[quote=pri_dk]Since you obviously missed it the first time, be sure to pay attention to the parts about debt in Millionaire Next Door. Stanley and Danko recommend paying off the credit card every month. Our government hasn’t been doing that. The tax cuts simply mean the bill will get bigger.[/quote]
Absolutely correct, it is the GOVERNMENT who has not been paying its bills. And so that is why I do not like the GOVERNMENT forcing us to pay more in taxes when it is the government not living within its means.
Anyways, here are some practices of people who become wealthy:
1. Be frugal in spending money (government does not do this).
2. Pay off bad debts and avoid negative interest (government does not do this).
3. Keep “maintenance costs” and other expenses low (government does not do this).
4. Keep “prices” (taxes) low in order to get more people/customers paying.
Maybe from these lessons we can find out why our government is not doing its job very well.
Because of the economy, many real estate investors are having trouble finding and keeping tenants. Basic fact. They have to keep their rents low in order to attract more tenants. Many investors may be in negative cash flow territory (they are in deficit, or in debt).
Now, this is their dilemma: they can either raise their rents, thereby almost guaranteeing that they will not get more tenants, or they will lower their rents and keep them low in order to attract as many tenants as they can. The solution for the smart ones is to keep the rents low or make them a little lower in order to attract as many tenants as possible. Because of this practice, their deficit/debt becomes less than if they raise their rents. Yes, they are still running a deficit and have debt, but it would be less.
So your argument about how tax cuts increase the deficits is flawed.
In any case, the problem with the deficit and the debt is not income (taxes), but spending. Every successful PAW millionaire knows that.
