Lost in the wake of debt topping $34 trillion is another budget showdown. Will this showdown be like all the other Republican capitulations? And what about the chants of hyperinflation?
Debt Blasts Past $34 Trillion
Q&A on Debt Levels
The Committee for a Responsible Federal Budget has a nice Q&A on Gross Debt Versus Debt Held by the Public
- What is gross federal debt? The gross federal debt is the sum of virtually all debt the federal government owes, including what it owes to itself. Specifically, gross federal debt is the sum of debt held by the public and intragovernmental debt.
- What is intragovernmental debt? Intragovernmental debt is debt that one part of the government owes to another part. In almost all cases, it is debt held in government trust funds, such as the Social Security trust funds. These debts represent assets to the part of the federal government that owns them (i.e., Social Security), but liabilities to the parts of the government that issue them (the Treasury Department). Therefore, they have no net effect on the government’s overall finances.
Which is a more important measure of debt, gross debt or debt held by the public?
Most economists regard debt held by the public – particularly as a share of GDP – to be the most economically meaningful measure of debt.
Debt held by the public measures the amount of U.S. debt held by entities other than the federal government and traded publicly. It is thus relevant for understanding the extent to which debt is providing fiscal stimulus, crowding out private investment, influencing interest rates, and consuming fiscal space.
Gross federal debt also has some significance as one measure of the government’s total obligations. With some minor adjustments, gross debt is also used to determine when the government has or will hit the national debt limit.
Who owns the national debt held by the public?
Of the $26.2 trillion of debt held by the public, over 30 percent is owned by foreign entities, roughly 50 percent by private and public domestic entities, and over 20 percent by the Federal Reserve Bank. The Federal Reserve has significantly expanded its Treasury holdings since the COVID-19 public health and economic crisis began in 2020.
Foreign holdings come from a mixture of foreign individuals, businesses, banks, and governments. Of the nearly $8 trillion of foreign-held debt, over 14 percent ($1.1 trillion) is held by Japan and 12 percent ($869 billion) is held by China. The next largest holders are the United Kingdom, Belgium, and Luxembourg, who each hold between $329 billion and $705 billion of U.S. debt. On a combined basis, the Eurozone holds about $1.4 trillion, and Organization of Petroleum Exporting Country (OPEC) member nations together hold $256 billion of U.S. debt.
A Truly Depressing Achievement
Also consider Gross National Debt Tops $34 Trillion; Third Milestone in 12 Months
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
“Though our level of debt is dangerous for both our economy and for national security, America just cannot stop borrowing. The U.S. gross national debt – the combination of both the debt held by the public and intragovernmental debt – hit $34 trillion Friday, which is barely three months after it hit $33 trillion. A truly depressing ‘achievement.’
There is not a single economic reason to add to the debt at the rate we are, but sadly our political leaders are unwilling to make the changes we need to turn the fiscal situation around.”
“We can be a weak divided country where our leaders fight, pander, and take the easy way out while we become increasingly vulnerable, or we can do the hard work to be stronger, more secure, and more prosperous for the long run. This is a moment of consequence and continuing to refuse to pay our own bills will not lead us to where we need to be as a nation.”
Interest on Debt Tops $1 Trillion
On November 6, Bloomberg reported US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year
Estimated annualized interest payments on the US government debt pile climbed past $1 trillion at the end of last month, Bloomberg analysis shows. That projected amount has doubled in the past 19 months from the equivalent figure forecast around the time.
For comparison purposes, consider the 2024 Fiscal Year Budget.
2024 Fiscal Year Budget Items
- Defense Budget: $880 billion
- Non-Defense Discretionary: $992 billion
- Medicare: $821 billion
- Medicaid: $556 billion
- Social Security: $1,559 billion
Ridiculous Hyperinflation Calls
Along with the debt ceiling blowout came the expected hyperinflation calls.
Hyperinflation is a complete collapse in currency in a short time frame. Weimar Germany, Zimbabwe, and Argentina (numerous times) are examples.
In hyperinflation, the value of a currency quickly heads towards zero vs. everything, not just oil, gold, or Bitcoin. US dollar hyperinflation would mean the dollar goes to zero vs the Peso, the Yuan, the Yen, and the Euro.
If you think that is going to happen, you are delusional. Hyperinflation calls are as laughable as ever.
Upcoming Deadlines
Please note the Upcoming Congressional Fiscal Policy Deadlines
In mid-November, the President signed a second continuing resolution (CR) for fiscal year 2024 that is “laddered,” or consists of two separate expiration dates for two separate sets of appropriations bills. The Senate cleared the measure late Wednesday night, after the House passed the bill on Tuesday night. The first expiration date in the CR, Jan. 19, would apply to the programs covered by the Agriculture, Energy-Water, Military Construction-VA, and Transportation-HUD bills.
The second expiration date, Feb. 2, would apply to the programs covered by the Commerce-Justice-Science, Defense, Financial Services-General Government, Homeland Security, Interior-Environment, Labor-HHS-Education, Legislative Branch, and State-Foreign Operations bills. Besides extending appropriations, the measure also includes several policy extensions through Jan. 19 for certain health care programs and a farm bill extension through FY 2024.
The first “clean” continuing resolution in 2023 cost Speaker Kevin McCarthy his job.
For discussion, please see Hoot of the Day: 209 Democrats and 127 Republicans Pass Clean Spending Bill
New Republican House Speaker, Mike Johnson, just passed the exact same bill that got former House speaker Kevin McCarthy booted.
On November 18, I commented House Speaker Mike Johnson’s Grace Period is Over, What’s Next?
“We’re on the job now. We’re going to make it happen,” said Johnson this week. Really? Make what happen? [I asked].
House Freedom Caucus member Rep. Chip Roy (R., Texas) gave a fiery speech on the House floor in which he fumed about the short-term funding vote and asked GOP colleagues to “explain to me one material, meaningful, significant thing the Republican majority has done.”
And for the first time ever, I agree with Progressive Rep. Pramila Jayapal (D., Wash.) who said, “It’s the same menu, different waiter.”
Dateline January 4, 2024
And so here we are. Nothing different happened.
Q: Will anything different happen?
A: Why would it?
What to Expect
The idea that 10-12 holdouts are going to swing this puppy is nonsensical. The way Congress works is “more of this in return for more of that”.
Biden wants more money for defense, more money for Ukraine, more money for Israel, and more money for the border (not a lot but more, to appease Republicans).
Some Republicans want more money for defense, more money for Ukraine, more money for Israel, and all of them want more money for the border.
Some Democrats want more money for defense, more money for Ukraine, and more money for Israel.
A bipartisan majority wants more of this and more of that. So that is what you should expect.
The fallback position is not less of anything. Rather, it’s another clean continuing resolution.
Debt to GDP Alarm Bells Ring, Neither Party Will Solve This
In case you missed it, please see Debt to GDP Alarm Bells Ring, Neither Party Will Solve This
“Neither party will fix the deficits. Neither party will do anything about mounting debt. No one will do anything about anything because the political system is totally broken.” Mish
That’s the message of gold. Bitcoin advocates would say Bitcoin as well.
The Fed has a third of total public debt on its books. The Fed claims interest paid on their Treasuries are returned to the government. Reports have said the Fed compensates various government agencies with the interest. Their interest should be returned directly to the Treasury or renounced. Otherwise the Fed is directing spending of national debt.
The only limit on the debt is the number of zeros that fit on the page. To Infinity…. and BEYOND, baybee!
Makes me wonder, have the insane unjustified economic sanctions on Russia been ‘good’ for the US or for any US vasal in particular ? It definitely did NOT reduce debt anywhere , did it ? The West is drowning in its fckn debt all over the place , ain t it?….Unlike Russia ….Good job !
It’s fun to poke at Putin.
In Soviet America, sanctions on Russia poke you.
For the answer to that question, I would refer you to the dollar/rouble currency pair…
‘How many votes doesn’t matter. It’s who counts them.’ Stalin.
How much money doesn’t matter. It’s who counts it. Biden & Co.
The fella’s in charge are watching the Japan experiment and think this is working pretty good, no need to worry, there is never to much debt and it does not matter.
“On November 6, Bloomberg reported US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year”
If one looks at a parabolic curve, it starts out virtually looking like a horizontal line. At the end it virtually looks like a vertical line. Like a rocket, they burn out.
US gov debt is rising bc people, banks, institutions, MMF, foreigners… are willingly financing it. When the cost of debt was zero we piled it. But now, when the cost of debt is higher and punishing, we are still financing it. Don’t blame congress.
Causes of the Roman Empire’s fall:
Too much bureaucracy and taxes.
For humanitarian reasons, romans let enter their realm hundreds of thousands of immigrants, that fled from asiatic hordes.
“Therefore, they (Intragovernmental debt) have no net effect on the government’s overall finances.” If one government agency calls for repayment from its debtor agency, where would the funds come from as there does not seem to be a bank account holding them. Assuming that is true, then upon calling, the government would have to borrow or tax the funds to make payment, thus Intragovernmental debt would represent a real liability. I request a comment on this thought by Mish.
David, you are so right. The Intragovernment debt is just as real as all other debt. For SS (Social Security) for checks to go out, there is not enough cash or Bonds (securities) to cover them. So the Tressury sells Bonds, AKA prints money. They then transfer the cash to SS account and SS checks go out. Same with Medicare benefits. So the Total “National Debt” always stays the same. Only now it’s NOT owed to us Boomers. It’s owed to the long list of countries Mish named. So from a political view point we paid benefits to the Boomers. But owe that much more to the rest of the World. So which account the debt is in today does not mater. The only difference is the fact that it SS has to be paid now, rather than later, AKA never. Note the Boomers only have votes. Everyone else Nukes. So the total debt is the one we have to watch.
The charges on debt are related to a cumulative figure; and since the multiplier effects of debt expansion on income, the ingredient from which the charges must inevitably be paid, is a non-cumulative figure, it would seem that the time will inevitably arrive when further debt expansion is no longer a practical or possible expedient, either to provide full employment or to keep debt charges with tolerable limits.
“A Truly Depressing Achievement”
The fall of the Roman Empire. A template for future empires to follow. All booms end in a bust. It’s the same playbook over and over again. In the 1930’s Glass Steagall was created to prevent what happened from happening again. In the 1990’s it was dismantled so it could happen again.
“End poverty.” “End hunger.” “The war to end all wars” None of these ever end.
The national debt is going to go to its human nature outcome. It’s why neither political party is going to fix the problem. Past is prologue. Action begets reaction. We just saw that at Harvard.
Wolf is fighting in the cage by cursing and insulting people for a long time. The more he curses, the more bs.
If only if we hadn’t squander $Trillions in stupid wars and instead invested in our country and it’s people. But the neocons and AIPAC have bought and paid for our politicians so the American people be damned.
Everyday, there is a demand for more money for the favorite projects of the politicians Anything like a balanced budget is impossible.
Where did the Fed get the $5 trillion to buy the federal paper?
They created it out of thin air. But don’t worry. They know what they’re doing.
The Fed can legally raid bank accounts, borrowing money without people knowledge
or permission, like in short selling. The Fed is the biggest short seller in the world.
No printing, no creation of money out of thin air. It was your money !
In the EU they express debt as consolidated public sector debt, and it includes state & local debts, as well as contingent liabilities (think Sally Mae in the US; Freddy Mac; Ginnie Mae).
Although everybody cites debt/GDP ratios, debts must be repaid from tax revenue, not from GDP. If your store has 1 million turn over per year (GDP) but no earnings (tax-revenu), from what will you service the debt? People should be looking at revenue/debt ratios, and they are not good news, neither absolutely or comparatively speaking.
RRP is down from 2.5T to 664B. RRP is Fed debt to the banks and MMF.
Fed assets are rising due to the RRP shrinkage : Fed Assets – 664B. No QT. Add Biden stimulus ==> QE.
RRP rate is 5.3%. It will not go to zero. Shortages of good collateral in the o/n market might spike RRP rates.
Inter-government debt really is a problem though because while it’s just a receivable to Social Security and a payable to the Treasury, they’re borrowing funds that are ear-marked for Social Security payments. Social Security needs that money back, but they’re treating it like a piggy bank.
And when the money is repaid, it’s ALWAYS paid off with public debt. So this shell game eventually pushes public debt higher. SO, YES, IT MATTERS!
When the Fed raided bank accounts for the first time gov debt was 10T. When the Fed started hiking gov debt was 30T. Between Oct 2008 and Mar 2022 most gov rates were below the inflation rate. The Fed paid back its IOU to the bank, hollowing people’s money. The Fed paid negative dividends for 13 years :
[10T + 30T]/2 x 13 years x (-)0.02 dividends = (-)5T.
Government debt out-the-wazoo is indicative of a thriving democracy: each party vying for power absolutely promises all the goodies the population deserves.
Brutal dictatorships don’t have this problem, they just order government statisticians to make up some numbers. Oh wait…
$60 trillion debt by 2030? Very probable.
Stagflation? Probably not.
8% to 12% inflation, if measured correctly, per year? Very probable.
No surprises to be found.
Once AI & robot workers take over, money won’t matter any longer. Everything will be free as robots, guided by the master AI, work 24 x 7 to fulfill all our desirers.
Since spending can never be cut by much, if anything and government employees can never be laid off, the only way to gain more revenue is to raise taxes and enforce payment more stringently.
so WHY can’t we make entire CONgress/potus/etc. financially responsible for all NEW DEBT – personal guarantees along with heirs
ie wipe them out 1st
Voters elected all these people. Who are you to question their wise choices? 😉
Yep. That will work!
Or we could ask Santa Claus and The Tooth Fairy to pay it for us.
While, I’m very much concerned about our national debt & the related interest expense, I have to call BS on these two statements:
“Therefore, they have no net effect on the government’s overall finances.”
Hogwash!!! As I’ve stated MANY times on Mishtalk, IGD has an impact on our public finances. Always, and I means always as this IGD matures, it’s paid off using public debt. So, YES, it matters very much, but it’s effect is spread out over many years. Be that as it may, IT MATTERS! It matters also in the sense of how screwed up our government is by robbing Peter to pay Paul. Like most things coming out of the Fed, it’s accounting gimmicks that keep the House of Cards from falling down.
“Estimated annualized interest payments on the US government debt pile climbed past $1 trillion at the end of last month, Bloomberg analysis shows.”
Again, BS meter is pretty darn high when you look at the article title that includes “rockets past”. Actually, at the end of Q3, the Treasury reported that the annualized interest expense was $981B.
Federal government current expenditures: Interest payments (A091RC1Q027SBEA) | FRED | St. Louis Fed (stlouisfed.org)
Granted, that’s close, but it hasn’t quite zoomed past $1T. The article is behind a paywall, so for all I know Bloomberg is speculating that it will move past $1T in Q4 of this calendar yet, and they, like myself, expect this number to keep rising throughout 2024, unless the Fed goes crazy with at least 4 or more rate cuts.
Get around spam post.
Right on. The most egregious example of IGD comes from Japan. The government debt is >260% of GDP, but BoJ prints money and buys most of it. The next step down the ladder is, why collect taxes when the government can just print as much money as it needs?
Hint: it always needs more…
There is no true asset. Come time to pay out, the net cash flow (social security minus fico contributions) must come from the tax payer … there’s nothing to sell.
BS!!! Virtually all of these monies are in treasuries that expire. When they mature, the bond holders have to be paid back. The payback money comes from public debt. IGD slowly increases public debt over time. Now, if IGD was falling over time, then I’d say it’s not too big of a deal, but the opposite is happening. IGD is growing, so public the amount of public debt also grows incrementally each year.
Go look it up!
IGD is an unfunded liability. And there is much more where than the $ 7 Trillion from the SS trust fund.
Sure. Characterize it however you want. All I know is that when the IGS matures, it’s paid off with public debt. It’s hilarious that people like Mish continue to spout the BS that it’s doesn’t matter. The only difference is the rate at which it’s causing the public debt to go up annually. While I don’t know the exact amount, it’s certainly incremental.
I remember Trump saying that his tariffs would result in China paying down our national debt. And of course, his supporters believed him. Lol!
What’s the truth?
Well, before Trump, the US govt was already collecting about $35 billion a year in tariffs.Trump added roughly another 30 billion. Biden probably bumped it another $5 billion.
So $70 billion a year in tariffs. That doesn’t even come close to the trillion in interest on the debt every year, let alone pay down the debt.
Who pays the tariffs? Not China or any other country.
The US importer pays them. And they pass them on until they reach their final destination: the US consumer.
Yep. Just another tax on the voters who cheer for more tariffs.
Theres no way we’re gonna go back 50 years and pay for a washing machine what it cost an American to actually build a washing machine without the cost being raised for some reason or another. Every other country tariffs and blocks our products from coming in. Tariffs all around. Globalization is dead. Use a rock and the river. 🙂
Tariffs mean that you’re more likely to buy a US-made washing machine instead of a China-made one. Clearly people buying US-made washing machines is very bad for the US economy, what with all the investment, jobs and profits it creates in the country.
More likely? Yes.
I assume that you only purchase “made in america” products then. Right?
What brand of large and small appliances do you own? How about everything else you own?
I’m a pseudo Trump supporter, and I certainly didn’t believe what he said. I believe very little of what he says. Also, I have read that a lot of the added costs of tariffs were paid by the Chinese exporters, since they have the margin to do so.
As usual, the truth lies somewhere in between, and I have not doubt in some situations the added cost is passed onto the US consumer. However, I don’t think it’s as widespread as you seem to suggest that it is.
No worries.
I don’t vote. But I applaud those that do.
Just don’t expect Trump or any other politician to solve your problems or make your life better. They can’t.
Only you can solve your problems and make your life better.
That’s not really true. FJB can let in tens of millions of illegal aliens that can cause a lot of problems for me, my family and friends. Elected politicians can do all sorts of things that can make my life miserable.
I respect your decision not to vote. That’s fine, but voting does matter. In fact, it probably matters more today than it has at any time over the last 50 years.
But, I do ascribe to what you may call the American, rugged individualism whereby I’m not looking for someone to give me a leg up, and it’s up to me to make good personal, career & financial decision to make my life better.
But, we don’t live in a vacuum; elections have consequences, and America is paying a huge price for these three things:
1) Election interference (big tech) – 50%
2) Cheating (mail in ballots) – 10%
3) Soccer moms / independents who voted against Trump because big tech & the MSM don’t report the truth anymore. It’s totally one sided – 40%.
Just my $0.02.
Tax policy can be used to change behavior. What’s so hard to understand about that?
That is an easy one to understand. Increase taxes on things that you want less consumption of.
The problem is the unintended consequences.
Example: solar panels; we want more of them installed; but we put tariffs on inexpensive imported panels and it raises the price of them to the point where installations slow dramatically. The price of US produced panels is already too high to install them. So yes, we have less consumption of solar panels. Not more.
This problem gets repeated for thousands of products.
That was thousands of lies ago… long forgotten like The Wall.
My Takeaways:
1. Most Important Question Asked: “Will this showdown be like all the other Republican capitulations?” > This is MJ’s time to Shine! Mike cannot and will not capitulate. I think if He does do that, then He should be removed from His Speaker Role Immediately. He was picked to take this role because he was ready for it. I say he is and will find a way to get, what he needs to, done. If we shut down then, it’s clearly on the Senate and Democrats at that point. Thus meaning Mr. Johnson will clearly have done His Job!
2. Most Important Comment: “America just cannot stop borrowing.” > I would clearly change “America” as that implies the entire country as a whole. More like: “Politicians and Banks just cannot stop lending” for accuracy purposes. Let’s lay fault where it belongs correct? Keep Allowing dumb things to occur, under your watch, and you won’t have much to watch over pretty quickly, just ask Chicago or NYC for example.
*3. Most Obvious Cut: “Military spending has got to come down a lot.” > We must stop Policing the World, and start Policing ourselves Immediately!! Cut Military Spending by 15%-20% overall, by a set period of time. Bring back 30,000 Troops from the EU and drop them ALL on Our Southern and Northern Borders Immediately. Finish the Wall while they are there, and for however long that has to be.
It’s a start…
I bet you said the same thing about McCarthy.
And you will probably say the same thing about whoever replaces Johnson.
No, I can’t stand Kevin!.
No, I value everyone in life independently.
Yes, I do believe MJ is the real deal. A far, far better choice than McCarthy could ever be. He is solid in his beliefs for my liking, but does he have what it takes to stand up to these clowns he will have to deal with, is my only real question.
I think he will be able to, because he is very grounded, and we desperately need that right now. We shall see as time moves on, but this will be his make or break moment for certain.
If I am correct, then he lives to fight another day, and I will be proud of Him!
If I am incorrect, then get him the heck out of there as fast as humanly possible!!!
The miracle of compounding is great for assets. Not so great for liabilities.
Exactly why the idiotic idea by the Politicians, to try to start taxing peoples increased wealth due to Stock Valuations, was so incredibly Idiotic!!!
Rolls Royce is making small nuclear power plants. An easy way to get debt down is buy a bunch of them and make residential energy almost free of charge. People have more disposable income, more dollars start bouncing around generating tax revenue. The government however would have to stop spending. Like no more spending over the budget. Over 30-60 years the debt would melt away.
I would also make tuition costs equal to the degree potential. A CRT degree would cost about $50. Engineering $30K.
Every for-profit and non-profit school will scuttle any plans you have to change the current educational format. Just like Pepsi makes sure food stamp regulations arent changed so people on stamps buy as much soda and chips as they want.
I would charge the inverse. A CRT degree would cost $30k and an engineering degree cost $50.
If SanFrancisco is the tremor, then the Federal government will start cutting programs and laying off employees to balance its budget.
The only federal programs that matter are Social Security, Medicare, and Defense. All others are rounding errors.
The majority of local govt spending is on employees. So cuts there can make a difference.
The federal govt spending on employees is a very tiny percentage in comparison. Cutting federal employees accomplishes almost nothing as a percentage of overall spending.
Thinking outside the box, what about Buildings and Land? There is an abundance of property, currently unoccupied, of which much could be sold I would think. That would be a large decrease in cost and maybe some cash flow too depending.
Stu forgets that we’ve already been down this road of selling unused Federal land and buildings, and found no takers as the buildings are in crappy locations requiring lots of repair, and the crap land also generates no bids. And Pop is right. The number of Federal employees doesnt matter as contractors can be hired and fired to boost or reduce head count as needed. And no one seems to be reducing contract employees.
Scott, there is a lot more property and land for sale, and in a lot better locations than before. Sell it to businesses to lower their expenses in these locations where we can, and get what we can get for it.
Contractors can be voided out or allocated by hours, so no issues there, but spine by Management.
Thinking outside the box:
Maybe we can sell Alaska back to Russia.
Or California, Nevada, Utah, New Mexico, most of Arizona and Colorado, and parts of Oklahoma, Kansas, and Wyoming back to Mexico.
Our Land and property to our businesses…
The figures in Mish’s post above support this.
There are way to many Federal employees IMHO, but cutting all of them gets us nowhere in terms of paying down the debt.
Forced cuts to Medicare, Medicaid, and SSI are coming along with tax hikes. There’s no other way to fix it.
Yep. But they will do their best to hide the cuts, and phase them in over time. So the net result will be citizens getting less, while paying more, each and every year.
Either way, all an individual can do is focus on looking after themselves and building their wealth to a point where they don’t care about govt cuts.
Individuals “building their wealth” doesn’t work when (a) there are too many retirees already soaking up the nation’s economic surplus, (b) myopic government policies actually destroy wealth, and (c) ultra-rich oligopolists have bloated the tax & legal codes to impair (or buy out) small businesses and prevent wealth-building through legitimate economic competition.
Okay. You stay poor. I will keep growing my wealth.
a) then I will not be a retiree soaking up the nations economic surplus like you
b) I will have a cushion against govt policy, while you will be dependent on them
c) I can be an oligopolist
LOL. I’m just saying that what might work for you personally cannot work across the whole nation. I wish we lived in an Adam Smith world where individual greed and free enterprise were all that was needed for everyone to thrive, but we don’t. The demographic and economic structure makes it hard for the nation to grow genuine wealth right now.
The solution, everywhere (not just America), is obviously cuts to government… simple.
It is simple. Just cut 100% of the only 3 programs that actually matter: Social Security, Medicare and Defense.
Without that, there is no way the debt will ever be paid down.
And since that will never happen, this continuing debate is not worth my time. However, others are free to keep offering their pet solutions.
And, it doesn’t matter who wins the next presidential election or the next 10 presidential elections.
As individuals, all we can do is look after ourselves and those close to us. Better to focus our attention where we can actually make a difference.
Now Pop you know the tax collections from corporations and the super rich have dropped off trillions of $ in the last 50 years. I know a real Republican would rather spare the wealthy and instead implode the country (God will fix it all anyway). I just thought I’d mention that there are sane proposals out there .. which would take us back to the early 1960s that people seem to remember that time with such delight — where taxes were high and everyone benefitted. The solution doesnt have to be cutting off your nose.
Yep. Trickle down doesn’t work. Though the Republicans keep trying. Amazing that so many of their supporters still buy into it.
Also regarding sane proposals to raise taxes on corporations and the super rich:
Corporations are merely tax collectors for the government. They collect those taxes in the prices paid by the consumers that buy their goods or services. That’s who really gets hit with higher corporate taxes. Not the corporations. Just like tariffs.
It’s hard to tax the super rich. They can afford to leave the country and live elsewhere.
They still get taxed unless they renounce their citizenship. The US is one of only THREE countries that use citizenship based taxation. The other two are Eritrea and North Korea.
When Britain tried taxing the rich with 99% tax rates, they gladly gave up their citizenship and left the country. The same would happen here.
Did you READ what I wrote above? If so, you didn’t understand what you read.
You know the Treasury Dept knows where all the rich and all the money is located. Every dollar. There are only so many Mersey islands to escape taxation from. Its a question of political will.
You only need to scrap Medicare/Medicaid. SS just needs a tweak to keep self funding and defence can cut costs by cutting the bloat.
People should fund their own healthcare with charity hospitals for the destitute. No free ride for illegals, no free ride for those land whales that won’t eat sensibly. And no free ride for the insurance corporations and hospitals with idiotic premiums and copays. Get healthcare back from 20% GDP to under 5%
Papa, I see and understand your points, but…
Just cut 100% of Social Security > I agree with this and have clamored for it for decades now. They needed and still need to, STOP Public Pensions and move everybody over to their own 401K type plan. Taxpayers should not be funding other taxpayers retirements EVER!!! Taxpayers should not be looking to be taken care of by others, but rather by themselves.
Just cut 100% of Defense > You know we can’t possibly do that. We can curtail spending by 40% and still probably spend more than we need to on our defense, and spend what we do, far more wisely and cost effectively. Stop policing the World would be a great start…
Just cut 100% of Medicare > Again, it will need to be phased in, due to dependency, but it’s possible over time. I agree to start now rather than later. This is more complicated due to it being purposely done this way, but it’s not insurmountable.
Again, elections matter. How our politicians run the country matters. We’re entering a time of great uncertainty as to how much wealth is going to be stolen from the rich to be given to the poor. I’m sure you don’t want the government taking your money.
Yes, I agree that we ALL have a personal responsibility to ourselves & wealth. The hard part is fighting against the growing tide corruption & dependence on social welfare.
The cost of debt : 1T/34T = 3% of the total debt, or 1T/27.8T = 3.6% of the nominal GDP. A big portion of the debt is to the Fed and to gov entities. Another portion is the Fed raids for deflating IOU. The money was there, in the accounts, but the gov will never pay for borrowing it, hollowing it.
The debt owned by the Federal Reserve is interesting because it’s almost like debt owed to other government agencies. Most interest paid to the federal reserve on the debt is ultimately returned to the Treasury as remittance payments.
Except that the Fed is currently so far underwater on its balance sheet (due to interest rate increases) that it’ll be many years before remittances resume.
$1 trillion in interest payments? We cant spend all that money?? Zero percent rates as fast as possible after Biden is re-elected. Back to 0% CDs.