I appreciate your perspective and what you’re saying makes a lot of sense to me.
With that said, you believe government would not have to increase taxes at all? That there are enough spending cuts to make getting out of the red possible without it?
Soaring U.S. Debt Is a Spending Problem Revenue is stable, but outlays are reaching new heights as a share of GDP.
- Thread starter West Dundee Hawkeye
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With that said, you believe government would not have to increase taxes at all? That there are enough spending cuts to make getting out of the red possible without it?
Yes; people are living longer, and drawing benefits longer.
Incomes have increased substantially, yet the payroll cap on SS tax has not kept up.
These are fundamentally simple fixes to shore up the pay-as-you-go setup. It is not a Ponzi scheme, it is pay-as-you-go, and the assumptions made for that system 50+ years ago have changed.
Democrats have proposed some of these fixes, which will not "fix" solvency completely, but will shore it up for another couple decades. Those are necessary changes, and the GOP will not entertain them, because they WANT it to fail.
When you look back at every GOP tax cut on the rich and corporations, you see those revenues dip well BELOW that historical average. And that is a problem that needs to be "paid back" to bring it back up to the 18% or so.
You cannot continue "cutting taxes" to fix the problem here, particularly when past tax cuts have exacerbated the issue. Bring back corporate and cap gains taxes like they were even in the Reagan years, and you have a clear path to balancing the budget.
Consumption is inflationary. Econ is at about 70% consumption which is a record. For decades we were at 50%-60% range so the last thing we want to do is to encourage more consumption. Consumption makes our widgets more expensive to export.
I had bought into the idea we could just become a service econ but then China joined the WTO and we lost millions of manufacturing jobs and I realized we need a manufacturing base. We don't want to be dependant on China.
I had bought into the idea we could just become a service econ but then China joined the WTO and we lost millions of manufacturing jobs and I realized we need a manufacturing base. We don't want to be dependant on China.
Which is why the Inflation Reduction act is deflationary, from an energy cost/use perspective.
Get high efficiency appliances/HVAC systems in place for everyone and they use less.
Same with gas mileage for vehicles (that conservatives bitch about constantly)
Electrical equivalent "cost per gallon" for fuel/energy is well under $1 'gallon' compared to liquid fuels; less than 1/3 what gasoline costs.
This is why the "green" projects being pushed by Democrats have very high long-term economic value, aside from the net-zero emissions targets. But the oil/gas industry is pushing hard to prevent that - which, in turn, keeps things more costly for everyone.
Not disagreeing, but, there really is no plan or way to get enough of a tax revenue increase to cover the debt. Anything that would get 1/2 of the current 2 trillion deficit would have a huge impact on the economy, which would lead to reduced tax revenue and a need for additional spending.
Once everyone realizes there is no correlation between federal spending and federal revenue, it will make it easier to understand. Spending is utilized for political purposes and in some cases it is actually used to assist.
The federal government spends whether it has the revenue for it or not. Several examples over history. The most recent is the Student Loan relief, they knew the deficit was going to be almost 2 Trillion, so, why not just spend another 100-200 billion. It is not like they are worried whether there is revenue to cover the additional spend.
Instead of loans being a personal responsibility and actually paid off we’ve let them become a federal liability and thus permanent transfer of wealth from society to Wall Street.Student loan relief contributing to 27% jump in projected federal budget deficit, per CBO
Student loan relief contributing to 27% jump in projected federal budget deficit, per CBO
By Tami Luhby(CNN) — The federal budget deficit will hit $1.9 trillion this fiscal year, according to an updated projection released Tuesday by the Congressional Budget Office. That’s 27% – or $400www.cbs58.com
Idiotic pandering with a real, and permanent, cost far in excess of what it pledges to ameliorate.
No, it isn’t. Consumption doesn’t create money.
The issuance of new federal debt serves as the fractional reserve collateral upon which our banking system issues new loans - creating money, creating inflation.
The US has been borrowing trillions to increase consumption. Like student loan relief, tax cuts, etc.
Congress/Pres authorize new spending, then the Treasury auctions Bills, Notes, Bonds, etc. and raises the $ which it then spends.
People can either spend (consume) the extra $ or save it. The savings rate is very low.
When people spend more, demand goes up and prices go up. That is part of the basic law of supply and demand.
The federal borrowing spurs inflation in our monetary system because it leads to the creation of new money.
Consumption in and of itself doesn’t change the money supply.
How about eliminating baseline budgeting?
When the MSM claim draconian cuts are being proposed by Republicans, just ignore them.
Freeze spending for everything at the level of the previous year.
When the MSM claim draconian cuts are being proposed by Republicans, just ignore them.
Freeze spending for everything at the level of the previous year.
Tax revenue doesn't automatically increase with population, and you apparently aren't aware of how small GDP increases have been since about 2007.
WE HAVE A SPENDING PROBLEM.
And about that fair share.......... You are WRONG again.
February, 2024 - Newly released data from the IRS show that the federal tax system remains highly progressive and has become more progressive over time. The highest‐income Americans pay a disproportionate share of income taxes and face the highest average tax rates across all federal taxes.
The federal income tax system is even more progressive. The latest Internal Revenue Service data on income taxes for the 2021 tax year show that higher‐income Americans continue to pay a disproportionate share of income taxes and that the system has become more progressive over time.
Since 2001, average income tax rates have fallen for all five income groups. Rates have fallen the furthest for those with the lowest income, declining from 4.9 percent in 2001 to 3.3 percent in 2021. For the top 1 percent, average income tax rates fell from 27.6 percent in 2001 to 25.9 percent in 2021. During this same time, the share of income taxes paid by the top 5 percent increased from 52.2 percent to 65.6 percent, while the share paid by all other taxpayers declined. According to the National Taxpayers Union, the top 1 percent’s income tax share is the highest it has been since the 1980s.
Now, how about the current POTUS lead by example and get his son to pay hos fair share.
Sure, not 'automatically'
But a 2x population will generate more revenue, so clearly it's correlated.
And, as already posted, the fraction of corporate and "other" taxes (meaning cap gains, etc) is LOWER than it has been, historically, meaning the middle class is being gouged compared to those groups.
Along with major tax cuts on the rich have dipped the % revenue well below the nominal average - when that happens, you need to increase tax rates on those folks to "repair" the revenue damage.
And Social Security is a separate issue here - GOP doesn't want to increase taxes on the upper-wage earners, but that is precisely what needs to happen. Again - Dems have put forward some options/plans. GOP has not done anything on this topic, which is why they are undeserving of anyone's vote. They want it to fail, so they can eliminate it. A vote for the GOP is a vote to eliminate SS, period.
Stable as a % of GDP, you dope.
Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows.
You’re an idiot, and everyone that liked your comment outed themselves as a moron like you.
Um, the basic law of supply and demand is that prices go up when demand exceeds supply. Spending isn't the driver, and can't be the driver, without an increase in money supply.
You are, again, ignoring the two key points already made:
Tax cuts on corporations and the rich have dropped that BELOW the nominal average, which means if you want to avoid deficits, you have to make that up at some point. Should not be a difficult math problem for you to understand they need to run ABOVE that average to offset that issue, which compounds over time.
Tax cuts on corporations and cap gains have demonstrated they are now a MUCH smaller share of revenues than they were in the past - which means working people and the middle class/lower class are making those revenue shortfalls up. That needs to be reversed, particularly in an economy driven by services and consumption, so that the people who drive the need for those services and goods have more money in their monthly cash flow.
If the debt is financed by someone else’s savings, that isn’t inflationary. They forgo consumption of their production (the savings they loan you).
They can’t eat their cake and loan it too.
Federal debt is a different creature. It is the legal collateral for the banks to pyramid loans upon in our fractional reserve banking system. Money is created on top of federal debt.
Federal debt under our fiat monetary system is inflationary.
Federal debt under a gold standard wouldn’t be inflationary (for the reason outlined above, the lenders production (gold) is lent out and not available to them to consume until (and only if!) the loan is repaid).
US runs Trade Deficit with China.
To pay for this spending, the US ran Budget Deficits.
China bought US Treasuries so the US could run Budget Deficits. By doing this China is lending the US $.
High savings nations run Trade Surpluses.
Savings-Investment=Exports-Imports
Not related.
China bought treasuries to diversify their central bank reserves.
They haven’t added to those reserves in over a decade.
How’s the China-US trade deficit been while their Treasury holdings decreased?
Look at what I said.
China bought US Treasuries so the US could run Budget Deficits.
By doing this China is lending the US $.
US spends $ on mostly consumption with a large part being imports from China.
So China is lending us $ to buy their stuff.
Anytime the US gives people more $ they spend more.
When people spend more consumption goes up.
Higher demand leads to higher prices.
People can either save or consume. If savings goes up, consumption goes down.
Think about a business. If their sales drop, do they raise their prices or drop them.
Conversely, if sales are up and they have a hard time keeping products on the shelf, then prices go up.
China bought US Treasuries so the US could run Budget Deficits.
By doing this China is lending the US $.
US spends $ on mostly consumption with a large part being imports from China.
So China is lending us $ to buy their stuff.
Anytime the US gives people more $ they spend more.
When people spend more consumption goes up.
Higher demand leads to higher prices.
People can either save or consume. If savings goes up, consumption goes down.
Think about a business. If their sales drop, do they raise their prices or drop them.
Conversely, if sales are up and they have a hard time keeping products on the shelf, then prices go up.
Not related.
The Chinese could have spent the trade surplus on American farmland, or anything on the globe you can buy with dollars (which is just about everything).
They decided to build up foreign currency reserves, for a time. That time ended over a decade ago, and they’ve shed some of those reserves while we continued to grow a trade deficit.
They’re not contingent.
We could issue zero public debt and still run a trade surplus with China.
Good discussion.
Wish the pols would ditch the lobbyists talking points and get serious and realistic on the topic
Reading the attached article there does seem to be some obvious starters available.
1. Extending the 2017 tax cuts on individuals as the GOP wants cost 4.6 trillion
The dems want them to sunset on those earning over 400k.
Split the difference and save trillions.
Dems want to raise corporate rate to 28% which splits the difference between old rate of 35% and current rate of 20%...consider this.
2. Immigration lowers deficit by .9 trillion.
Trump wants to mass deport immigrants...that would raise deficit. Do not do this.
3. Student loan program changes by Biden are expensive and the courts have blocked. Scrap it.
4. Raise retirement age for SS benefits.
5. FDIC insurance cost 70 billion this year. Should ultimately be recoverable. Need to up the fees on giant banks to cover more of this.
6. Healthcare...super expensive.
Need to find a way to reduce cost of obesity drugs for general population. The revolution in these drugs is here. Lilly and novadisk are among many racing toward oral medications even more effective than ozempic. Obesity is the root cause of so many expensive medical problems. America is at a 40% obesity rate. It is the main reason we spend double on healthcare in US over the rest of industrialized world.
Figure out how to give Pharma a good cut but not the whole pie.
Start there.
Wish the pols would ditch the lobbyists talking points and get serious and realistic on the topic
Reading the attached article there does seem to be some obvious starters available.
1. Extending the 2017 tax cuts on individuals as the GOP wants cost 4.6 trillion
The dems want them to sunset on those earning over 400k.
Split the difference and save trillions.
Dems want to raise corporate rate to 28% which splits the difference between old rate of 35% and current rate of 20%...consider this.
2. Immigration lowers deficit by .9 trillion.
Trump wants to mass deport immigrants...that would raise deficit. Do not do this.
3. Student loan program changes by Biden are expensive and the courts have blocked. Scrap it.
4. Raise retirement age for SS benefits.
5. FDIC insurance cost 70 billion this year. Should ultimately be recoverable. Need to up the fees on giant banks to cover more of this.
6. Healthcare...super expensive.
Need to find a way to reduce cost of obesity drugs for general population. The revolution in these drugs is here. Lilly and novadisk are among many racing toward oral medications even more effective than ozempic. Obesity is the root cause of so many expensive medical problems. America is at a 40% obesity rate. It is the main reason we spend double on healthcare in US over the rest of industrialized world.
Figure out how to give Pharma a good cut but not the whole pie.
Start there.
It kind of is when the govt diverts all that "paying as we're going" to other spending.
STOP SPENDING, STOP SPENDING, STOP SPENDING, STOP SPENDING, STOP SPENDING, STOP SPENDING!
The spending problem is definitely a both sides thing.
I wouldn’t raise the retirement age. I would remove the earnings cap without raising the benefits for those people.
Figure out a way to heavily tax executive stock options.
Federal property tax on second homes. Federal property tax on private jets.
Federal property tax on Yachts.
Cut military spending. The boogie man doesn’t exist. Fricking China and Russia don’t have enough of a navy to do jack shit. No invasion is coming.
If drug companies are selling the same drugs to foreign countries and lower prices then they sell them for in the US start taxing the difference at about 500%.
I would also have a federal spending freeze on non social security and Medicare programs.
Have a deficit tax on imports.
Figure out a way to heavily tax executive stock options.
Federal property tax on second homes. Federal property tax on private jets.
Federal property tax on Yachts.
Cut military spending. The boogie man doesn’t exist. Fricking China and Russia don’t have enough of a navy to do jack shit. No invasion is coming.
If drug companies are selling the same drugs to foreign countries and lower prices then they sell them for in the US start taxing the difference at about 500%.
I would also have a federal spending freeze on non social security and Medicare programs.
Have a deficit tax on imports.
For years the Chinese were the biggest holders of US Det. They still own a large share.
US has a $34 Trillion National Debt. Roughly half of that is owned by foreigners like China, Japan and OPEC nations.
China was the most obvious example.
If the US starts running budget surpluses, it still has the $34 Trillion of existing Nat. Debt.
The Chinese gov subsidizes their exports enabling them to sell products below market price.
Do you not get the difference on the effects of consumption (including buying imports) and savings?
Do you question Savings-Investment=Exports-Imports?
You keep talking about the money supply driving demand. Increasing the money supply doesn't drive demand. The same products simply cost the consumer more. The loaf of bread that used to be $4.00 is now $4.80. Demand for bread doesn't go up because people have more money to spend.
If increasing the money supply without a corresponding increase in GDP was the answer, Argentina & Venezuela would be the richest countries in the world.
Huh?
Like 100k debt on 75k income. Not a problem unless interest rates go way up. That coupled with 200k per capital private debt. Then its 300k debt on 75k. Tight, doable...as long as all are employed and interest is still low.
Not bad considering what we did during COVID.
Federal Debt: Total Public Debt as Percent of Gross Domestic Product
View the ratio of federal debt to the economic output of the U.S., which can indicate economic health and the sustainability of government borrowing.
fred.stlouisfed.org
Like 100k debt on 75k income. Not a problem unless interest rates go way up. That coupled with 200k per capital private debt. Then its 300k debt on 75k. Tight, doable...as long as all are employed and interest is still low.
Not bad considering what we did during COVID.
Yes
Accurate
You will continue to deny facts that do not fit the narrative you want to push
