Balanced Budget
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There is not way than $1 and $1 would make $5.  We will need five $1s.  There is now way around it.  No miracles!

First and foremost, we need a balanced budget .  A country riddled with debt only invites disaster (case in point: Argentina or Turkey).

Investors look years ahead.  If what they see is a tunnel, and no light at the end, they will not go in!

It is popular to rebate or cut taxes, but in doing so, are we sensible or are we negligent?

Even under the motto of "helping the economy and bursting economic activity",  I would be skeptic and cautious on accolades to popular political moves, when I see that they do not make much financial sense.

The current problems of the economy are deep.  It will take time to sort them outCheap labor from millions and millions of mainland Chinese might be one of the culprits of our economic problems.  We need to encourage the Chinese to spend more on their development, thus recycling capital.  We need a trade-balanced with that country, and some other ones as well.  And at the earliest possible.  If everything that we buy these days is going to be made in China, then they will have to buy technology from us: airplanes, telecommunication equipment, contracts to participate in the building of their infrastructure, etc.

The economic downturn -I am afraid- might not go away for some time.  I wish that were not the case.  I lost a great deal of money in the stock market due to this downturn. However, not paying our national debt, and instead giving tax rebates just because we had a very good year in 1999, does not cut it!  In my opinion, it just makes things worse.  And investors (foreign and national) will be even more worried and concerned, about our economy.

The present state of the American economy we all know is not that good.  If the future state were not to be promising, then we are really doomed.  We have a huge debt hanging from our necks, we need to take care of that.  WE NEED FISCAL RESPONSIBILITY, and we need to stop playing election games!

According to the Congressional Budget Office (CBO) the surplus that we were going to have during the next 10 years is not going to happen.  The CBO had predicted the entire federal debt would be paid in 10 years.  That was a very optimistic -and irresponsible- extrapolation based on a couple of years of excellent economic news. Now they say that the federal debt will increase to $ 4,200,000,000,000 (yeap! $ 4.2 trillion dollars), requiring another trillion in interest payments. This number is too big to make any sense in most people minds.  Let's divide it by the number of wage earners in America (around 100,000,000)... now it says that the American federal debt is equivalent to each American tax-payer owing $42,000.  That is equivalent to a lot of credit cards max-out to the limit, my friends!  Do you see now why the investors are scared, and the economy is in shambles ?

These projections are optimistic, and do not include the additional $48 billion requested for the military and homeland security. It does not include either a prescription drug program for the Medicare.  And it does not contemplate the $54 billion in tax cuts, scheduled to take effect between 2004 and 2006.

Years ago we also had a huge federal debt (are you old enough to remember the Nixon/Vietnam days?).  But in those days few countries in the world -if any- could match our industrial and manufacturing prowess.  In 2002 -though- a great deal of our manufacturing jobs went overseas. And those jobs that have not left our shores are finding a hard time competing against similar products made in low-wage countries.

Many of my peers (Plant Managers and Industrial Engineers) can not find jobs.  They are in the prime of their lives, yet they are fast becoming obsolete, often discriminated by age.  And many white and blue-collar American workers have been displaced (geographically and professionally).  The base of our economy is moving fast toward "Internet Vaporware" , the smoke-and-mirrors stuff (today you see it, tomorrow you don't!).  And this who writes is a Software Engineer, indeed one of the pioneering visionaries on that field ( for more details please visit  ).

Furthermore, on that "Information Super-highway" field there is a very small "entrance barrier".  Any country can "have a slot, and play". We will compete with every other country that has people who have brain power, and most countries have that. Some of those countries have seen misery pretty close, and they will fight hard.  They will see tremendous rewards to their efforts.  We Americans will try hard to maintain our lead, but no matter what we do we will see the leading gap becoming shorter and shorter.  The same way that AT&T sees MCI and Sprint getting closer and closer.  High-tech pricing will go down the same spiral as plastic toys did (and not just toys anymore, but all the paraphernalia of things "Made in China" -or somewhere in Asia- which accounts for almost everything we buy these days in Wal-Mart, or Best-Buy).  On the software though, the sticker will be "Made in India", or "Made in Pakistan", or "Made in EEU".

By the way, only 25% of the tax cuts would occur in 2002, yet, all of it will go to the top 30% of income earners, many of whom have already plenty of toys and households and do not know what to do with the money.  The stock market these days is a "can of worms", therefore most of the money will probably stay in the sidelines. Middle and low income earners would have been more likely to use the tax cuts in ways that would stimulate the economy more.  And it would have been more fair as well.  If you have read some of the factual pages on this site, you will probably agree with me that it is time to revert the trends in America, and give some relief to the working family.  If it is not money that we could offer, then it has to be other type of help, such as child care, maternity leave, more days of vacation with their families, decent health care, ...

As Mr. Alan Greenspan, Chairman of the Federal Board, has suggested: tax cuts and other budgetary rules should be made contingent on actual budget surpluses, and on milestones reached in paying our federal liabilities.

Not too long ago, both parties had promised not to touch the Social Security surpluses.  But how else can they get those trillions of dollars without causing major upheaval in the international financial markets?  Well, we could use payroll taxes paid by low and middle-income Americans to finance the scheduled tax cuts for the 20% wealthiest, whom already amassed as much income as the other 80% of earners.  Where are we going, America?

It is not good to live at the edge of a precipice.  Because, if something goes wrong (a terrible hurricane, a series of damaging tornados, or another disaster like the one in September 11) then there is no slack to move back.  And we will move closer to the abysm.  For a robust economy we need to promote investments and more savings (please read my inedited proposals on capital gains and investments), and ....

We need to pay our debts, FIRST AND FOREMOST.

And we need watchdogs, to make sure the National Budget will be balanced.   No tricks !!

Proofreader: JX
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