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Thursday, April 12, 2007
The Chunk of Your Tax Bill That Just Doesn't Matter
The Chaney Fiscal Theorem, which asserts that Deficits Don't Matter, was the dominant view underlying the tax and budget policies of the nation's governing party for most of this decade.
$1.6 trillion in tax cuts? Doesn't matter, and not just because of the revenues they bring in, but because, really, what is an extra GDP percent or two worth of deficit? A comma in history. No matter. Greater spending increases under this administration than any in the history of the country? No worries -- we can borrow to pay for it and our credit is good (until it isn't). The additional borrowing costs? They don't matter (see Theorem).
The National Priorities Project's interactive income chart will show you, down to the penny, how much of your family's tax bill this year will go to paying interet on the nation's debt.
For the average American family in 2005, $3179.00 went to pay the interest on the debt. Not to worry, though -- according to the Cheney Theorem, it just doesn't matter.
And that is why at this point, even for President Bush, who this year took pains (and budget gimmick liberties) to propose a budget projecting a surplus in 2012, it is the Cheney Theorem that apparently ... just doesn't matter.
Posted by Dana Chasin
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