“The bully keeps taking half of your lunch money each day. But don’t confront him because he might beat you up. Instead, just keep paying half and if he asks for a little more, just do it! I mean, we don’t want him getting really mad.”
Awful. DLM
Dear DLM: Let’s use a different analogy because the “bully” in your story doesn’t really fit.
Let’s make it a landlord instead.
You are years behind on the rent but the landlord is leaving you alone, for whatever reason. But one day you decide that it would be fun to piss him off. So you start making demands — you don’t like the way he treats people. And more demands — you want him to upgrade stuff in your apartment. And then, just for fun, you start telling people about your demands just to make the landlord look bad.
You’d be out on the street pretty quickly.
The Chinese own $1.3 trillion in US government debt, which is roughly 7 percent of all the money that has been borrowed by the US government. When you exclude money that America owes to Social Security or its citizens, the money owed to China is the largest debt.
China is our landlord. It doesn’t own the whole house. But it has power over us nonetheless.
Dear John: Here’s a new idea. How about a negative sales tax to encourage spending?
So, rather than the government giving a tax cut — which people save — it will encourage people to spend. M.I.
Dear M.I.: So, a guy goes into the store to buy a pack of gum and instead of paying the 7 percent sales tax the government gives him a rebate — or a discount — of 7 percent, or 2 percent, or 1 percent.
Interesting.
While a “negative” sales tax, or a sales tax rebate can be too tilted in favor of the wealthy (who buy more and pricier taxable goods) it could be tweaked to have some items (like yachts and luxury cars) be exempt from the rebate.
If there’s a guarantee that the economy will grow fast enough to absorb the givebacks, then it might work. What I do like about this is that it is different — the same old stuff just isn’t working.
Thanks for the note.
Dear John: Did Hillary Clinton promise, or hint, that someone from Goldman Sachs would become Secretary of the Treasury? J.M.
Dear J.M. I haven’t ever spoken to Ms. Clinton and I doubt I ever will.
But clearly the odds favor someone from Goldman Sachs getting key roles in her administration. Ex-Goldman Robert Rubin was her husband’s longest-serving Treasury boss.