US consumers are increasingly dependent on Medicare, Medicaid, SNAP and Social Security. 
Q: What are Personal Current Transfer Receipts?
A: The Bureau of Economic Analysis (BEA)explains PCTR consists of income payments to persons for which no current services are performed. It is the sum of government social benefits and net current transfer receipts from business.
Medicare, Medicaid, SNAP (food stamps), housing subsidies, and Social Security are examples.
PCTR Percent Detail
PCTR Observations
- PCTR tends to rise in recession the fall back some, but not to the previous level.
- This makes sense because of the decrease in jobs during recession followed by an increase in jobs after recession.
- When the decline in PCTR following a recession turns into an increase you have a recession warning but with a variable time lag.
Boomer Demographics and Immigration
Demographics, especially aging baby boomers, increase the reliance on Medicare and Social Security.
Immigration plays into Medicaid for children. But Trump has shut off all benefits for illegal immigrants.
Social Security and Medicare are the big issues. Fewer workers support a growing need by dependents.
Employment-Population Ratio
What is the Employment-Population Ratio?
The employment-population ratio is a statistical measure that represents the percentage of a country’s working-age population that is currently employed.
It shows the proportion of people within a population who are actively working.
EPR is calculated by dividing the number of employed people by the total civilian non-institutional population aged 16 and over.
How Does Inflation Play Into This?
Real and Nominal PCTR
- Annualized PCTR were $4.74 trillion in January of 2025. This compares to $35 billion in July of 1965.
- Annualized Real PCTR were $3.78 trillion in January of 2025. This compares to $211 billion in July of 1965.
In January of 2025 people got $4.74 trillion but it felt like $3.78 trillion.
From a consumer standpoint, PCTR was overstated by $953 billion, 25.4 percent. However, the impact on the federal deficit was the full $4.74 trillion.
Thank You Fed and Congress
The Fed is not to blame for the three rounds of free money fiscal stimulus that fueled the massive post-Covid inflation.
However, the Fed is 100 percent to blame for its QE response to inflation that created asset bubbles and literally destroyed the housing market.
Inflationary and Deflationary Forces
- Free money and rising deficits are inherently inflationary
- The resultant rise in asset values is inflationary
- Boomer demographics and retirements are disinflationary but offset by rising asset prices and bubbles
- Inflation is punishing the non-asset holders who need PCTR to buy food and pay rent. This is deflationary.
- If asset prices sink, the entire mix becomes deflationary.
Government Dependence Synopsis
We have a growing dependence on government aid over time. The problem is exacerbated by rising benefit levels, inflation, and demographics.
Neither party will fix this. Neither party will fix anything because Congress is corrupt.
There are no fiscal conservatives to be found.
DOGE is a side-show relative to $4.74 trillion in PCTR and the entire budget.
Trump wants more money for defense and will get it by offering something to Democrats in return.
The Fed won’t fix anything either because fiscal policy will play an increasing role and the Fed does not even understand what inflation is.
Related Posts
February 21, 2025: Student Loan Borrowers Crushed by Appeals Court Ruling, Credit Scores Plunge
The courts are busy. This one goes against Biden. Economic repercussions are significant.
February 28, 2025: Subprime Auto Loan Delinquencies Hit Record High 6.56 Percent
As borrowers struggle to keep up with car payments, auto lenders offer payment extensions to keep those loans from going bad.
February 26, 2025: Homebuilders Have Most Speculative Unsold Inventory Since May of 2008
Homebuilder inventory of started and completed homes is soaring but sales are weak.
February 26, 2025: New Home Sales Plunge 10.5 Percent in January From Upward Revision
New home sales have been mostly sideways at a weak level, in a choppy fashion.
February 25, 2025: US Consumer Confidence Drops at Sharpest Pace in 3-1/2 Years
Consumers are concerned over inflation. Recession should be the bigger fear.
February 24, 2025: Top Ten Percent Account for Half of All Spending, Up From 36 Percent
The share of spending by the top 10 percent keeps rising.
Understanding Inflation
The Fed, Congress, and the White House have created a two-state economy that bails out the banks, the asset holders, and the wealthy time and time again.
The Fed does not recognize the result as inflation. Meanwhile, both parties support more spending on this in return for more spending on that fueling various bubbles.
Asset bubbles are by definition inflationary. Few understand that because the Fed and economists in general tout inflation as the CPI or PCE. The Fed repeatedly says “Inflation expectations are well-anchored”.
So what? Please consider Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed
Consumer inflation measures are a very poor measure of overall inflation. By failing to understand this simple point, the Fed has sponsored numerous bubbles of increasing amplitude over time.
Meanwhile, it takes more and more PCTR to keep the have-nots from revolting.
When the bubbles burst, the outcome will be very deflationary. Tariffs may easily be the proverbial straw.
Of course we are. Aging population with low birthrate Add 60 million abortions many of which would create production. That is a gap
Can you imagine that we once believed that parents should be responsible for feeding their own children?
The slow rise in government cheese correlates well with the decline in union membership and stagnant worker’s pay. If all companies paid at least a living wage, far fewer people would need nor qualify for assistance.
Libertarians don’t like subsidies. There’s a reason for that. They push up prices. In 1970, one working person with a mediocre job could own a nice home and fund a household of four kids. Government intervention in prices has made that virtually impossible now.
This is the graphic tale of a country’s central government embracing socialism and what happens when this embrace meets the always unevenness of population from generation to generation.
Because the chart for free money given to banks, especially through the Fed paying interest on their compulsory deposits, is not socialism. No, sir, that’s the purest capitalism since 1913.
The Chinese congress NPC gather on Wed. In China the uniparty won in 1948. In the US they lost.
Replacing workers with automation/robots is massively deflationary when people finally take off their blinders and acknowledge that there really aren’t going to be “better” or in many case, any new jobs for those displaced.
Tomorrow, during the State of the Union, after tariffs, the angry uniparti might repeat Trump/Zelensky chaos in congress, to show how Trump ripped us apart. How will
the Trump/Vance respond ??
The Soylent Corporation has a plan to eliminate the need for Social Security & Medicare. Their plan will also increase the food supply and solve the overpopulation problem.
Sounds like the Final Solution drafted in 1942.
A truly ‘green’ plan 😉
The turn is here.
Choices will be forced as no way to sustain Buying Guns and Supporting Domestic economy in these United States.
Let alone supporting Europe’s never ending attempts at conquering Russia.
Since Napoleon this is now fourth major attempt by Western Europe to take over Russian assets. Each time ended with catastrophe.
Europe if it makes even a small gesture at follow thru with picking up slack as US bows out of Europe’s internal affairs will be headed into an inflationary storm as GDP can not support what is getting proposed. So they will have to print as no Will exists to scale back welfare state in Europe.
US is finding out its resources are not unlimited either. So pulling back on Ukraine will save money for Domestic purpose as well as rebuilding a Modern armed forces.
Peace in Ukraine eases budget pressures and that is where things are going.
If Ukraine thinks it will connive US into going along it is in for a Huuge enlightenment about what are US fiscal priorities..
Hate Trump all you want, but he is dead to nuts about where US priorities are.
What are those priorities exactly? My ancestry goes back over 300 years, and I think that I have a pretty good feel for why our nation was formed, what role in the world our successful democratic experiment has naturally led to, and how much the world has benefited from the mantle that the U.S. and Western Europe picked up after the end of WWII. What has changed in your view? I think the most significant two changes over the last 50 years have been the end of the Cold War and the emergence of China in the global economy as a legitimate economic rival to the U.S. Great! We won the Cold War, and we should embrace this competition regarding China. Russia is the remnant left over from the dissolution of the Soviet Union, and we should not fool ourselves into believing that Russia does not share the DNA of the Soviet Union and the ambitions that go along with that DNA. China and the U.S. can co-exist in a hyper-competitive fashion. Still, as long as someone like Putin leads Russia, Russia is the greatest threat to the type of democracy that the U.S. and its democratic allies cherish. The U.S. has been the undisputed economic heavy weight champion since the end of the Cold War. If it ain’t broke, don’t fix it.
“If it ain’t broke, don’t fix it” sums it up well.
Is there a new world definition of being Broke and not able to cover Bills with revenue?
We no longer owe it to only ourselves but have sold US Treasury via debt issuance, to the world.
US without full fledged default has become indentured servant to Global interests.
National debt is beyond recovery, paying interest alone is becoming largest public outlay in Budget.
My view, things are beyond just a little Broke.
My family has been here into our fourth generation.
This Wisdom was left to us from thousands of years ago. It describes what we who live under the Sun have obligation to do.
Ecclesiastes 12
“13: Let us hear the conclusion of the whole matter. Fear God, and keep his commandments: for this is the whole duty of man.
14: For God shall bring every work into judgement, with every secret thing, whether it be good, or whether it be evil.”
Mary Shelley’s monster is ambient in a different form again.
Not that long ago, I would sit at holiday dinners with the prior three generations.
Yep, buying crypto, including Trump meme coins, with our tax money.
I don’t consider the past few decades to being a period of Europe trying to over Russian assets. I would blame American neocons starting with Victoria Nuland and the Maidan Revolution of 2014. One could go back even further, to 1990, when Bush 41 refused to give the Soviet Union/Russia written assurances that NATO would not be expanded to the east. If the US had to raise taxes every time every time it launched an expensive campaign to overthrow a foreign government, it might think a lot more carefully before deciding to meddle in the affairs of foreign countries.
Lot of truth you post.
Would not have happened if US just stuck with its own Hemisphere. Not possible to do after carnage of 2nd world war. Second World War where Central Europe decided to go after Russia.
Globe has gotten rebuilt. Time for US to mind its own Business and let those with all their opinions about how US is to spend its wealth, start spending their own.
The victorious allies in WWII, except Stalin’s Russia, spilled blood and invested treasure in defeating Fascist Authoritarians Hitler and Mussolini, who set out to take over all of Europe forcibly. Russia started the war as an ally of Hitler and Mussolini until Hitler double-crossed him and attacked Russia. At that time, Stalin was forced to side with the Allies. Russia’s motives for defeating Hitler and Mussolini differed entirely from the other Allies. When the war ended, the “Western” Allies did not set out to divide the spoils and occupy Germany and Italy. The Allies rebuilt those countries and restored democracy, giving those sovereign countries back to their peoples. Russia did not liberate Eastern European nations from Germany to give those countries back to their people. Russia forcibly occupied those countries, and the people there went from living under a German dictatorship to being forced to live under a Russian dictatorship.
It will only be deflationary if you think that the government (the President, Congress, Fed, etc.) will allow deflation for any prolonged period. Their response will be to push more money (more fiscal spending, more tax cuts, lower interest rates, QE (or another name)) into the system.
Bush 43 was a champion at pushing more money into the system even after a launched his wars in the Middle East. Remember the tax cuts he pushed in 2001 and again in 2003. I guess he did not believe in Newt Gingrich’s Contract with America.
No politician can get elected running on a responsible government a government that has to make the hard choices . This has been the case for decades . People have voted against anyone who dared to want to cut basically anything or a government that lives whithin its means, so I guess at the end of the day the people are the ones who have caused this problem . The government is and has been corrupt look at how much the senators and congress officials are woth it is unbelievable and they keep voting for corruption .
Thats is why I am for allowing one longer single term so those puppets will vote for policy that is unpopular but neccessary. Eliminate all campaign contributions so they won’ be beholden to special interests. This is the only way I can see the path forward improving. Otherwise we will continue to circle the drain. Its the fourth turning and something is bound to break.
Well we could sell the National Parks to the highest bidders and put the proceeds into a Soverign Fund, and pay social security and other deficits through the profits from such funds.
I’d personally be against it, but there are measures that can be taken to balance the budget.
personally I’d rather see Zelensky hand over the deeds to any Ukraine National Parks and we can sell them, and put the profits into a USA Soverign Fund. You can only hand out so many free bullets and missiles before you have to start charging for them..
Absurd. The US Gov creates money to spend from nothing, not taxes nor selling national assets. It’s done so for a really, really long time.
The wars in Afghanistan and Iran were a much worse “investment”. We spent $5T and handed them back. We got nothing in the sense of improved security for the world or our country, improved trade, or improved economy. Only much cost to the soldiers that died or were injured.
so we should continue to seek and fund wars, and use Afghanistan as economic metric for our war dividends?
I took PreCambrian to say we should fund entitlement programs because we get value for that here in the US and stop waging foreign wars and save those $Ts.
Medicare and social security are not aid. They are programs that continually get paid into.
One can receive Social Security without being dependent on it, so I have a quibble with the headline in that respect.
If the government would actually enforce current anti-trust laws on the medical industry we might not need Medicare. As it is, they took the tax money up front with a promise to pay for some amount of medical care later.
The Financialized Corporatized Medical Industrial System..
4.74 Trillion divided by the 1965 number (35 Billion) – – and mind you I have trouble with that many zeroes, but here goes:
It takes a 135.428 multiplier which shows us the growth. This is unreal.
Someone else should check my numbers.
That’s right. A trillion is 1000 billion so just do 4,740/35.
That’s 8.5% yearly increase over 60 years.
Bank lending = M*Vt
Nonbank lending = Vt
Bank lending is inflationary (where S “≠” I)
Nonbank lending is noninflationary (where S = I)
The U.S. Golden Age in Capitalism was driven in 2/3 by velocity, i.e., by putting savings expeditiously back to work with the thrifts. It was epitomized by “George Baily’s “It’s a Wonderful Life”). In contrast, today’s economy is almost entirely driven by new money.
It is much more desirable to promote prosperity by inducing a smooth and continuous flow of monetary savings (driving the banks out of the savings business – which doesn’t reduce the system’s size), into real investment outlets than to rely, as we have done since 1965 (the elimination of Reg. Q ceilings), on a vast expansion of commercial and Reserve bank credit to stimulate production.
velocity is a meaningless construct
Velocity is more important than money. 2X more important according to history. Of course, I’m not speaking of income velocity, a contrived metric, but of the transaction’s velocity of funds, bank debts to deposit accounts.
As Dr. Philip George put it “Changes in velocity have nothing to do with the speed at which money moves from hand to hand but are entirely the result of movements between demand deposits and other kinds of deposits.”
https://fraser.stlouisfed.org/files/docs/releases/g6comm/g6_19961023.pdf
It should be quite obvious that the extent of money’s impact on prices and the economy is measured by monetary flows, not the stock of money. If the transactions velocity of money were a constant it would not matter, but money turnover has varied from an annual rate of 13 in 1945 to over an all-time annual high of 525 in Oct. 1996.
Then came the “time bomb”, (which Dr. Leland Prichard foretold), the widespread introduction of ATS, NOW, and MMMF accounts at 1980 year end — which vastly accelerated the transactions velocity of money (all the demand drafts drawn on these accounts cleared thru demand deposits (DDs) – except those drawn on Mutual Savings Banks (MSBs), interbank, and the U.S. government).
This propelled N-gNp to 19.2% in the 1st qtr 1981, the FFR to 22%, and AAA Corporates to 15.49%. My prediction for AAA corporate yields for 1981 was 15.48% using the G.6
Not keen on Social Security being in PCTR as that is just paying back with interest (very little interest, and sometimes negative interest if the person does not live long) unless you’re talking about SSDI and such.
As for the Employment-Population … I’m sure it’s pretty close but I see 2 issues:
Still, your are 100% on point and it scares me how many people are furious that we are looking into corrupt and wasteful spending.
Personally, I can’t imagine livinig in a world where I can’t go see a gov’t funded trans-sexual opera or where we don’t spend $8M or more teaching Sri Lankan journalists to use more gender neutral language … but that’s just me (yes, that’s sarcasm)
You pay in with after tax income and pay taxes when you collect. WTF.
Inflation rarely backtracks. It becomes the well from which profits are derived. Deficits are a good indicator of the rate of it.
Still flogging the stimulus payments I see but not a word about the deficit busting 2017 Trump tax cuts for the 1%. When Clinton and Gingrich balanced the budget it was through a combination of spending cuts and tax hikes. The idea that we can cut our way to a balanced budget may appeal to the Musk’s and Koch’s of the world in their deluded Libertarian fantasy world but it’s not realistic.
https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver
“When Clinton and Gingrich balanced the budget it was through a combination of spending cuts and tax hikes.”
One of these decades this type of nonsense will stop being bandied about.
There was peak employment (see the Employment:Population graph above), Boomers were entering peak earning which coincided with social security taxes at max surplus (that benefited the federal budget and led to humorous talk of social security lock boxes during the 2000 campaign season), and the commercial internet bubble was being blown. Trump, Biden, Obama, and even W would have had a difficult time running an annual deficit in that kind of environment!
You know that the population about tripled in that time period, don’t you? What would a PCTR per capita look like? Because it’s not like Usonians are swimming in a welfare state.
The tax burden for individuals (personal income tax, sales tax, property tax, local taxes, et cetera) has increased significantly since the 1960s.
It would be interesting to see a comparison of PCTR to individual tax burden. One should presume it is not a 1:1 relationship as the income/wealth disparity has grown more quickly than taxes, but I suspect that perspective would significantly dampen the impact of Mish’s post.
“Congress is corrupt”
There is no incentive to fix the problem so they facilitate it.
not facilitate, accelerate … every year they double down in the millionaire factory that is congress.
Mish, we have always had “have nots, ” which will never change. The “have nots” today are far better off than the “have nots” 50 or 100 years ago. Inflation does not cause “have-nots” personal choices, and the entitlement that goes along with them will always exist. I was in high school in the late ’70s and early ’80s, and it was drilled into myself and my schoolmates that if you want a life better than your parents, you must get an education beyond high school. Now, I can return to my high school reunions and see in real-time that those teachers and counselors were 100% right when I saw the varying degrees of financial and personal success within a group of people who mostly had the same background and advantages. The differences can be reduced to 80% poor choices and 20% bad luck. Our economy was already in the midst of changing from a manufacturing-based economy to an information and technology-based economy when I was in high school. Those of us who heeded the advice of our teachers and counselors and were willing to relocate to where the best job opportunities almost universally did very well; those who did not heed that advice and were unwilling to relocate were not so fortunate.
That’s true as long as those degrees were in the medicine, STEM fields, accounting, law or similar. Wouldn’t be true for degrees in liberal arts ( banking aside) and later the Gender/Race etc. related degrees ,
Like I said, choices. “Have nots” have always blamed “the government,” “the elite,” and “the Others” for their plight when, in reality, for the most part,” the person to blame can be found in the mirror.
Education is often misunderstood as meaning structured learning in an institutional environment.
We teach ourselves, our brains learn, knowledge cannot be injected into the ignorant.
Educational criteria must be upgraded to teaching from a young age how to learn, and later they will understand why it is important.
We are born curious, and most schooling is an active attempt to destroy that, to produce “good worker bees”.
Most of current education is baby sitting people with poor attention spans caused by excessive daily computer and phone use. It will require retraining children and adults.
Perhaps smart phones that produce electrical shocks when you exceed your daily useage quota, which would be based on your improvement in various areas of your personalized learning program. Negative stimuli, and positive stimuli, to create motivation in the overstimulated undereducated.
“The “have nots” today are far better off than the “have nots” 50 or 100 years ago.”
My wife’s Parents came to Cal, from Arkansas, back in the 1930’s. They arrived in Sebastopol, Ca where there was fruit to pick. They literally were treated like IMMIGRANTS by locals, and many of them were Immigrant Russians (My wife lived next door to a Russian Immigrant Family).
My bigger point:
ALL of those 12 kids (and my father in law is still alive) MADE IT BIG: some ended up with Trucking Companies, agricultural land (now worth MILLIONS), and my Father in Law ended his career as a supplier of doors to Commercial Projects (hotels mostly) and he is a multi-millionaire and DEBT FREE.
SO, NO you are wrong: it was EASIER BACK THEN TO BE “DIRT” POOR AND MAKE IT because the cost of living was SO MUCH CHEAPER and many of those family members worked as AG PICKERS (APPLES) and they broke through. Four of their kids died in WWII.
I have worked with entrepreneurs in one capacity or another for the last 30 years. I have seen plenty of first-generation immigrants who have been very successful. They have started businesses, landscaping, restaurants, dry cleaners, etc. Successful people make good choices along with short-term sacrifices for long-term gains.
Not really; college degrees that are not STEM related have become meaningless.
If a young person plans on spending a large sum of money on an education they had better choose carefully and have a solid plan.
Most don’t.
There are not nearly enough teaching, sociology or government ‘careers’ out there anymore.
And even those STEM degrees no longer guarantee a job that will pay well; the flood of H1B (and the plethora of other visa types) workers and the accompanying scams that have allowed the flood of cheap labor into the country have decimated the ‘degreed’ middle and upper middle class.
Along with the outscoring of every job possible.
And if your degree is not meaningful, that cherished education may well have burdened you with student loan debt that is not dischargeable by bankruptcy.
In today’s world, most young people would be better off to choose a trade, learn it well, start a small business and have a financial plan that will give them financial independence.
And that financial independence will usually be attained well before the average retirement age required by gov or teaching jobs.
That’s what I did and I haven’t had much regret.
I am no genius and have an average IQ but I could not allow myself to be dependent or beholding to a company or boss that may be less competent and less trustworthy than I am.
“Most young people would be better off to choose a trade, learn it well, start a small business and have a financial plan that will give them financial independence.” I agree! I have known many non-college-educated persons who have started various small businesses that have grown to a sufficient size to provide a standard of living far in excess of the average college graduate. You say choose a trade; that is just another way to say learn beyond what was taught to you in high school. You and I are on the same page.
AI will fix everything and bit coin will make everyone a trillionaire, if you dont know this by now, you aren’t absorbing enough propaganda.
Conditions were not quite as bad for college graduates who finished their education prior to the Arab Oil Embargo of 1973.
Bitcoin is well anchored … wait wut? The peasants are revolting. They stink like fish on ice.
1) the fact we dont have images of people laying on streets starving on the news is an indicator that whatever we are doing is working 2) the rest of the world (that matters) identify health care as a right not an “optional benefit” — so why are we going north while the rest of the world goes south? 3) we dont have a spending problem — we have a revenue problem — 50 years of tax breaks to the rich hopelessly trying to pay for benefits that 90% of the country wants (and all these great unwashed provide lots of services to the rich too)
“we dont have a spending problem — we have a revenue problem”
That is the most ludicrous statement you could make, given all of the crazy spending that DOGE has found & will find. And it sounds like a typical liberal democrat, where the answer is always higher taxes.
How about this? We have a massive wasteful / fraudulent spending problem and a tax code that’s out of control. As for taxes, it gives money away to people at the bottom that they don’t pay into the system rather than just saying your tax liability is $1, and it gives tax breaks to the rich at a higher rate than the rest of the taxpayers.
The problem is that whether you cut spending or add revenue, it takes money out of the economy. At some point, if you do enough, you’re going to cause a serious recession & create permanent stagflation.
Spoken like a true Ditto-head, and just as wrong. Just one point “The problem is that whether you cut spending or add revenue, it takes money out of the economy.” it absolutely does not. Where does it go, into a savings account? NO. It goes back into the economy through corporate contracts or direct payments that get spent into the pockets of corporations.
Ditto head. Nice! Thanks!
DOGE has found nothing of consequence and almost everything they have done is illegal. But of course when you own the courts … instead of the non-specific non-words “wasteful/fraudulent spending” why dont Repubs TRY to be specific about what spending is wasteful and improper. List FACTS. If you even know what a fact is. What is objectionable? Veterans? Food stamps? SS checks? Paying for poor people’s births? Be a real human and be specific. For 50 years you guys havent ever been able to do it. Just fluffy words meaning nothing.
If you think America ONLY has revenue problem, it’s pointless to have a discussion.
Im ready to hear specific budget items (Food stamps, Veterans hospice, weather prediction, housing for military families, FEMA payments, anything!) that you believe have a snowballs chance of hell of being cut and we can talk about cutting REAL MONEY all day long if you like
1) What do you call the homeless camps that have skyrocketed over the last decade or two? Those are literally people lying on the streets 24×7 for the most part starving. I don’t recall that in the 90s and earlier back to when I was a kid in the 70s
2) It’s a myth that you can’t get healthcare. Anyone, even illegals can just show up at the emergency room and get medical care for free (paid for by us taxpayers). So we also have healthcare. So the question is ‘how much’ and who pays. I was talking to my sister in Canada last week and she mentioned she was going in for a root canal. She was told back in July she needed it. By the time she got scheduled (Feb) the tooth was beyond saving so had to be pulled. That’s not the level of care I want here in the USA. If I need a root canal I get it done this week or next and my tooth is saved.
3) Disagree. Spending ALWAYS, ALWAYS rises to the level of revenue. Double the revenue, the spending will double. Its the same for private citizens. If your salary goes from 50 to 100K or 100 to 200K you just suddenly find yourself spending 100 or 200K. This is why you always read about people making 200K barely making ends meet. People spend what they have so if you give them more they spend more.
I didn’t know that Canada covered dental services. When did this coverage start? Did your sister get a dental implant to replace the lost tooth or did she decide that it wasn’t worth replacing?
Not sure if she has decided yet. It just happened last week. I would presume she’ll get an implant but who knows.
I agree, how can you have meaningful discussions with people who spend 110% of whatever they make and then they complain about the cost of debt?
They lack a fundamental understanding of economics and personal discipline.
Hate to tell you, simple procedures or general health care is taking MONTHS to schedule AND we pay outrageous prices to the bloated health industry – yes, here in the US
Yes, the homeless are fed and everyone gets emergency health care. My point exactly. No one is dying in pain in front of you.
I think the point people are making is what we’re doing now is unsustainable. All of those programs that have popular support won’t be able to continue to the same extent because the debt will eventually matter a lot more. If more people lose to inflation after buying our debt, fewer people will buy it and if the fed prints money to buy it again, inflation could wipe out any cost of living increase resulting in people getting less and less per year, effectively substantially reducing or even ending what those popular programs provide.
It would seem you do have a spending problem, not a revenue problem. Just saw a Pew article that said 0.02% of the richest Americans pay 12.6% of the total tax.
In 2023, the US military spent more than the next 9 countries combined – and that feat in nothing new. It’s not for nothing that Trump floated the idea of halving it! He seems to have understood that you can’t carry on like this much longer
We’ve carried on for 50 years. Im sure you have specific spending you’d like to cut? Not weasel words. ACTUAL specific spending. Name it, and we’ll see if it has any chance of seeing the light of day.
Everything besides interest on the debt should be cut and taxes increased on the wealthy and corp profits, ban stock buybacks. If we don’t do that, the “cuts” will be as people and countries give us less and less goods and services for money we print out of thin air.
We can’t afford to be the policeman of the world. Poor Louis XVI found out too late. His meddling in the American Revolution made his country’s finances even worse than they than they already were. Eventually, he paid for his mistakes when his head was chopped off in the French Revolution.
One big insight here is that Americans are simply not saving enough, which is also the root of our large external deficit. And the biggest drivers of the savings shortfall is not Social Security, but it’s Medicare. US Social Security is a reasonably well-designed social insurance program, but it’s essentially a program to prevent old-age poverty. What the US always needed, but never got, was a mandatory second pension pillar that would have provided enough insurance income for retired people. Instead we got Medicare, which is essentially a badly designed giveaway by the government to people older than 65, but which depresses incentives to properly save for retirement. When snake oil salesmen like Trump tell you that we can fix these problems, plus cure cancer, by putting tariffs on imports, he counts on you all being total fools.
you may not agree with Trump’s policies and plans, but at least he is stating the problems and offering plans, something his predecessors failed to do.
we must begin somewhere, if it doesn’t work, we analyze our failures, reformat our plans and try again.
the price of stasis, of inaction is guaranteed failure. That price is too high.
If you don’t like Trump’s plans, write up your own and send them to Musk and Trump, no good idea will be rejected whether on red,blue or rainbow stationary.
That’s an interesting suggestion. But with Great Balls as the DOGE gatekeeper, I won’t make it through.
You have figured it out Mish.
The rich must, and will be served at the lowest possible cost.
What is a free man that must serve a non-free market? A slave to debt. Suffocating generational debt.
There is no way out.
The country needs a partial debt jubilee.
That would not sit well with the Fed and Banks but it would allow a reset.
The country also needs to reset the welfare system.
And the Medical Industrial System.
And the College Industrial Degree System.
All have become bloated, financialized scams that prey on the middle and lower classes.
I would agree as far as the debt is not revenue-generating – and yes, that includes home/property mortgages, student loans, cars loans for hire, etc
We’re Turning Down Free Money by Firing IRS Workers: Increased tax enforcement more than pays for itself. Republicans’ opposition to it is a signal that they don’t truly care about closing the deficit. Firing IRS Workers Is Turning Down Free Money – Bloomberg (archive.ph)
King Dollar: The Past and Future of the World’s Dominant Currency by Paul BlusteinAn award-winning economic journalist on why the US dollar is positioned to maintain global primacy—and what that means for America and the world https://a.co/d/2Q6ZnrJ
Maybe. Break out Social Security as a separate item. Maybe the PCTR is mostly rising because there are more retired people and they’re living longer.
Thats why they pushed the covid vax. They won’t be living longer as a result.
an injection to cure debt, the semiglutide of finance. MRNA the cure for a long life span.
“Immigration plays into Medicaid for children. But Trump has shut off all benefits for illegal immigrants.”
As he should have. Thanks, Trump! MAGA!
And what happened around the time of 1999, when the employment ratio peaked at 64.7%? That’s about the time that illegal immigration doubled from 5M in 1996 to 10M in 2005, which began the slow replacement of American workers in some industries with foreign born, illegal labor. And as Mish points out, we’ve had two massive rounds of inflationary stimulus as well as a gradual expansion of welfare state. Well, it’s time to roll back all of the waste & fraud in welfare.
FYI – baby boomers wouldn’t have started to retire in mass until 2008 but certainly over the last 16 years this has pulled the employment ratio down.
BINGO : )
But Musk and Ramaswamy say most Americans are too dumb to man the manufacturing trenches. Isn’t it then better to let immigrants work for us?
Yes. This is a story that has been playing out for many decades now. And I suspect it will continue to play out for many decades more.
I accept that nothing will be done about it. I accept that all I can do is focus on my own well-being and the well-being of those close to me.
Feel free to vote, but don’t expect that who you vote for will improve your life. That’s your responsibility.
At some point, something has to be done about it or we won’t have a country. The question is when? And while the voting between now & then might not make that big of a difference, when the time comes, it will.
we manage the micro in our own lives, but someone has to manage the macro, we vote for leaders to do this. most have failed or used it as tool for their own enrichment.
We can lay our problems to 2 activities created by leadership voted in.
1st nation trading status for China, and the huge economic cost differential between Chinese production and 1st world production leading to the deindustrialiazation of the 1st world.and all the attendant problems that followed.
Unrestrained illegal immigration across the 1st world, an open border.
we must now close the borders, remove the invading hordes and reindustrialize, to rebuild the nations of the 1st world.