Being the world's reserve currency helps a lot towards inflating our debt. That and currency manipulation. Yes, we manipulate our currency just like China, Japan, and also Germany through the Euro. 400% debt to gdp ratio is uncharted. The U.K. Flirted with 250 when they were king of the hill but if brexit holds, that'll buy us a year or five of more risky borrowing and hollowing out of physical demand and productivity through abstract finance instruments nobody understands.
You don't understand what fungible means. I'm not proposing that we do this. I think we should raise taxes combined with across the board spending cuts so we can pay off the debt. Once that is done, the spending cuts stay in place and the taxes are lowered to reflect the new budget reality. I certainly don't want to replace entitlements with massive new government spending. Yes, if you eliminate the top two expenditures, the third biggest expenditure becomes number one. Guess what, if you then eliminate the military, the fourth biggest expenditure becomes number one. You have managed to describe an ordered list. Congratulations.
Because that number is based on a cost to government over potentially 80 years and you never count things like interest on borrowed money when you tabulate the cost of ANY other program yet you are doing so here in order to make it sound like a larger number. The vast majority of that 4-6 trillion dollar figure is VA benefits over potentially 80 years and interest paid on borrowed money. That's not honest. The reason for the dishonesty is because the actual cost paid for the Iraq and Afghanistan wars isn't significant enough to list by itself when you have a president who supports 1.4 trillion dollar deficits every year and cried like a b**** when Republicans forced ONLY 500 billion dollar deficits per year. If you factor in interest and related costs to the ridiculous deficits Obama and the Democrats ran while literally doubling the national debt in only 8 years it would be absolutely ridiculous by comparison. Only if you weren't paying attention at all could you think that "total government spending" would mean "from the discretionary budget" The true name for those programs are "contributory entitlements", which I said earlier in this thread. They ARE entitlement programs and yes, the government does jack that money from us to pay for it. My point was that if you look at the ridiculous amount of money taken every year, it sure seems like we're not getting a lot back in return. You can equip and maintain the most powerful military in the world with 16% of government spending but what do you get for 60% that goes into entitlements? What has it cured? Is poverty no longer a thing? They do though, in order to make Social security and medicare constitutional they had to say that it was just a tax and it was meant for the general fund, not for only social security or medicare. The government has no responsibility to pay ANYTHING out to social security, if they did, then it would have been struck down as unconstitutional. Now sure, it would be political suicide to not pay out social security, but the point is that it would be legal. My point was that you keep tax levels the same and use the money more wisely. We're used to the current level, so why not just spend it in a manner that would actually help people? You still seem to be under the impression that money taken from your paycheck for social security has to go towards paying social security benefits, that couldn't be further from the truth.
Yes, cutting the SS and Medicare programs is a debate worth having. You want to temporarily continue to collect the Payroll tax, by transferring it to higher Income Tax to pay off the debt. And once that's done, what is the 34% of total revenue used for. You better cut that 34% tax at some point, or you are an out of control tax collector. And it better be in the bill that passes Congress stating what you will do with the 34% revenue once the debt is paid off. I'm asking for 5yr (or whatever) budget plan, here. Don't send me a Bill that doesn't legislate what the 34% must be used for...because that's what you are replacing...the FDR Act that ties the 34% to SS and Medicare. No, Medicare is only 15%, being paid by the Payroll Tax. Military is 16% total budget, but 25% of income tax. The Payroll Tax operates as a surplus to pay for the two programs FDR set up as a social contract with voters. So, we separate that out (which is what the FDR Act mandates), because it isn't part of creating the debt (yet). Removing those two programs and the revenue collected for them helps us see where the actual debt spending is coming from. FDR's Act didn't create debt. So look at what does. That's where the 25% Military comes from.
The Payroll tax and the two programs that it was set up to pay for do not contribute to the debt. Never have. They operate in a surplus. FDR didn't create debt with the Social Security Act. We know that, because he set up a separate fund and accounting to follow that money. So, if we remove SS/Medicare and the Payroll Tax that FDR set up, we can then look at the budget that does cause the debt (from income tax), and you see Military is 25% of that debt-creating budget. #1.
You should have read the post more closely, I never said that they created debt, I said that they were massive tax hikes that don't give anywhere near as much benefit to society as they should given how incredibly much is paid into it. That money can however be used to completely eliminate the debt since that money is just another tax to be used for the general fund.....you know, the ONLY reason it wasn't struck down as unconstitutional (just like Obamacare). The fund used for social security is just a general use fund and can be used for anything so it's fair to point out that between social security, unemployment, medicare, and medicaid you are chewing up 60% of the total amount that the government spends in a year. You can't separate those things just because there are taxes named after those programs, those taxes are just general fund taxes.....again the ONLY reason social security wasn't struck down when FDR passed it....much like many FDR plans were struck down for being unconstitutional.
And just to play this line of logic out a bit further, you're saying that if there was a payroll tax entitled "military" that went into the general fund and the military budget stayed at the same level or was even increased but stayed just under the level that they took from payroll taxes then it would no longer be contributing to the debt and would rather be contributing to paying down the debt? That's an interesting way of thinking about taxes.
No, I'm just making a point of how easy it is to follow that money...and that it creates a Surplus. I'm also agreeing with you the political suicide nature of removing FDRs retirement fund act to pay for something else entirely. The govt would be a much bigger out-of-control tax collector if we didn't remove that spending if we kept the 34% revenue....long term. And yes, I know about the constitutionality of the SS Act. And I know how the Trust Fund works. Other general funds can borrow from it at will of Congress. And congress is not required to make payments to us...blah blah blah. Separating out the FDR Payroll Tax and FDR Programs from the equation is something I insist upon, because if you don't, you better tell me what you intend to spend that 34% on...both shortterm (debt??) and longterm. And in any longterm discussion of how to spend that money, I operate by viewing that money is off budget until you budget it. By removing it, we see where the real debt creators are.
Everyone needs to understand the scale of the problem here. Doing this would already require MASSIVE spending cuts, and still take...decades. We need massive cuts just to get the budget balanced, then even more massive cuts after that to begin paying off the debt. And paying the debt off will already take a couple decades. As bad as that sounds, the problem will only get increasingly worse over time. The problem with this is that the best way to fix the problem is probably to grow out of it. Tax increases are growth inhibitors. What we should be focused on, like a laser beam, is trying to get to 4% GDP growth. Anything that increases spending without a corresponding increase in GDP should be discarded. Almost the sole focus of government should become economic growth. Without the money coming in, it can't address the other issues. Failure to realize that basic fact is what put us in this situation to begin with.
The whole point is that those systems are eating up a ton of tax money and not producing very much....again, we equip and fund the most powerful military on the planet for a fraction of what we spend on those entitlement programs and what have we gotten from them? Is poverty no longer a problem? Has homelessness been eliminated? I mean, if you are going to eat up 60% of the total federal spending in the richest country on the planet.....shouldn't you have something to show for it?
SS and Medicaid, in fact almost all government spending, is discretionary. They don't have to pay any of it. The government spends money on things other than what it was collected for all the time. This is why there is no money in the supposed SS Trust Fund...it was spent as it came in. Perhaps one way to wake government up is if there were a class action lawsuit, or something, levied against the government indicating they need to recognize that the SS liabilities have already been paid for, and they need to address them without raising any additional taxes anywhere...since we've already paid the taxes to address this problem. The problem is, that's not what they used the money for. In the corporate world, this would be criminal behavior, subject to both extensive jail time and large civil penalties. In government, it's laughed off and ignored. Ironic, no? SS and Medicare revenue taken as payroll tax was 34% of total tax revenue ($1.1t) SS and Medicare spending last year was 38% of the budget ($1.44t) It is disingenuous to say the govt has 60% to play with, when 38% can't be stopped without losing 34% of the revenue. I'm all in favor of the debate on whether we should stop taking money from our income to put aside in trust funds, but if we do and subtract the spending from the budget, then (if my math is correct) the Military budget goes from 16% to 25% of the total budget.[/QUOTE]
True there might be a solution out there that everyone agrees but this seems like a very odd line of argument. I can easily propose that we look into tapping zero point energy which would provide us with unlimited energy so that we could resolve all of our problems. Of course based upon our current understanding of science it may be impossible to actually tap into zero point energy and even if theoretically was possible practical usage would still be hundreds of years away. There is nothing wrong with hoping for new novel solutions but really any practical solution has to be rooted in the here and now of the problem.
If we did, at least voters would more easily see how much a debt creator it is during war, versus the surplus years of peace. That's my accounting point. We can track FDRs money, because he did in fact set up an accounting system to track it from Payroll Tax to Trust Fund to spending...and allows for the general fund to borrow from that Trust Fund, due to surplus. btw: the paying down the debt part is Stupidmoniker's discussion, that I was continuing.
I think the best solution when it comes to tackling the debt would be across the board cuts. Cut literally every program by a certain percentage and don't lower taxes until the debt is gone. If you made them true cuts instead of merely cutting the level of increase which is a common tactic, then you can eliminate the debt fairly easily and fairly quickly even after Obama and the Democrats literally doubled it over the last 8 years. Other ideas like entitlement reform would be nice, but you don't even have to go to those extreme measures to make things right, you just need responsible adults in charge of the nations finances, something that hasn't happened in a LONG time.
No, it doesn't. We've just let that happen. The Constitution specifically says that any right not specifically enumerated in the Constitution is reserved for the states. All of the things put forward under this clause are NOT specifically enumerated, therefore any programs beyond those specifically enumerated should be the exception, not the rule. The main purposes of the Federal government are pretty basic: Foreign affairs, interstate issues, and providing for the common defense. That's it. And we did that for decades with no income tax at all. We'd have a lot less problems if the states had been left to manage most of what the federal government now spends money on. The more local programs get, the more effective they are. The federal government is too removed from most voters. A perfect example is local schools. Getting funding for any programs there is a real struggle. Why? Because all those affected by the spending have direct access to those requesting it, and to those then spending it. This forces efficiency and production. If you get money for something, and it doesn't happen or doesn't meet its goals, you've got some xplaining to do, directly to the people who gave you the money. None of this indicates in any way that the government needs to insert its pug nose into this. It should ONLY get involved in cases where there is some dispute between the above states, that they cannot resolve themselves. What they never envisioned, though, is how warped we would become, and how corrupt politics would become, to where we were spending massive amounts of money on programs that are really designed primarily to get politicians reelected. If they were truly trying to solve some of these problems, they'd be resolved, and/or lots of people would get fired when they weren't. Neither of the above happens. We spend massive amounts of money, we still have all of the problems that money is supposed to address, and no heads roll because of this.
The problem would be that even in war time, it would be such a small tax compared to the entitlement programs that they are used to getting jacked from their check that it would kill those arguments. Also, according to your logic, with a payroll tax, it wouldn't be creating any debt at all.
Correct. I understand this from a constitutional standpoint. I'm discussing the political social contract setup by FDR...as opposed to saying "financial contract" like a real retirement fund. And you do a good job of explaining how Congress cheats that New Deal by borrowing from it in exchange for govt securities. Point is: we are creating debt from other programs and blaming SS and Medicare as huge debt creators basically claiming FDR set it up with passing a bill that pays for it. No, he passed a Bill to pay for it...but that Act, it isn't a debt creator.
Those programs are blamed because they are spending so much money and providing so little benefit. The money spent on them doesn't have to be spent on them so you are stealing from things that actually do some good in order to fund a massive program that is highly inefficient. Again, I ask the same question, shouldn't we expect more from programs that account for over 60% of the total federal spending every single year? We spend more on those programs every single year than the total amount spent by the federal government in the 8 year Iraq war and the 13 year Afghanistan wars combined. We always hear about how expensive that was, yet the same people act like there's nothing wrong with spending more per year on entitlement programs that don't really work.
And even if you want to use the much higher number that includes interest on borrowed money (something we never attach to any other expense) and 80 years worth of VA costs for vets on top of the 8 year war in Iraq and 13 year war in Afghanistan, it's still less than we spend on those entitlement programs in 3 years.
