Howdy, So, the U.S. national debt is currently at 34.15 trillion dollars. Just for your reference, it was 10 trillion in 2008, the last so called "financial crisis". Now it's 3 times worse, as it seems. But how about paying it off? What would that take and how would that look? Please submit your ideas and suggestions here. Thanks!
Step one would be to close loopholes in the tax system, simplify it, and broaden the tax base. Individuals using stocks to borrow money, so they don’t appear to have any income should be taxed for that utilization we also need to end under performing and duplicative programs and departments. Our company has implemented AI processes that have allowed us to save about 30% on labor cost through attrition healthcare is going to have to be addressed at some point as it is making up a larger and larger share of the national debt finally, we need to look at all spending across-the-board, any department that cannot account for money or fails. An audit should have that amount withheld from their budget the following year unfortunately, we only have two parties in this nation and one party believes we should make the middle-class and poor pay for it while the ultra wealthy get more tax breaks while the other party believes we should just ignore it in its entirety
Any discussion of paying off the debt has to start with a critical look at spending; I don't think any plan that tries to target specific programs/departments will get support. The "don't gore my sacred Ox" syndrome would set in. Across the board cuts and a government hiring freeze for starters. I would also split Social Security/unemployment out of the budget. These programs are funded by dedicated "taxes" that can only be used for those programs, and are designed to be self supporting. Put them in their own class and make them do what they were designed to do. Both Congress and the bureaucrats need to change their attitude about money and budgets. They need to take the attitude that every dime of money is taxpayer money and must be squeezed until they get 9 cents change. Unlikely to happen in our life times however. The President needs to veto any budget that is not at least neutral, ideally is 10% below revenue projections and any surplus must be used to pay down the debt. If Congress can't do that, they aren't taking care of our business and should not be paid. Bet that would get us a budget that includes paying down the debt, eh? Then and only then do we talk about increasing taxes.
The correct answer is “Never.” Politicians stay in office by giving free stuff to the voters in general and special breaks to those who buy their influence via campaign contributions. You can’t pay down the debt with tax increases. The politicians will only spend more if there is more on the slash fund. If the government raises taxes too high, it will push the economy into a recession which will make the debt worse. The option of running up the debt until the U.S. dollar is worthless is a possibility. Having studied such outcomes in history, you don’t want to go there. I am very much in favor of some national debt. Essentially risk free government bonds provide a floor for setting interest rates and a safe investment for “widows and orphans.” The trouble is the government is run by overaged, incompetent lunatics who are badly in need of term limits. Asking them to handle the nation’s fiscal policy responsibility is beyond their abilities.
I played a game called Democracy 4 as the USA with a debt of $36 trillion. It was nearly impossible to get the debt and budget under control at that level, and I wouldn't want to play with a higher debt than $36 trillion. Basically, I learned that the USA, in real life, is about to pass the threshold where we can't get out of it. The end result of a huge debt just doesn't make that possible. So, the only real question is what form the point of no return and the resulting collapse will take.
It's never going to be paid off entirely (and for various reasons, that wouldn't necessarily be an entirely bad thing), but it could, and probably should be reduced. The "simple" answer to that is the same it is for our household budgets - spend less and/or earn more. For a government, that would involve significant cuts to public spending and significant increase in tax take. The problem is that no politician is going to win on that kind of policy because people are generally selfish, greedy and politically short-sighted.
I just accidentally added much more debt to the USA when I was starting the game, and didn't realize it until I had to confront the national debt. Which was much larger than the actual real-life debt of the USA at the time that I played. I found it to be very difficult which is why now the the real-life debt of the USA is just a few billion dollars away from the hard times I experienced... well, let's just say I don't envy the jobs of the legislators who will have to deal with the real-life debt of the USA. It isn't a job for dopes and simpletons.
We don't have a choice. We either start paying the debt down, in serious amounts, or face the government equivalent of bankruptcy.
Well, it may be not that bad. Actually, it might be kind of nice. (c) The government bankruptcy, I mean.
Here's a relic of a government bankruptcy, a 5 million mark token in bass from Westphalia in Germany during the early 1920s. The value of the mark went to virtually zero, which was fertile political ground for guys like Adolph Hitler. Be careful what you wish for.
So what's your idea, raise taxes to pay off the $ 34 200 billion? That's 265 K USD per American taxpayer, mind you. But you already denied that. You also don't want hyperinflation. Well, you can't get out of water dry. You either raise taxes or you get hyperinflation. So, what is going to be? Also, what is a healthy national debt - 1 trillion, 5 trillion, 10 trillion?
A good portion of it is pensions, govt-backed securities and other ways that amount to citizens investing in their own nation. Its 'good' debt. The portion of it that is owed to foreign entities can be viewed as 'good' debt in the sense that its foreign entities investing in our nation. It can also be 'bad' as it affords those entities some influence over democracy... In both cases, its not so much the debt thats bad, as it is what we do with the money they invest. When we use it to study the effects of nonbinaryism on brine shrimp or send satelite guided missiles to blow up a tent wedding in the desert instead of rehabilitating our homeless veterens or replacing a collapsed sewer line, one might say we're squandering that investment and thus incurring bad debt.
The national debt doesn't need to be paid off, it just needs to be lower due to the interest we must pay on it, thus it is expressed as "Debt to GDP ratio". One serious problem is that unfunded spending is inflationary in a normal market - consumers bid up prices simply for paying higher than normal prices. The worst thing under Biden's debt load is him trying to federalize spending by creating a command economy: IOW: buy this, buy that, and we will subsidize your purchase to make up for you not wanting to buy it on your own. Rarely discussed is the "multiplier effect". This measures how every dollar you spent in an economy rotates through approximately 1.5 times in a healthy economy. (IMO: before it is taxed out of existence) We are at ~ 1.2 due to deficit spending on areas that create no private sector profits, only payroll taxes: green subsidies, rebates for you name it the gives you a $1000 to save a $20 in electricity or what ever, welfare, the list grows every day.
It is nor only "the interest" (a trillion a year, if I am not mistaken), you are aware you need to pay those borrowed trillions back, right?
Well how about cutting spending? First put social security and unemployment outside the federal budget. They are unique programs funded with dedicated taxes and should be self supporting. Their debt skews the numbers. Next, across the board cuts to minimize battles over what to cut. Next, put a fire under congress to pass a budget that includes paying off the debt. Any new costs need to include a funding source, not "general revenue". You want a bridge? How do you intend to pay for it? We hold the president accountable for the debt, give him(her) line item veto power.
It is a "money in / money out" system. It rises and falls. Right now the upward pressure is on due to high federal spending.
The only way to "broaden the tax base is to make lower income people pay Treasury department says "rich and ultra rich" pay a huge portion of taxes now - far more than their share of income. At the same time the lower 50% of earners pay little if any tax and some even get refundable tax credits - free money.
Its almost like they are manipulating their “income” by taking shares in their companies and then taking loans against them. The top 10% of Americans now hold 90% of the wealth — that means they should pay more. Or you can just make people that are struggling to buy food pay more so that they starve to death — that makes perfect sense!
Then how come I've never seen the debt decrease but only increase? They keep raising and raising the debt ceiling every year. Could that go forever?
The value of a dollar shrinks with inflation as the GDP swells, so technically Biden's inflation technically will make the debt relatively smaller in buying power.
How about less spending, and allowing the economy to grow so that we can get the debt to manageable level? The only way out of this mess is to have the economy grow faster so that the debt is less relative to the debt. Nothing gets better until the Democrats and Republicans slow the spending.
Not at the rate we are going. The Covid spending was too much, and then Biden and the Democrats, including Joe Mansion piled more on top of that. New York is no spending Covid money to buy debit cards for illegal aliens. I would call that a misappropriation of funds.
