreign products (including raw materials) became much more expensive. But it also would mean that we would be forced to be more innovative and creative.

How about composting instead of putting oil-based products into our soil as fertilizers. Curtailing imports might end corporate farming and cheap food. But it might bring a renaissance in victory gardening and small farms. We might eat steak less often and beans a lot more often. But that might be a healthy thing not only for our bodies, but from a societal, cultural point of view.

Oh, and how would it be for us if we imported less oil and walked, cycled and used public transportation more often? Do you think that if gas prices went up to $9 per gallon, we might actually see a few people start to use their vans as pay-per-ride vehicles?

Not such a bad idea if you want to ask me.

Ending free trade might actually loosen the natural entrepreneurial spirit in America that has been destroyed over the past 50 years.

I would love to go back to the days when you actually knew the name of the family that owned the shoe store down the block. Things were a bit more expensive -- but then so were wages for a lot of people.

Only the big corporate CEOs would take pay cuts in that situation. And there would be lots of entry-level jobs for students and jobs for older workers -- not high-paying jobs, but at least some work.

Americans are still fundamentally creative and resourceful. Ending free trade would free Americans to be who we really are in my opinion.

On edit, California tried this. It failed.

We can't raise taxes without a super, super majority vote. And of course, the Republicans religiously vote against raising taxes ever, no matter how much debt we have.

It has been a disaster. Our state has terrible debts.

Fact is, we have hefty sales tax. It is imposed at the point of sale, which is, of course, now in some other state. California has passed a law saying imposing taxes on internet sales -- but how will California enforce that law? Hard to do.

So, governments need the flexibility to respond to economic changes, changes in the way we spend money,

What if we had a really major crisis and had to raise money very rapidly. That is what happened in WWII. The government would need to have the freedom to raise taxes.

Sorry, but a no more taxes amendment would be disastrous.

It's a no go. Just another stupid idea that appeals to simple-minded Republicans. Can't think beyond their TV schedules.