GlockTalk Forum banner

61 - 80 of 131 Posts

·
Registered
Joined
·
2,026 Posts
I would have posted this exact thing 10 years ago - not so sure it is still true. Although I still think this myself most days - today is just not one of them!

The politics are impossible - people have been voting themselves free stuff for so long - anyone that tries to cut spending can not get elected.

Hard to imagine a candidate for POTUS saying we have to cut social security, Medicare and the military ever getting elected.

But even if someone that was already elected tried it - like say Trump in his second term -

When government spending is 15% of the total economy cutting spending a little and raising taxes a little can be done - and the other 85% of the economy will not be damaged enough to cause a major problem.

The larger the % of the total economy government becomes the harder it is to cut spending and raise taxes - without hurting things. I fear we are past the point - government (federal, state & local) is pushing close to $10 trillion dollars out of a GDP of around $20 trillion.

When gov is close to 50% of all spending - it becomes really hard to cut it without making things worse.

If government cut spending - and raised tax rates - we could very well see total tax revenue decrease - and maybe even see a larger budget deficit as a result of a fiscal austerity program.

When government cuts spending people lose their jobs - when people lose their jobs the government welfare programs must spend more to provide the unemployed the benefits to survive.

Just don't ask me for my solution. :couch:
Good post. You said this far better than I could have.
 

·
Registered
Joined
·
24,974 Posts


BTW - Income Security consists of six categories: general retirement and disability insurance; federal employee retirement and disability (including military retirement); unemployment compensation; housing assistance; nutrition assistance --

What you going to cut?

You going to say we need to reduce government employees pension? How about military disability payments?

Many folks on GT think social security and Medicare should be off limits when cutting the budget.

Military budget?

Raise taxes on the rich - wait instead of just raising taxes a little lets kill the rich and take their total net worth -

If Jeff Bezos fortune was confiscated to plug the budget deficit it would be spent in less than a month - Gates - Musk - Zuckerberg would all be gone in a few short months -

Sorry - NFW we can raise taxes to solve this one - we don't have enough rich people.

Plus what do you think happens to the stock market and housing prices when people are forced to sell stocks to pay taxes?

Aren't I a ray of sunshine today!
 

·
Registered
Joined
·
9,928 Posts
Discussion Starter #64
Pie in the sky.

1. Austerity and "non critical" expenditures - who decides what is "non critical"? In my own life that's easy. Once even one other person gets involved it becomes more complicated. Multiply that by 350 million and compound that by people with more influence and power than the average Joe Six Pack.

2. Increase revenue by raising taxes - not a given in any scenario as people can and do modify their behavior based on the ever increasing complexities of a "progressive" tax system which tries to nudge people into certain actions, expenditures and behaviors. Big money is far more mobile in today's world than ever before. Right now people are moving with their wallets from high tax states to lower tax states. It doesn't take too much imagination to see that playing out on a global scale for big money people.

3. Balanced budget amendment - this might be more likely, but the bar is pretty high for any constitutional amendment.

Doing nothing is sometimes the best option - it's not necessarily surrendering. We can demand better from our representatives, but we also have to demand it of ourselves. And if everybody isn't on board, then nobody's on board.
What is your recommended resolution?
 

·
Registered
Joined
·
9,928 Posts
Discussion Starter #65


BTW - Income Security consists of six categories: general retirement and disability insurance; federal employee retirement and disability (including military retirement); unemployment compensation; housing assistance; nutrition assistance --

What you going to cut?

You going to say we need to reduce government employees pension? How about military disability payments?

Many folks on GT think social security and Medicare should be off limits when cutting the budget.

Military budget?

Raise taxes on the rich - wait instead of just raising taxes a little lets kill the rich and take they total net worth -

If Jeff Bezos fortune was confiscated to plug the budget deficit it would be spent in less than a month - Gates - Musk - Zuckerberg would all be gone in a few short months -

Sorry - NFW we can raise taxes to solve this one - we don't have enough rich people.

Plus what do you think happens to the stock market and housing prices when people are forced to sell stocks to pay taxes?

Aren't I a ray of sunshine today!
It took decades to get here, it will take decades to work our way out.
 

·
Registered
Joined
·
4,927 Posts
"There is no budget gap." Winston Smith
 

·
Registered
Joined
·
24,974 Posts
The last time the USA was debt free was on Jan. 8, 1835. Don't ever think that will happen again. We can't even balance a budget.
After we default on the debt - we will be debt free.

Can be a normal default - like bankruptcy - but more likely the death of the dollar will cause the same result.

If it takes $1 trillion to buy a loaf of bread - how concerned will people be to get the $100K they have invested in US treasury securities paid back to them?
 

·
Registered
Joined
·
9,928 Posts
Discussion Starter #69
And the President after Trump will continue increasing the debt.

Trump had no control over the Governors shutting down the States resulting in the economic catastrophe which has increased the debt more than usual.

President Trump had to deal with the situation that was handed to him. The virus panic was another attack against President Trump. What happens after Nov. 3rd. will prove this.
I blame all the politicians equally.
Trump's business plan was always based on leverage and default if necessary. I didn't expect that to change when he became president.

The fact is we are here now and need to take the first steps to fixing it.
 

·
Registered
Joined
·
24,974 Posts
It took decades to get here, it will take decades to work our way out.
Yes - It would take decades to work out - if the next 30 years has no big crisis events -

The solution to every crisis is increase debt - print money - only now we need trillions to paper over each new crisis -

I don't know what the next big crisis will be - but am pretty sure it will require $15 - $25 trillion dollars to solve -

At some point the hole will be too big to crawl out of - even if you are willing to climb for 30 years.

Imagine how unfair it is for someone that is born in 2021 (I have a grandson scheduled to be born in March 2021) - you get to pay the interest on the bills that were rung up before you were even born - so for basically your whole life you will never be free from the debts of others. Seems like at some point young people would revolt. Maybe they are now - hard to say -

Is it better to default - take the pain - and then start over?

Which would be hyper deflationary for the win!

OK now I am just talking crazy.
 

·
Registered
Joined
·
691 Posts
Stop digging the hole deeper (balance the budget). Get rid of politicians who spend like drunken sailors. Sorry, drunken sailors, for having human feces compared to you.

Slowly dissolve the private, deceptively misnamed Federal Reserve System that's enabling new debt.
 

·
Registered
Joined
·
994 Posts
Cut Social Security and Medicare out. How do old people work their entire lives and not save up enough to live independently in retirement?
 

·
Registered
Joined
·
10,665 Posts
Does this mean that there is no money for Universal Basic Income?
 

·
Registered
Joined
·
2,996 Posts
I think one thing that we all can agree on is that we are going to stay on our current course in the near term. We are going to continue to print money and we are going to continue to spend. It's what we are used to doing.

Human nature being what it is, we'll ride the Titanic until it starts sinking. I'm hoping we'll avoid disaster by talking about it since when people talk about issues they tend to be aware of their existence. It was the same with Y2K.

A lot of people here comment but don't really offer any solutions. Being a put up or shut up type of guy, I'll post mine.....

I intend to keep my money moving and growing. I don't like assets in fixed locations since I think that there are too many vultures, thinking of ways to confiscate or capitalize on them. I like money making skills, competence in risky investments and working short term jobs that develop my skillsets. I intend to expand into other areas but I understand that it takes five to ten years to become proficient so I'm being careful what I invest my time and energy into.

V.
 

·
Registered
Joined
·
2,996 Posts
Does this mean that there is no money for Universal Basic Income?
I think Covid is being used as an experiment into one probable future. You'll see pundits mention that 20% of our workforce is going to be displaced by tech and AI. There is a lot of discussion as to what to do with them. Welfare is the solution that seems to be the most popular. A lot of businesses are simply writing off selling to these people.

We can't just write off this 20%. Doing so will give rise to problems ranging from depression to revolution.

V.
 

·
Registered
Joined
·
2,349 Posts
The same actions it would take to save a business. Until the budget is balanced and the deficit has been paid:
  1. An austerity program. Cut all non-critical expenditures. That will include a lot of expenditures and programs that many believe are "critical".
  2. Increase revenue. Taxes will have to go up (corporate and personal). Additional revenue generated from the tax increase will have to be applied to paying down the budget by statute.
  3. A "Balanced Budget" constitutional amendment to prevent future lawmakers from doing it in the future.

What won't work:
  1. Not taking action or giving up.
  2. Leaving it to the generations that follow.
I agree with most of your points here but no one in Washington has the stomach for cutting the fat. Moreover, the citizenry has become drunk on easy money and numbers on paper to the point where no politician can run on an austerity platform and ever hope to get elected. Your points are valid but nothing will get done until people start to experience some real economic pain. I’d love to be wrong, but we’re in too deep.
 

·
Registered
Joined
·
24,974 Posts
FED is going to destroy the dollar -

Committing to keeping interest rates close to zero - means the FED will have no choice except to monetize all new treasury debt -

They are buying $120 billion a month right now already - an amount that just a few years ago would have been off the chart emergency action - now it is just normal business - if they stop interest rates will spike or the treasury will have a failed bond auction.

Just imagine - which would we worse?

The treasury wants to sell $25 billion worth of T-bills

1. They only have $15 billion worth of buyers.

2. Rates spike from .1% to 4% in order to get them all sold.

Either of these happen and UST will start being dumped like crazy - it will guarantee a collapse of the US economy.

FED can't let either of these happen - so they will buy them - this enables congress to spend money on everything - what use to be called the bond vigilantes are all dead.

The combo of a government hell bent on spending trillions more than they have combined with a FED that is backed into a corner is going to cause the dollar to come under pressure - has to - what investor wants to buy bonds at such low rates you are not even keeping up with inflation?
 
  • Like
Reactions: Westexas

·
tabula rasa
Joined
·
484 Posts
Rome. Late Republic. You’re watching the condensed version. Didn’t take us long at all to squander the greatest nation the world has ever seen. Makes me want to puke.
 
61 - 80 of 131 Posts
Top