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The United States could become bankrupt within our lifetimes
- Thread starter Unknown Soldier
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The problem isn't how much money taxes take in, it's how those taxes are allocated.
A lot of money is wasted in dead-end programs, overspending on the defense budget, and the thing I find worst of all, having to finance maintenance and repairs of the urban sprawl. Sprawl has gotten to the point where it's not sustainable and has to keep growing in order to keep itself going. For a while that was occurring, but a lot of it was artificial. So now we are stuck with the repair bills as the second and third generations of sprawl can no longer finance the first generation as it gets older. It costs a lot of money to widen and pave those highways we hastily put up in the 50s and 60s and a lot of money was just wasted on development that is now in ruins as populations move to other parts of the cities. I'm not saying that everybody should live in close-quarters or anything, but perhaps commuting an hour to work every day really isnt a very good idea. Beyond the whole oil consumption thing, it causes a lot of wear and tear on cars and roads and a lot of money is wasted repairing things far too often.
A lot of money is wasted in dead-end programs, overspending on the defense budget, and the thing I find worst of all, having to finance maintenance and repairs of the urban sprawl. Sprawl has gotten to the point where it's not sustainable and has to keep growing in order to keep itself going. For a while that was occurring, but a lot of it was artificial. So now we are stuck with the repair bills as the second and third generations of sprawl can no longer finance the first generation as it gets older. It costs a lot of money to widen and pave those highways we hastily put up in the 50s and 60s and a lot of money was just wasted on development that is now in ruins as populations move to other parts of the cities. I'm not saying that everybody should live in close-quarters or anything, but perhaps commuting an hour to work every day really isnt a very good idea. Beyond the whole oil consumption thing, it causes a lot of wear and tear on cars and roads and a lot of money is wasted repairing things far too often.
The Albatross
Member
People aren't serious about paying off debt. The people who talk about cutting defense spending when talking about reducing debt are so uninformed. Talk about "taxing the rich" and reducing defense spending will not make any discernable change to our debt (and in particular, if we really cut defense spending, it could completely disrupt international trade) -- To really begin to pay off debt, we have to raise taxes across the board, on every American, including that 50% +/- who do not pay any federal income tax and are the single largest burden on federal spending: This INCLUDES the elderly and retired. When Democrats talk about "ending Bush tax cuts" they're meaning "ending Bush tax cuts" on a miniscule American population -- an arbitrary number that they designate as "the rich." Enough of this rich/poor dichotomy bull shit, if you are serious about paying off debt, you have to raise taxes on everyone... And that will never happen because nobody is serious about paying off debt, they're serious about staying as career politicians.
On top of that, even if you do completely eliminate "bush tax cuts," as well as establish broad new taxes for all Americans, it would just trickle over the amount that we're going to be spending on interest on our debt alone (some $1t over 10 - 15 years).
So, not only do you have to raise taxes on all Americans and foreigners living in America but you have to cut entitlements across the board. The political effect of this is that a Democrat will never be elected to office ever again in our lifetimes because they'll be seen as selling out a huge portion of their voting block: working class, the "poor," union workers, municiple employees, and anybody who shares sympathies with the "working class." This is politically impossible, but entirely necessary unless we want to have this burden hanging over our generation and our grand, grand childrens generation. However, it will simply never happen. When Barack Obama came to office talking about having to make "tough decisions" and "tough choices" he didn't mean it for his party.
The other major problem with this is a political problem: Republicans are the only party who can effectively raise taxes and cut defense spending, and Democrats are the only party who can effectively cut entitlements. It's not really a catch-22 but it seems like one. Nobody wants to make tough choices though for their party... mainstream liberals who talk about helping to alleviate the debt problem do not take it seriously... they hammer on inneffectual talking points like "taxing the rich" or "eliminating Bush tax cuts" (for a miniscule population -- they don't dare eliminate Bush tax cuts across the board, or increase taxes to their voting blocs) or cutting defense spending. Get real.
On top of that, even if you do completely eliminate "bush tax cuts," as well as establish broad new taxes for all Americans, it would just trickle over the amount that we're going to be spending on interest on our debt alone (some $1t over 10 - 15 years).
So, not only do you have to raise taxes on all Americans and foreigners living in America but you have to cut entitlements across the board. The political effect of this is that a Democrat will never be elected to office ever again in our lifetimes because they'll be seen as selling out a huge portion of their voting block: working class, the "poor," union workers, municiple employees, and anybody who shares sympathies with the "working class." This is politically impossible, but entirely necessary unless we want to have this burden hanging over our generation and our grand, grand childrens generation. However, it will simply never happen. When Barack Obama came to office talking about having to make "tough decisions" and "tough choices" he didn't mean it for his party.
The other major problem with this is a political problem: Republicans are the only party who can effectively raise taxes and cut defense spending, and Democrats are the only party who can effectively cut entitlements. It's not really a catch-22 but it seems like one. Nobody wants to make tough choices though for their party... mainstream liberals who talk about helping to alleviate the debt problem do not take it seriously... they hammer on inneffectual talking points like "taxing the rich" or "eliminating Bush tax cuts" (for a miniscule population -- they don't dare eliminate Bush tax cuts across the board, or increase taxes to their voting blocs) or cutting defense spending. Get real.
The Albatross said:
Only taxing those groups isn't going to raise a lot of money, and they're barely getting by as it is. However taxing the richest 5% will raise a lot of money, and their lifestyles won't change drastically.
Spending also needs to be corralled, but the govt. needs more income too.
Mr. B Natural
Member
People do realize that the social security bar isn't budging because they keep pushing up the social security availability age, right? You do realize that they'll have to keep moving it up to prevent it from shooting up over the future too, right?
Who Rules America: Wealth, Power, and IncomeThe Albatross said:
Code:
Total Net Worth
Top 1 percent Next 19 percent Bottom 80 percent
1983 33.8% 47.5% 18.7%
1989 37.4% 46.2% 16.5%
1992 37.2% 46.6% 16.2%
1995 38.5% 45.4% 16.1%
1998 38.1% 45.3% 16.6%
2001 33.4% 51.0% 15.6%
2004 34.3% 50.3% 15.3%
2007 34.6% 50.5% 15.0%http://www.neogaf.com/forum/showpost.php?p=28899834&postcount=407. What were you trying to say then?Cujshi said:
Won't even touch the other stuff in your post. Brutal crackdowns on minorities presented as a good thing... Jesus H.
The Albatross
Member
Maxim726X said:
The idea that increased taxation of 95% of Americans will not raise money is ridiculous. The only reason we don't seriously talk about increasing taxes across the board is because it is not viable politically. On the contrary, it's really easy for the majority to increase taxes on a fractional minority.
Nobody is serious about the government getting more income when we're only talking about taxing minority groups. And nobody is serious about cutting spending when we're leaving out every group over age 55 or every group under $25k.
balladofwindfishes
Member
it may be ridiculous and very sad, but it's trueThe Albatross said:
Those who share in <1% of the wealth of nation, should pay <1% of the taxes.
That 95% only share 5% of the wealth of the country, so they should only contribute 5% to the tax income.
Mr. B Natural
Member
And it shouldn't because the point is to help the elderly and yet will only support the last 9 years of their lives (if the number doesn't rise, which it consistently will of course). And when the obesity epidemic and no nest egg epidemic rears its ugly head, yeah good times are ahead for the average american.Maxim726X said:
And moving that age up isn't saving squat, it's just preventing the number from going up.
I'm just saying to the people noticing social security expensives not rising is only getting half of the story. It's not because social security is in the least bit stable at all. It's not. It's dying and a huge time sink that benefits its people less and less every year and every generation and yet costs about same, actually rising a little more and a little more.
Getting less for the same price isn't a "thumbs up America!" to me
ClosingADoor
Member
The Albatross said:
If 80% of people own 20% of the income, it isn't wise to tax them more. The thing to do is tax the 20% that earn 80% of the income. That way you keep the majority of your population happy and get more money in taxes.
LegendofJoe
Member
The solution is to back 3rd party candidates like there is no tomorrow, i.e. people who don't have established constituencies and have less to lose by making contentious decisions. Please for the love of your family, friends, and yourself stop voting Democrats and Republicans into office.
The Albatross
Member
mt1200 said:
Will do nothing.
Massively draw down defense across the globe. Massive cut entitlements. Cut pensions, benefits, cut government by ~50%. Raise taxes on every American of course including the rich, perhaps even far higher on the so-called rich.
That would begin to get us on the right track financially in terms of paying down debt. But let's also remember where innovation comes from, a major driver of our national revenue... For the first thirty years of the microchip existing, the only entity that bought it was the US Military. It was a massive investment.
Fareed Zakaria's interview with Tom Ashbrook on On Point back in early June is a great example of the quagmire we're in. I don't really agree with Zakaria because his thesis contradicts itself and he realizes this midway through the interview -- but his realization is when you get the "oh shit" moment, that if we're serious about paying down debt, we're going to have to be serious about it and stop fooling around with stupid, half-hearted ideas.
Edit:
Here is the link if you missed it: Fareer Zakaria's latest interview with Tom Ashbrook, On Point, NPR, June 1, 2011
balladofwindfishes
Member
Will never happenLegendofJoe said:
We've always been a country of two parties, who's names have been the only things that changed
On raising taxes for the rich
The Albatross said:
On raising taxes for the poor
The Albatross said:
Hmm...
Ah... hit submit on accident! Sorry for the double post!
balladofwindfishes
Member
nvm, double post
balladofwindfishes
Member
and watch as demand plummets and the companies lose business and eventually go bankrupt because they couldn't handle a little bit less profit.Parch said:
We also know that that's just not how the real world reacts.
When you factor inflation, the prices of goods have remained relatively the same, if not rose, despite taxes being slashed by like 80%.
Shouldn't things be 80% cheaper than they were when tax rates were that high?
Hilarious article that is wrong on pretty much every single item.
The US government issues only USD denominated bonds and owes no sovereign debt whatsoever. It's it literally impossible for the US to go "bankrupt". Also, for all the hysteria about China owning the US, people tend to conveniently overlook that China is only among the biggest foreign debt holders. Around 2/3 of US debt is owned by US agencies and the American public. China's holdings amount to less than 10%. And as long as China wants to maintain its trade surplus with the US, it'll have to keep buying treasuries.
But most importantly, bonds aren't actually issued to fund future spending but instead target existing reserves in the system. And thus by design it is impossible for treasury auctions to fail.
The US government issues only USD denominated bonds and owes no sovereign debt whatsoever. It's it literally impossible for the US to go "bankrupt". Also, for all the hysteria about China owning the US, people tend to conveniently overlook that China is only among the biggest foreign debt holders. Around 2/3 of US debt is owned by US agencies and the American public. China's holdings amount to less than 10%. And as long as China wants to maintain its trade surplus with the US, it'll have to keep buying treasuries.
But most importantly, bonds aren't actually issued to fund future spending but instead target existing reserves in the system. And thus by design it is impossible for treasury auctions to fail.
LegendofJoe
Member
balladofwindfishes said:
That's a self-fulfilling prophecy if I've ever seen one. If it's never been done before, clearly it's impossible and will never happen. *shakes head at that kind of attitude*
aronnov reborn
Banned
I think we're just screwed. No one wants to raise taxes (these people want to cut entitlements).. no one wants to cut entitlement spending (these people want to raise taxes).
I think we should just all pull a Nicholas cage from leaving las vegas and go out on our terms... drinking ourselves to death and gambling... goodbye cruel world!
I think we should just all pull a Nicholas cage from leaving las vegas and go out on our terms... drinking ourselves to death and gambling... goodbye cruel world!
balladofwindfishes
Member
The concept of two widely different spectrum is ingrained into our psyche. Black and White, night and day, evil and good.LegendofJoe said:
Throwing a third notch into that would be exceptionally difficult and would require a restructure of our political and social system.
Tax Rates and Tax Burdens in the District of Columbia - A Nationwide Comparison 2009balladofwindfishes said:
They have a nice set of charts starting on Page 8 listing estimated TOTAL tax burdens for various cities around the country, by family income. A family of 3 earning $25,000 is estimated to pay an average $2,750 in taxes per year, or 11.0%. A family of 3 earning $150,000 is estimated to pay an average $12,165 in taxes per year, or 8.1%.
When you're told the bottom 50% (or whatever) doesn't pay any taxes it ought to set off your bullshit detector. Look a little deeper and discover they mean they don't pay any federal income taxes. Are these the only taxes Americans pay? No, certainly not. And many of the other forms of taxation fall disproportionately on the poor, as the above data suggests.
balladofwindfishes
Member
I know, I was only attacking the reason why poor people don't pay income tax. I didn't mean to imply that was the only form of taxation they pay.Evlar said:
Skiptastic
Member
I'd like to see a chart about income. Because the other charts are about wealth.ClosingADoor said:
The Albatross
Member
I hate to chirp on Fareed Zakaria too much because I really very rarely ever agree with him, but something he accidentilly points out ("accidentilly" because it undoes some of his arguments), is that the only reason we have things like microchips, the internet, and a lot of technology that has become the economic engine for the American economy (and hence, the #1 revenue generator for the Federal government) is because of Federal spending and Federal investment under the category of defense spending. He points out that for the first twenty-five years of its existence, the only customer who bought the Microchip from Texas Instruments was the US Federal government, under defense spending for the US Military. Without a huge initial investment over some 20-years from military spending, the technology simply wouldn't exist today. Does anybody think that venture capitalists would invest in any technology that would have zero customers for 20 years?
Not that I agree with Zakaria's thesis... But... He accidentilly highlights a quagmire: Cut spending, including defensive spending majoritively, and we lose out on the major motivators of our economic engine (and I'd extend it one further: The global economy would lose out on its single largest security system).
Not that I agree with Zakaria's thesis... But... He accidentilly highlights a quagmire: Cut spending, including defensive spending majoritively, and we lose out on the major motivators of our economic engine (and I'd extend it one further: The global economy would lose out on its single largest security system).
Same source I linked earlier: http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/09STUDY.pdfSkiptastic said:
Code:
Table 6: Distribution of income in the United States, 1982-2006
Income
Top 1 percent Next 19 percent Bottom 80 percent
1982 12.8% 39.1% 48.1%
1988 16.6% 38.9% 44.5%
1991 15.7% 40.7% 43.7%
1994 14.4% 40.8% 44.9%
1997 16.6% 39.6% 43.8%
2000 20.0% 38.7% 41.4%
2003 17.0% 40.8% 42.2%
2006 21.3% 40.1% 38.6%
The Albatross
Member
Evlar said:
Just to reiterate, I was clear on this in my post that your poster quoted: They, largely, do not pay federal taxes (although there are still some small amounts income the federal gov't generates even on those who are under that "no-federal tax revenue" umbrella category).
I completely support the argument made by your numbers... But, seriously, no politicians of any national renown are talking about significantly raising taxes on people making $75,000/year.
Although, as an aside: Do Gaf posters think that $75,000/year qualifies you as being "rich" ?
LegendofJoe
Member
balladofwindfishes said:
There is a huge chasm between impossible and difficult. If it was easy it would have been done before now. Also, I think you'd be surprised by the amount of people in the U.S. that recognize we are long past due for a political reordering. The support for the TEA party in the last election is proof of that. This country is ready for a 3rd party to emerge. The biggest hurdle is to get jaded, set in their ways voters off their asses to make it happen.
balladofwindfishes
Member
At the time of the invention of those things, military spending was proportionally a lot smaller than today.The Albatross said:
Nobody is proposing cutting the military to 0. But rather, going back to a spending a lot less than we do today, and eliminating the great deal of wasted resources and psudo-corporate bailouts the military has become.
Finally, some sense! I beat you to the punch and pointed this out on page 4 or something, though.zou said:
But yeah, this thread has been a pretty grating read as a someone who sympathizes a great deal with neo-chartalism. People actually think taxation finances federal government spending? Yikes.
The Albatross
Member
RbBrdMan said:
As another poster already posted, it is impossible for the Gov't to actually go bankrupt. But, to answer your question: yes. And if the Feds had any sense, they'd also eliminate all of those grants and easy credit that drove up the cost of higher education in the 90s and 2000s. For a micro-analogy: If you buy a house for $200k and the financial institution that provided you your mortgage goes "bankrupt," you are still paying your mortgage to the organization that absorbs the debt of that original financial institution.*
*although in most cases of mortgages, your loan is rarely owned by the bank that initially provided it. I bought my house in 2008, just at the bottom of the first housing decline, and I almost shit a brick when I got the letter in the mail that Fannie MAe had bought my loan... I couldn't believe it. I was a 24-year-old first time buyer, with an artificially low interest rate, and while I do have a steady job and I am responsible enough to always make payments or find a way to pay for my mortgage, my loan should have set off every red flag to avoid in every computer in the mortgage backing industry... but of course, it did not.
Well I can tell you right now living in a world where they expect you to work and take it up the ass from corporate america your whole life only to retire when your ill or have 5 years left is no way to live. They need to find way get any joe to invest wisely and enjoy life at intervals not when your too enfeeble. Consider its very possible to up the human life span to at least 150, folks are not going tolerate working like a slave that long. Alot has to change. As does bringing kids into this overly competitive resourced drained messed up world when we need fix it and planet first before cheating the cycle of life and still popping out toddlers.
The Albatross
Member
zou said:
Quoting this because the poster is completely right on the point of 'bankruptcy.' But, nevertheless, federal debt is still a major problem even if the semantic boogeyman of 'bankruptcy' is a misnomer and the spectre of China is not completely realistic.
balladofwindfishes
Member
Unless that is backed by a law that places price ceilings on higher education, it's going to force a lot of students to never be able to afford to go past High School.The Albatross said:
HephalumpsAndWoozles
Banned
Could become bankrupt??? Since when is 14T in debt not a good qualification??
Oh yeah, when you have the strongest military in the world, thats when.
More like a matter of time until we file for bankruptcy...
On that note though, a lot of schools would risk shutting down or lowering tuition, hmm.
Oh yeah, when you have the strongest military in the world, thats when.
More like a matter of time until we file for bankruptcy...
balladofwindfishes said:
On that note though, a lot of schools would risk shutting down or lowering tuition, hmm.
ReBurn
Gold Member
That'll teach them a lesson for being successful.mt1200 said:
Doesn't matter how much money comes in from taxes if the government wastes it on war, earmarks and bogus entitlements. Our yearly deficits aren't from defense spending alone. We need a balanced budget to control spending first. Then look at tax rates to see what can be done to eliminate debt.
Cutting spending is the only way to get out of debt. There are lots of people who are considered rich who have debt that outpaces their income, and borrowing more money doesn't get anyone out of debt. Government is in the same boat. As long as politicians have a blank check it's only going to get worse.
Fire all of them and elect people with brains.
OK. I'm posting up data in defense of progressive taxation as a remedy for the flow of wealth to the very top, and also (I hope) an indication of the difference in means between the poor (undeniably poor- those families of 3 making $25,000 annually with little to no assets) and the undeniably wealthy (the top 1% or 10% from some of the other data I've posted). I have seen a trend in recent media of casting the people on the lower end of the income scale as free-riders because of the progressive taxation code... the "flat tax" crowd, I guess. I was responding to that craziness.The Albatross said:
But the people truly in the upper-middle range of income, that $75,000 crowd you mention, I can support seeing their taxes raised under the right conditions. There is still a MASSIVE gap in means between them and the top 10%, both in terms of income and assets, so it's hard to see how much money they might be simply hoarding, which means raising taxes now immediately following (or still in the midst of) a demand-starved downturn might not make as much sense as raising them on the very wealthy who presumably leave more cash lie idle. But under other circumstances, yes, raise 'em.
And I agree with you, neither party is willing to consider that.
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
beat said:
It comes mostly from Medicare actually.
Neuromancer
Member
This is pretty sound adviceAstroLad said:
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