The U.S. national debt is rising by $1 trillion about every 100 days

[MSgt]

I have no more friends in the Republican Party than I do in the Democrat Party.

I think I know more Republicans than Democrats. My Dad is a Republican who believes every fringe Right-wing conspiracy until he moves on to the next. My wife's a moderate Democrat. Her family on the Mom's side are Democrats, but they are mostly all idiots. Her family on the Dad's side are all Republicans, but they are bull-headed. My whole neighborhood is virtually all Republican, but they are all frustrated and don't know what they are supposed to support from day to day. I have a neighbor who flies the Ukrainian flag, married to a Ukrainian who attends protests against Russia, but he is a staunch Republican who still believes the election was stolen from Trump and remains blindly loyal to a Party that rages over supporting Ukraine. I mean...just unreconcilable and dumb.

Time and again it has been shown, that there is not enough money in the private sector to cure the government spending ills.

This is not true at all. You said it yourself, the country was doing fine until Bush's debt. It was also doing fine before Reagan. That Bush debt cannot be blamed on spending alone, because America loves war. We managed to fight two World Wars, a Korean War, and a war in Vietnam without sinking into a hole of massive never-ending debt. This was because we understood that wars need to be paid for. New Deal programs carried on; and the wealthy still bought their mansions, their vacation homes, their yachts, their private airplanes, etc. for decades. But after Reaganomics and the start of gross tax-cuts (which actually started with Kennedy's Revenue Act of 1964), "spending" was the sudden problem. Never mind that we saw the creation of the 1%. We now have a 1% within the 1%! How did this happen? And Bush simply decided that he was not going to pay for his wars with American money, the first President to do this in American history.

There has always been the plenty of money in America. We are the most powerful and richest country in human history. Perverting the tax-code is what put us into this. And only correcting it will get us out. But good luck telling all those wealthy donors that they may no longer hoard the massive bulk of the country's wealth in their coffers. I don't know that, without the massive economic disaster that the Great Depression introduced, if we can ever return to normalcy.

 

[Helix]

Raise taxes when the CPI is in the stratosphere.... yeah... that's gonna work.

It will work better than destroying the programs and giving the rich another tax cut. No thanks.

 

[Fiddytree]

Raise the retirement age, but make it applicable to everyone immediately, no favoritism toward the boomers.

 

[Kushinator]

Raise the retirement age, but make it applicable to everyone immediately, no favoritism toward the boomers.

Unfortunately, that only discriminates towards people of lower incomes, which doesn't necessarily impact the cash flows for quite some time.

 

[L88]

Raise the retirement age, but make it applicable to everyone immediately, no favoritism toward the boomers.

Social Security needs to be entirely restructured. It has become the main retirement vehicle for many but was never set up or intended as such.
The way it is used today, it needs to be restructured as a mandatory 401K or IRA with financial managers independent of the government.
1,788 a month can't be a pretty way to live in this country.
Whoever manages the teacher's pension in Missouri should be under first consideration to manage a national Pension

Home

The Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) provide a significant and stable source of retirement, disability and survivor benefits to Missouri's public school teachers, school employees and their families.

www.psrs-peers.org

 

[Ahlevah]

There has always been the plenty of money in America. We are the most powerful and richest country in human history. Perverting the tax-code is what put us into this. And only correcting it will get us out. But good luck telling all those wealthy donors that they may no longer hoard the massive bulk of the country's wealth in their coffers. I don't know that, without the massive economic disaster that the Great Depression introduced, if we can ever return to normalcy.

We’ve built an economy based on debt, consumerism, and greed. A lot of this presumed wealth consists of people trading goods that originated overseas, unproductive assets like homes that have been bid up to absurd levels, and IOUs from governments, businesses, and households. All of this continuous boom and bust asset-reflating has the effect of hollowing out the real economy. That’s why real GDP growth has trended down for decades. If you want economic growth, what we need is an economic reset—a cleansing, as it were, and redistribution of capital. A lot of greedy people need to go bankrupt for a change—get their clocks cleaned in the real estate, stock, and bond markets.

 

[Visbek]

We’ve built an economy based on debt....

Here we go

We’ve built an economy based on debt, consumerism, and greed. A lot of this presumed wealth consists of people trading goods that originated overseas, unproductive assets like homes that have been bid up to absurd levels, and IOUs from governments, businesses, and households. All of this continuous boom and bust asset-reflating has the effect of hollowing out the real economy. That’s why real GDP growth has trended down for decades.

The GDP growth rate isn't slowing because of "debt, consumerism and greed." It's because the rate of population growth is slowing, and income inequality is going up.

How has the economy been "hollowed out?" Unemployment is near record highs. LFPR started declining in 2001, and that wasn't because people started buying underwear made in China. US companies dominate the globe. The US economy has some issues, and there are some distressed areas, but what economy doesn't?

Do you genuinely not understand how it's not 2002? Housing prices aren't being artificially inflated by speculators. They're high because there is a genuine shortage of housing in the US, especially in desirable areas like big cities. Good grief.

If you want economic growth, what we need is an economic reset—a cleansing, as it were, and redistribution of capital.

A what now?

Yeah, you're going to need to be a LOT more specific about this.

 

[Ahlevah]

Here we go

Yeah, here we go. Already auto dealers, Realtors, and mortgage brokers are screaming at Powell to cut interstate rates yesterday.

The GDP growth rate isn't slowing because of "debt, consumerism and greed." It's because the rate of population growth is slowing, and income inequality is going up.

Debt is a claim on income. If it's national income we're talking about then it's GDP. There was a time before VCs and private equity when companies raised capital in the financial markets. Now the stock market is viewed by many Americans as a sort of get-rich-quick scheme. The VCs take the proceeds of an IPO and cash out along with other insiders/founders so they can buy islands and mega-mansions in Atherton or Biscayne Bay or $50 million impressionist paintings. Or managements take on debt to buy back shares to raise the value of their stock awards and options. They're not trying to invest in the actual company. Obviously, some are, but many of them are not. Boeing, for example, bought back billions of dollars in stock but hasn't invested in a new airplane since the 787 Dreamliner and likely won't for another decade. Meanwhile, real personal income has lagged far behind productivity growth:

How has the economy been "hollowed out?"

Artificially-low interest rates have been an adrenaline rush for speculators, driving up prices in assets like real estate, stocks, and bonds.

Unemployment is near record highs.

Yeah, well, it's always brightest during a midday sun. Full-time employment peaked almost a year ago. All of the net jobs that have been created since are part-time, and get ready for more plant idling/layoffs in the auto sector and tech.

Do you genuinely not understand how it's not 2002? Housing prices aren't being artificially inflated by speculators. They're high because there is a genuine shortage of housing in the US, especially in desirable areas like big cities. Good grief.

There is no housing shortage. That's the NAR talking. The fact is a lot of Americans simply can't afford a detached single-family home, so many of them have been renting apartments. Home builders, rather than building on spec and getting caught with their pants down again like they did in the Great Recession, build to demand. And apartment vacancies have been rising, because many of the units that were built were luxury-style apartments that renters also can't afford. So they're doubling up or moving back home to live with mom and dad. Rental vacancy rates have been rising in every region of the country except the Midwest:

A what now?

I mean, just pick something. To paraphrase the Oracle of Omaha, the tide is high at the moment, but when it goes out we'll find out who was swimming naked. It's noteworthy that he's sitting on a record amount of cash--about $168 billion at last count.

 

[Visbek]

Yeah, here we go. Already auto dealers, Realtors, and mortgage brokers are screaming at Powell to cut interstate rates yesterday.

They've been screaming for months. That's not new.

But... You were spouting off recently about how the next recession would be caused by the Fed cutting rates. And you blamed the Fed for causing a recession (that hasn't happened yet), by... keeping rates too low in 2020 and 2021!

In other words: In your view, no matter what the Fed does, it's going to cause a recession. Right?

Debt is a claim on income. If it's national income we're talking about then it's GDP.

GDP = Consumption + Investment + Government Spending + Net Exports

Funny how "debt" isn't a component of GDP.

And as we've discussed previously, there is no evidence whatsoever that governments with high debt-to-GDP ratios have lower growth rates.

There was a time before VCs and private equity when companies raised capital in the financial markets. Now the stock market is viewed by many Americans as a sort of get-rich-quick scheme.

Yes, because Americans never thought that ever before. C'mon man, they've thought that since the 1920s.

The VCs take the proceeds of an IPO and cash out along with other insiders/founders so they can buy islands and mega-mansions in Atherton or Biscayne Bay or $50 million impressionist paintings.

Yes, I concur that economic inequality is a serious issue.

Ironically, the cure for this will also help reduce deficits, namely: Tax the rich. Economic inequality did not rise in the US because the government ran deficits; it happened because the wealthy lobbied the government extensively to lower their tax burdens, and riddle the tax code with loopholes. (Plus, executives took an increasingly larger share of wage gains for themselves). You good with that?

Or managements take on debt to buy back shares to raise the value of their stock awards and options. They're not trying to invest in the actual company.

You, uh... Do know that kind of activity dates back to the 1990s, right?

Anyway. I'm certainly not going to tout the benefits of private equity and VCs. But I will say that suggesting the US economy has been "hollowed out" by them does not add up.

Boeing, for example, bought back billions of dollars in stock but hasn't invested in a new airplane since the 787 Dreamliner and likely won't for another decade.

So, we're just going to ignore the reams of innovation and productivity gains everywhere else, because Boeing's management tried to take advantage of its monopoly position?

Meanwhile, real personal income has lagged far behind productivity growth:

That isn't what your graph shows. Real GDP is not a measure of "productivity growth." Heck, you didn't even bother to adjust the graph to "YoY change."

So, here is the graph you should have posted. It's not perfectly correlated, but it doesn't look like income has been left behind.

Continued....

 

[Visbek]

Artificially-low interest rates have been an adrenaline rush for speculators, driving up prices in assets like real estate, stocks, and bonds.

Hello? The Fed started jacking up interest rates TWO YEARS AGO. It makes no sense whatsoever to suggest there is still huge amounts of liquidity sloshing around 2 years after the Fed makes it more expensive to borrow. Not to mention you were dinging the Fed for higher interest rates in that very post!

By the way, what is the "natural" interest rate? Surely you must have a time-tested formula to determine those "proper" interest rates, since you seem to know for certain that the Fed had it wrong....

Yeah, well, it's always brightest during a midday sun.

Full-time employment peaked almost a year ago. All of the net jobs that have been created since are part-time, and get ready for more plant idling/layoffs in the auto sector and tech.

Yes, that's what happens when unemployment hits record lows. Remember when 5% unemployment was considered "normal?" What's going on is that pretty much everyone who wants a full time job now has a full time job.

Here's a chart of all the part time workers (i.e U6 minus U5). Notice how it's near record lows? And yet, you're screaming your head off like it's 2010. You are obviously just hunting for anything resembling bad news, at a time when the economy is doing well by any reasonable standard.

There is no housing shortage.

Yes... There is. Homeowner vacancy rate is at record lows.

Rental vacancy rate did pop up a little bit since 2022 -- but still hasn't been this low since the 80s.

Rental Vacancy Rate in the United States

Graph and download economic data for Rental Vacancy Rate in the United States (RRVRUSQ156N) from Q1 1956 to Q4 2023 about vacancy, rent, rate, and USA.

fred.stlouisfed.org

The fact is a lot of Americans simply can't afford a detached single-family home, so many of them have been renting apartments.

Hello? They can't afford detached single-family homes because there aren't enough of them to meet demand.

Home builders, rather than building on spec and getting caught with their pants down again like they did in the Great Recession, build to demand.

That isn't the problem. It's that America simply hasn't built enough new housing. New housing starts fell off a cliff in 2007, leaving a significant hole in supply. And these numbers aren't coming from NAR. (And since when is NAR the target of conspiracy theories? Yeesh.)

And apartment vacancies have been rising, because many of the units that were built were luxury-style apartments that renters also can't afford.

lol... No, vacancies are near record lows. Stop cherry-picking, kthx.

Also, I asked you to specifically explain what you mean by the US needing an "economic cleansing." You didn't answer. So, let's hear it. What do YOU think will fix all these issues you claim to see?

 

[HangLow]

My solution would slow the problem down.
What's yours?

They got NOTHING...
-Peace

but I will leave this here with you Mr. Helix

​

 

[iguanaman]

This is not sustainable.

The debt load of the U.S. is growing at a quicker clip[url] in recent months, increasing about $1 trillion nearly every 100 days.... U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 billion, as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day pattern will remain intact with the move from $34 trillion to $35 trillion....​

​

Moody’s Investors Service lowered its ratings outlook on the U.S. government to negative from stable in November due to the rising risks of the country’s fiscal strength. “In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”​

For those who think "Just Raise Taxes" is the solution:

View attachment 67495908

We have had tax rates a lot higher - and didn't collect anywhere close to the % of GDP we need.

LOL We did not have the income disparity we have now when the top rate was high. We now need a wealth tax to reach those that have benefitted by low taxes and have raise our deficits. It is looking more and more likely and all those GOP tax cuts are to blame.

The United States ranked 31st¹ out of 38 OECD countries in terms of the tax-to-GDP ratio in 2022. In 2022, the UnitedStates had a tax-to-GDP ratio of 27.7% compared with the OECD average of 34.0%. In 2021, the United States was ranked 32nd out of the 38 OECD countries in terms of the tax-to-GDP ratio.

https://www.oecd.org/tax/revenue-statistics-united-states.pdf

 

[cpwill]

LOL We did not have the income disparity we have now when the top rate was high. We now need a wealth tax to reach those that have benefitted by low taxes and have raise our deficits. It is looking more and more likely and all those GOP tax cuts are to blame.

The United States ranked 31st¹ out of 38 OECD countries in terms of the tax-to-GDP ratio in 2022. In 2022, the UnitedStates had a tax-to-GDP ratio of 27.7% compared with the OECD average of 34.0%. In 2021, the United States was ranked 32nd out of the 38 OECD countries in terms of the tax-to-GDP ratio.

https://www.oecd.org/tax/revenue-statistics-united-states.pdf

I'm glad you brought up the OECD, because we also have the most progressive tax structure in the OECD. What the other nations generally do that we do not is tax their middle and lower income strata more heavily, especially with sales/vat taxes.

If you want significantly more revenue, that's where you are going to have to go to get it.

If you just want to mess with people who have more stuff than you, you can try the wealth tax, but you won't get the revenues.

"Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries."

 

[cpwill]

Anywhere, we are still screwed:

The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97% of GDP last year to 116% by 2034 — higher even than in World War II. The actual outlook is likely worse.

From tax revenue to defense spending and interest rates, the CBO forecasts released earlier this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume — as most in Washington do — that ex-President Donald Trump’s tax cuts mainly stay in place, and the burden gets even higher....

In the end, it may take a crisis — perhaps a disorderly rout in the Treasuries market triggered by sovereign US credit-rating downgrades, or a panic over the depletion of the Medicare or Social Security trust funds — to force action. That’s playing with fire....​

 

[iguanaman]

I'm glad you brought up the OECD, because we also have the most progressive tax structure in the OECD. What the other nations generally do that we do not is tax their middle and lower income strata more heavily, especially with sales/vat taxes.

If you want significantly more revenue, that's where you are going to have to go to get it.

If you just want to mess with people who have more stuff than you, you can try the wealth tax, but you won't get the revenues.

"Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries."

We can configure a wealth tax that is not subject to the problems in Europe. I thought you wanted to pay down the debt? To do that you need to get the money from people that have it. You can't get blood out of stone. Historically we don't need to ever pay down our debt. We let inflation reduce it naturally instead.

 

[cpwill]

We can configure a wealth tax that is not subject to the problems in Europe

We will use magic? "It's only failed every other time it's been tried - this time will be different"?

. I thought you wanted to pay down the debt? To do that you need to get the money from people that have it.

believe it or not, that's called "the middle class", which is why Europe and other nations with higher tax revenues as a percentage of their GOP get their money there.

You can't get blood out of stone

The average American is fantastically wealthy compared to historical global standards, and, the American middle and lower classes pay much less than their European counterparts, despite earning more.

There's no free lunch, @iguanaman. "Build a large transfer payment system and have the rich pay for it" is as chimerical as Trumps' similar formulation involving Mexico and a Wall. If you want to solve the coming entitlement crisis with tax increases, it's gonna have to be on people you don't want to tax.

Historically we don't need to ever pay down our debt. We let inflation reduce it naturally instead.

That requires that we stop adding to it at our current and projected rates, deeply slahing the deficit and then holding it down.

 

[iguanaman]

We will use magic? "It's only failed every other time it's been tried - this time will be different"?



believe it or not, that's called "the middle class", which is why Europe and other nations with higher tax revenues as a percentage of their GOP get their money there.



The average American is fantastically wealthy compared to historical global standards, and, the American middle and lower classes pay much less than their European counterparts, despite earning more.

There's no free lunch, @iguanaman. "Build a large transfer payment system and have the rich pay for it" is as chimerical as Trumps' similar formulation involving Mexico and a Wall. If you want to solve the coming entitlement crisis with tax increases, it's gonna have to be on people you don't want to tax.




That requires that we stop adding to it at our current and projected rates, deeply slahing the deficit and then holding it down.

Taxing people that spend all their income in the economy is self defeating because that money comes straight out of GDP. If we want to reduce our revenue shortfall without tanking the economy the money must come from those that can afford to pay. The top bracket must be raised to at least 45% and include capital gains. Higher would be better. The world is awash with capital and does not need "stimulation" by lower rates. Or we could continue to put the defcits on credit and the wealthy can loan it to us.

 

[Kushinator]

Taxing people that spend all their income in the economy is self defeating because that money comes straight out of GDP. If we want to reduce our revenue shortfall without tanking the economy the money must come from those that can afford to pay. The top bracket must be raised to at least 45% and include capital gains. Higher would be better. The world is awash with capital and does not need "stimulation" by lower rates. Or we could continue to put the defcits on credit and the wealthy can loan it to us.

European counterparts also have universal healthcare, a more generous social safety net, far more PTO, And more government spending overall.

Increasing taxes on the lower and middle classes to pay for current expenditures is sneaky austerity.

In regards to the top bracket... it would need to be more reflective of the top. A person making $600k, $6 million, and $60 million all hit the top bracket.

 

[AZRWinger]

If you want to address the problem, it's a step in the right direction. Republicans don't actually want to address the problem, though. They just want to use it. If they wanted to address the problem, they wouldn't keep giving the ultra-rich more tax cuts.

Demagoguery and blame shifting targeting political opponents is responsible for creating the problem.

Not a word about solving the problem. No matter how much taxes are raised spending has expanded more. Until this pattern is broken the debt will continue to grow.

 

[iguanaman]

European counterparts also have universal healthcare, a more generous social safety net, far more PTO, And more government spending overall.

Increasing taxes on the lower and middle classes to pay for current expenditures is sneaky austerity.

In regards to the top bracket... it would need to be more reflective of the top. A person making $600k, $6 million, and $60 million all hit the top bracket.

Yes we need more brackets to better define the 1% for sure. But the idea that the wealthy are not being subsidized by low tax rates is just bunk.

 

[iguanaman]

Republicans and Democrats are both unwilling to address the problem, and we've tried higher tax rates:

View attachment 67495924


It turns out, people are able to anticipate things, and alter behavior accordingly. So long as we are keeping our basic progressive structure, nominal revenues are driven primarily by growth (or lack thereof).

If you mean that executives took smaller shares of the profits when taxes were high I agree. They invested their money in their businesses and employees instead. That will mean increased revenue from the middle class since their incomes will increase. There was a good reason for the 90% tax brackets and it is because we tax things we want less of.

 

[bomberfox]

I dont really think of the national debt as really a debt anymore but i think if we tax these algorithmic high speed stock trades we could get more revenue while reducing utterly useless speculative ventures.

 

[bomberfox]

I get it. You're in the Dem tribe and Kascih and Gingrich were dicks. The bottom line is, Clinton was the best Republican President we've had. Add to that the Clinton Crime bill.

The Balanced Budget Act was introduced on June 24, 1997, by Republican Ohio Representative John R. Kasich. There were three short titles that the act was also known as in the House of Representatives. In the House, this act was also called the Child Health Assistance Program of 1997, the Expansion of Portability and Health Insurance Coverage Act of 1997, and the Veterans Reconciliation Act of 1997.

https://www.congress.gov/bill/105th-congress/house-bill/2015

You guys do realize getting rid of the debt would mean 0 money in the economy right?

 

[L88]

You guys do realize getting rid of the debt would mean 0 money in the economy right?

Really? How is that? But that won't happen. We're on a pace for 141 Trillion Debt in 2050.

 

[bomberfox]

I'm glad you brought up the OECD, because we also have the most progressive tax structure in the OECD. What the other nations generally do that we do not is tax their middle and lower income strata more heavily, especially with sales/vat taxes.

If you want significantly more revenue, that's where you are going to have to go to get it.

If you just want to mess with people who have more stuff than you, you can try the wealth tax, but you won't get the revenues.

"Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries."

We could also tax their political contributions so the wealthy dont just waste it i mean nobody in the middle class or lower class can afford to blow billions on just stupid shit like the wealthy can lol.