I want to understand the deficit issue better
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Anonymous
| Thank you to everyone who provided thoughtful comments. I appreciate them. Interestingly I’m dealing with a health issue for my elderly parent and have firsthand experience into waste at the department of defense. The health issue that resulted in the inability of the hospital to provide a one hour study and kept him in the hospital overnight results in thousands of extra dollars of cost to Medicare. What I’ve seen at DOD is astounding in terms of the amount of government purchases and hires when they don’t need things and can’t deliver what they promise. |
Anonymous
The government creates the money. Debt is paid via a mix of taxes and inflation (implicit tax on purchases). Rarely it is cancelled via default, effectively a tax on bondholders. Everything is fine until one day it isn't and the merry go round stops. Look to 1929 and 2008 for examples. |
Anonymous
The debt spiral happens when we have to take out debt to pay the interest on our debt, EG print money. Eventually the dollar inflates, and people stop using it. This is where it bites to be an international reserve currency, because then people start dumping the dollar and using other currencies. We may already see those effects when the dollars in overseas reserves start coming home. "The cows coming home issue." Where we have little control over the money supply. This is why we'll probably see persistent inflation into the future as long as we continue to ratchet up debt. Something will probably break before the debt spiral happens, but there is a definite limit. |
Anonymous
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Once a country can print money the voices of discipline get steamrolled. That’s what happened in 2005 when people dared to try and get the mortgage regulations tightened Barney Frank called them racist and disappeared them.
Only going back to the gold standard would save the currency but that means the destruction of grift, fraud and abuse while immediately causing efficiency. A vast portion of the US population would rather commit suicide than have to produce more than they consume. |
Anonymous
Do conservative news outlets talk about this at all? Everything is about waste, waste, waste, but DOD is one of the biggest pieces of the pie and it feels like willful ignorance to the blatant fraud and waste there. I thought DOGE was going to investigate DOD, did that ever even happen? I feel like DOD spending is the elephant in the room and meanwhile, the proposed budget would increase their spending. |
Anonymous
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I hear people saying the rich should be taxed more. Who qualifies as rich? According to link below there is an average tax rate of 21% on people earning $170-250,000. This sounds quite low by international standards but only reflects federal taxes. What do you think the average tax rate would be if you included state taxes and social security? Should these earners be paying more?
https://www.cbsnews.com/amp/news/tax-irs-income-taxes-who-pays-the-most-and-least/ |
Anonymous
Donald Rumsfeld implemented a reform to DoD purchasing. It was eliminated by Obama. |
Anonymous
| It stinks that reining in DoD spending is verboten. There is so much to investigate there. I don’t feel very hopeful about the future of the US. I think we have run our course. Humans can’t help but take things too far. It’s our nature. How depressing. |
Anonymous
It is an interesting question though; how will we pay for our military? |
Anonymous
The US should have reined in its spending in the 1990s. After the fall of the iron curtain and China’s apparent move towards capitalism, the threat was severely diminished. |
Anonymous
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There are 2 types of people in this country. The first group understands financial management and would NEVER run their own household budget this way - these people are mostly republicans with the exception of a couple areas like DMV where people have so much money that they feel insulated against whatever happens nationally or even globally (with their safe and secure government jobs, or so they thought) and so they like to feel superior and vote Democrat even though they must understand that we simply can’t afford most of this spending*. Then there’s a second group of people who have no idea how compound interest works, get themselves into all sorts of trouble with debt, and think that “government money” grows on trees and doesn’t understand that some of us are working really freaking hard to fund all of these programs (and, a lot of the time, waste).
* Another explanation is to look at the math skills of a lot of these people. They may have fancy degrees and big jobs as big lawyers or whatever but I do think that a lot of them probably really struggled with math in school. So maybe they just really don’t get it, despite earning lots of money. |
Anonymous
I had a quick look and it seemed that a lot of the “military” spending was actually medical and other types of support for veterans. So I think that it’s maybe not really fair to consider it all “military” spending the way most people usually think of it. |
Anonymous
You haven't been paying attention to the last few decades of Republican and Democratic leadership have you? Rs trash the economy and explode federal spending and Dems come along and fix it. Pay attention right now. Rs are giving a master class in it. |
Anonymous
Veterans spending is not military spending. Veterans spending is the fastest growing piece of non-defense spending. |
Anonymous
Taxes should rise at $1,000,000 in earnings and should go up a few more times, to 35%-50% on very high levels of income, including stock-based awards, etc. If we had done this a while back, we wouldn't have the revolution-baiting levels of income distribution we have now. The key points from the article you linked to, with bolding by me: "But the average tax rate paid by the top 1% has declined in recent decade...in 2001, the nation's top earners had an effective tax rate of 27.6% — almost two percentage points higher than their current rate. The analysis also found that the top 0.1% of earners, with at least $3.8 million in annual income, pay an effective federal tax rate of 25.7%, which is a hair lower than the 25.9% tax rate for the top 1%. Ultra-wealthy households often have access to tax loopholes and write-offs that aren't available to salaried workers who receive W2s, and much of their income can also stem from capital gains, which has a lower tax rate than earned income. About 6 in 10 Americans said they were bothered by the feeling that corporations and the rich aren't paying their fair share in taxes, Pew Research found last year. That may explain why about two-thirds of those polled said they support higher taxes on the rich." |