Great Analogy of the US National Debt

It must be admitted that there is fundamentally a lack of a "spending" plan but there is also a lack of a "taxing" plan as well. There has to be a balance between how much taxation should be imposed as well as how much spending there should be. It's not an "either or" proposition but instead its a "both" proposition. A balanced budget is the minimum requirement today but a surplus budget is what the real necessity is.

In short, how much taxation can be imposed that will pay for the necessary expendtures plus generate excess revenues to pay off prior deficit spending. The limit on taxation is inherent and cannot exceed a reasonable amount and still has to generate a surplus in revenues.

Germany was mentioned earlier as it imposes a 40% tax on the German People. As I noted the taxation imposed on Americans is already 35%. Many States, which also impose a part of this 35% tax are demanding more taxation to meet expendatures. If we use "Germany" as a metric of taxation then we have 5% in additional taxation we can impose but that has to be split between both the State and Federal government and both the State and Federal government spending would be limited by that amount.

Of course we can also go higher than 40% in taxation to achieve a surplus to pay down the national debt but how much more? I already spend more money in taxes than I do for "shelter, food, transportation and energy" combined. Is funding of our government more important that having a roof over our head, food on the table, a means of transportation, and the energy we require daily? That is a serious question I would put forward for everyone. All things being equal how much of our income should go to pay for government? 35%, 40%, 50% or more? When does the government become more important than our own personal welfare?

 

Those "spending cuts" where hypothetical and only reflected about $200 billion in average cuts and tax increases per year over the next ten years. When we had trillion dollar annual deficits this proposal was laughable. Of course the "Tea Party" Republicans are idiots as well and as we've noted the problem is related to both Democrats and Republicans as both are refusing to address the problem which are deficits today and not issues 10 years down the road when perhaps none of them will even be in office. Obama is the President now at least through next February next year and at most is the president until 2016.

Obama's responsibility relates to his term in office and not the term in office of some future president. He has not proposed any solutions to the deficits and increases in the national debt that can be implemented while he is in office. Zero, Zip, None! This crap of "I can be completely irresponsible and leave this mess for a future president" is political BS. It happened under Bush and it's happening under Obama and, as a nation, we're worse off today because of both of them.

We need a president that states, "We're going to fix this on my shift" and Gary Johnson is the only presidential candidate stating that.

 

The "Romney/Ryan plan" fixes nothing just like "Obama's plan" fixes nothing. None of these promise a balanced budget in 2013 so the current $15.2 trillion national debt is going to continue to increase with these "plans" all depending on a future Congress and future President to fix the problem that the Republicans and Democrats have created and continue to make worse. What part of "it ain't gonna happen" under either plan do people fail to understand?

 

Except that as I demonstrated, the sources that show a 40% of GDP tax level show a ~25% tax level for the US. Using Germany as a metric would then give us over $2 trillion more in revenues.

But otherwise I certainly agree that there should be a balanced approach.

We took a record deficit in 1992 to a surplus by 2000 with a combination of tax cuts and limitation on spending increases. There is no reason why we cannot do the same today. Except for greed and partisanship.

Depends on your situation. A guy making $100 million can pay 50% without it putting a big harm on his personal welfare.

 

I agree. We need bigger compromises on spending and taxing.

But the "me" generation is more focused on me.

 

Even a modest $200 billion cut in spending coupled with an equivalent revenue increase would make a big dent in the deficits as the economy grows out the recession. Shoot I'd take that over nothing. But it takes two to tango and the Republicans refuse to compromise even that modest amount.

I agree Obama needs to be more agressive. But when the other side won't agree to even a modest tax increase, it's seems kind of silly to demand a bigger one.
We need a president that states, "We're going to fix this on my shift" and Gary Johnson is the only presidential candidate stating that.[/QUOTE]

 

There was never an offer or plan to reduce spending by the 'trillions'??

The Tea Party does not run the government nor sit in Congress or the Oval Office.

Taxes have not increased therefore Obama is a happy camper. Unless of course you can point to Obama's words in which he outlines a tax increase plan?

 

The Obama administration, in seeking $4 trillion in spending cuts in a debt limit deal, has put major changes to Social Security and Medicare on the table if Republicans agree to increased tax revenues.

http://news.yahoo.com/obama-puts-medicare-social-security-cuts-table-031442907.html

To the contrary. They can veto the budget with their representation in the House.

The debt ceiling extortion fiasco last year is a case in point.

WASHINGTON — President Barack Obama proposed tax increases on wealthy individuals and some corporations Monday, setting the stage for an ideological battle that won't be resolved until after the November election – if then.

Obama's proposed tax hikes put him at odds with the Republican presidential hopefuls. They have all called for tax packages that would lower taxes but possibly add to the federal deficit.

http://www.huffingtonpost.com/2012/02/13/obama-tax-increase-budget-plan_n_1273432.html

 

Things we need to recognize and accept are the US is lingering in an economic recession, the nation and states are deep in debt, 15%-20% of eligible Americans are under-employed or unemployed, population growth continues, and the US must operate in the global economy. There is NOTHING I just mentioned which indicates an increase in taxation or a reduction in government spending. If anything, I would bet on a reduction in taxation and an increase in government spending. The other variable to guess is how much time will the US remain in this condition? If the answer is two months then everyone can go out today and buy a home and new car and a steak dinner. If the answer is several years then people will be selling homes and buying used cars and eating oatmeal. So...what should a government do? Do we play political games and continue down the current path for the next decade...or...should government spending be increased by $2-$3 trillion or more in order to build stuff and put people to work?

 

IMO if a president or presidential candidate today says they have a plan to reduce debt or deficit spending, then I will call them a liar! The reason I say this is because IMO we cannot reduce deficit spending or debt without jeopardizing more damage to the economy.

I would prefer a president or candidate who tells us the truth! And that truth is that the USA is in deep (*)(*)(*)(*).

 

I believe we first must understand what is needed and how much it will cost then we design a tax revenue system to provide the funding. Of course this requires a careful economic balance. If we cannot know what type of government we demand, how can we know how much it will cost?

Regarding how much of our income should go to pay federal taxes, today every single US citizen's share of government spending is $11,290 per person! If over 1/2 of the taxpayers today cannot pay $11,290 per person per year then we are spending too much. We cannot have a 'prosperous' nation if over 1/2 don't pay their way and the other 1/2 are burdened with paying all taxes.

Seems to me we have two long term choices; We must collect more tax revenue which means we must find decent paying jobs for about 15-20 million Americans. Or, we must greatly reduce the government...

 

The "per person" cost of government is basically irrelevant because it includes minors and seniors that aren't earning income. The accurate measurement is on a per household basis as households have combined income. Currently the per household federal expendatures alone are in the $25,000 to $30,000 range and that doesn't include state spending that the taxpayers also have a liability to support.

Let us clarify again that neither the Republicans or Democrats are attempting to end the deficit spending and elimination of the national debt. We can point to both the Ryan budget and the Obama budget and both increase the national debt in 2013. Both propose a budget with about $800 billion in deficits for 2013 and neither reach a balanced budget within the next presidential term of office.

Congress managed to increase the national debt by about $7 trillion in four years so why can't they come up with $7 trillion worth of surplus revenues to pay that off in the next four years? They can't even come up with one dollar to reduce the national debt in four years!!!!

 

There must be a reason why "the US must operate in the global economy," they have resources we cannot obtain without trade. The most obvious one is oil. Eliminate dependency and eliminate that "must." If cheap disenfranchised labor is the resource that we must use, then the choice is either impost taxes to make their goods more expensive as ours or expect the people who can vote and do not want to live on oatmeal to want redistribution.

Government spending for things that require eminent domain and have long lasting economic benefits like the Hoover (*)(*)(*)(*) and TVA...is fine. Just spending to put people to work like CETA is not; Joseph Califano wanted to tag people at the beach and have CETA workers tell them when to leave to prevent skin cancer. My father was logging in Oregon at 14 for the WPA, before he went to Camp Lee Virginia and joined the Army and was punched in the stomach at 16 and made a drill instructor before Pearl Harbor; made for a great "Shining" but did not power cities.

An energy spending for major projects that hire here, makes here, and benefits us as massively over the years, yeah, that will help.

We cannot just spend government money to put people to work, they must build something that keeps giving.

Now if the Government built a solar manufacturing plant, with everything supplied to it, and distributed the power more cheaply than people buying on the open market, like say think of it as the benefits of a Hoover Dam or the TVA, people would scream socialism and communism.

What is our private industry going to build to compete with this:

http://en.wikipedia.org/wiki/Three_Gorges_Dam

Forget dams, what equivalent to that could private industry build? Unless you can use alchemy to do away with waste do not say nuke plants.

We are equal:
http://en.wikipedia.org/wiki/File:Countries_by_carbon_dioxide_emissions_world_map_deobfuscated.png

We are horrible:
http://en.wikipedia.org/wiki/File:CO2_per_capita_per_country.png

When we collapse, and more people are eating oatmeal, we will not be as horrible.

*****

"The other variable to guess is how much time will the US remain in this condition?"

The Republicans say, like just yesterday on the Foxy Blond Legs Channel's "On the Record w/ Greta Van Susteren," that after Obama is out everything will be fine, business is not hiring because they do not know what taxes they will pay or how much health care will cost. And lets not consider that if entitlement granny is thinking of selling the house or buying a new car, she will have to wait to see if she has an entitlement. And certainly do not consider that lowly worker is pondering that if he takes a higher paying dangerous job, or just works harder, there will not be an entitlement if he gets smushed by less regulations. Being safe is a two edged sword.

 

What this shows us is that no matter all of the political BS talk about the economy improving, fact is, the US economy remains so fragile that when impacted by government spending reductions or tax increases it will drop even further into the abyss. And, none of the politicians if we can get them to tell the truth, can point to anything today or in the future that is the impetus for significant economic improvement.

Today there is an article of Obama blaming Congress for unemployment and the poor economy, and one of the things Obama encourages Congress to do is some type of mortgage refinancing plan. For the life of me I cannot figure out what this will do to lower unemployment or grow the economy?? And any type of mortgage refinancing, unless it is a government giveaway program, requires the buyers to have good credit and a steady income which probably means few people will be served by this program. I've been saying for 2-3 years now all they need to do is let mortgage holders qualify for 50 to 100 year mortgages, not relieving any of the mortgage obligation, not taking anything from the banks, just lowering the monthly payments. But even this won't lower unemployment or grow the economy.

IMO the per person share of government costs is simply a metric which can be compared over the years to help understand the spending trends. Per capita trends tell a story but are not the whole story. But I maintain that if more than 1/2 of Americans cannot afford their fair share of government costs, then government costs are too high...

 

We must operate in a global marketplace because we can't consume ourselves into sustained prosperity. We need to import and export goods and services. We can't export unless we allow imports. If imports are cheaper etc. than domestic goods, if you apply tariffs on imports you will cause inflation. And IMO just because you tariff imports this does not mean domestic manufacturers will magically appear, meaning after applying tariffs we will have higher prices on goods and less choice of goods. The long term answer is the USA must operate and compete in the global marketplace. Until we can do this, I suspect all the problems we have today will continue.

If either party, or anyone for that matter, had legitimate ideas how to approach the US deficit spending, and debt, and unemployment, and job creation, etc. they would have placed it on the table and attained bragging rights! The private economy will create jobs and grow when IT wants to...not when government thinks it should. If government wishes to provide social welfare for everyone who cannot find a place in the private economy, this is government's decision to do so assuming they can get the taxpayers to support it. But all the talk about government creating jobs in the private sector is political BS.

We've simply reached the Peter Principle...this is the best we can do...we don't know how to do any better today...more time will give us more answers but more time is also our enemy...

 

I have heard it before. "We all must sacrifice for the common good" of an equitable distribution of the world wide economic pie slices, lowering living standards of the affluent to compete with peasants and lower castes. Applying tariffs on imports does not need to inflate anything if the sides trading have equitable living standards and are able to sustain it together, as if the other planet has not been opened to trade yet.

The private economy will create jobs and grow when it CAN...when the environment exists that government provides.

If We the People wish to provide social welfare for everyone who cannot find a place in the private economy, this is We the People's decision to do so, assuming the private economy has more satisfied taxpayers than non-payers to support it. All the talk about the private sector creating jobs (better than another's trading partner, shipping costs included) in the private sector is political BS too.

The debt (including private) is a direct result of trying to compete and maintain what cannot be maintained under the conditions.

Basically with "the Peter Principle...this is the best we can do...we don't know how to do any better today" you are saying that America and the West has been promoted beyond its level of ability. That is what the "liberals" have been saying all along.

Like when Jimmy Cotter Pin said when discussing Socialized Medicine that people are just going to have to accept that people die; everyone could not have the standard of alive that the rich get.

Now if Billions of Martians are discovered under the crust, and assuming we can establish trade, and their living standard is much lower than our planet's lowest, "We all must sacrifice for the common good," and trade ourselves down to a lower level.

The long term answer is the USA must operate and compete in the Solar marketplace, but not too fast.

Our minimum wage cannot be higher and compete with the Martians who have none, but hey, like you just said, "We all must sacrifice for the common good."

Might as well just tax the rich and redistribute their income and wealth so they are as low as a Martian equivalent, because "We all must sacrifice for the common good." Right?

“The report puts the average annual salary of the top three highest paid managers at China National Petroleum Corporation (CNPC) at 1.1 million yuan ($173,470), which is excessively high[.]“ http://www.chinahearsay.com/criticizing-executive-pay-the-chinese-way/

That would make sense, in competing in the Global marketplace, because none of them should be making more than our Top Executive Obama (what is Hu Jintao annual salary?)

 

The first thing we do after electing Mr. Johnson is start taking the debt payments out of Bush's and Obama's presidential pension.

 

Our government has not asked us to sacrifice for the common good nor have we done so. 40% of all federal expendatures are paid for with borrowing which imposes the sacrifice on our children and not upon us. This debt continues to grow so large that even our children will not be able afford the sacrifices that will be required.

Government doen't produce wealth but instead consumes wealth and prevents the growth of wealth by it's actions. When the government builds a road or a hydro-electric powerplant it has produced nothing but instead it has consumed the labor of the people and the commodities required for those projects. Yes, those projects may provide limited benefits to society but had those benefits been needed then private enterprise could have produced them. Mankind invests labor and the government merely consumes the fruits of those labors.

Tariffs on foreign commodities do not improve any economy. They are recepricated historically which reduces the economies of those nations involved. It is fair for all sovereign nations to impose the identical tariffs that other sovereign nations impose upon them and this is counter-productive to expanding the economies of the nations involved.

When we address the "social" problems in America we find that our government does not address them. We can use Social Security as a perfect example of this. In the 1930's under FDR our government identified a serious problem in that 1/2 of all individuals at "retirement" age had not accumulated enough personal assets to provide for their financial future in old age. That was the problem, a lack of personal assets, and the government did not address that. Instead under Social Security it addressed the symptom which was the lack of income because individuals didn't have personal wealth. In the 1960's, because the government didn't address the problem of a lack of personal wealth, a new problem was identified and that was that 1/2 of the individuals are retirement age didn't have the personal assets so that they could afford medical insurance when they retired which would have been resolved had FDR and Congress addressed the same problem in the 1930's. Once again Congress addressed the symptom which was a lack of income because people weren't accumulating personal wealth. Once again the Congress addressed the symptom by creating Medicare as opposed to addressing the problem which was a lack of personal wealth.

About 1/3rd of the US annual budget is being spent to address symptoms of the problem which is a lack of personal wealth. This is like having a leaking gas tank but instead of fixing the leak all we do is put more gasoline in the tank and paying for it with a credit card.

 

just a gentle reminder that,

deficits don't matter ~ Dick Cheney

 

Our government asks us to sacrifice for the common good of someone else every time it promotes one human making one dollar and another $7.25 for the same work, so the one HERE making the seven gets laid off; "ask not what your country can do for you, ask what you can do for [their] country."

We the People produce wealth but some insist we prevent the growth of our wealth. When the We the People build a road or a hydro-electric powerplant it has produced something, it has consumed the labor of the people and provided the means and power to move the commodities required for more progress and projects. Yes, those projects provide continuing benefits to society, but had those benefits been left to private enterprise they would never have produced them without a toll. Mankind invests labor (force times distance moved) and private enterprise merely consumes the fruits of that work. Private enterprise created pirates, and daddy had a still and uncle a race car, they never really kept all lanes of commerce open; excepting of course Rhett Butler, but that is the difference between a merchant fleet and a road cutting through the Ponderosa.

Yeah, private enterprise built a road, farmers with property lines right up to the centerline, the gubermint found out the hard way where the property line really was when they told my parents to move their mailbox and rock gardens to widen it, but, private enterprise never paved it; the government paid for the land they thought was theirs, and then paid to move the mailbox and gardens. Mostly though you go running a road through the Ponderosa and private enterprise is going to come up lacking.

Just got back from the beach, really nice, hot chicks all around and saw fish jumping, wouldn't have enjoyed it much if the hotels got their way and I had to pay a toll to play on their beach. Water a little warm for this time of year, but there is this big imaginary red spot of heat in the Midwest, kind of reminds me of Rick Perry praying for rain. Hundred year old fart who used to grow my Martin Gourds, who had as stack a calendars with temps and weather conditions filling a closet all the way from his childhood on the farm, seemed worried a couple of decades ago; no worries, simple physics, private enterprise can produce anything.

Both apply the exact same force both move the exact same mass, the deficit is caused by friction; one economy has more disposable and cheaper elbow grease. All Imposts did was make America. So your history is flawed, as it did not reduce the economy but made it. It was only when the trading partners have more equal elbow grease, their industrialization is equalized, that Imposts loose value as a revenue source.

You are not going to address the problem of a lack of personal wealth by making more disposable and cheaper elbow grease here. And, dagnabbit, isn't a history of a lack of personal wealth a PRIVATE enterprise problem? Since when could private enterprise force people to save up for seven lean ugly cows in Texas?

Okay fine, "About 1/3rd of the US annual budget is being spent to address symptoms of the problem which is a lack of personal wealth." A lack of Imposts is like having a leaky bearing, wanting cheaper disposable elbow grease, and US paying for the other guy to make a sealed bearing with a credit card.

 

The US should not have made the Louisiana Purchase, or bought Alaska for that matter, all that government money wasted on totally non-productive nothing.

 

Americans are never going to wake up. They simply don't want to undergo the terrible austerity that you are proposing! You ask why they still vote for Democrats and Republicans and not some wild Ron Paul "Slash and burn" libertarian? Because they simply cannot accept the austerity that "slash,burn and tax" libertarians would embrace with glee.