U.S. Debt discussion

[Azure]

Originally Posted by Gozer

Preposterous.

Sarcastic or not, that post is pretty much on par with every other post you've had on CP the past few years.

We all might disagree at times, but everyone is entitled to their opinion. I for one like reading what others have to say, even if I strongly disagree with them.

You just seem to arrogantly shoot them down every chance you get.

[Jag_Gator]

Originally Posted by Azure

They are actually talking about the cuts obtained from the wars in Iraq and Afghanistan winding down.

But either way, I think you save more money by paying more attention to how much money the Pentagon throws around blindly without anyone keeping an eye on them.

Some Austerity
by Michael D. Tanner

"The Reid plan would theoretically cut spending by $2.7 trillion over ten years. Even if that were true, it would still allow our national debt to increase by some $10 trillion over the next decade. But, of course, the $2.7 trillion figure is mostly fiction. About $1 trillion of the savings would come from the eventual end of the wars in Iraq and Afghanistan, savings that were going to occur anyway. Senator Reid might just as well have added another $1 trillion in savings by not invading Pakistan."

This is what I'm talking about. Token cuts. This is all for show. America needs to stop trying to be the policemen of the world. It has helped to bankrupt the nation--along with corporatism.

[tripin_billie]

Originally Posted by Azure

The fact that so many people in the US aren't paying any taxes is probably a good as reason as any to support a flat tax on income.

20% across the board. Anyone under $25,000 in income is exempt.

Put that together with a consumption tax of say 5% federally, with things like groceries, baby clothes, pills, etc, etc being exempt, and you're probably in a much better situation that you are now.

But either way, Obama told the Republicans today that he is willing to look at tax reform and entitlement reform, and willing to write some sort of law that forces them to be accountable to making those reforms happen.

Still think the $3 trillion in cuts along with $600 billion more in revenue is the best plan going forward.

You do realize the US effectively has a consumption tax system for 98% of Americans? Almost every dollar earned by Americans is spent within the year, and what is saved is tax deferred, leaving essentially a consumption tax on almost all earned income in the US.

[Cowperson]

How A Flush Country Gets Into Trouble - an analysis in the Washington Post. Good job of noting that a large percentage of USA debt is held internal to the country versus the external debt issues that once plagued Canada in the 1990's and plague countries like Greece or Italy today:

http://www.washingtonpost.com/busine...AiI_story.html

Japan is another country where most of its debt is held internally by Japanese, meaning they are effectively borrowing from themselves.

Cowperson

[SeeBass]

[mikey_the_redneck]

Wow, what a gong show.

America needs direct democracy like in Switzerland......because these republican/democrat "representatives" are awful, awful people.

It looks like the middle class will bear the brunt of the austerity bill, I mean spending cuts. What a broken system....

How about making the top fortune 100 or whatever pay taxes instead of allowing them to hide revenues off shore?
How about cutting all this foreign aid?
How about ending the pointless wars in Libya, Iraq, Pakistan, Afghanistan etc.?
How about slashing the over-sized federal government?...the country can run without it.

How about they actually make the corporations like GE pay taxes? They have payed virtually no taxes in the last few years. I laugh at the fact that GE CEO Jeffery Immelt is the head of Obama's Jobs Council! During his time there, GE has shipped about 34,000 American jobs off shore since 2001. The corrupt corporatism is disgusting.

The supposed "grass-roots" tea party members have totally assimilated into the republican party and it is now obvious. Wanting to cut entitlements while mostly ignoring the Pentagon budget is totally selling out.

I see America defaulting down the road no matter what.

[Sample00]

from a friend in the US. I found it to be quite comical.

DEAR CONGRESS,
Last year I mismanaged my funds and this year my family and I cannot decide on a budget. Until we can come to a unified decision that fits all of our needs and interests, we will have to shut down our check book and will no longer be able to pay our taxes. I'm sure you'll understand. Thank you very much for setting an example we can all follow.

Sincerely,
An American Citizen

[Mike F]

Originally Posted by Jag_Gator

Some Austerity
by Michael D. Tanner

"The Reid plan would theoretically cut spending by $2.7 trillion over ten years. Even if that were true, it would still allow our national debt to increase by some $10 trillion over the next decade. But, of course, the $2.7 trillion figure is mostly fiction. About $1 trillion of the savings would come from the eventual end of the wars in Iraq and Afghanistan, savings that were going to occur anyway. Senator Reid might just as well have added another $1 trillion in savings by not invading Pakistan."

This is what I'm talking about. Token cuts. This is all for show. America needs to stop trying to be the policemen of the world. It has helped to bankrupt the nation--along with corporatism.

Haven't read the whole article yet, but that point is bunk, and if it's reflective of the author's general thinking, you can dismiss the article..

If you're $1 Trillion in debt and you can show that an eventual end to an ongoing expense will save you $1 Trillion, then your books are, to some extent, balanced.

If you're $1 Trillion in debt and you decide not to spend another $1 Trillion on another expense, it doesn't help balance your books, it just notionally helps you avoid going further into debt.

[CaptainCrunch]

I'm not sure that I agree, if every year your $1 trillion in the hole because your spending it wrecklessly on hookers and blow, and you get locked in a cellar for a year and don't spend that money, unless your spending that money on something else your decreasing your deficit spending by that trillion and not spending it elsewhere so you're in a break even position.

[Mike F]

Originally Posted by CaptainCrunch

I'm not sure that I agree, if every year your $1 trillion in the hole because your spending it wrecklessly on hookers and blow, and you get locked in a cellar for a year and don't spend that money, unless your spending that money on something else your decreasing your deficit spending by that trillion and not spending it elsewhere so you're in a break even position.

I didn't understand that.

Are you disagreeing that the savings from the end of the wars is legitimate savings, or are you disagreeing that there's a difference between savings from ending the current wars and "savings" from not choosing to start other wars?

[seattleflamer]

Originally Posted by Cowperson

How A Flush Country Gets Into Trouble - an analysis in the Washington Post. Good job of noting that a large percentage of USA debt is held internal to the country versus the external debt issues that once plagued Canada in the 1990's and plague countries like Greece or Italy today:

http://www.washingtonpost.com/busine...AiI_story.html

Japan is another country where most of its debt is held internally by Japanese, meaning they are effectively borrowing from themselves.

Cowperson

I really like this analogy from that WP article:
The United States is a lot like a rich businessman who owns two homes, a yacht and millions of dollars in stock but is in debt because he took out a big loan to buy a private plane.
This fellow could always have used some of his wealth, for instance his stock, to pay cash for the plane. But he didn’t want to. Now, with the weak economy, he’s finding it hard to pay off the plane simply out of his salary. By putting most of his wealth beyond reach, he has boxed himself in.

I would even use the analogy that the US is like a family where both parents are high income/high asset physicians where one of the spouses decides voluntarily to stop working. They also decide to improve their home and buy a second house. They end up taking more debt even though they reduced their income.

At any point, the non-working spouse can easily take a job but doesn't really have the will to go there. They also decide to make up their income short fall by stopping contributions to their retirement plan and saving for their children's education and, yes, getting rid of cable will help.

The US has the income/assets given the political will via reducing or eliminating tax breaks, tax loopholes etc to reduce the deb/deficit ie. increasing revenue.

It is veritable tax haven in the US versus Canada (and probably most of the other G8 nations though I don't know from either experience or research) and anyone who says they are overtaxed must being comparing their tax rates to 3rd world countries where there are no gov't services.

Property tax, sales tax, state income tax are deductible off your federal return not to mention mortgage interest, just to mention a few "middle class" tax breaks that should be reduced at least. The mortage interest break is up to 1 million in mortgage interest. That is INTEREST. So if you have a million dollar loan, you can essentially deduct $350K off your return assuming you are in the highest bracket courtesy of your fellow tax payers.

You know this country has gone so far to the right that the Democrats are trying to channel Ronald Reagan! It has skewed so far to the supply side that it really doesn't make common sense anymore to the average person.

[seattleflamer]

And to further my point about the taxes in the US. From today's Globe and Mail: http://www.theglobeandmail.com/repor...rticle2114872/

[CaptainCrunch]

Originally Posted by Mike F

I didn't understand that.

Are you disagreeing that the savings from the end of the wars is legitimate savings, or are you disagreeing that there's a difference between savings from ending the current wars and "savings" from not choosing to start other wars?

I think its a bit of both. If your spending a million dollars more then your making on your yearly deficit and the next year you manage to spend a million dollars less then in theory you should balance to a 0 deficit position.

However even I'm not foolish enough to believe that you instantly turn off the money taps of a war. Canada is going to continue to spend dollars on the Afghan war in terms of bringing equipment home, repairing, refitting and replacing worn out equipment. Dealing with veterans who are leaving the military and training their replacements and replenishing supplies and ordinance.

The hookers and blow example for me is that in a lot of ways war is like spending money on useless things in that you don't see any economic benefits to it that will cover the losses.

[Shazam]

Originally Posted by seattleflamer

Property tax, sales tax, state income tax are deductible off your federal return not to mention mortgage interest, just to mention a few "middle class" tax breaks that should be reduced at least. The mortage interest break is up to 1 million in mortgage interest. That is INTEREST. So if you have a million dollar loan, you can essentially deduct $350K off your return assuming you are in the highest bracket courtesy of your fellow tax payers.

Yeah the mortgage interest deduction doesn't work like that.

[Ducay]

Originally Posted by Shazam

Yeah the mortgage interest deduction doesn't work like that.

You mean I don't get $350,000 free dollars for buying a million dollar home? Guess I'll cancel that US VISA application....darn

[CaptainCrunch]

I still thing that the American's are really going to have to consider a consumer tax to get them out of this box, and its got to be in the 7 to 10% range. There are what 320 million people in the states right now, I could look it up but I'm feeling lazy today.

But if the average person spent $1000.00 on luxury goods which lead to $100.00 in average taxation x $320,000,000 would equal $320,000,000. I also like the idea of a flat no exemption tax of 20% of income with no tax loops or shelters allowed. then everyone could pay their fair share based on income percentage, of course you would have to set a 0 tax floor.

The average personal income in the states in 2010 was $40,000.00 so your income tax would be $8,000.00, right now the number of people working in the U.S. was 64% for 2010, so out of 320,000,000 would be 208,000,000 with an average income tax of $8,000,000 you would have a tax income of $1,664,000,000,000.00

If you look at 2007 which was the latest I could find the U.S. under its current system was $1.3 trillion. Plus you could save money by cutting back the IRS because you would have a 1 page basically two line return. How much did you earn, how much did your company take from your paycheck?

The real hole in revenue generation is really based around corporate taxation, looking again at 2008 the U.S. collected $395,000,000,000.00 in corporate taxes, that should be far higher, and should be almost equal to what they could collect on personal income tax.

(BTW going to the IRS site and looking up the states, there isn't a huge difference between 2007 and last year in terms of tax dollars collected.

Even if these measures were temporary especially on the corporate taxes it might make a world of difference.

In 2011

The United States government collected

Total Direct revenue $4,500,000,000,000
Total Income Tax $1,600,000,000,000
Social Insurance $900,000,000,000
fees $400,000,000,000
Business and other $600,000,000,000

Total $8,000,000,000,000

If you could increase corporate taxes to trillion from 600,000,000,000
And added the federal sales tax which would equal 320,000,000,000

You suddenly add another roughly billion dollars to the budget that could service the debt, with the flat tax of 20% you could actually reduce the tax burden on the middle class and lower class.

You could cut a lot of federal bureaucracy which would start you on the way towards cutting trillions off of spending which they have to do.

The spendings out of whack, but the tax collection is equally silly, too complicated and has too many loop holes.

Of course I've been taking pain killers all day so this is all probably insane ramblings.

[CaptainCrunch]

sorry to add on, looking at the U.S. government the total mandatory spending was 2.17 trillion, total discretionary spending was $1.4 trillion for a total of $3.55 trillion.

I think my numbers of revenue might be wrong, but I'm going off of the IRS breakdown.

But some things that stand out.

I love the military and support it, but there was a 13% increase last year, I think that if they're out of the war next year they should be able to reduce that. funnily enough defense was considered discretionary settings.

But all categories of mandatory spending which was social security, medicare , medicade, interest on the debt and the shadowy other which is shows $571 billion and saw an average increase of 12% last year all have to be cut.

The U.S. needs their own austerity program this year and now. They need to pay more then the interest on the national debt.

[afc wimbledon]

Originally Posted by CaptainCrunch

sorry to add on, looking at the U.S. government the total mandatory spending was 2.17 trillion, total discretionary spending was $1.4 trillion for a total of $3.55 trillion.

I think my numbers of revenue might be wrong, but I'm going off of the IRS breakdown.

But some things that stand out.

I love the military and support it, but there was a 13% increase last year, I think that if they're out of the war next year they should be able to reduce that. funnily enough defense was considered discretionary settings.

But all categories of mandatory spending which was social security, medicare , medicade, interest on the debt and the shadowy other which is shows $571 billion and saw an average increase of 12% last year all have to be cut.

The U.S. needs their own austerity program this year and now. They need to pay more then the interest on the national debt.

The US aught to be able to reduce their military down to half of its current level, it is useless in an asymetric 'war on terror' and other than the chinese has no other appreciable enemy in sight.

Won't happen though, the US military is like owning a gun, mostly an unused expensive waste of time and money and a more of a threat than a salvation, but try and tell the average yank that.

[Flash Walken]

Originally Posted by CaptainCrunch

sorry to add on, looking at the U.S. government the total mandatory spending was 2.17 trillion, total discretionary spending was $1.4 trillion for a total of $3.55 trillion.

I think my numbers of revenue might be wrong, but I'm going off of the IRS breakdown.

But some things that stand out.

I love the military and support it, but there was a 13% increase last year, I think that if they're out of the war next year they should be able to reduce that. funnily enough defense was considered discretionary settings.

But all categories of mandatory spending which was social security, medicare , medicade, interest on the debt and the shadowy other which is shows $571 billion and saw an average increase of 12% last year all have to be cut.

The U.S. needs their own austerity program this year and now. They need to pay more then the interest on the national debt.

It's really tough to get a full understanding of just what the defense budget is.

So much of it is re-routed and funneled and given a new name.

Yes, giving billions of dollars to Turkey in the form of cash and military equipment is technically a state department issue, but that's defense spending.

There is so much of this; I remember the last time I tried to compile the numbers I almost lost my mind.

[Calgaryborn]

Originally Posted by CaptainCrunch

I think its a bit of both. If your spending a million dollars more then your making on your yearly deficit and the next year you manage to spend a million dollars less then in theory you should balance to a 0 deficit position.

However even I'm not foolish enough to believe that you instantly turn off the money taps of a war. Canada is going to continue to spend dollars on the Afghan war in terms of bringing equipment home, repairing, refitting and replacing worn out equipment. Dealing with veterans who are leaving the military and training their replacements and replenishing supplies and ordinance.

The hookers and blow example for me is that in a lot of ways war is like spending money on useless things in that you don't see any economic benefits to it that will cover the losses.

Ya when those guys come home they are still going to be soliders. America will have to feed, house and pay them until their term is up. They will still need ammunition to shoot and gear to wear out. If they use less that that just means less jobs in the manufactoring sector. As the soliders retire out they will need jobs or else begin their secondary education with the government flipping the bill.

Military related manufactoring jobs have been some of the most stable throughout this economic down turn. It helps that the military uses American companies pretty much exclusively. The cuts will hit middle class workers hard.

As for Harry Reid figuring the country will save a trillon with the wind down of the 2 war; I think he is estimating high. I also doubt if the projected deficits for the next ten years don't already figure in an easing of military spending because of the wind down of the 2 wars. Even in the mist of the Iraq war the extra military spending was always treated as special and voted on separately. Either way there should be no problem taking 4 trillion out of the budget within ten years without counting what is already going to happen.