Might be some crony capitalism and political favoritism going on too. Sure feels like most of the pols in both parties are more interested in their well being than in ours. Aside from the discussion about the proper role of the federal gov't, they're doing a really bad job of effectively and efficiently spending out money.
1913 is the year that laid the groundwork for nearly all the problems we have to deal with today. The Federal government should be nearly debt free except in time of war or some great natural disaster. It's budget, the Federal governments that is, should be small and fully funded with the exception of what I mentioned above. The spending and debts of States and local governments are much more easily controlled by the people who both vote and are responsible for the repayment of the debts they allow to occur.
Surely you know the federal government is handing out free of charge billion$ in debt money to State and local governments around the nation. Five of our largest cities are near bankruptcy! Many smaller cities are near bankruptcy. ALL GOVERNMENTS in the USA are mismanaged! Either governments spend too much, or taxpayers refuse to fund the government they demand, or some of both. But at the core of all of this is our president and Congress who decide how much to spend even when there's no money in the checking account. Of course voters keep these same people in office so obviously voters are okay with the reckless and fiscally irresponsible spending...
I agree, the Federal government has run up the debt to more than $17 trillion dollars by taking in less than it spends, and as long as everyone is happy getting something for nothing the debt will only increase, and prices and wages will rise which provides the appearance of economic growth, manipulating the debt to be less than the gdp which allows government to claim it remains solvent, while reducing the solvency of the vast majority of working taxpayers, and increasing the need to fund government entitlement programs which buys politicians votes. As long as a majority of people feel they are getting more from government spending than they are paying in taxes, nothing will change. And as long as the wealthiest can become more wealthy even when paying more taxes, why should they care?
I dont get to point guns at people and make them give me money. the govt DOES do exactly that. That's what taxes are all about. if you don't believe me, don't pay yours and then try to EFFECTIVELY resist them when they come to arrest you. SEE what gets pointed at you (and FIRED at you, too). - - - Updated - - - they'll care when it falls on their heads. I did a John Galt over 30 years ago, and encourage everyone to do the same. I aint funding my enemies, any more than I can possibly arrange to avoid.
Actually, debt is caused by too much spending, too little tax revenue, or some of both. Debt versus GDP means what? GDP is a measure of the private sector which has almost nothing to do with government debt and spending. Debt and government spending has nothing to do with the wealthy or any other tax payer. Obviously no one cares about government spending and debt because voters keep the same people in office. The ONLY time people will care is when they need to pay their fair share...or for 50-100 million Americans any share at all...
Debt is an unpaid obligation. Government with the help of the Federal reserve has made debt the means by which we exist, perpetuating a worsening dilema situation necessitating inflation resulting from the devaluation our currency, which enhances the acceptance of growing debt. We borrow and spend a dollar today, and over time we are repaying that dollar with the equivalent of cents. GDP is a measure of spending. If the same amount of goods are produced and sold each year, but the price of the goods increases as a result of the currency being devalued, the GDP is showing growth, when in reality none has occurred. The problem is that VERY few persons could afford to pay their "fair share" of the cost of government from which they benefit, and a growing number are paying nothing at all, but receiving greater benefits as a result of the increasing debt government is acquiring. While the problems may be easily found by looking into our mirrors, the solutions require actions, and few persons are willing to give up something for nothing, so they continue to vote for those who will increase rather than decrease our debt as the means of providing even more.
Who is benefiting? Its not Joe Average. See, for example, Maniatis (2014, Does the State Benefit Labor? A Cross-Country Comparison of the Net Social Wage, Review of Radical Political Economics). This concludes: "Hence, in almost all advanced capitalist countries, the great bulk of this social spending (and especially the part which constitutes labor benefits or the gross social wage) necessarily comes from gross labor income, that is, from personal income taxes, social security contributions, and other personal and property taxes that are levied on labor. To the extent that indirect business taxes or consumption taxes are assumed to be levied on labor, they finance and usually exceed the remaining part of the gross social wage even in the advanced capitalist countries with more developed welfare states than the United States. Therefore, if we assume that indirect taxes are partly paid by labor, the net social wage is significantly negative in the United States (-6.0 per-cent to -7.5 percent of GDP over the entire postwar period) and from modestly negative to close to zero in other countries."
You said 'government has run up the debt to more than $17 trillion dollars by taking in less than it spends' with 'taking in less' being the action words. I was merely pointing out that over-spending no matter the income is an equal issue. It would be hard for me to imagine in today's political climate in which government will have a balanced budget...IMO they will always spend more than they have and seldom for emergency reasons. Government abuses debt because there is little punishment for doing so. Sure we pay an annual interest payment of ~$450 BILLION but the masses don't seem to care but they care immensely if they perceive something will be taken from them. Reducing deficit spending for many people is taking something from them...their personal needs trump the debt issue, and this is supported by tens of millions of Americans. Growth can also be measured in the cost of goods but the trick would be to decrease expenses to offset inflation to grow profits. Or have increased sales with increased expenses and the same profit. I can't accept GDP as a measure of government funding or government debt. IMO they are two separate entities which do their own thing. If I owe $12,380 each year to pay my 'fair share' of taxation, and I can't come up with the money, then someone else must support me. So someone else is receiving less cash in their pockets because I'm not paying my way. Would it make much difference if the number was smaller like $6,000 per year...probably not. Or even $3000 per year! I know what my personal footprint is and except for roads, airports, etc. which benefit everyone, I know I'm not demanding much from my government...in fact it's even surprising to me that we can operate the USA on $12,380 per person...perhaps it should be $20K per person but who would pay the increase and how would it effect the economy? In the last few years we've added $10 trillion in debt. So our economy is actually $10 trillion more than it should be on it's own merits. This has forced inflation while the earning potential has not grown for many to offset inflation. We're living in a false economy and IMO cannot be sustained...
Total state and local government debt is larger than the Federal government debt. So much for the ability of people to control spending at any level of government.
that depends upon whom you call "joe average", does it not? 50 Million americans qualify for food stamps, and that "line" is WAY below middle class, dude. Middle class is 100k+ per year per household, and that leaves out half of the US population. 50k per year, gross, per adult is NOTHING anymore. Due to inflation, it's the same as 6k was back in 1970. $3 lousy per hour. that was nothing special back then, just twice minimum wage. Like $15 an hour today is nothing. Slow starvation.
The analysis was straight forward and focused on labour. Welfare state redistribution is largely illusionary in the US, as shown by the low social wage. So who is really benefiting from the expenditure?
It's a matter of perception. People don't see government spending coming directly out of their own pockets. And a lot of State and local spending occurs as a result of Federal mandates tied to the distribution/redistribution of tax revenues and borrowed money made available by the Federal government to individual local and State governments the repayment of which is owed by the total population. As long as debts can be accumulated without the necessity of repayment, with the exception of interest, debt will grow larger, with the result being a dilemma in which the worst solution increasingly becomes the most desirable solution, making a bad situation worse but one which the critical point can be put off for a future generation to HAVE to solve.
That's cuz almost half of the people do not pay federal income taxes to the IRS. Most folks have no problem spending someone else's money, especially if it's to their benefit.
That fact is a sad commentary on income distribution in the United States. PS- who else do people pay federal income tax to?
Nice try. Most state and local debt problems are from decades of deliberately unfunded pension obligations which the Federal government had absolutely nothing to do with. In fact, state and municipal workers are excluded from Social Security and Medicare. It is a matter of state's rights, or state incompetence, your choice. States and municipalities have accumulated these massive debts all on their own, despite massive infusions of Federal spending for everything else. They deliberately chose to not pay for future pension obligations as they accrued because that was in the future and the future is far away. Now that the future has arrived and they need to pay up they are suddenly in a panic, like they never saw it coming or its is somehow unfair or the Federal governments fault? Get a grip, and pay up you deadbeats.
It's a even sadder commentary on the tax code that so many people have no skin in the game, and what's worse so many are even getting more money back than they paid in. And the saddest part is that their kids and grandkids will end up paying the bill. The current lack of fiscal discipline is gong to cost future generations big time, but the left doesn't seem to care.
You have to start somewhere, and what I'm trying to get across is that the Federal goverment should be removed as a source from which money flows to fund State and local spending, not as loans which must be repaid by the recipient, but as loans which both the providers and the recipients are made responsible for repayment.
Fine with me since where I live we receive less from the Federal government than we pay in. If Federal government transfers to state and local governments were eliminated along with the taxes to pay for them my state would actually have more money to get public works accomplished. The people here are not afraid to tax themselves to pay for the things they want their state and local government to do. I am not so sure about the red states, some of which get $2-3 from the Federal government for every dollar they pay in. Given the rabid anti-tax sentiment in many of those states it is likely that many state and local governments would fall into debt default and bankruptcy. Schools would close, prisons would close, public agencies like police and fire departments would be shuttered, roads and bridges would fall apart. There would be a wholesale exodus of people and businesses seeking a more reasonable environment, further reducing tax revenues. The entire swath of red states could become one big Detroit, depopulated and unable to provide even a minimum of services to the people who live there. They would really become flyover states because flying would be the only way to get across them. Anyway, the reality of the situation is that the people in the red states have adopted political positions without actually considering the consequences of the actions that the people they elect propose to visit on them. They want tax cuts but want no cuts to Social Security or Medicare or Defence or Highways or farm subsidies or funding for state and local initiatives and no increase in the debt. They are entirely convinced that it is possible for all that to happen. In other words, they are operating entirely on faith, which is just fine for religion but faith cannot overcome the reality of economics no matter how fervent the belief.
When you use the term "Red States", to me it refers to the Left leaning States, and then you mention Detroit as an example so you need to make it clear which States you are referring to. You obviously recognize as fact that the Federal government redistributes tax revenues and debt, none of which originates from the Federal government, but instead from the taxpayers of each and every State. As it is most States and local governments are deeply in debt as is the Federal government, which puts us all on the brink of default and bankruptcy, put off by the Fed manipulating interest rates, and devaluing our currency. As a result the survival of each State and local government is totally dependent on the survival of the Federal government. Some of what you say could very well happen, and should. If an environment is incapable of supporting its' inhabitants, some or even all of them should move. As it is large cities have become overpopulated relative to the employment they can provide and a growing number of people have allowed themselves to depend on government support rather than relocate. Collectivist government has become the new religion promoted by the Left, who put all their faith in elected politicians to provide their needs and wants, and the reality of economics remains to be you cannot live beyond your means perpetually.
Taxes are not the answer, it's about SPENDING. I realize it's useless to say this to a liberal democrat, they all think the answer to everything is to take more money from the rich guys, as if the rich guys are just going to take it in the shorts year in and year out and docilely accept their fate to support everyone else. The answer is to grow the economy so you don't have to raise taxes. The answer is to stop the crony capitalism that both parties employ, the answer is to do a better job of SPENDING the revenue they get now to get better results. The answer is to reduce the size of the federal gov't, which anyone with half a brain can see is too big and unmanageable as it is, and instead delegate some functions down to the state level where those functions can be tailored to their needs better than a one size fits all that you get from the federal gov't.
I wonder what the 'real' cost of living might be today if this nation did not spend an extra $10 trillion in debt money during the past few years? I'm sure many of you will say $10 trillion in government debt spending did not effect inflation but I won't agree with you. Even at a personal level, a person earning $60K/year, with credit and loans, can commit to 5-10 times what they earn. So all of this debt money on cars, homes, jewelry, vacations, etc. is forcing inflation while the actual earned income is not growing as fast...it's no wonder to me why 100 million Americans live pay-check to pay-check. I'll suggest the biggest problem we have today is the political and economic impossibility of ever lowering our debt and spending...
