Comment: Re:Some debt is fine. Key word is "some" (Score 1) 246
The government grows because the nation grows. A larger more complex nation requires larger services. For instance, there were no need for ultra engineered paved roads in 1776. Post war federal spending as a percent of GDP has been around 20%. Most of the complexity in the tax code is to provide special privileges to special entities. It is, however, correct, for those certain entities will have income that is hard to define. This is why a flat tax would not work. Most of us we would pay about the same, but the special entities would manage to define income so they would pay less. Look at it this way. If I make money by working with my own two hands, my body, that is taxed at a higher rate than if I sit back and earn interest. Income of the wealthy is different differently than income of the working class.
The current deficit situation is probably caused by special entities not paying as much tax as they once did. For instance, federal debt fell rapidly post war, but increased 30 percentage points with respect to GDP during the reagan bush era. There were two reasons for this. First, as mentioned, borrowing is good and the country was not paying the debt down too fast. Second, Reagan cut taxes to below sustainable levels, something with bush realzied and fixe resulting, along with good, policy, the debt falling about 10 percentage points during the Clinton years.