Would you rather pay now or later?
Say you need to upgrade your car but don’t have enough set aside to pay cash. So you must take out a loan. But the lender offers you an intriguing choice: You can start paying immediately or defer the start of payments for five years. Taking the latter choice, however, will cost you more in interest in the long run.
Which way do you choose? You can liken the above scenario to our government. The feds keep borrowing money that ultimately must be paid back. As a story in today’s Gazette explains, back in the George W. Bush administration, the federal government started giving us income tax breaks that have rolled over and continued from year to year. It’s not that our government is awash in money—it borrows most of every dollar it now spends—and it’s spending a vast amount just in the time it’s taking you to read this. Sometime in the future, all this red ink must be paid back.
So are you ready to take a hit starting Jan. 1 that would see income taxes rise by $2,000 annually for the typical middle-income family making between $40,000 and $64,000? That tax bill would be even higher for families making more, of course. Is your household income flush enough to handle it? Would you rather pay the government this amount now or more later as interest costs pile up and we dig a deeper deficit?
To borrow a familiar phrase from the makers of Fram oil filters, “You can pay me now or pay me later.”
Greg Peck can be reached at (608) 755-8278 or gpeck@gazettextra.com. Or follow him on Twitter or Facebook
Oct 4, 2012 at 1:45 a.m.
Suggest removal
"Take a look at the austerity programs and the the protests in Europe. Do you think Americans would stand for cuts in benefits and higher taxes? "
.
Just look at the minor cuts which Walker implemented to state workers here in WI..MASS protest, and near riots in the streets, and those were pretty mild cuts. You propose austerity that Greece has (which have been 40% across the board cuts) and the results would be EXACTLY as you have over there..MASS riots in the streets, and TOTAL chaos.
.
As far as the 401K comment, as I have always preached, if you want to maintain value in savings, you buy metals and commodities. Things that hold value, as they have real intrinsic value, not just faith in some paper that can be created by central planners at will.
Oct 4, 2012 at 1:37 a.m.
Suggest removal
"I dont understand how people pay and pay and pay and in 10 years they still dont have anything. Blows my mind."
.
Sigma: It's because of what has been instilled into today's society. We are taught that spending on debt is VERY GOOD thing. Make ZERO doubt about that statement. It is why you have prime borrowing rates at zero (and they will NEVER go off zero in our life). Of course with interest rates at zero you DIS-courage any saving. What is the point of saving a $ if you get next to nothing in interest, while inflation is far above that rate of interest, which will decay the value of your $$ to spend over time? Everything the fed does, and everything trying to be instilled in the fabric of our society is to SPEND, and SPEND NOW. Spend on debt, borrow, borrow, leverage and leverage more. It is what fed policy ENCOURAGES EVERYONE from the individual, to corporation, to government itself, to do.
Oct 3, 2012 at 9:10 a.m.
Suggest removal
I understand Sigma is building a new car elevator for all his vehicles, modeled after Romneys.
Oct 3, 2012 at 7:27 a.m.
Suggest removal
Sigma thinks this article is about car payments. LOL.
Kiowamohican is correct. There is no intention of changing our current and expanding fiat currency policy. That Million you have in your 401k will last you a year in twenty years from now.
Take a look at the austerity programs and the the protests in Europe. Do you think Americans would stand for cuts in benefits and higher taxes?
I think those Romney ads talking about how welfare and unemployment bebefits have skyrocketed under Obama just encourages more people to vote for him and government welfare.
Oct 3, 2012 at 6:33 a.m.
Suggest removal
If you been driving for 5 years you should have a car paid off and if you been driving for 10 or more and dont have 1 or more cars paid off you got issues. If you been driving for 20 years you shuold never have an issue. If you keep driving cars till the value declines and consider a car a "consumable" instead of an investment then you are your own failure. Ive been driving for 20 years and own an SUV, a truck, 3 sports cars, a older muscle car, and a project car... and I havnt had a car payment in years. If I had more room i'd buy another car every year. I dont understand how people pay and pay and pay and in 10 years they still dont have anything. Blows my mind.
Oct 3, 2012 at 4:10 a.m.
Suggest removal
First they need to quit spending money on stupid pet projects which do nothing. More tax dollars they get, the more they find ways to waste it away.
Definately a flat tax. No deductions, no exemptions.
Oct 3, 2012 at 3:31 a.m.
Suggest removal
"Sometime in the future, all this red ink must be paid back.".
.
NO PROBLEM AT ALL.
When you control the bank, and are given the full authority to create $$, hey we can pay it off tomorrow, if we want. Just create $15 or so trillion out of thin air.
NO WORRIES folks!
Oct 3, 2012 at 3:24 a.m.
Suggest removal
"The feds keep borrowing money that ultimately must be paid back."
.
That statement is 100% FALSE!
You simply create the $$ at the federal reserve to pay it back.
See QE1-2-3 and soon 4-5-6-7-8-9......
If you mean paying it back by hitting a few computer key strokes at the federal reserve, then your statement has some validity.
The solution is plain as day for any who bother to look past the smoke. You simply 'pay it off' by monetary-currency devaluation. Where it ultimately gets "paid" is by the consumer in the form of higher prices as the $ devalues. This is the plan, fully endorsed by pretty much every major figure in government, do not be fooled!
Oct 2, 2012 at 9:50 p.m.
Suggest removal
Sooner or later our economy is going to collapse unless the idiots that vote for either the bulk of Republicans or Democrats currently in office or running for office stop putting them in charge.
Oct 2, 2012 at 8:50 p.m.
Suggest removal
What difference does it make if you pay now or later? It ends poorly either way.
From the National Inflation Association:
"One thing NIA is almost 100% sure of is that come year 2015, middle-class Americans will be spending at least 30% to 40% of their income on food,"
http://inflation.us/egyptpreviewamerica....
Oct 2, 2012 at 7:12 p.m.
Suggest removal
Oh,please...........take a look at the debt accumulated under the current potus.
Oct 2, 2012 at 5:24 p.m.
Suggest removal
If it helps to pay down our debt, I am all for it. I just wish people making 1000000 a year would pay the same percentage as the guy making 40000 a year. Flat tax please.
Oct 2, 2012 at 4:50 p.m.
Suggest removal
Pay now? Why didn't anyone tell George W. Bush that?
Oct 2, 2012 at 2:32 p.m.
Suggest removal
Pay now.
Before you post a comment, consider this:
Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy AgreementPost Comment
Commenting requires registration.