[Duramaxsky]

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 everything except raising taxes. It's been proven time and again to reduce revenue. We need to end welfare and put those people to work. We need to remove all people who don't belong here and not give them anything until they are gone. We can't keep giving some free money. We can't keep paying for illegal aliens needs. Let those who can but won't work die. Those with substance abuse problems get one shot at rehab then they are on their own and if they die too bad. Fear is a great motivator. When the illegal aliens are gone there will be jobs. Anything else is a waste of time.

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[Aurora]

FED is going to destroy the dollar

That is the only option given our current conditions. I can't imagine how they intend on hiding it, especially so when there are so many people watching out for it.

V.

 

[Jonesee]

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.

We are in far better condition than Greece, Italy, Spain and countless other countries. The rational approach is to address our deficit now rather than delay.

Poorly run businesses never want to change, until ownership is facing bankruptcy and the loss of their business. Then they institute any and every draconian strategy they can to save the business.

It is better to recognize issues and threats early then develop and institute plans to mitigate them.

 

[Jonesee]

I agree with everything except raising taxes. It's been proven time and again to reduce revenue. We need to end welfare and put those people to work. We need to remove all people who don't belong here and not give them anything until they are gone. We can't keep giving some free money. We can't keep paying for illegal aliens needs. Let those who can but won't work die. Those with substance abuse problems get one shot at rehab then they are on their own and if they die too bad. Fear is a great motivator. When the illegal aliens are gone there will be jobs. Anything else is a waste of time.

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A constitutional amendment will prevent lawmakers from frittering away increases in tax revenue.

As for social programs, helluva idea. Painful though. Take a deep breath, grit your teeth and admit that includes social security, Medicare, Medicade, and countless other social programs touching tens of millions of the population. Those will not be slashed to zero. Ongoing cuts and restructure will be necessary.

 

[DannyB]

We are still running about 800-900 thousand new unemployment claims per week. We're not fixing any debt problems anytime soon.

Watch this video. Danielle DiMartino Booth worked for Richard Fisher, Dallas Federal Reserve President, for many years. She is a Fed insider. For your stocks pay attention to about 4:00 minutes in. Then listen again at 15:30. FHA mortgage delinquencies at over 17%, greater than during the "Great Recession."

 

[rj1939]

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.

Absolutely........................Kung Flu seems to be being used to transition us into whatever comes next. MMT in practice? Digital Dollars?, the Fed has been working on that for a while.......

 

[Z71bill]

There are 3 basic types of spending -

So called "mandatory", "discretionary" and interest on the debt.

Mandatory is basically things that "must" be paid because of laws that were previously passed - like social security and Medicare / Medicaid, student loans and FDIC insurance - and a whole bunch of other things like government pensions and veterans disability and health care -

Discretionary is the military (except the hundreds of billions already committed to future programs) , foreign aid and education -

Interest on the debt is pretty straight forward.

If you add up all the mandatory spending it is already over 70% of the budget and when you are running trillion dollar deficits - like we are now and will for the next 10 years - you are not even covering mandatory spending with the taxes you collect.

Sure congress is a bunch of cowards - they put all of these programs like social security on auto pilot - so they did not have to vote on them every budget - and it will be extremely difficult (impossible) to cut them without blood being spilled -

But the idea we can "cut some fat" on the edges and increase taxes a little and get back to a balanced budget is just not real any more.

It will take pain and suffering - much higher taxes on everyone - cutting military spending, means testing social security - and kicking a lot of people off the government hammock.

As long as the federal gov can borrow at less than the rate of inflation none of these things are going to happen. As long as the FED decides to keep interest rate at zero and buy all the debt nobody else wants - it will not change.

 

[Z71bill]

Google FASAB Statement 56 - also called SFFAS 56

(Cut and pasted)

The Federal Accounting Standards Advisory Board (FASAB) has released Statement of Federal Financing Accounting Standards 56 (Standard 56); taking government accounting practices from laxly enforced reporting standards to a new benchmark entirely–expressly approved obfuscation of reporting and, in some cases, outright concealing financials.

The new guidance, “SFFAS 56 – CLASSIFIED ACTIVITIES” permits government agencies to “modify” public financial statements and move expenditures from one line item to another. It also expressly allows federal agencies to refrain from telling taxpayers if and when public financial statements have been altered.

You have to realize the current deficit is only what they are showing us - I am sure they have hundreds of billions - maybe much more being hidden from public view.

Just think the official accounting standard of our federal government is it is OK to publish fake numbers -

How can free people even vote without the understanding of what our true financial position is?

 

[mtidaflash]

Every business, corporation, and every working person from Jeff Bezos to somebody stocking shelves at Walmart starts paying 15% income tax. No exceptions and no deductions of any kind. Got 5 kids? Sorry, you pay the same percentage as somebody with none. Earned income credit also needs to go. Our tax codes are unmanageable.

 

[Westexas]

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.

Reminds me of the Roman Empire around 165 A.D.

 

[Aurora]

We are still running about 800-900 thousand new unemployment claims per week. We're not fixing any debt problems anytime soon.

Watch this video. Danielle DiMartino Booth worked for Richard Fisher, Dallas Federal Reserve President, for many years. She is a Fed insider. For your stocks pay attention to about 4:00 minutes in. Then listen again at 15:30. FHA mortgage delinquencies at over 17%, greater than during the "Great Recession."

First off, this video is put out by Kitco, which advocates buying gold. That alone gives a wise person pause........

Real estate? The problem with high real estate defaults is that there is a HORDE of people with money in their pockets, looking for an opportunity to buy in. People I personally know have money lined up, ranging from guys and gals with money from their parents to private equity.

Then, there are people who've realized that hard assets are a hedge against ANYTHING that's coming. It'll take a lot to bring down real estate. That's why real estate is screaming in spite of the delinquencies. A 20% drop in home prices will attract a lot of buyers.

It's shocking the amounts of money sloshing about. Any time that money (printed or otherwise) is injected into a system, the result will be inflation, especially when it's put into hard assets like real estate.

People have been doing all this for a long time and they're not going to change their ways anytime soon, probably not until disaster is staring them in the face. Are we really there yet ... or are we just going to kick the can down the road again?

Layoffs are a legitimate concern. Covid has done a good job of speeding up the implementation of technology and the trimming of staff. Some companies can't continue due to the amount of time the lockdowns have been in place. There is just nothing to work with.

Stock market; I'm very good a doing this. That's not bragging on my part, it's the result of a lifetime of study and practice. As proof, I'll offer up my performance during the covid drop. It's all a matter of public record on this forum. Here is my advice;....

Don't buy crap.

Speculative and garbage stocks are not for someone who doesn't like to gamble. Me, I love to gamble but most people don't.

Buy something going up. Volume drives technicals, earnings drive fundamentals. Points are taken off for liabilities. Learn to do this stuff for yourself - the basics are simple to learn.

The beauty of this approach is that if there is a drop, a good stock will snap back very quickly. Traders know about these stocks and will run to them when safety (or survival) is paramount.

Food for thought.

V.

 

[Dave Lively]

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

There is no way we can tax the rich out of this. But a broad based tax could work.

A VAT of about 5% with no exemptions would eliminate most of the systemic trillion dollar deficit. Everyone would pay from someone living on SNAP and other programs buying groceries to a billionaire buying a new private jet. Everyone would have some skin in the game. SS is funded by a similar flat tax and people have gotten used to it, they would get used to this too. And it should show up on the receipt so people see how much federal spending is costing them every time they buy anything.

This would have to be an addition to the current tax system, not a replacement. Ideally it would be designed to be increased or decreased as required based on the average deficit over the past 5 or 10 years. There would be some slow down in the economy but nothing like the problems we will eventually see if we do nothing.

Sadly, no way this will happen in the US. The right has a knee jerk reaction against any tax increase and the left would scream about its not being progressive.

 

[Z71bill]

There is no way we can tax the rich out of this. But a broad based tax could work.

A VAT of about 5% with no exemptions would eliminate most of the systemic trillion dollar deficit. Everyone would pay from someone living on SNAP and other programs buying groceries to a billionaire buying a new private jet. Everyone would have some skin in the game. SS is funded by a similar flat tax and people have gotten used to it, they would get used to this too. And it should show up on the receipt so people see how much federal spending is costing them every time they buy anything.

This would have to be an addition to the current tax system, not a replacement. Ideally it would be designed to be increased or decreased as required based on the average deficit over the past 5 or 10 years. There would be some slow down in the economy but nothing like the problems we will eventually see if we do nothing.

Sadly, no way this will happen in the US. The right has a knee jerk reaction against any tax increase and the left would scream about its not being progressive.

If Congress is spending $5 trillion and collecting $3.5 trillion in taxes - $1.5 trillion deficit.

If they pass a new tax that increases revenue by $1.75 trillion to $5.25 trillion -

Then Congress will figure out a way to spend $7 trillion. Leaving a deficit of $1.75 trillion.

Tax revenue has in general been growing - it was just over $1.6 trillion in 1997. Spending was almost the same with the deficit being only $25 billion.

Taxes have more than doubled -up 120% to $3.5 trillion (2019 before COVID-19)

Spending was $4.4 trillion up 170%.

You see the problem?

If a drug addict is behind on the rent - so you give him $1,000 so he can pay it would you be surprised to find out he spent the money on something other than rent?

Same thing with Congress-

Same thing with all the plans to save social security and Medicare.

You can’t use logic when dealing with politicians.

Giving these bastards a 5% VAT would be like giving a meth addict $1,000 and telling him to go get some rehab.

All it will end up being after 20 years is a 14% VAT tax will thousands of exemptions for some things / people and a 21% VAT tax on some things like private jets.

EDIT:
I almost forget - the reason Congress is like this is not just because they are a bunch of incompetent criminals - although they are that.

It is because that is what VOTERS WANT!

That is also what the big companies want too.

 

[JK-linux]

$3.1 trillion? Who cares? No nation intends to pay off their debt. The end result of debt, for nations, is war. Until then, spend away.

 

[Z71bill]

Every business, corporation, and every working person from Jeff Bezos to somebody stocking shelves at Walmart starts paying 15% income tax. No exceptions and no deductions of any kind. Got 5 kids? Sorry, you pay the same percentage as somebody with none. Earned income credit also needs to go. Our tax codes are unmanageable.

It is hard for me to "do the math" because I don't know how you are defining income - especially for business -

But as far as individuals are concerned - guys earning a pay check - are already paying 15.30% in FICA taxes if you include the employer share. That doesn't even include income taxes.

Plus really high income people are already paying more than 15%.

So unless I am missing something - your plan would reduce revenue compared to what we have now.

In gross overall terms - combine federal, state and local spending - the average person would need to pay over 40% of their income in taxes - more like 45% but it is hard to get really solid numbers.

If you want to just carve out federal my guess is taxes would need to be around 25% -

Combine that with elimination of the EIC - and that is going to absolutely crush the poor - and give really high earners a big tax cut.

 

[Z71bill]

$3.1 trillion? Who cares? No nation intends to pay off their debt. The end result of debt, for nations, is war. Until then, spend away.

I worry about my grandkids -

We have been borrowing from the future to boost our standard of living - and at some point people will need to reduce their standard of living so that it all evens out -

I guess if you live during the good times and are dead when the hard times come you may not care -

But again - I care about my grandkids future -

 

[engineer151515]

Obama care was in the works years before Obama came along. Pelosi is planning out President removal even before mentally declining Joe Biden has been elected.

My bet is the financial "reset" has been "wargamed", not as a method of paying down the debt, but as a method of re-setting the value of the dollar. These scenarios may have been studied for a decade or two. In fact, the abandonment of any fiscal reality may be a sign that the economic 'trigger" is very near. Getting what one can before you wake up with your dollar devalued.

The event of electronic currency may have made implementation of the "new dollar" very easy. Anything "paper " is old currency and worth 1/10 of the new dollar. 100 Trillion in national debt - suddenly it's 10 Trillion in new dollars.
Capital flight? Where are they going to go?

The time for measured, meaningful debt reduction is long past. Nobody had the political will when the problem was workable. Nobody has the political will now, when the kitchen fire has developed into a house fire and threatens to burn down the neighborhood too.

What is being analyzed and engineered now, is what will the world be like after the neighborhood has burned down.

 

[Doc Holliday]

Every business, corporation, and every working person from Jeff Bezos to somebody stocking shelves at Walmart starts paying 15% income tax. No exceptions and no deductions of any kind. Got 5 kids? Sorry, you pay the same percentage as somebody with none. Earned income credit also needs to go. Our tax codes are unmanageable.

The idea would work only if those who hold the purse strings would use the money responsibly.

We all know they won't, though. You could tax people at 100% and the gov't would still be in the hole, just like a teenager with their first credit card. You know what's going to happen.

"Whoa! Look at all this money coming in from everyone paying 15%...let's spend it like it's 2999! It's party time at Von Hayes place!"

 

[Jonesee]

I worry about my grandkids -

We have been borrowing from the future to boost our standard of living - and at some point people will need to reduce their standard of living so that it all evens out -

I guess if you live during the good times and are dead when the hard times come you may not care -

But again - I care about my grandkids future -

This is what drives me. The generations that follow the baby boomers will be the first to have a standard of living worse than the previous generation.

It isn't right or fair. We need to pay for our party not leave the tab for our kids and grandkids to pay. Sadly, too many here are fine with ducking their share.

 

[Z71bill]

Some of my favorites -

Where are we now? IMHO past good times create weak men and in the first stage of weak mean create hard times.

Without ever increasing debt the economy crashes.

​

Where are we now? Between bloat and budget cuts in most major programs.


The next three need to be looked at together - who matters when Congress passes or doesn't pass a law. Think we can vote our way out of this? Nope.

Sure sometimes voters want the same thing as elites and special interest groups - when they are the same the law will get passed - but the chance of anything being passed if special interest groups and elites are against it is slim to none.