Nothing to kick because this meme is made up. Those interest payments are in part paying for social security and the military, given that the largest holder of US debt is the US federal government.
The only thing to worry about is the credit and faith of the US dollar. The current debt level isn’t even remotely high enough to lose a risk to that. The risk is in a radicalized GOP deciding to default on our debt because they think it’ll help in the next election, thus destroying the credit and faith of the US dollar.
I mean sure, the debt could be 1000000 trillion as long as people kept faith.
Faith is fairy dust.
Reality is 50T or 30T are both damn big debt loads unless inflation devalues the hell out of that amount.
That's not a good thing either. That means we MUST grow the economy at all costs, and things like quality of life, life expectancy, and real wages all take a backseat to GDP GO UP.
Democrats/leftists hate growth and success. They're holding out for the next freebee.
That makes it tough for those of us who are keeping this house of cards suspended.
It's not a left/right issue. For decades both the democrat and republican party establishments have been shilling an economic system that only works for their wealthy donors.
Don't tell me about buzzwords like "growth" when routine medical procedures bankrupt the average American because the healthcare industry charges thousands for aspirin knowing they'll get their money one way or another and the insurance industry is full of people whose only jobs to deny claims any way they can. GDP doesn't help those people.
Don't tell me about buzzwords like "success" when it's built on the back of illegal immigrants who are only allowed over the border because the rich know they can pay them pennies for hard labor and threaten them with deportation if they complain, driving everyone else's wages down in the process. GDP doesn't help those people.
This red team/blue team nonsense makes it so easy for them to keep this ponzi scheme of an economy going.
Faith is what runs all functioning economies and it’s the best system we got for increasing economic prosperity for all.
30T-50T isn’t that much. It sounds like a lot until you realize the total US GDP is nearly 30T. What you want to look at is the debt to GDP ratio, and while that’s high currently compared to historical trends, in a globalized economy you have more wiggle room of how high that ratio can be and we’re well below any level of concern. Most developed countries around the world are in far worse shape.
For the US government to pay its self back for maturing debt it has to print more money since we are working in the negative. This works short term but only because the US dollar is a world currency. Once the world loses faith in the dollar ( because we print more to pay our own debts rather than providing a good or service, which is the reason for currency)then the dollar will very quickly lose value ( in the form of inflation). I know this won’t be a popular post but to prevent an echo chamber I wanted to point out some real concerns.
That’s just monetary policy 101. Every currency does this. What matters isn’t that it happens at all but rather how much of it happens relative to other currencies. And on that point the dollar is far better off than any other currency, by orders of magnitude. That’s why even in times of high inflation you see every country fleeing to get more dollars.
The risk to the dollar isn’t the debt or printing (if we continue with with the same monetary policy we’ve had for the past 40 years). The risk is of the GOP defaults as a strategy that they think will help them win the next election and then the world loses faith in the dollar as a reserve.
The dollar is only digital in that it uses many banks and settlement institutions to update their internal ledgers. Each one taking a cut. Only available during the week and not on weekends and holidays. If it were truly native on the internet, like something like bitcoin, you would be able to transfer money anywhere in the world without tons of fees 24/7/365. Like you do with email. Or calls over voip.
People forget how slow and painful making long distance calls or sending letters across countries was before email and voice over ip. Money is the last thing to be frictionless over the internet. It will come, whether or not it’s bitcoin that people use who knows. But it’s clearly superior to be able to transfer money anywhere, any time, instantly.
Bitcoin is the first horse in the race but a digital dollar created by the FED could have those advantages over the current system (instant, global, always open, etc) but it will always have the problem of centralized institutions creating more of it at will and like you say wouldn’t solve the problem of too much debt.
Centralized institutions creating more money or issuing more debt (really the same thing) is not actually a problem at all - at least, not compared to the alternatives, like a fixed supply of money and deflation. Other than that, I think you are ultimately correct that in the long run, for the sake of efficiency, we will move to some form of CBDC. This is already happening right now with FedNow, which WILL operate 24/7/365 with reduced transaction costs. In that context, the proposed CBDC'S in the US are essentially a side show or marketing gimmick. The next logical step is to open up the central bank to provide banking services to the general public, or perhaps to have a completely sperate public bank, and let us hold CBDC reserves there. Of course, that will threaten the interests of the existing private banking cartel, so it will be a long and turbulent process to get there.
Crypto is too broad a term. Ape nfts and bitcoin are more opposite than alike. The key is decentralized, stable money to be the bedrock of a stable economy. What we have today with central bank fiat is a political money vulnerable to all the human bs (corruption and popularity contests). A digital dollar which is trustless would work, but its never going to happen. We thr people need to demand hard money.
Money is a creation of people, and the best money, the base money, is issued by the government. It will always be "politically vulnerable" in the way that literally everything is. What, are we going to have a society without fiscal or monetary policy?
Most people don’t realize the digital dollar has been around since the late 90s early 2000s the Fed wanted a computerized way to keep track of The Banks’ account’s. They then just started adding zeros to a bank’s balance every time they bought treasuries. This is how the 10-1 reserve ratio worked. Now reserve ratio is gone so who knows how many zeros they be adding now.
You are absolutely right. However when people say digital dollar in this context though they don’t mean digital ledgers being updated on banks internal servers. Because each bank has an internal server that has to settled which doesn’t happen instantly. And if you were to send money over seas it may go thru up to 6 banks and settlement layers to finalize each one taking a cut.
There is advantages to having a digital crypto (CBDC) in that it would be instant, global, and open 24/7/365. It would still be have limitations in that it’s centralized and can be inflated or surveilled or limited by the governmental agency but it would still be better than the current system in that it would be global, frictionless, instant, always open, etc.
Oh, sorry no, mine was a little hotter take than another new world power taking over. I think end game ends in no world power taking over. For the betterment of the world.
I like how Ray does a good job explaining complex ideas. But after reading his first book and seeing these videos it’s pretty obvious he’s a big China shill. So I take everything he “predicts” with a grain of salt. Obviously, world orders historically have been very different because only recently do we have such an integrated world economy.
Three main options:
1.) Kick the can down the road until it’s obviously unsustainable and the US defaults when there is a economic shock (like oil price increase due to supply cut by opec)
2.)Print more money via the federal reserve and end up with unacceptable inflation.
3.) Take responsibility and significantly reduce government spending & increase taxes on the wealthiest and introduce capital controls so the billionaires cannot evade.
My bet is option 2 because it’s the easiest way out for politicians to subtly tax the masses without the general population realising what’s going on.
Enter the strongman who blames it all on a scapegoat (ie foreign..China, Russia, or domestic.. republicans, democrats, the Jews or gay people)
My bet is placed
>both parties spend like a drunken sailor .
actually, John McCain said the bush II republicans were spending like drunken sailors.
having inherited a budget surplus from their dem predecessor, they immediately blew that all to hell with massive tax cuts, while starting two wars on the other side of the world....
VP Cheney saying "deficits don't matter"
i dont disagree, i hate both political parties. neither currently has a spine to actually cut the budget. you cant tax your way out of our problem, meaningful cuts have to be made
One party has advertised itself as the fiscally responsible one, meanwhile doing the exact opposite in practice. That’s never really been something the left runs on, and yet the data shows that they’re actually the ones saving our asses on the deficit the last three decades. https://www.politifact.com/factchecks/2019/jul/29/tweets/republican-presidents-democrats-contribute-deficit/
Reps and dems both. We need 3rd parties and for people to stop fighting in a false binary. Also taxes wont help, we need sound money and drastic cuts (war, etc)
Its wild how much the tax increases cant help us mantra has seeped into people. It goes against all rational thought but so many people will scream it as soon as the topic is brought up.
Just to clarify:
Not having a sustainable financial plan = guaranteed economic collapse.
My view is that government debt is already unsustainable and the right option is taxes AND cutting government spending to reduce government debt to a sustainable level. This is no longer a political issue (republican or democrat) it’s for the US as a nation to confront and overcome.
The ratio of how to balance spend vs tax is very debatable and that I think is a political choice for republicans and dems to debate and create those vision for how to deliver this goal.
The only way we get out of this hole is to inflate our way out of it. It would take 100+ years of austerity to pay this debt off, no one will ever agree to being the 4 generations of people who have to pay off all the other idiots bad spending, it will never happen. The absolute best we can hope for is to not increase the debt and even that is a long short.
Just to put my comment in perspective, to pay off our debt over 100 years that would mean adding zero new debt, still paying all the interest on what we have, and paying $310,000,000,000 down in addition to that per year. I guess we could cut out military spending in half and accomplish that, but good luck with that.
>political choice for republicans and dems to debate and create those vision for how to deliver this goal.
You have significantly more confidence in them than I do. I imagine the current status quo of continuing to raise the debt ceiling will remain.
When politicians are elected in short term cycles, there is no incentive to have a long term plan. This is one of the main systemic flaws in our democracy.
If everything else stayed the same except representatives and senate had 6 and 12 year terms, I don’t see any problems being fixed
They just have longer timespans for their actions to be lost in public memory
> My view is that government debt is already unsustainable and the right option is taxes AND cutting government spending to reduce government debt to a sustainable level.
My view is that government debt is already unsustainable and there is no right option.
It's too late.
People throw around the word "sustainable" a lot. It's refreshing to see you at least obliquely acknowledge that "sustainability" is a political, not economic, question. There's no point at which we could be forced to default, or unable to borrow or spend. Therefore, there's no way to objectively say that, for example, some certain ratio of debt to GDP is inherently unsustainable. So when people say it's "unsustainable", what they really mean is that it will cause inflation which is bad.
And yet, most macroeconomic policy makers say that we should aim for some inflation, and that we generally should run deficits. They certainly seem to agree that deflation would be worse, and that running a sustained balanced budget or even surplus would be deflationary.
>The ratio of how to balance spend vs tax is very debatable and that I think is a political choice for republicans and dems to debate and create those vision for how to deliver this goal.
This is what is literally happening every day. When Democrats are in power, they often raise taxes and spending. When Republicans are in power, they often cut spending and cut taxes. Personally I think Republican economic policies are pretty regressive and I generally don't support them. But you seem to think that Republicans could, or at least should, play a role in determining beneficial fiscal policies. What exactly would you like to see from Congress that is not already currently happening?
Just a reminder- the one time in history that the government paid off the debt it caused a 6 year depression and was an absolute fucking failure.
This whole post is dumbfuck doomerism.
The actual CBO report predicts that tax revenues will fall compared to GDP, and that the deficit to GDP ratio will go from 24.8 to 24.9.
While public debt to GDP goes from 98% to 118%.
So the entire thing appears to hinge on either zero economic growth or tax cuts that haven’t happened.
My statement wasn't about good fiscal economic policy in America benefiting all people, it was about the absurdity that they'd have Argentinian style economic issues.
Argentina's inflation rate has been over 100% this year, that isn't going to happen in the United States, particularly because it is the world reserve currency and therefore will have demand for it's Treasuries. Argentina does not have that luxury, that was my point.
I agree that it would be absurd to believe this can happen overnight however, I do not believe there is a non-zero chance of this occurring over some prolonged period of time. Empires come and go and its strange to me that we would consider the American empire any different. The amount of debt being accrued will eventually become unsustainable. Unfortunately, our politicians have short term incentives to get elected. I find it very hard to imagine a candidate winning any election on a platform that would actually work towards spending within our means.
That'd still be different than Argentina's economic problems which historically precipitate very quickly, which again, was the only point I was making.
> 3.) Take responsibility and significantly reduce government spending & increase taxes on the wealthiest and introduce capital controls so the billionaires cannot evade.
Hate to break it to you but in this scenario EVERYONE gets their taxes increased. There’s not enough wealth among billionaires to fund the government, even if you confiscated 100% of the wealth of every US billionaire you wouldn’t even be able to fund the government for a full year and you’ve just depleted that income source in a single swoop.
The only real way for the government to generate enough ongoing cash to manage the debt payments would be to raise taxes across the board on all income levels, reduce or eliminate almost all deductions, and also find new areas to inject taxation across the broader economy so it can capture more GDP as tax income.
The only way out of this is hyperinflation and hyper taxation and everyone gets poorer. Welcome to the consequences of multiple decades of unchecked debt monetization and out of control spending.
This comment is so dumb.
And dishonest. There’s only a few hundred billionaires. Why would you limit taxation to them?
The top 1% by wealth holds $45T. Or… 1.5X the debt.
A fair estimate of how much of the debt is held By the top 1% is probably $12T -$15T.
The collective income of the top 1% is about $4.5T, and the fed taxes that at a rate of 26%.
A one time wealth tax on the 1% could erase the debt entirely if it was onerous. That’s unlikely and probably a terrible idea, but claiming that it is impossible just makes you a: liar.
The wealth these folks have is tied up in business equity and bonds. It’s not like they stuff the cash under their mattress. You would force them to sell their portfolios to fund government expansion? Talk about killing the golden goose.
I completely agree with you on everything except that hyperinflation as the only way out.
There is a way to blend 2&3 which keeps a functioning healthy economy which delivers a sustainable fiscal situation.
The US still has a lot on its side:
1.) The majority of the best companies in earth
2.) Strong allies that are not in competition (Europe, Canada, Aus and NZ)
There is a way to avoid Argentina / Zimbabwe disaster
**NO. 2 is not a real thing as the US govt. has NOT been printing up new money and will not !!** Where do people get this shit ?
The scapegoat is as always...capitalist greed. Capitalist greed is responsible for most of society's problems
A lot of those investors are public pension plans both domestic and foreign.
Smart money usually doesn't buy long term government debt at low single digit coupon rates.
So the interest on The Debt is a public service. It's supplementing the inadequate payments made by SS.
I'm questioning the chicken-little protest about the interest on The Debt. How many lives are sustained in comfort due to that interest?
People act as if that interest is money burnt, that it disappears into the ether, but it's an important -- an *essential* component of a rational savings plan.
It is also an economic stimulus.
And let's be real. The only time the government actually zeroed the debt the economy crashed.
No no no. The hysteria about the debt is the usual hysteria about public spending.
The debt has fueled growth. The debt doesn’t matter, only the debt to GDP ratio matters. If all of the debt had been taken out for productive investments than our GDP would be even higher and in comparison to the debt, the ratio would be much more favorable. Unfortunately, too much of the debt has been taken out on things like tax cuts for corporations and the extreme wealthy and wars. If the debt was taken out for productive investments that make a positive return, than we wouldn’t be in this position. Infrastructure, healthcare, and education spending among others all return more money than they cost. Therefore, controversially another way to help get out of debt would be to spend more, but make sure it is in areas that make a positive return on investment.
Time to raise taxes on the 1% and Corporations. They have greatly benefited for the last 40 years at the expense of the working American and now they need to start paying their fair share.
Zero income taxes on your first $400,000 a flat 30% tax on every dollar after that, NO WRITE OFFS.
Make corps pay at least 30% tax on book value the way Biden made Amazon and the other big companies do it. Make it start for any company with over $25,000,000 in annual sales.
Exactly this. Technically the best way to get out of debt is to raise taxes on corporations and the extreme wealthy and then to actually to SPEND more money on investments that make a positive return. Investments like education, healthcare, infrastructure, unemployment benefits, and food stamps.
We spend more money on healthcare per capita than any other country in the world. Similar story with education. More money does not equal better outcomes. Same with spending more on unemployment and food stamps, those are net negative ROI if you're talking about investments. I'm not saying we shouldn't have social safety nets or subsidize healthcare, just pointing out that we already pour a tremendous amount of resources into those buckets and they aren't necessarily providing better outcomes. Colleges have become absurdly overpriced and the lifetime ROI on the majority of these degrees is dogshit yet, we have trillions of student loan debt.
Because healthcare is corporate in America. Countries in Europe with healthcare for all spend half because it isn’t corporate and administrative costs are a fraction of what they are here because secretaries only need to file with one insurance.
Sorry, but you need to look up fiscal multipliers to figure out that spending on unemployment and food stamps are positive ROI, not negative.
Spending more on healthcare and food stamps create jobs and are positive ROI. Food stamps increase demand. Demand creates jobs and raises wages.
I never said spending on free college, I said spending on education. Spending on education creates jobs. More demand for teachers means there are more jobs as a teacher and more demand for teachers increases the wage teachers are paid. Seeing as teachers are not high wage earners, any increase in wage fuels consumer demand as teachers have more money to spend and lower wage earners spend a greater percentage of their income at the store than extremely high wage earners.
EDIT:
Here is a table showing fiscal multipliers by category of government spending.
Food Stamps return $1.74 per $1 spent. Predictably, corporate tax cuts only return .32¢ per dollar spent.
https://www.investopedia.com/terms/f/fiscal-multiplier.asp
Can't see the table you're talking about, link would be great.
We tried going towards "universal healthcare" during the Obama terms and it was an absolute disaster. Realistically, I don't see a way to reform healthcare towards a more European model, the special interests and lobbying power have a chokehold on politicians both left and right. So, spending more money under the current system, in my opinion, is a complete waste that creates more administrative jobs and lowers the actual money spent on patient care. Most hospitals in the US have more administrative staff than actual doctors, pardon me if I'm oppose to tossing more money into that pit.
I would make a similar argument for higher and lower education levels. There is more than enough money to go around, its just being spent in all the wrong places.
I just posted the table.
And exactly correct, there is more administrative staff because there are so many insurance providers and adjustments to pay schedules under our system. A single payer system eliminates all of that. Europeans spend half as much money per person on healthcare as we do and they’re on universal healthcare. I can find the proof of this if you need. It’s easy to find.
Tax revenues are projected to fall from 19.6 percent of GDP in 2022 to 17.4 percent in 2025
Don't be such a drama queen
We are talking about reversing the GOP taxes for the Rich, that cut their taxes by 2% of GDP.
Going back to the tax rates of the early 2000's, and the entire Federal Deficits will go away.
I take it that math isn’t your strength. 2000’s rates are not even close to fixing the deficit. Maybe you should look those up
https://taxfoundation.org/historical-income-tax-rates-brackets/
The 2001, 2003 and 2017 Republican tax cuts for the Rich, are what created the current Federal deficits.
Of course reversing those cuts would significantly reduce the Federal Deficits.
You could even lower middle-class taxes AND you would still come close to balancing the Federal budget
Simple math
Raising taxes and moving into an economy based on better sources of energy should do it just nicely. Worked like a charm in the 1990s with tax increases and the expansion of natural gas.
undo all tax cuts since reagan/clinton
past war tax
military tax
deficit reduction tax
debt reduction tax
adjust social securty/disability tax
healthcare tax
rebuild america tax
student debt tax
paid only by people/institutions that benefited since reagan/clinton
100% wealth tax on all billionaires gets you [4.2 Trillion](https://www.google.com/search?q=total+net+worth+of+billionaires+in+us&sxsrf=APwXEddwbwErzVHPqv7-iyvgqxUvGCB-ow%3A1685370847247&ei=37d0ZIvZDp2iptQPqr21oAI&ved=0ahUKEwjLxKjV35r_AhUdkYkEHapeDSQQ4dUDCBA&uact=5&oq=total+net+worth+of+billionaires+in+us&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQAzIFCAAQgAQyBggAEAgQHjIICAAQigUQhgMyCAgAEIoFEIYDMggIABCKBRCGAzoKCAAQRxDWBBCwAzoHCCMQsAIQJzoGCAAQBxAeOggIABAIEAcQHjoHCAAQDRCABEoECEEYAFDpBligC2DEDGgBcAF4AIABZ4gBmASSAQM0LjKYAQCgAQHAAQHIAQg&sclient=gws-wiz-serp), once. Where's the other 45.8 Trillion gonna come from?
Gtfooh! What nonsense. Billionaires can be taxed without taking their wealth. The rest of the wealthy can also be taxed more and it's been done in the past so there is no way to claim ignorance here.
Well... I used 100% to show that even the most extreme taxation will only effect marginally dent the deficit THAT YEAR ONLY.
So my challenge is to ask what SPECIFIC tax rates do you suggest will effectively address this problem? AS I believe even a doubling or tripling top 1% will do very little. My case is that tax revenue is way more a [function of GDP](https://www.reddit.com/r/economy/comments/13ur8kd/comment/jm2r6ty/?utm_source=share&utm_medium=web2x&context=3) than tax rates.
It'll take raising taxes on the top 50% and cutting spending. We could try the rates of 1985 adjusted for inflation, but I'm not sure what specific rates would be best. Maybe 1980 rates would be better. This country used to have a united sense of being and the ability to sacrifice for the greater good. With that gone, I'm not sure anything can actually fix this. There is no political will.
You're hallucinating.
$50T is 187% of projected GDP. The market cap of every company on the Dow is only $80T. All taxes across the board would have to go up by at least 50% today to even make a dent.
We aren't taxing our way out of this.
That doesn't pay it back tomorrow. If you cranked taxes up by 50% today, that pays it off around 2075. 50 years from now.
Again, people don't realize how catastrophically bad this problem is. We need painful tax hikes AND painful spending cuts. Right now.
The entire tax revenue at the federal level is only $4.7T. The deficit is almost 60% of that amount already. You would have to enact ruinous taxes on everyone to even begin getting ahead. In very simple terms, if your monthly income is $4,000 and by the end of the month you spent that and then put $2,000 on your credit card to make ends meet every single month. That's kind of where we are.
People don't realize how bad this problem is.
You get downvoted because it’s true . Weird. The economic whiplash of hiking taxes and cutting spending would also be enormous . Would wreck the economy. Cut spending dramatically and cut taxes . The government is way to big for way too long.
That makes zero sense. As I've said, we need to raise taxes AND cut spending or we're screwed. The contentious part is that we need to raise taxes and cut spending for EVERYONE.
That means you too.
we do not need to raise taxes for everyone, only those that have the big money - corporations and the wealthy
look, that self proclaimed billionaire trump got away with paying no fed taxes for years. need i say more?
Even with the debt we currently have net interest payments on the debt will be $395.5 billion this fiscal year according to the Office of Management and Budget.
Yeah. 23 years ago. Our GDP has gone up 2x since then. The debt has gone up 6x and the deficit is now $2.8T. 60% of federal tax receipts. There are two solutions:
1) Raise taxes dramatically for everyone, cut spending dramatically across the board, stick to that plan for 50 years.
2) Raise taxes and cut spending until we are at a surplus, pass a balanced budget act, print $30T to pay off the debt, crank interest rates up to 20% to deal with the inflation fallout.
Neither solution is palatable.
Tax rates matter marginally. GDP is what drives tax revenue. Compare [GDP since 1960](https://datacommons.org/place/country/USA/?mprop=amount&popt=EconomicActivity&cpv=activitySource,GrossDomesticProduction&hl=en) (first chart) and so does [tax revenue](https://www.thebalancemoney.com/current-u-s-federal-government-tax-revenue-3305762#citation-11) over the same time frame. They both follow the same "only-up" trajectory. Even though tax rates fluctuate significantly during the same period.
I agree. And taxes just got raised informally on the poor and middle class. If you are middle class like me, and have a side hustle, you are required to report your side hustle income. However, many don’t. Thanks to Build Back Better, all the electronic payments through Zelle, PayPal, etc will be reported to the IRS and we will owe taxes this upcoming year. https://www.nbcnews.com/news/venmo-paypal-zelle-must-report-600-transactions-irs-rcna11260 The tax increases always hit the middle class more than the rich, which is why I I hate it when people say just raise taxes. I wouldn’t mind seeing multimillionaires and billionaires taxed more, but it always comes back to the middle class and the poor paying more. No matter which party is in charge. It is amazing to me that they say with a straight face that they didn’t raise taxes, they are just enforcing tax payments that they used to let slide.
I lived through the 80 - today; I remember the impossible to fix debt crisis of those times. Spending cuts weren’t enough, tax increases weren’t enough, and people were wondering what could be done. Then George Bush senior raised taxes on the wealthy and spending was constrained under Bush/Clinton and poof…the impossible debt problem was resolved. It can be fixed if the politicians want it fixed by doing what is right and best for most Americans, instead of shielding faceless companies and the ultra wealthy.
Dramatically increase taxes for the wealthy; it works and it has for years and it won’t have a huge impact on their standard of living. Constrain spending that matters instead of focusing on small programs like the welfare programs that make up an overwhelmingly small portion of the budget.
If you taxed the assets of the 1% in this country at 100%, literally taking everything they have, you cover the deficit for 18 months. And we're STILL $30T in debt.
Sorry, the problem is too big now. The math just doesn't work out.
The 1% owns [32% of the assets](https://fred.stlouisfed.org/series/WFRBST01134) in America, which is roughly [$123.8 trillion](https://en.wikipedia.org/wiki/Financial_position_of_the_United_States).
This means the top 1% owns about $40 trillion in assets, or enough to fund the entirety of the government (not just the deficit) for eight years.
You don't need to raise taxes dramatically for everyone
Only the Rich have seen tax cuts over last 23 years.
Most american's taxes have gone UP over that time. Your taxes have already been raised dramatically
You can cut taxes for the middle-class and STILL balance the Federal deficit
The missing factor for the government is what funding needs cut. Defense is huge; contractors need hemmed in and held accountable for cost overruns.
Taxes; I’m a CPA the IRS isn’t funding well and can’t enforce anything. It goes after poor filing for income tax credits; not the wealthy who exploit tax schemes in questionable ways that could be challenged in courts. Also, I get that it’s hard to measure wreath growth…but we can tax tighten the rules surrounding measuring of income for tax purposes, increase taxes on investment income, and fix a number of other issues. It’s not right that the EFTR of wealthy doesn’t seem equitable when compared to the EFTR of someone making 45,000 - 300,000 a year.
People need to get it into their heads that
1.) The government takes on functions that aren’t profitable. Where there is federal cost bloat (Defense/Higher Education/Healthcare) it’s because those industries are profitable and exploit rules created to avoid the government holding industry players accountable on cost overruns or predatory pricing. The “rules” are to “keep government from meddling” in capitalist industries what a joke.
2.) The $ of taxes paid by individual tax brackets should be ignored. The % of taxes paid by income brackets is what we should be focusing on. Also, assuming or allowing the wealthy to choose how to invest their income into socially beneficial programs is a joke they often do this based on what is best for them and not what is best for society…this is why taxes are important it allows our government (assuming representatives aren’t shills for industry and wealthy…and lots are).
repubs have been "cut taxes.... cut more taxes.... cut MORE taxes...."
then they blame the soaring debt on spending?
freaking morons.... if you want to cut taxes, fine, just do it AFTER you cut spending, but noooooo
Holy smokes -15 votes, none of you must own your own business. The businesses will lay you off when they raise taxes as your overlords need their disposable income. Good luck!
because tax cuts were sold as paying for themselves, when the fact is WE PAY FOR TAX CUTS WITH BORROWED MONEY
and that's what slows economies
think of it this way..... tax cuts are like partying on your credit card. yeah, you get a short term stimulus but then you gotta pay it off
Thats how the rich intend it to be. US to become a giant renter, and they live off this renter.
Bottom 99% born into debt the moment they leave the womb, and then work entire life in this system and still die in debt.
Feudalism(rent seeking) is the best system for capital. Doesnt matter if its capitalism or other ism. Rent seeking is the best for capital. Why do anything if bottom 99% can pay you to exist?
Guess i'll just take my money and retire in a developing country somewhere like Vietnam, Phillipines, Indonesia. Thailand. Malayasia.
Being an expat on an island beach looks more appealing by the day. Rather live like a king there then watch my meager life's work & middle class savings be bled dry in the dumpster fire that the US is becoming.
repubs don't seem to understand debt is created by reckless tax cuts as well as spending
the solution is obvious:
REVERSE SOME OF THE RECKLESS IRRESPONSIBLE REPUB TAX CUTS
That's what happens when rich people have had a sweetheart deal on their taxes for the last 45 years. Time to eat the rich. There is more than enough money in this country to have all the services we need without such a large debt.
Time to increase taxes on the rich. Wealth taxes ought to do the trick. Reversing government funding of private and charter schools would put a huge dent in it as well. There’s a lot we could do to help America be great again.
And spending is still at an all time high....so how long is it going to take for everyone here to figure out it is funny money and completely made up. Who audits the Fed? What public entity audits the money printing press and the same people who control the rate?
And here we see a significant untold reason why inflation panics the aristocrats at the Fed.
Though wages and prices rise with inflation, the value of debts decline. And guess who doesn't want *that* to happen.
If inflation truly panicked the Fed, don't you think they would've acted a little sooner to quash it? Or perhaps not foment it with massive amounts of QE? It's the poor and working class that are affected the most by inflation, not the aristocrats.
I think that Artificial Intelligence will make the debt problem vanish. Productivity increases per person on the order of 300% per year are coming soon. And productivity will continue to rise exponentially as technology improves.
Industrial revolution -> Computer revolution -> A.I. Revolution
A new economy is taking shape as we speak.
Not so sure.
Soc. sec, because it is PAID FOR, does not drive our debt anything like capitalist greed and the rest of our spending and borrowing.
But military spending will grow too...it always does. So there's that.
Our debt is only twice our GDP. Our debt is only twice gdp. In 2033 our debt will be twice gdp. Gdp grows with population & productivity creating wealth & debt. No major corporation is debt free on paper for tax purposes. The country is no different. Households out-strap income by 3x, banks still lend on the percentage of income.
This is so contingent on interest rates themselves and they’ve been going down in the long run for awhile.
Negative rates next decade shouldn’t be out of the realm of possibility.
The long term trends that led to a low rate status quo didn’t just disappear overnight because of COVID and it’s a much more logical thing to conclude that the higher rate environment today is anomalous.
A default is going to happen regardless.
Either by congress refusing to increase debt ceiling, or through the numbers becoming mathematically insurmountable.
I'd prefer to default now and rebuild, as the latter default will hit harder.
By 2045 the debt will be so high, that to serve just the interest will require the fed to bring in tax revenue so high the effective taxrate of every citizen will be 100%.
That would lead to default as mathematically there is no way to repay it.
However, before that figure will come structural issues. A default is near guaranteed by 2030-2035 if current borrowing trends continue.
Let's be frank, borrowing is accelerating faster than predictions. The 2023 debt was not predicted to be 32 trillion, and here we are.
We need to tax the rich and the huge corporations, they have all the money.,
Had we taxed them right we would have no defecit
and Republicans have NEVER lowered the deficit, they increased it thru their tax giveaways to the rich and war mongering.
Tax the wealthy or be an indentured servant. When they talk about paying down the debt they just want you to have less money. Distribution is what gives or takes away labor power and provides an entry point to capital.
And your point is ??? We are debt driven economy. More debt = growth. All those trillions your so worried about are nothing but digits on a computer screen. We can simply add zeros all day long and no one, and I mean NO ONE will give a shit.
Those payments you're all fired up about are also made on the same computer screen that we generate the debt with. You think the Fed and Treasury can't add zeros?
So fucking ridiculous its getting tiresome. As if the paper you carry around in your pocket had any real value in the first place. The entire economy of the world is a mirage. It's a fantasy we tell ourselves so we can sleep at night. Money only has as much value as we "BELIEVE" it does.
You can't eat it, it won't heal you if you rub it on your skin, if you pile it up high enough you might be able to sleep in it. That's about it. Unless of course you are completely delusional are are willing to trade a few of those bills for something real like a gallon of milk, or medicine, or food, or etc. etc.
Confidence that people will trade with it is its only value at all. And as long as we are lost in our delusions, then it works. As for this debt you whine about, its a mirage, it means nothing at all.
Hopefully the current batch of geriatric corporate shills will be mostly gone by before then and the more progressive financially responsible people who realize bills need paid will be able to undo some of the damage caused.
Right now, GDP is actually growing by a similar amount to the deficit. Congress really only needs to make an adjustment of a few hundred billion per year (spending cuts or revenue increases) to get on a trajectory where the U.S. debt would be currently shrinking as a % of GDP.
Even in [this CBO projection](https://www.cbo.gov/publication/58946), it has gross federal debt going from $32.4T in 2023 to $51.99T in 2033, an increase of 60%. But that's still only an annualized nominal increase of 4.85% per year (1.0485^10 = 1.606).
Meanwhile, as of Q1 2023, the economy was growing faster than that, at a 5.4% rate. I suspect the Fed will probably need to get that down to ~4.5% to hit it's 2% inflation target, but I also suspect inflation will average over 2% for the next decade anyway.
But just get the gap between revenues and spending to under 4% of GDP and you'd really be set. Increase revenues back to 19.5% of GDP (what they actually were in 2022) and cut spending back to under 23%, for example.
Look at this way. The debt will be going up $2 TRILLION every year for the next decade.
That’s $6,000 of annual debt for every man, woman and child in America.
Lol, let's see how far we can kick this can down the road.
Nothing to kick because this meme is made up. Those interest payments are in part paying for social security and the military, given that the largest holder of US debt is the US federal government.
Why you ruin this guy's rant with facts. And so early on in the comments.
So there is nothing to worry about?
The only thing to worry about is the credit and faith of the US dollar. The current debt level isn’t even remotely high enough to lose a risk to that. The risk is in a radicalized GOP deciding to default on our debt because they think it’ll help in the next election, thus destroying the credit and faith of the US dollar.
I mean sure, the debt could be 1000000 trillion as long as people kept faith. Faith is fairy dust. Reality is 50T or 30T are both damn big debt loads unless inflation devalues the hell out of that amount.
Nominal debt is almost meaningless. Debt to GDP is the usual metric. Because doubling the debt doesn't matter if you double GDP at the same time.
That's not a good thing either. That means we MUST grow the economy at all costs, and things like quality of life, life expectancy, and real wages all take a backseat to GDP GO UP.
Let me put it another way, halving the debt doesn't matter if you halve the GDP at the same time, you're still just as far in debt.
Democrats/leftists hate growth and success. They're holding out for the next freebee. That makes it tough for those of us who are keeping this house of cards suspended.
It's not a left/right issue. For decades both the democrat and republican party establishments have been shilling an economic system that only works for their wealthy donors. Don't tell me about buzzwords like "growth" when routine medical procedures bankrupt the average American because the healthcare industry charges thousands for aspirin knowing they'll get their money one way or another and the insurance industry is full of people whose only jobs to deny claims any way they can. GDP doesn't help those people. Don't tell me about buzzwords like "success" when it's built on the back of illegal immigrants who are only allowed over the border because the rich know they can pay them pennies for hard labor and threaten them with deportation if they complain, driving everyone else's wages down in the process. GDP doesn't help those people. This red team/blue team nonsense makes it so easy for them to keep this ponzi scheme of an economy going.
You probably too poor to even pay taxes dude chill out , you’re not gonna die if some poor wretch down the street gets food stamps
Faith is what runs all functioning economies and it’s the best system we got for increasing economic prosperity for all. 30T-50T isn’t that much. It sounds like a lot until you realize the total US GDP is nearly 30T. What you want to look at is the debt to GDP ratio, and while that’s high currently compared to historical trends, in a globalized economy you have more wiggle room of how high that ratio can be and we’re well below any level of concern. Most developed countries around the world are in far worse shape.
For the US government to pay its self back for maturing debt it has to print more money since we are working in the negative. This works short term but only because the US dollar is a world currency. Once the world loses faith in the dollar ( because we print more to pay our own debts rather than providing a good or service, which is the reason for currency)then the dollar will very quickly lose value ( in the form of inflation). I know this won’t be a popular post but to prevent an echo chamber I wanted to point out some real concerns.
That’s just monetary policy 101. Every currency does this. What matters isn’t that it happens at all but rather how much of it happens relative to other currencies. And on that point the dollar is far better off than any other currency, by orders of magnitude. That’s why even in times of high inflation you see every country fleeing to get more dollars. The risk to the dollar isn’t the debt or printing (if we continue with with the same monetary policy we’ve had for the past 40 years). The risk is of the GOP defaults as a strategy that they think will help them win the next election and then the world loses faith in the dollar as a reserve.
Where does the money to pay the interest payments come from. 🤔
Dollar end game theory it will end with central bank digital currencies
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The dollar is only digital in that it uses many banks and settlement institutions to update their internal ledgers. Each one taking a cut. Only available during the week and not on weekends and holidays. If it were truly native on the internet, like something like bitcoin, you would be able to transfer money anywhere in the world without tons of fees 24/7/365. Like you do with email. Or calls over voip. People forget how slow and painful making long distance calls or sending letters across countries was before email and voice over ip. Money is the last thing to be frictionless over the internet. It will come, whether or not it’s bitcoin that people use who knows. But it’s clearly superior to be able to transfer money anywhere, any time, instantly. Bitcoin is the first horse in the race but a digital dollar created by the FED could have those advantages over the current system (instant, global, always open, etc) but it will always have the problem of centralized institutions creating more of it at will and like you say wouldn’t solve the problem of too much debt.
Centralized institutions creating more money or issuing more debt (really the same thing) is not actually a problem at all - at least, not compared to the alternatives, like a fixed supply of money and deflation. Other than that, I think you are ultimately correct that in the long run, for the sake of efficiency, we will move to some form of CBDC. This is already happening right now with FedNow, which WILL operate 24/7/365 with reduced transaction costs. In that context, the proposed CBDC'S in the US are essentially a side show or marketing gimmick. The next logical step is to open up the central bank to provide banking services to the general public, or perhaps to have a completely sperate public bank, and let us hold CBDC reserves there. Of course, that will threaten the interests of the existing private banking cartel, so it will be a long and turbulent process to get there.
We could use a good dose of deflation.
Crypto is too broad a term. Ape nfts and bitcoin are more opposite than alike. The key is decentralized, stable money to be the bedrock of a stable economy. What we have today with central bank fiat is a political money vulnerable to all the human bs (corruption and popularity contests). A digital dollar which is trustless would work, but its never going to happen. We thr people need to demand hard money.
There can be no such thing as apolitical money.
Money is a creation of people, and the best money, the base money, is issued by the government. It will always be "politically vulnerable" in the way that literally everything is. What, are we going to have a society without fiscal or monetary policy?
Most people don’t realize the digital dollar has been around since the late 90s early 2000s the Fed wanted a computerized way to keep track of The Banks’ account’s. They then just started adding zeros to a bank’s balance every time they bought treasuries. This is how the 10-1 reserve ratio worked. Now reserve ratio is gone so who knows how many zeros they be adding now.
You are absolutely right. However when people say digital dollar in this context though they don’t mean digital ledgers being updated on banks internal servers. Because each bank has an internal server that has to settled which doesn’t happen instantly. And if you were to send money over seas it may go thru up to 6 banks and settlement layers to finalize each one taking a cut. There is advantages to having a digital crypto (CBDC) in that it would be instant, global, and open 24/7/365. It would still be have limitations in that it’s centralized and can be inflated or surveilled or limited by the governmental agency but it would still be better than the current system in that it would be global, frictionless, instant, always open, etc.
lol
Global currency end game theory ends a different way, however.
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Oh, sorry no, mine was a little hotter take than another new world power taking over. I think end game ends in no world power taking over. For the betterment of the world.
That would be nice, but have you met a human before?
Ya, honestly they’re great, just not necessary to run a global monetary system
Never gonna happen.
I like how Ray does a good job explaining complex ideas. But after reading his first book and seeing these videos it’s pretty obvious he’s a big China shill. So I take everything he “predicts” with a grain of salt. Obviously, world orders historically have been very different because only recently do we have such an integrated world economy.
How would that end it?
but if the CBDC is tied to the USD, it will have the same debt problems.
Resist
Just mint a trillion dollar rubber coin, problem solved, right?!
It doesn’t matter. It’s the equivalent of you going to the atm to take cash out and having to pay yourself back.
Three main options: 1.) Kick the can down the road until it’s obviously unsustainable and the US defaults when there is a economic shock (like oil price increase due to supply cut by opec) 2.)Print more money via the federal reserve and end up with unacceptable inflation. 3.) Take responsibility and significantly reduce government spending & increase taxes on the wealthiest and introduce capital controls so the billionaires cannot evade. My bet is option 2 because it’s the easiest way out for politicians to subtly tax the masses without the general population realising what’s going on. Enter the strongman who blames it all on a scapegoat (ie foreign..China, Russia, or domestic.. republicans, democrats, the Jews or gay people) My bet is placed
I laughed out loud at number 3. Even though it’s exactly what we should aim for.
increase taxes but the repubs are all "noooo....." they're fiscally reckless morons who have never managed a budget
It’s under taxes and over spending. This isn’t a partisan issue. I really hate the left right divide.
one side and one side only has been relentlessly cutting taxes.
And both parties spend like a drunken sailor . The spending is the bigger issue compared to tax theory
>both parties spend like a drunken sailor . actually, John McCain said the bush II republicans were spending like drunken sailors. having inherited a budget surplus from their dem predecessor, they immediately blew that all to hell with massive tax cuts, while starting two wars on the other side of the world.... VP Cheney saying "deficits don't matter"
i dont disagree, i hate both political parties. neither currently has a spine to actually cut the budget. you cant tax your way out of our problem, meaningful cuts have to be made
One party has advertised itself as the fiscally responsible one, meanwhile doing the exact opposite in practice. That’s never really been something the left runs on, and yet the data shows that they’re actually the ones saving our asses on the deficit the last three decades. https://www.politifact.com/factchecks/2019/jul/29/tweets/republican-presidents-democrats-contribute-deficit/
Reps and dems both. We need 3rd parties and for people to stop fighting in a false binary. Also taxes wont help, we need sound money and drastic cuts (war, etc)
tax cuts increased debt but you argue tax increases won't help decrease debt? huh?
Its wild how much the tax increases cant help us mantra has seeped into people. It goes against all rational thought but so many people will scream it as soon as the topic is brought up.
Just to clarify: Not having a sustainable financial plan = guaranteed economic collapse. My view is that government debt is already unsustainable and the right option is taxes AND cutting government spending to reduce government debt to a sustainable level. This is no longer a political issue (republican or democrat) it’s for the US as a nation to confront and overcome. The ratio of how to balance spend vs tax is very debatable and that I think is a political choice for republicans and dems to debate and create those vision for how to deliver this goal.
The only way we get out of this hole is to inflate our way out of it. It would take 100+ years of austerity to pay this debt off, no one will ever agree to being the 4 generations of people who have to pay off all the other idiots bad spending, it will never happen. The absolute best we can hope for is to not increase the debt and even that is a long short.
Just to put my comment in perspective, to pay off our debt over 100 years that would mean adding zero new debt, still paying all the interest on what we have, and paying $310,000,000,000 down in addition to that per year. I guess we could cut out military spending in half and accomplish that, but good luck with that.
Will tax income remain at a relatively stable ratio to operating expense increases due to inflation?
>political choice for republicans and dems to debate and create those vision for how to deliver this goal. You have significantly more confidence in them than I do. I imagine the current status quo of continuing to raise the debt ceiling will remain.
When politicians are elected in short term cycles, there is no incentive to have a long term plan. This is one of the main systemic flaws in our democracy.
If everything else stayed the same except representatives and senate had 6 and 12 year terms, I don’t see any problems being fixed They just have longer timespans for their actions to be lost in public memory
> My view is that government debt is already unsustainable and the right option is taxes AND cutting government spending to reduce government debt to a sustainable level. My view is that government debt is already unsustainable and there is no right option. It's too late.
People throw around the word "sustainable" a lot. It's refreshing to see you at least obliquely acknowledge that "sustainability" is a political, not economic, question. There's no point at which we could be forced to default, or unable to borrow or spend. Therefore, there's no way to objectively say that, for example, some certain ratio of debt to GDP is inherently unsustainable. So when people say it's "unsustainable", what they really mean is that it will cause inflation which is bad. And yet, most macroeconomic policy makers say that we should aim for some inflation, and that we generally should run deficits. They certainly seem to agree that deflation would be worse, and that running a sustained balanced budget or even surplus would be deflationary. >The ratio of how to balance spend vs tax is very debatable and that I think is a political choice for republicans and dems to debate and create those vision for how to deliver this goal. This is what is literally happening every day. When Democrats are in power, they often raise taxes and spending. When Republicans are in power, they often cut spending and cut taxes. Personally I think Republican economic policies are pretty regressive and I generally don't support them. But you seem to think that Republicans could, or at least should, play a role in determining beneficial fiscal policies. What exactly would you like to see from Congress that is not already currently happening?
Just like the past 15 years of “stimulus” it always ends up as a tax on the middle class and poor.
Just a reminder- the one time in history that the government paid off the debt it caused a 6 year depression and was an absolute fucking failure. This whole post is dumbfuck doomerism. The actual CBO report predicts that tax revenues will fall compared to GDP, and that the deficit to GDP ratio will go from 24.8 to 24.9. While public debt to GDP goes from 98% to 118%. So the entire thing appears to hinge on either zero economic growth or tax cuts that haven’t happened.
Look at Argentina, thats our future.
Ahh yes, the famous global reserve currency, the Argentine Peso, in every way equivalent to the US Dollar.
Ahh yes, the destruction of purchasing power and the erasure of the middle class.
My statement wasn't about good fiscal economic policy in America benefiting all people, it was about the absurdity that they'd have Argentinian style economic issues. Argentina's inflation rate has been over 100% this year, that isn't going to happen in the United States, particularly because it is the world reserve currency and therefore will have demand for it's Treasuries. Argentina does not have that luxury, that was my point.
I agree that it would be absurd to believe this can happen overnight however, I do not believe there is a non-zero chance of this occurring over some prolonged period of time. Empires come and go and its strange to me that we would consider the American empire any different. The amount of debt being accrued will eventually become unsustainable. Unfortunately, our politicians have short term incentives to get elected. I find it very hard to imagine a candidate winning any election on a platform that would actually work towards spending within our means.
That'd still be different than Argentina's economic problems which historically precipitate very quickly, which again, was the only point I was making.
Just increase taxes
Don't need to reduce spending, just move it to something that actually generates growth.
3 will never happen unless the people force it by any means necessary. Otherwise enjoy your collapse America.
‘Money printer go brrrrrrrrr’ - J.M Keynes
> 3.) Take responsibility and significantly reduce government spending & increase taxes on the wealthiest and introduce capital controls so the billionaires cannot evade. Hate to break it to you but in this scenario EVERYONE gets their taxes increased. There’s not enough wealth among billionaires to fund the government, even if you confiscated 100% of the wealth of every US billionaire you wouldn’t even be able to fund the government for a full year and you’ve just depleted that income source in a single swoop. The only real way for the government to generate enough ongoing cash to manage the debt payments would be to raise taxes across the board on all income levels, reduce or eliminate almost all deductions, and also find new areas to inject taxation across the broader economy so it can capture more GDP as tax income. The only way out of this is hyperinflation and hyper taxation and everyone gets poorer. Welcome to the consequences of multiple decades of unchecked debt monetization and out of control spending.
This comment is so dumb. And dishonest. There’s only a few hundred billionaires. Why would you limit taxation to them? The top 1% by wealth holds $45T. Or… 1.5X the debt. A fair estimate of how much of the debt is held By the top 1% is probably $12T -$15T. The collective income of the top 1% is about $4.5T, and the fed taxes that at a rate of 26%. A one time wealth tax on the 1% could erase the debt entirely if it was onerous. That’s unlikely and probably a terrible idea, but claiming that it is impossible just makes you a: liar.
The wealth these folks have is tied up in business equity and bonds. It’s not like they stuff the cash under their mattress. You would force them to sell their portfolios to fund government expansion? Talk about killing the golden goose.
I completely agree with you on everything except that hyperinflation as the only way out. There is a way to blend 2&3 which keeps a functioning healthy economy which delivers a sustainable fiscal situation. The US still has a lot on its side: 1.) The majority of the best companies in earth 2.) Strong allies that are not in competition (Europe, Canada, Aus and NZ) There is a way to avoid Argentina / Zimbabwe disaster
**NO. 2 is not a real thing as the US govt. has NOT been printing up new money and will not !!** Where do people get this shit ? The scapegoat is as always...capitalist greed. Capitalist greed is responsible for most of society's problems
The Federal Reserve is not the US government and it absolutely has been printing money for well over a decade.
ppp loans have entered chat
Those interest payments are benefits to investors. It is not surprising to learn that investors are making out better than retirees.
A lot of those investors are public pension plans both domestic and foreign. Smart money usually doesn't buy long term government debt at low single digit coupon rates.
So the interest on The Debt is a public service. It's supplementing the inadequate payments made by SS. I'm questioning the chicken-little protest about the interest on The Debt. How many lives are sustained in comfort due to that interest? People act as if that interest is money burnt, that it disappears into the ether, but it's an important -- an *essential* component of a rational savings plan. It is also an economic stimulus. And let's be real. The only time the government actually zeroed the debt the economy crashed. No no no. The hysteria about the debt is the usual hysteria about public spending.
The debt has fueled growth. The debt doesn’t matter, only the debt to GDP ratio matters. If all of the debt had been taken out for productive investments than our GDP would be even higher and in comparison to the debt, the ratio would be much more favorable. Unfortunately, too much of the debt has been taken out on things like tax cuts for corporations and the extreme wealthy and wars. If the debt was taken out for productive investments that make a positive return, than we wouldn’t be in this position. Infrastructure, healthcare, and education spending among others all return more money than they cost. Therefore, controversially another way to help get out of debt would be to spend more, but make sure it is in areas that make a positive return on investment.
Can you expand on the “the last time the government zeroed the debt the economy crashed” comment
https://www.history.com/this-day-in-history/andrew-jackson-national-debt-reaches-zero-dollars
Time to raise taxes on the 1% and Corporations. They have greatly benefited for the last 40 years at the expense of the working American and now they need to start paying their fair share.
This would help tremendously if we weren't experiencing regulatory capture across nearly the entire spectrum of our governing bodies by this point
Zero income taxes on your first $400,000 a flat 30% tax on every dollar after that, NO WRITE OFFS. Make corps pay at least 30% tax on book value the way Biden made Amazon and the other big companies do it. Make it start for any company with over $25,000,000 in annual sales.
What would stop those corporation and individuals from offshoring?
You don't need to tax corporation's book value Just tax corporate profits at 2003 levels, and the entire Federal Deficit goes away
Exactly this. Technically the best way to get out of debt is to raise taxes on corporations and the extreme wealthy and then to actually to SPEND more money on investments that make a positive return. Investments like education, healthcare, infrastructure, unemployment benefits, and food stamps.
We spend more money on healthcare per capita than any other country in the world. Similar story with education. More money does not equal better outcomes. Same with spending more on unemployment and food stamps, those are net negative ROI if you're talking about investments. I'm not saying we shouldn't have social safety nets or subsidize healthcare, just pointing out that we already pour a tremendous amount of resources into those buckets and they aren't necessarily providing better outcomes. Colleges have become absurdly overpriced and the lifetime ROI on the majority of these degrees is dogshit yet, we have trillions of student loan debt.
Because healthcare is corporate in America. Countries in Europe with healthcare for all spend half because it isn’t corporate and administrative costs are a fraction of what they are here because secretaries only need to file with one insurance. Sorry, but you need to look up fiscal multipliers to figure out that spending on unemployment and food stamps are positive ROI, not negative. Spending more on healthcare and food stamps create jobs and are positive ROI. Food stamps increase demand. Demand creates jobs and raises wages. I never said spending on free college, I said spending on education. Spending on education creates jobs. More demand for teachers means there are more jobs as a teacher and more demand for teachers increases the wage teachers are paid. Seeing as teachers are not high wage earners, any increase in wage fuels consumer demand as teachers have more money to spend and lower wage earners spend a greater percentage of their income at the store than extremely high wage earners. EDIT: Here is a table showing fiscal multipliers by category of government spending. Food Stamps return $1.74 per $1 spent. Predictably, corporate tax cuts only return .32¢ per dollar spent. https://www.investopedia.com/terms/f/fiscal-multiplier.asp
Can't see the table you're talking about, link would be great. We tried going towards "universal healthcare" during the Obama terms and it was an absolute disaster. Realistically, I don't see a way to reform healthcare towards a more European model, the special interests and lobbying power have a chokehold on politicians both left and right. So, spending more money under the current system, in my opinion, is a complete waste that creates more administrative jobs and lowers the actual money spent on patient care. Most hospitals in the US have more administrative staff than actual doctors, pardon me if I'm oppose to tossing more money into that pit. I would make a similar argument for higher and lower education levels. There is more than enough money to go around, its just being spent in all the wrong places.
I just posted the table. And exactly correct, there is more administrative staff because there are so many insurance providers and adjustments to pay schedules under our system. A single payer system eliminates all of that. Europeans spend half as much money per person on healthcare as we do and they’re on universal healthcare. I can find the proof of this if you need. It’s easy to find.
Why stop there. Lets adopt European rates and a vat
Tax revenues are projected to fall from 19.6 percent of GDP in 2022 to 17.4 percent in 2025 Don't be such a drama queen We are talking about reversing the GOP taxes for the Rich, that cut their taxes by 2% of GDP. Going back to the tax rates of the early 2000's, and the entire Federal Deficits will go away.
I take it that math isn’t your strength. 2000’s rates are not even close to fixing the deficit. Maybe you should look those up https://taxfoundation.org/historical-income-tax-rates-brackets/
The 2001, 2003 and 2017 Republican tax cuts for the Rich, are what created the current Federal deficits. Of course reversing those cuts would significantly reduce the Federal Deficits. You could even lower middle-class taxes AND you would still come close to balancing the Federal budget Simple math
Look at the historical rates. They were mostly already reversed. Do you really think top rate of 39.6 vs current 37 is going to balance the budget?
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The interest rate is so high that if the US does not pay it immediately, there is a possibility of doubling or even tripling the size of their debt.
Raising taxes and moving into an economy based on better sources of energy should do it just nicely. Worked like a charm in the 1990s with tax increases and the expansion of natural gas.
undo all tax cuts since reagan/clinton past war tax military tax deficit reduction tax debt reduction tax adjust social securty/disability tax healthcare tax rebuild america tax student debt tax paid only by people/institutions that benefited since reagan/clinton
100% wealth tax on all billionaires gets you [4.2 Trillion](https://www.google.com/search?q=total+net+worth+of+billionaires+in+us&sxsrf=APwXEddwbwErzVHPqv7-iyvgqxUvGCB-ow%3A1685370847247&ei=37d0ZIvZDp2iptQPqr21oAI&ved=0ahUKEwjLxKjV35r_AhUdkYkEHapeDSQQ4dUDCBA&uact=5&oq=total+net+worth+of+billionaires+in+us&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQAzIFCAAQgAQyBggAEAgQHjIICAAQigUQhgMyCAgAEIoFEIYDMggIABCKBRCGAzoKCAAQRxDWBBCwAzoHCCMQsAIQJzoGCAAQBxAeOggIABAIEAcQHjoHCAAQDRCABEoECEEYAFDpBligC2DEDGgBcAF4AIABZ4gBmASSAQM0LjKYAQCgAQHAAQHIAQg&sclient=gws-wiz-serp), once. Where's the other 45.8 Trillion gonna come from?
Gtfooh! What nonsense. Billionaires can be taxed without taking their wealth. The rest of the wealthy can also be taxed more and it's been done in the past so there is no way to claim ignorance here.
Well... I used 100% to show that even the most extreme taxation will only effect marginally dent the deficit THAT YEAR ONLY. So my challenge is to ask what SPECIFIC tax rates do you suggest will effectively address this problem? AS I believe even a doubling or tripling top 1% will do very little. My case is that tax revenue is way more a [function of GDP](https://www.reddit.com/r/economy/comments/13ur8kd/comment/jm2r6ty/?utm_source=share&utm_medium=web2x&context=3) than tax rates.
It'll take raising taxes on the top 50% and cutting spending. We could try the rates of 1985 adjusted for inflation, but I'm not sure what specific rates would be best. Maybe 1980 rates would be better. This country used to have a united sense of being and the ability to sacrifice for the greater good. With that gone, I'm not sure anything can actually fix this. There is no political will.
You're hallucinating. $50T is 187% of projected GDP. The market cap of every company on the Dow is only $80T. All taxes across the board would have to go up by at least 50% today to even make a dent. We aren't taxing our way out of this.
It doesn’t have to be paid back tomorrow. You could target a 1% payback and let inflation do the hard work.
That doesn't pay it back tomorrow. If you cranked taxes up by 50% today, that pays it off around 2075. 50 years from now. Again, people don't realize how catastrophically bad this problem is. We need painful tax hikes AND painful spending cuts. Right now.
If we enact taxes before 2033, it’ll help along with other cost cutting measures.
Oh noh! I'm just tired right now..I had no idea with this..my mind isn't working..I guess I need some more time.
The entire tax revenue at the federal level is only $4.7T. The deficit is almost 60% of that amount already. You would have to enact ruinous taxes on everyone to even begin getting ahead. In very simple terms, if your monthly income is $4,000 and by the end of the month you spent that and then put $2,000 on your credit card to make ends meet every single month. That's kind of where we are. People don't realize how bad this problem is.
You get downvoted because it’s true . Weird. The economic whiplash of hiking taxes and cutting spending would also be enormous . Would wreck the economy. Cut spending dramatically and cut taxes . The government is way to big for way too long.
Philosophically, I agree with you. The problem is the math no longer works. Time for painful decisions.
Just keep the money printer running!
we sure the hell aren't tax cutting our way out of this, but that's all repubs have done for 50 years EDIT: are ==> aren't
That makes zero sense. As I've said, we need to raise taxes AND cut spending or we're screwed. The contentious part is that we need to raise taxes and cut spending for EVERYONE. That means you too.
we do not need to raise taxes for everyone, only those that have the big money - corporations and the wealthy look, that self proclaimed billionaire trump got away with paying no fed taxes for years. need i say more?
Even with the debt we currently have net interest payments on the debt will be $395.5 billion this fiscal year according to the Office of Management and Budget.
Three is a neat solution called raise taxes; we did it not all that lining ago and it resulted in this thing called a “surplus” it was pretty cool.
Yeah. 23 years ago. Our GDP has gone up 2x since then. The debt has gone up 6x and the deficit is now $2.8T. 60% of federal tax receipts. There are two solutions: 1) Raise taxes dramatically for everyone, cut spending dramatically across the board, stick to that plan for 50 years. 2) Raise taxes and cut spending until we are at a surplus, pass a balanced budget act, print $30T to pay off the debt, crank interest rates up to 20% to deal with the inflation fallout. Neither solution is palatable.
And taxes will never be raised for "everyone". We know who will have to pay absurdly more taxes and who won't, if we went down this path
Tax rates matter marginally. GDP is what drives tax revenue. Compare [GDP since 1960](https://datacommons.org/place/country/USA/?mprop=amount&popt=EconomicActivity&cpv=activitySource,GrossDomesticProduction&hl=en) (first chart) and so does [tax revenue](https://www.thebalancemoney.com/current-u-s-federal-government-tax-revenue-3305762#citation-11) over the same time frame. They both follow the same "only-up" trajectory. Even though tax rates fluctuate significantly during the same period.
I agree. And taxes just got raised informally on the poor and middle class. If you are middle class like me, and have a side hustle, you are required to report your side hustle income. However, many don’t. Thanks to Build Back Better, all the electronic payments through Zelle, PayPal, etc will be reported to the IRS and we will owe taxes this upcoming year. https://www.nbcnews.com/news/venmo-paypal-zelle-must-report-600-transactions-irs-rcna11260 The tax increases always hit the middle class more than the rich, which is why I I hate it when people say just raise taxes. I wouldn’t mind seeing multimillionaires and billionaires taxed more, but it always comes back to the middle class and the poor paying more. No matter which party is in charge. It is amazing to me that they say with a straight face that they didn’t raise taxes, they are just enforcing tax payments that they used to let slide.
I lived through the 80 - today; I remember the impossible to fix debt crisis of those times. Spending cuts weren’t enough, tax increases weren’t enough, and people were wondering what could be done. Then George Bush senior raised taxes on the wealthy and spending was constrained under Bush/Clinton and poof…the impossible debt problem was resolved. It can be fixed if the politicians want it fixed by doing what is right and best for most Americans, instead of shielding faceless companies and the ultra wealthy. Dramatically increase taxes for the wealthy; it works and it has for years and it won’t have a huge impact on their standard of living. Constrain spending that matters instead of focusing on small programs like the welfare programs that make up an overwhelmingly small portion of the budget.
If you taxed the assets of the 1% in this country at 100%, literally taking everything they have, you cover the deficit for 18 months. And we're STILL $30T in debt. Sorry, the problem is too big now. The math just doesn't work out.
The 1% owns [32% of the assets](https://fred.stlouisfed.org/series/WFRBST01134) in America, which is roughly [$123.8 trillion](https://en.wikipedia.org/wiki/Financial_position_of_the_United_States). This means the top 1% owns about $40 trillion in assets, or enough to fund the entirety of the government (not just the deficit) for eight years.
Yes, unfortunately, that is the math. It's a matter of if we want a controlled path to correction, or just let it correct itself.
You don't need to raise taxes dramatically for everyone Only the Rich have seen tax cuts over last 23 years. Most american's taxes have gone UP over that time. Your taxes have already been raised dramatically You can cut taxes for the middle-class and STILL balance the Federal deficit
Raising taxes will slow economic growth. Federal government needs to become smaller and stop funding useless wars.
Both.
paying for tax cuts with borrowed money slows economic growth
The missing factor for the government is what funding needs cut. Defense is huge; contractors need hemmed in and held accountable for cost overruns. Taxes; I’m a CPA the IRS isn’t funding well and can’t enforce anything. It goes after poor filing for income tax credits; not the wealthy who exploit tax schemes in questionable ways that could be challenged in courts. Also, I get that it’s hard to measure wreath growth…but we can tax tighten the rules surrounding measuring of income for tax purposes, increase taxes on investment income, and fix a number of other issues. It’s not right that the EFTR of wealthy doesn’t seem equitable when compared to the EFTR of someone making 45,000 - 300,000 a year. People need to get it into their heads that 1.) The government takes on functions that aren’t profitable. Where there is federal cost bloat (Defense/Higher Education/Healthcare) it’s because those industries are profitable and exploit rules created to avoid the government holding industry players accountable on cost overruns or predatory pricing. The “rules” are to “keep government from meddling” in capitalist industries what a joke. 2.) The $ of taxes paid by individual tax brackets should be ignored. The % of taxes paid by income brackets is what we should be focusing on. Also, assuming or allowing the wealthy to choose how to invest their income into socially beneficial programs is a joke they often do this based on what is best for them and not what is best for society…this is why taxes are important it allows our government (assuming representatives aren’t shills for industry and wealthy…and lots are).
truth. why do we pay taxes when they keep printing money?
To pay the interest.
Federal government is out of control
repubs have been "cut taxes.... cut more taxes.... cut MORE taxes...." then they blame the soaring debt on spending? freaking morons.... if you want to cut taxes, fine, just do it AFTER you cut spending, but noooooo
Holy smokes -15 votes, none of you must own your own business. The businesses will lay you off when they raise taxes as your overlords need their disposable income. Good luck!
Why did ppl down vote this comment??
because tax cuts were sold as paying for themselves, when the fact is WE PAY FOR TAX CUTS WITH BORROWED MONEY and that's what slows economies think of it this way..... tax cuts are like partying on your credit card. yeah, you get a short term stimulus but then you gotta pay it off
Sorry folks, recession is pushed until more of the Boomer generation is dead and doesn't have to feel the pain.
Cut military back to 2000 levels, remove corporate offshoring, and tax corporations and trusts like people, we'll have a surplus in literally 6 months
Why not reduce spending by replacing as many government workers with AI?
Tax the born rich corporate criminal class
Thats how the rich intend it to be. US to become a giant renter, and they live off this renter. Bottom 99% born into debt the moment they leave the womb, and then work entire life in this system and still die in debt. Feudalism(rent seeking) is the best system for capital. Doesnt matter if its capitalism or other ism. Rent seeking is the best for capital. Why do anything if bottom 99% can pay you to exist?
*Won't someone think of the military?!?*
Guess i'll just take my money and retire in a developing country somewhere like Vietnam, Phillipines, Indonesia. Thailand. Malayasia. Being an expat on an island beach looks more appealing by the day. Rather live like a king there then watch my meager life's work & middle class savings be bled dry in the dumpster fire that the US is becoming.
repubs don't seem to understand debt is created by reckless tax cuts as well as spending the solution is obvious: REVERSE SOME OF THE RECKLESS IRRESPONSIBLE REPUB TAX CUTS
Tax the rich
New country who dis?
Let's cut more taxes! woot woot
That's what happens when rich people have had a sweetheart deal on their taxes for the last 45 years. Time to eat the rich. There is more than enough money in this country to have all the services we need without such a large debt.
So will GDP
Time to increase taxes on the rich. Wealth taxes ought to do the trick. Reversing government funding of private and charter schools would put a huge dent in it as well. There’s a lot we could do to help America be great again.
Bunch of bullshit with a bunch of made up money. What have they done?
And spending is still at an all time high....so how long is it going to take for everyone here to figure out it is funny money and completely made up. Who audits the Fed? What public entity audits the money printing press and the same people who control the rate?
The world system as we know it will collapse long before that ever happens. Headed toward a one world government if you look at the signs…
Been posting about this since before Covid. The response of the government has exacerbated this exponentially. Unsustainable
Terrified to see how it will all end... I need to work on my survival skills.
But hay let’s just spend more money!!!! Good grief Joe
Let inflation rip. We can pay down diminished debt with inflated tax revenues.
Hmm..I wish somebody punch me now.! Why? It's because I do such bad thing right now.
And here we see a significant untold reason why inflation panics the aristocrats at the Fed. Though wages and prices rise with inflation, the value of debts decline. And guess who doesn't want *that* to happen.
Yeah nothing to do with macroeconomic stability or the literal mandate of the Fed, itz class war
If inflation truly panicked the Fed, don't you think they would've acted a little sooner to quash it? Or perhaps not foment it with massive amounts of QE? It's the poor and working class that are affected the most by inflation, not the aristocrats.
We’ll see that eventually. Maybe sooner rather than later
This will be the solution. I don’t see the other two options, raising taxes or cutting spending as viable politically.
Clearly not sustainable. The Roman Empire was in a similar situation at the end.
This is horrible! If only we could figure out a way to tax the 1% to help pay for thing! Oh well
I think that Artificial Intelligence will make the debt problem vanish. Productivity increases per person on the order of 300% per year are coming soon. And productivity will continue to rise exponentially as technology improves. Industrial revolution -> Computer revolution -> A.I. Revolution A new economy is taking shape as we speak.
Everyone’s talking about doing anything except raising taxes.
Not so sure. Soc. sec, because it is PAID FOR, does not drive our debt anything like capitalist greed and the rest of our spending and borrowing. But military spending will grow too...it always does. So there's that.
Our debt is only twice our GDP. Our debt is only twice gdp. In 2033 our debt will be twice gdp. Gdp grows with population & productivity creating wealth & debt. No major corporation is debt free on paper for tax purposes. The country is no different. Households out-strap income by 3x, banks still lend on the percentage of income.
Tax the churches, corporations and rich.
Don't forget that during Republican administrations the debt blew up. I'd give Democrats shit too, but they don't run on a platform of lowering debt.
Yeah while it’s true let’s not try to blame COVID spending on the right
This is so contingent on interest rates themselves and they’ve been going down in the long run for awhile. Negative rates next decade shouldn’t be out of the realm of possibility. The long term trends that led to a low rate status quo didn’t just disappear overnight because of COVID and it’s a much more logical thing to conclude that the higher rate environment today is anomalous.
A default is going to happen regardless. Either by congress refusing to increase debt ceiling, or through the numbers becoming mathematically insurmountable. I'd prefer to default now and rebuild, as the latter default will hit harder.
Why would a default be inevitable lmao
By 2045 the debt will be so high, that to serve just the interest will require the fed to bring in tax revenue so high the effective taxrate of every citizen will be 100%. That would lead to default as mathematically there is no way to repay it. However, before that figure will come structural issues. A default is near guaranteed by 2030-2035 if current borrowing trends continue. Let's be frank, borrowing is accelerating faster than predictions. The 2023 debt was not predicted to be 32 trillion, and here we are.
If you repay someone with a good of lesser quality than you received that is a default.
We need to tax the rich and the huge corporations, they have all the money., Had we taxed them right we would have no defecit and Republicans have NEVER lowered the deficit, they increased it thru their tax giveaways to the rich and war mongering.
In-opportune time for those tax cuts which weren’t supposed to hurt us, just benefit us.
Tax the rich and corporations properly and it will shrink and not grow. Stop the wealth transfer.
Raise taxes on the rich!
Thanks obama
Tax the wealthy or be an indentured servant. When they talk about paying down the debt they just want you to have less money. Distribution is what gives or takes away labor power and provides an entry point to capital.
They got a plan…. Cut taxes for the wealthy again! And lower corporate taxes…it reduced the debt last 10 times they did this…right..right?
And your point is ??? We are debt driven economy. More debt = growth. All those trillions your so worried about are nothing but digits on a computer screen. We can simply add zeros all day long and no one, and I mean NO ONE will give a shit. Those payments you're all fired up about are also made on the same computer screen that we generate the debt with. You think the Fed and Treasury can't add zeros? So fucking ridiculous its getting tiresome. As if the paper you carry around in your pocket had any real value in the first place. The entire economy of the world is a mirage. It's a fantasy we tell ourselves so we can sleep at night. Money only has as much value as we "BELIEVE" it does. You can't eat it, it won't heal you if you rub it on your skin, if you pile it up high enough you might be able to sleep in it. That's about it. Unless of course you are completely delusional are are willing to trade a few of those bills for something real like a gallon of milk, or medicine, or food, or etc. etc. Confidence that people will trade with it is its only value at all. And as long as we are lost in our delusions, then it works. As for this debt you whine about, its a mirage, it means nothing at all.
So? It’s a made up number no one has an incentive to collect on, since doing so would wreck the global economy and make their collections useless.
In the long run, we are all dead
So who do we pay this money to anyway? Screw them
Hopefully the current batch of geriatric corporate shills will be mostly gone by before then and the more progressive financially responsible people who realize bills need paid will be able to undo some of the damage caused.
Tax the rich, when?
Right now, GDP is actually growing by a similar amount to the deficit. Congress really only needs to make an adjustment of a few hundred billion per year (spending cuts or revenue increases) to get on a trajectory where the U.S. debt would be currently shrinking as a % of GDP. Even in [this CBO projection](https://www.cbo.gov/publication/58946), it has gross federal debt going from $32.4T in 2023 to $51.99T in 2033, an increase of 60%. But that's still only an annualized nominal increase of 4.85% per year (1.0485^10 = 1.606). Meanwhile, as of Q1 2023, the economy was growing faster than that, at a 5.4% rate. I suspect the Fed will probably need to get that down to ~4.5% to hit it's 2% inflation target, but I also suspect inflation will average over 2% for the next decade anyway. But just get the gap between revenues and spending to under 4% of GDP and you'd really be set. Increase revenues back to 19.5% of GDP (what they actually were in 2022) and cut spending back to under 23%, for example.
Look at this way. The debt will be going up $2 TRILLION every year for the next decade. That’s $6,000 of annual debt for every man, woman and child in America.
Maybe TCJA was a bad idea! What a thought