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DeltaMD90
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What are we going to do about the US Debt?

Sat Feb 22, 2020 6:46 pm

$23 trillion!!! (source so my topic doesn't get deleted: https://www.thebalance.com/the-u-s-debt ... ig-3305778)

This topic rarely comes up in debates, shockingly IMO, but like climate change, it's something that will hurt us more the more we put it off. It's something we can't just ignore forever.

I think eventually, it'll hit a point where it REALLY hurts and we are forced to address it... at what amount will that be? I know it's a pretty American thing to spend more than you have and max credit cards out, and so many people hit financial ruin or bankruptcy. It sucks when it happens to a family but will be absolutely devastating if it happens to the United States.

Shame on both parties... the Democrats only bring it up when they (rightfully) point out Republican hypocrisy, but other than that, they're all spend spend spend. I know they're about "making the rich pay their fair share," which I agree doesn't always happen, but that's more lipservice IMO. If they got their way, I think they'd rack up spending way faster than extra taxes (or go overboard with taxes and crash the US economy.)

Republicans? What a joke. I think they're actually worse since they acknowledge the crippling debt problem but when it comes to their pet projects, they're the worst spenders.

(I know there are some fiscally responsible members of congress, on both sides, but they're the minority.)

I feel like I'm gonna make good decisions in life, stay debt free, not blow my money on stupid stuff I don't need, invest, etc, and then I'll be the one hit hardest bailing out the US government because the financially irresponsible citizens sure can't. And no one will feel sorry for me since "I make so much." Has nothing to do with that.

What say yall?
 
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Dutchy
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Re: What are we going to do about the US Debt?

Sat Feb 22, 2020 6:53 pm

Fiat money = debt. So no more debt, no more money.
Debt for a country is not a bad thing per say. If the money is spent wisely, it can help a country: infrastructure, education etc. That said, Japan still hovers at 200% of their GDP, the EURO countries have a max of 60% of the GDP.

If you want to get rid altogether of debt, go back to the green back Dollar, but that is a system change and that's no easy task.
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Aaron747
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Re: What are we going to do about the US Debt?

Sat Feb 22, 2020 7:07 pm

DeltaMD90 wrote:
$23 trillion!!! (source so my topic doesn't get deleted: https://www.thebalance.com/the-u-s-debt ... ig-3305778)

This topic rarely comes up in debates, shockingly IMO, but like climate change, it's something that will hurt us more the more we put it off. It's something we can't just ignore forever.

I think eventually, it'll hit a point where it REALLY hurts and we are forced to address it... at what amount will that be? I know it's a pretty American thing to spend more than you have and max credit cards out, and so many people hit financial ruin or bankruptcy. It sucks when it happens to a family but will be absolutely devastating if it happens to the United States.

Shame on both parties... the Democrats only bring it up when they (rightfully) point out Republican hypocrisy, but other than that, they're all spend spend spend. I know they're about "making the rich pay their fair share," which I agree doesn't always happen, but that's more lipservice IMO. If they got their way, I think they'd rack up spending way faster than extra taxes (or go overboard with taxes and crash the US economy.)

Republicans? What a joke. I think they're actually worse since they acknowledge the crippling debt problem but when it comes to their pet projects, they're the worst spenders.

(I know there are some fiscally responsible members of congress, on both sides, but they're the minority.)

I feel like I'm gonna make good decisions in life, stay debt free, not blow my money on stupid stuff I don't need, invest, etc, and then I'll be the one hit hardest bailing out the US government because the financially irresponsible citizens sure can't. And no one will feel sorry for me since "I make so much." Has nothing to do with that.

What say yall?


I say the discussion is kinda moot until there is an unbiased independent body handling credit ratings. Moody's and Fitch are in NYC, always have been, and regardless of the drunken spending with no CONCEPT of rebalancing or repayment in sight, the US maintains a Triple-A rating almost unfailingly. S&P has been a little more critical since Lehman/AIG, but it's more or less the same message. Then again there are macroecon bloggers who suggest nutty stuff like the idea of the G20 countries convincing major banks worldwide to institute a massive write-down program and set the global debt clock back to 0 to wipe the slate clean on everyone's GDP-to-debt ratios. Funny that nobody suggests big rescues like that for John Q Public, but I guess that's what Sanders is usually talking about.
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LCDFlight
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Re: What are we going to do about the US Debt?

Sat Feb 22, 2020 9:00 pm

I think it is a stable situation as long as it doesn’t grow much faster than US GDP. The US had debt in 1990 too; the economy grew and debt grew. Low interest rates since 2008 have made the interest payments fairly sustainable, at least for another 40-50 years of this.

The main factors in the debt have been military spending, particularly after 9/11, and growth in health care spending. These are both areas of significant duplication and mismanagement. But people make money from the mismanagement. It is unclear if there is political will to “clean up” military and health care spending. My estimate is both sectors are about 50% overspending compared to what a properly financially controlled system overseen by a financial planning and analysis group would do. In other words, most of the costs in these sectors is waste fraud and abuse. This is nothing new. Every organization (Apple Inc, Google) would collapse due to waste fraud and abuse if they suddenly operated under a bizarre theory that financial controls, spending governance, and financial planning are optional things you can just not do. That’s bizarre. Even a family would financially collapse if they behave like that. But that is how we run our military and our health care. Soon, universities as well. So that is my synopsis on where our debt came from.
 
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DL717
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Re: What are we going to do about the US Debt?

Sat Feb 22, 2020 9:05 pm

The short answer is to raise taxes, the long answer is that someone will find a way to spend it instead of paying it down.
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MaverickM11
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Re: What are we going to do about the US Debt?

Sat Feb 22, 2020 9:40 pm

Nothing. Until a democrat is in the white house. And then it's all their fault--especially Trump's farm bailout which makes the auto bailout look like peanuts.
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tommy1808
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 5:40 am

DeltaMD90 wrote:
$23 trillion!!! (source so my topic doesn't get deleted: https://www.thebalance.com/the-u-s-debt ... ig-3305778)

This topic rarely comes up in debates, shockingly IMO, but like climate change, it's something that will hurt us more the more we put it off. It's something we can't just ignore forever.

I think eventually, it'll hit a point where it REALLY hurts and we are forced to address it... at what amount will that be? I know it's a pretty American thing to spend more than you have and max credit cards out, and so many people hit financial ruin or bankruptcy. It sucks when it happens to a family but will be absolutely devastating if it happens to the United States.


The usual way: default.

The way US politics work there is no way out. Everyone running for elections boasts "for ever $ we send to DC we get 1+x$ federal spending back"

Trumps push for balanced trade in goods is also bad, considering that it can only be achieved if you lose a lot of trade in services, lose direct foreign investments and lose foreigners buying US bonds. Without foreign buyers interest rates go up, government runs out of money for other stuff = bankruptcy. Imagine interest rates going to 5% again......

Unless citizens get around accepting that the need to pay 3000US$/Year more taxes on average, there is no way avoiding that.

But, it's a place where everyone complains about crumbling infrastructure, but no one dares increasing the gas tax enough to give the highway admin even the money they had in 1993, because that would cost elections. And that's just 14ct or so per gallon. So, funding the government is a lost cause.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
blueflyer
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 6:30 am

Considering that one half of the political class has subscribed to Paul Krugman's view that debt doesn't matter as long as the interest rate is below GDP's growth rate, and the other half of the political class cares about debt only when it is in the opposition.... I'd say we won't do anything anytime soon.

It may be that Krugman is not wrong though. We are way past the levels of debt indebtedness that were supposed to bring about the end times according to that political class that cares only some of the time, and there is no evidence that we are nearer to Armageddon just yet. We don't know yet whether Krugman is right, but we do know that class that cares part-time was wrong. Not that they'll ever admit it. They still cling to the fairy tale that lower taxes pay for themselves.
 
olle
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 9:03 am

Public dept as mentioned is normally good if used for investments or other things increasing the economy. This is true as long as investors has trust in the money being payed back.

A bit funny is that republicans always talks about the need to balance budgets but normally creates them, with democrats presented as the ones spending money but uses at least 2-3 years of their presidency making US government get back in balance ;-)
 
olle
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 9:04 am

In northern Europe we have the opposite problem. Governments in special Scandinavia should have more depts and invest more in infrastructure.
 
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DeltaMD90
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 3:43 pm

I get what many of yall are saying, I'm not talking about us collapsing after only a few more years from now. But surely no one thinks we can just do this forever?

Will we be ok at $30T? $40T? $50T? $100T?

And this isn't just a US problem, unfortunately for the rest of the world, our economies are all connected, and if we come crashing down so will much of the world.

Maybe I'm fundamentally misunderstanding something, I'm pretty surprised with the nonchalant-ness of most of the replies, I really am
 
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einsteinboricua
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 3:55 pm

Progressives will tell you it's not important because if we spend money on defense and bailouts, we can spend it on social programs. Can't afford it? Tax the wealthy and corporations. Still not enough? Well they can afford to pay even more (especially because it's immoral to be wealthy).

Deficit chihuahuas (they're all bark and no bite) will tell you that the debt needs to be reduced through cuts in social programs, but the savings generated must be returned to the taxpayers so they can do whatever they need. Still running deficits? cut spending some more and then reduce revenue...unless a Republican is in the White House; then, the deficit is the best thing since sliced bread.

I do agree we need to increase taxes and curb spending. To make the impact less targeted to one area, spread the pain across the entire government with all agencies required to reduce their spending by the same percentage. Return the tax levels to the ones before the Bush tax cuts, increase the SS tax beyond its current limit, and increase corporation tax rates as well. Make the tax scheme long lasting, such that there is no way to repeal it except through a judicial order or emergency act because of recession and it can get the government on a path to pay off about 50% of the debt.

Debt isn't necessarily a bad thing, but the larger the debt is, the harder a collapse will feel.
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DeltaMD90
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Re: What are we going to do about the US Debt?

Sun Feb 23, 2020 4:38 pm

einsteinboricua wrote:
Progressives will tell you it's not important because if we spend money on defense and bailouts, we can spend it on social programs. Can't afford it? Tax the wealthy and corporations. Still not enough? Well they can afford to pay even more (especially because it's immoral to be wealthy).

Deficit chihuahuas (they're all bark and no bite) will tell you that the debt needs to be reduced through cuts in social programs, but the savings generated must be returned to the taxpayers so they can do whatever they need. Still running deficits? cut spending some more and then reduce revenue...unless a Republican is in the White House; then, the deficit is the best thing since sliced bread.

I do agree we need to increase taxes and curb spending. To make the impact less targeted to one area, spread the pain across the entire government with all agencies required to reduce their spending by the same percentage. Return the tax levels to the ones before the Bush tax cuts, increase the SS tax beyond its current limit, and increase corporation tax rates as well. Make the tax scheme long lasting, such that there is no way to repeal it except through a judicial order or emergency act because of recession and it can get the government on a path to pay off about 50% of the debt.

Debt isn't necessarily a bad thing, but the larger the debt is, the harder a collapse will feel.

Increasing taxes is great and all but only if it isn't offset by even more spending. That's my biggest fear of some of our democrat candidates... I mean if I didn't care about responsibly spending, I'd be all for Bernie! But I do, so I'm in the moderate faction.

I just don't see his policies are fiscally responsible or sustainable, at least not anytime soon. And yeah, before anyone says that he "has ways of paying for it all, it's so simple!", yeah, of course he does, they all do. Too easy!


I hear you when you say debt is not bad, I know you can strategically use it just like companies do. But the point is to take some on and then pay it off at some point, not just continue to grow it infinitely
(not necessarily saying you're saying that)
 
Iloveboeing
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 1:55 am

olle wrote:
In northern Europe we have the opposite problem. Governments in special Scandinavia should have more depts and invest more in infrastructure.



More debt? I've heard the cost of living in Norway and Sweden is sky high. When my grandparents visited, they said that the cost of a meal at McDonald's was the equivalent of $50 USD! They need to find ways to make things more affordable instead of taxing the heck out of everybody.
 
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DIRECTFLT
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 1:57 am

Just Default on the debt, after we bring back manufacturing to the homeland.
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TheFlyingDisk
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 3:02 am

Iloveboeing wrote:
olle wrote:
In northern Europe we have the opposite problem. Governments in special Scandinavia should have more depts and invest more in infrastructure.

More debt? I've heard the cost of living in Norway and Sweden is sky high. When my grandparents visited, they said that the cost of a meal at McDonald's was the equivalent of $50 USD! They need to find ways to make things more affordable instead of taxing the heck out of everybody.


The median salary in Sweden is SEK 110,000. Convert that, and you'll get $11,640.57 a month. The minimum wage for a Swedish McDonald's worker is $16 an hour (2015 data). So is the cost of living really sky high, or is it sky high relative to where you are living now?
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KFTG
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 8:28 am

We'll do what we always do. Evict the MAGAt POTUS, elect a Democrat to the White House. Then, two years later, elect a MAGAt Congress. Then, forget why the Democrat won, capitulate to MAGAt demands, and repeat.
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 5:33 pm

Yes, like the Democrats has complete control in 2009-2011 and NEVER proposed a balanced budget. Hint: they could have passed one but passed on actually doing so.

And what they actually did pass, was so unpopular they were thrown out.
 
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 6:42 pm

GalaxyFlyer wrote:
Yes, like the Democrats has complete control in 2009-2011 and NEVER proposed a balanced budget. Hint: they could have passed one but passed on actually doing so.

And what they actually did pass, was so unpopular they were thrown out.


Please provide proof that the Dems had "complete" control in those years, specifically the Senate.
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casinterest
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 7:31 pm

Currently we have an issue. I call it the beer/hangover issue.

Beer:
We issue debt to cover costs, people make money in the Government sector, or from the Government sector, and then they spend it in the private sector, and the economy flourishes. Everyone is happy.

Overuse of Beer: We increase debt to well outside of our ability to manage it ( higher than GDP). Buyers of debt start to stay away from purchasing debt, so we start increasing the interest rates to keep them happy,putting us in a spiral, where we are issuing far more money and debt than anyone is willing to take on.

Hangover: The US will have to recover much like other countries when hyperinflation takes hold.



Where are we know ? We are in that good time roll,/ right on the edge of overuse of GDP and debt. This corona virus could cause a realslowdonw/recession that exposes the US to a overindulgence in deficit spending.



There is an argument that with countries such as China so tied to the US that our money is gold that we continue to mine and fund the debt with, but that argument fails when we overspend the GDP by so much.

We need to reign in the balance. That would involve cutting the budget, raising taxes, or a mixture of both. Cutting the budget is never ideal, as it means someone is going to lose a job in Government and possibly down the line in the private sector, however raising taxes could have the same effect in the private sector, while boosting government jobs.
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Sokes
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 9:33 pm

DeltaMD90 wrote:
I feel like I'm gonna make good decisions in life, stay debt free, not blow my money on stupid stuff I don't need, invest, etc, and then I'll be the one hit hardest bailing out the US government because the financially irresponsible citizens sure can't. And no one will feel sorry for me since "I make so much." Has nothing to do with that.

What say yall?


What is true for a family father is not necessarily true for a government. You won't be able to print money. Amerika's debt is in home currency, so the US government can always print whatever is needed for interest payments.

Heiner Flassbeck is a German left wing economy professor/ politician. I believe in monetarism, so I can't be a fan of his. However I find one thought of his interesting: "Who absorbs the savings?" It comes back to Keynes's statement "Not everybody can save."
Flassbeck argues that since WW2 in Germany private housholds in sum saved. Government took little debt, but industry would use most of the savings. Since Germany has such huge trade surplus in recent years German households as well as industry are saving. Can the government in such a situation save?

Foreign countries absorb German savings these years. It's an unstable situation. The Germans/ Chinese may not be able to enjoy the fruit of their works and industrial countries with trade deficit loose jobs. Only developing countries profit. Indeed I believe that absolute poverty in the world shrank so much is on account of cheap interest which lead to investments in poor countries which would otherwise be considered too risky.

I like Milton Friedman's idea concerning money supply. Friedman suggested that money should increase every year by a fixed percentage. Friedman preferred 2%, but said even 5% is o.k. The money can be spent by the government. Interest rates get fixed by offer and demand on the market. It's not the government's business. We wouldn't know the name Greenspan. Wouldn't that be great?
I think why Friedman's system doesn't even find support with those who claim to believe in markets is this: Sometimes the super rich make wrong gambles. And then they need monetary policy to bail them out.

I had to stay in a hotel in a small town. The hotel was totally overpriced. There used to be two hotels in that town which together already had too many beds. Thanks to cheap interest another hotel opened. Now there are three buildings to heat/ maintain/ clean. And three receptionists are required. As monetarism says: cheap money makes stupid investments.

That's very unlike investments which are made in a high interest environment. I guess a lot of the savings in the world are lost as spent in stupid investments. But how long can one pretend it isn't so if interest is close to zero? I myself wonder. Capitalism is not old enough. There is no historical example, with the possible exception of Japan. I guess funded retirement systems will have to change to the unfunded system/ pay as you go.

However while all this may be true for other countries, it may not be true for the US. The US is reserve currency.
See it that way: Even at near zero interests the Chinese and Germans are not willing to consume the fruits of their labor. If the US doesn't absorb the savings, Gerrmany/ China may have to close their factories.

If the US is supposed to spend excess savings in the world the question arises: Who in the US? Bill Clinton said "Let the poor and middle type of people build houses with these savings". George Bush decided to use it in the fight of good against evil. Surprising the first use led to the global financial crisis, while the second use seem to be considered more acceptable in the financial community. I'm not sure about today.
I personally believe the money is gone both ways. But then it's just stupid if countries don't maintain a balance of payment. Considering that the huge trade deficit of the US means that the currency is overvalued and that therefore US industry struggles to compete: Can Germany/ China really demand that money back?

I think Germany (or was it EU?) gave credit to Greece. Interest rate is 0% and payback date is never. Discussions are on if this is debt or not.

It's a bit like my neighbor telling me: I bought a car on credit, now you also have to buy one on credit.
If an individual likes to go in debt, so be it. I don't think within a country it's the right of the majority to put a minority in foreign debt. In between countries there mustn't be debt.

You may refer to Keynes's "Bancor" (= "Proposal for International Clearing Union") for a system which was never tried, but which sounds logical. Basically a country having trade surplus pays a fine, just like a country having trade deficit. The Bancor was a political project. Keynes had to compromise with the US, which was trade surplus country at the time. Only the first version makes sense. It was easy to find the first version on the internet before 2008. Now it's more difficult.
E.g. for some reason best known to them the IMF presents a fourth version in which countries can agree to credit without paying that fine.
"Any member-State in debit may, however, borrow from the balances of any member-State in credit on such terms as may be mutually agreed, by which means each would avoid these contributions."
https://www.elibrary.imf.org/staticfile ... 5_vol3.pdf
If such agreements are possible, why should anybody pay fine to the Clearing Union for not maintaining a balance of trade? What's the point then of the Clearing Union?

At any rate the Bancor wasn't accepted. Instead in Bretton Woods 1944 it was agreed that certain countries will peg their currency to the Dollar.


DIRECTFLT wrote:
Just Default on the debt, after we bring back manufacturing to the homeland.

I guess that's the option which follows from what I wrote above.
Why can't the world be a little bit more autistic?
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Wed Mar 04, 2020 9:52 pm

bhill wrote:
GalaxyFlyer wrote:
Yes, like the Democrats has complete control in 2009-2011 and NEVER proposed a balanced budget. Hint: they could have passed one but passed on actually doing so.

And what they actually did pass, was so unpopular they were thrown out.


Please provide proof that the Dems had "complete" control in those years, specifically the Senate.


The Dems never had less than 255 members in the House and never less than 55 Senators. Plus the President.
 
Sokes
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 12:11 pm

Slightly off topic as it is about Germany/ Europe, but this 3 min video of 2016 explains why some countries end up with trade surplus and others with trade deficit. It's mainly about the development of
"unit labour cost = nominal wages / productivity"
https://www.youtube.com/watch?v=j6E-TbuAYx8

It's of course not as easy as in the video. Somewhere I read that China started competing with Greece in certain products. If Germany doesn't produce this product there is no point of comparing unit labour cost development of Greece with Germany. But the video is part of the truth.
Why can't the world be a little bit more autistic?
 
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Tugger
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 4:06 pm

Here is my simple solution: Decrease spending slightly, raise taxes slightly. Rinse, repeat.

Cut $200 million from the current spending. Sure it will be hard and no one will want to have their pet project of budget item affected. But $200M is doable.
Raise taxes to bring in $200M more to support the budget. Sure there will be resistance from some quarters, but if carefully targeted this can be done with strong support from the majority of the public.

Repeat this process every two years.

Tugg
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tommy1808
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 4:12 pm

Tugger wrote:
Here is my simple solution: Raise taxes slightly, decrease spending slightly. Rinse, repeat.

Cut $200 million from the current spending. Sure it will be hard and no one will want to have their pet project of budget item affected. But $200M is doable.
Raise taxes to bring in $200M more to support the budget. Sure there will be resistance from some quarters, but if carefully targeted this can be done with strong support from the majority of the public.

Repeat this process every two years.

Tugg


Only problem is that you never get more than two year if you did that.

You can only successfully raise taxes, as in not losing the next election, when you make sure most people (=voters) benefit from it.
Cutting spending and raising taxes is a pretty safe way to piss of everyone.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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Tugger
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 4:16 pm

tommy1808 wrote:
Tugger wrote:
Here is my simple solution: Raise taxes slightly, decrease spending slightly. Rinse, repeat.

Cut $200 million from the current spending. Sure it will be hard and no one will want to have their pet project of budget item affected. But $200M is doable.
Raise taxes to bring in $200M more to support the budget. Sure there will be resistance from some quarters, but if carefully targeted this can be done with strong support from the majority of the public.

Repeat this process every two years.

Tugg


Only problem is that you never get more than two year if you did that.

You can only successfully raise taxes, as in not losing the next election, when you make sure most people (=voters) benefit from it.
Cutting spending and raising taxes is a pretty safe way to piss of everyone.

And? What you are otherwise saying is that there is effectively no solution then.

The reason I said two years was to have an election in there. It need to be done.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
zhiao
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 4:32 pm

TheFlyingDisk wrote:
Iloveboeing wrote:
olle wrote:
In northern Europe we have the opposite problem. Governments in special Scandinavia should have more depts and invest more in infrastructure.

More debt? I've heard the cost of living in Norway and Sweden is sky high. When my grandparents visited, they said that the cost of a meal at McDonald's was the equivalent of $50 USD! They need to find ways to make things more affordable instead of taxing the heck out of everybody.


The median salary in Sweden is SEK 110,000. Convert that, and you'll get $11,640.57 a month. The minimum wage for a Swedish McDonald's worker is $16 an hour (2015 data). So is the cost of living really sky high, or is it sky high relative to where you are living now?


That’s BS it’s not 110,000 a month. More fake news.

In fact according to the OECD the mean is $44,000 a year:

https://data.oecd.org/earnwage/average-wages.htm
 
THS214
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 4:55 pm

DIRECTFLT wrote:
Just Default on the debt, after we bring back manufacturing to the homeland.


USA sure can do that but its a disaster. USA isolated and your taxes will go of the roof or a huge inflation. All the US companies having worldwide business shrinking only to US? Like Google, easily replaced elsewhere. Your homeland manufacturing without resources would be fun to watch. A huge unemployment and of course that means a huge increase in crimes.

Are you trolling or really believe that if USA default its debt everyone would just think OK no harm is done? That homeland manufacturing means nothing when their products can't be sold.
 
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Tugger
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 5:07 pm

Ummm... people here do understand that the vast majority of the US debt is in fact held by US citizens and the USA itself, don't they? Foreign holdings of US debt amount to something like $7 trillion of the $21-22 trillion total debt.

So defaulting on the debt... umm.. yeah....

Tug
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GalaxyFlyer
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 9:46 pm

Most US subsidies are in the tax code, most benefit individuals, not business and most go to high income individuals. Trump’s tax cut actually reduced the tax expenditures by limited the SALT deduction to $10,000. Listen to blue states howl over that one.

https://www.cbpp.org/research/federal-t ... penditures
 
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Tugger
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 10:26 pm

GalaxyFlyer wrote:
Most US subsidies are in the tax code, most benefit individuals, not business and most go to high income individuals. Trump’s tax cut actually reduced the tax expenditures by limited the SALT deduction to $10,000. Listen to blue states howl over that one.

https://www.cbpp.org/research/federal-t ... penditures

And we're at a $1 TRILLION deficit with a BOOMING economy?

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
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Re: What are we going to do about the US Debt?

Thu Mar 05, 2020 11:02 pm

You could eliminate 80% of US discretionary spending (defense, infrastructure and the like) and not eliminate the deficit. Look at future SS and Medicare/Medicaid spending—that’s what’s driving the deficit. And nobody’s talking about that.
 
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Aesma
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Re: What are we going to do about the US Debt?

Fri Mar 06, 2020 2:01 am

Tugger wrote:
Ummm... people here do understand that the vast majority of the US debt is in fact held by US citizens and the USA itself, don't they? Foreign holdings of US debt amount to something like $7 trillion of the $21-22 trillion total debt.

So defaulting on the debt... umm.. yeah....

Tug


Yeah. I have a nice amount saved for my age and income, but don't own any government debt, it's not worth it, especially with current low interest rates.

Many countries have debt problems, Italy was a worry, now with the coronavirus it could become a very big worry.

Japan and Abe led the way for spending more money even though the debt is already very high, and so far Japan is still there, so I guess this can continue.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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Tugger
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Re: What are we going to do about the US Debt?

Fri Mar 06, 2020 5:32 am

GalaxyFlyer wrote:
You could eliminate 80% of US discretionary spending (defense, infrastructure and the like) and not eliminate the deficit. Look at future SS and Medicare/Medicaid spending—that’s what’s driving the deficit. And nobody’s talking about that.

Which is why we need to propose solutions that increase intake and where possible reduce expenditures.

A really good and understandable resource with good information on the budget and the structural problems you highlight is here:
https://www.pgpf.org/finding-solutions/ ... t/spending

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Fri Mar 06, 2020 3:47 pm

And interesting thing there is that transfer payments are crushing the ability to pay for real government functions—providing for public goods like infrastructure, defense, law enforcement, safety regulation, etc. One who robs Peter to pay Paul can depend on Paul’s vote.
 
Dieuwer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 1:48 am

Easy. It will be (hyper-)inflated away.
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 1:56 am

Dieuwer wrote:
Easy. It will be (hyper-)inflated away.


There’s one problem—the vast majority of US debt is short term, less than 5 years. Pretty hard to inflate it away when you have keep rolling it over, the lenders start demanding higher interest rates. Add in 70% of the expenditures is on inflation-adjusted transfer payments and it ain’t gonna happen. Inflation equals more transfer payments equals more borrowing equals higher interest.

GF
 
Dieuwer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 1:58 am

GalaxyFlyer wrote:
Dieuwer wrote:
Easy. It will be (hyper-)inflated away.


There’s one problem—the vast majority of US debt is short term, less than 5 years. Pretty hard to inflate it away when you have keep rolling it over, the lenders start demanding higher interest rates.

GF


Uhm, no.
The FED will simply buy the Treasuries off the hands of the Primary Dealers.
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 2:08 am

The primary dealers resell US Treasuries, the public buying them aren’t gonna rollover and watch their money be reduced in value without demanding more interest, neither are the primary dealers.
 
Sokes
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 11:00 am

Tugger wrote:
Ummm... people here do understand that the vast majority of the US debt is in fact held by US citizens and the USA itself, don't they? Foreign holdings of US debt amount to something like $7 trillion of the $21-22 trillion total debt.

So defaulting on the debt... umm.. yeah....

Tug


I was surprised to learn that. It's less dramatic than I thought. However the speed of debt increase is concerning.

"The difference between a country's external financial assets and liabilities is its net international investment position (NIIP).[1] A country's external debt includes both its government debt and private debt, and similarly its public and privately held (by its legal residents) external assets are also taken into account when calculating its NIIP."
https://en.wikipedia.org/wiki/Net_inter ... t_position

Image
source: https://www.bea.gov/news/2019/us-intern ... ual-update


I believe also of concern is how the workforce is distributed:
https://www.statista.com/statistics/978 ... -industry/

13 million people in manufacturing is not much. But then it's the task of the US to absorb the world's saving.
Isn't it funny that the world needs a country to absorb excess saving?

It's true that Japan soldiers on for decades with it's funny zero interest policy. I still can't believe that this is long term stable.
But then, as Keynes said: "In the long run we are all dead." And the zero interest policy not only lifted billions of people out of poverty. It also makes renewable energy possible.
Interesting times.
Why can't the world be a little bit more autistic?
 
Sokes
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 11:16 am

Dieuwer wrote:
GalaxyFlyer wrote:
Dieuwer wrote:
Easy. It will be (hyper-)inflated away.


There’s one problem—the vast majority of US debt is short term, less than 5 years. Pretty hard to inflate it away when you have keep rolling it over, the lenders start demanding higher interest rates.

GF


Uhm, no.
The FED will simply buy the Treasuries off the hands of the Primary Dealers.


There is always the possibility to add a few Zeros.

Image
source: https://en.wikipedia.org/wiki/Zimbabwean_dollar
Why can't the world be a little bit more autistic?
 
bgm
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 11:23 am

GalaxyFlyer wrote:
You could eliminate 80% of US discretionary spending (defense, infrastructure and the like) and not eliminate the deficit. Look at future SS and Medicare/Medicaid spending—that’s what’s driving the deficit. And nobody’s talking about that.


And what about Trump’s tax cuts? Conveniently left that out I see.

It’s funny that the GOP are the ones who rack up debt but then get all mad about the debt when they’re not in power.

Where are those infamous teabaggers today?
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 3:24 pm

Starve the Beast. I’m all in on tax cuts because the Federal government needs shrinking and faster the better. Spending a bipartisan deal.

Our corporate marginal tax rate was too high and among the highest in the world. Cutting the tax expenditure on SALT and limiting mortgage interest was great but didn’t offset the rate reductions. We really need to reorder the entire code to simply be a flat rate around 15%-17%, personal deduction around median income. Perhaps a national consumption tax
 
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Tugger
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 9:34 pm

GalaxyFlyer wrote:
Our corporate marginal tax rate was too high and among the highest in the world.

You don't know what you are talking about. I suspect you are just pouting what you have been told by talking heads or being simplistic and looking only at the number and not the facts of what was the reality.

Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.

https://americansfortaxfairness.org/tax ... tax-rates/

I don't think states or counties etc. should be allowed to give tax breaks to specific companies when they go "shopping" for others communities to set up in. It is unfair to every other business that has been there working in and supporting the community for years.

If you are going to make your corporate tax "flat", seriously flat, then I might support that.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 10:19 pm

Tugger wrote:
GalaxyFlyer wrote:
Our corporate marginal tax rate was too high and among the highest in the world.

You don't know what you are talking about. I suspect you are just pouting what you have been told by talking heads or being simplistic and looking only at the number and not the facts of what was the reality.

Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.

https://americansfortaxfairness.org/tax ... tax-rates/

I don't think states or counties etc. should be allowed to give tax breaks to specific companies when they go "shopping" for others communities to set up in. It is unfair to every other business that has been there working in and supporting the community for years.

If you are going to make your corporate tax "flat", seriously flat, then I might support that.

Tugg


You’re the one that is clueless about MARGINAL tax rates and the effects of combined Federal and State corporate taxes. Marginal rates and what they pay are two very different things. High marginal rates are just a way for politicians to carve out goodies, that is favors, for companies in their district.

https://taxfoundation.org/us-corporate- ... mpetitive/

And then NPR will explain to you,

https://www.npr.org/2017/08/07/54179769 ... -the-world
 
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Tugger
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 10:32 pm

GalaxyFlyer wrote:
Tugger wrote:
GalaxyFlyer wrote:
Our corporate marginal tax rate was too high and among the highest in the world.

You don't know what you are talking about. I suspect you are just pouting what you have been told by talking heads or being simplistic and looking only at the number and not the facts of what was the reality.

Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.

https://americansfortaxfairness.org/tax ... tax-rates/

I don't think states or counties etc. should be allowed to give tax breaks to specific companies when they go "shopping" for others communities to set up in. It is unfair to every other business that has been there working in and supporting the community for years.

If you are going to make your corporate tax "flat", seriously flat, then I might support that.

Tugg


You’re the one that is clueless about MARGINAL tax rates and the effects of combined Federal and State corporate taxes. Marginal rates and what they pay are two very different things. High marginal rates are just a way for politicians to carve out goodies, that is favors, for companies in their district.

https://taxfoundation.org/us-corporate- ... mpetitive/

And then NPR will explain to you,

https://www.npr.org/2017/08/07/54179769 ... -the-world

Then don't make statements without clarifying that you support higher corporate taxes, just make it flat without exemptions, aka "carve outs.

Glad you agree that companies over all need to contribute more than what the average has been.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
GalaxyFlyer
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Re: What are we going to do about the US Debt?

Sat Mar 07, 2020 11:46 pm

Where did I support higher corporate taxes, I just pointed out the US corporate marginal tax rates were high and needed the reduction to be competitive. It questionable who pays the corporate tax—the workers thru lower investment in productivity, the owners by reduced returns to capital or consumers thru higher prices. Lots of confusion and analysis of various elasticities.
 
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stl07
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Re: What are we going to do about the US Debt?

Sun Mar 08, 2020 12:04 am

GalaxyFlyer wrote:
Yes, like the Democrats has complete control in 2009-2011 and NEVER proposed a balanced budget. Hint: they could have passed one but passed on actually doing so.

And what they actually did pass, was so unpopular they were thrown out.

Neither party will ever have a balanced budget. They only complain about it when they are not in office to get votes like the Ds are now and the Rs did when Obama was in office
Instead of typing in "mods", consider using the report function.
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Aaron747
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Re: What are we going to do about the US Debt?

Sun Mar 08, 2020 1:00 am

stl07 wrote:
GalaxyFlyer wrote:
Yes, like the Democrats has complete control in 2009-2011 and NEVER proposed a balanced budget. Hint: they could have passed one but passed on actually doing so.

And what they actually did pass, was so unpopular they were thrown out.

Neither party will ever have a balanced budget. They only complain about it when they are not in office to get votes like the Ds are now and the Rs did when Obama was in office


Exactly, it’s all a partisan fantasy.
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hashtagconfused
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Re: What are we going to do about the US Debt?

Sun Mar 08, 2020 3:28 pm

bgm wrote:
GalaxyFlyer wrote:
You could eliminate 80% of US discretionary spending (defense, infrastructure and the like) and not eliminate the deficit. Look at future SS and Medicare/Medicaid spending—that’s what’s driving the deficit. And nobody’s talking about that.


And what about Trump’s tax cuts? Conveniently left that out I see.

It’s funny that the GOP are the ones who rack up debt but then get all mad about the debt when they’re not in power.

Where are those infamous teabaggers today?


even with the tax cuts, federal revenue has increased each year. without the cuts it may have increased enough to help offset some of the spending increases. the candidates that ran, and want to reverse the trump tax cuts, want to use that money for new programs or to expand current programs. so it would do nothing to reduce the deficit.

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