Government surplus funds can lead to tax cuts and diminution of the federal debt.
There is no great secret to balancing a budget or reducing a debt. Balance occurs when individuals, businesses and government entities spend no more than their incomes. And if there is a debt, it has to be paid off by spending less than the intake. Now there is debate about whether current government surplus income should be used to provide needed tax cuts or go toward a balanced budget.
There is a chance to do both.
Alan Greenspan, the Federal Reserve chairman who has figured so prominently in good economic things for America, at one time favored using surpluses to reduce the nation's debt. His latest approach seems to be: "In due time, but tax cuts should now take precedence."
President George W. Bush currently is seeking $1.6 billion in tax cuts over 10 years. He knows, like Greenspan, that won't make an immediate impact on the currently struggling economy. But down the line, the results should be good.
Says Greenspan, "Should current economic weakness spread beyond what now appears likely, having a tax cut in place may do noticeable good."
But the Fed chairman adds that the main reason he likes a tax reduction plan is that it will keep the government from piling up even more money. Surpluses are growing so fast, he says, that the time is near when the federal debt can be reduced to a level he considers "an effective, irreducible minimum." There are complications, but there also are reasonable expectations for success.
Writes Bill Thompson of the Fort Worth Star-Telegram:
" maybe it's not complicated at all. Greenspan, the foremost economic genius of our time, has basically told the Senate Budget Committee what conservatives have been telling the public for year: Government should not collect more money than it needs. And he was telling the Democrats what they really didn't want to hear: When the government has more money than it needs, it's supposed to give the excess cash back to the folks who forked it over in the first place."
Now that's a start toward federal fiscal policy that most Americans, particularly those who help build those surpluses, hope becomes a constant presence.