U.S. National Debt Update

[AgeofKnowledge]

The non-partisan Congressional Budget Office (CBO) has released a new report on the national debt and it's all very very bad. Currently, the amount of federal debt is exactly 74 percent of the economy, and if measures aren’t taken to reign in the deficits, the CBO projects that by 2039 the U.S. will see a debt to GDP ratio of 106 percent which is a rate of debt growth expanding at an undeniably unsustainable rate.

CBO Study: The 2014 Long-Term Budget Outlook - CBO

Obama's response is that he wants to greatly increase individual income taxes on you while also expanding government spending simultaneously: http://www.budget.senate.gov/republ...?File_id=c9508367-109a-4229-b144-f7168e7a4089

The rapidly rising national debt and increased taxes will have a very negative impact on the U.S. economy the CBO warns which will injure a domestic labor market whose labor participation rate is in free fall already.

In less than two decades, all projected tax revenues will be consumed by two entitlement non-welfare programs that Americans paid into (e.g. Medicare and Social Security) and one welfare program (e.g. Medicaid). There will be no money left over to run the government, for any of the 82 other welfare programs currently dominate the federal budget, the military, or any other government expense whatsoever including even paying the interest on the national debt which is soon to exceed the amount of all U.S. military spending. Try to imagine that. The annual interest payments on the U.S. national debt will exceed all annual U.S. military spending which is presently 36.6% of all military spending in the entire world!

All federal government employees, all those who live off and benefit from government welfare, all those relying on entitlement programs, etc... are soon to face the reality. Soon, very soon, frantic fighting for tax dollars is about to begin on a level not seen since the Great Depression in the U.S..

GREECE!

China's response:

 

[Atwood]

Ah, The Entitlements.
IMHO:

The public has learned that it can vote itself money.

I think that the entitlement issue with Social Security can be handled by freezing the payments while inflation runs on, increasing the tax revenue figure. I think this is already being done. Then a little euthanasia can be thrown in.

One thing seems a big lie to me: the idea that overspending is a tax on our grandchildren. I think it is a tax on the current savers, who will find that their money is worth very little. The grandchildren won't have any trouble paying off debts which are inflated to nothing. Those who have savings will be the payers as their savings will be worth very little. I figure the baby-boomers will soon find that their investments & savings aren't worth a diddle. And those who hid gold under their mattresses will have it confiscated by the government, as under FDR.

 

[AgeofKnowledge]

The U.S. has an independent currency and therefore an option to monetize most of the national debt (e.g. replace debt liability with currency liability) which inflates the money supply resulting in inflation devaluing the principal of the remaining debt.

BUT, the resulting inflation would destabilize the economy bringing it to a crawl and result in another Great Depression while increasing interest rates and causing much of the world to begin dumping the dollar crashing the financial markets too.

I'm talking 1932-1933. The harm to the elderly on fixed incomes in our non-agrarian society would result in what can only be described as a senior citizen democide. The cost of essential goods and services would rise dramatically while medical care benefits were dramatically curtailed resulting in lowered life expectancies for the poor and greatly increasing the number of poor as our declining middle class downsized rapidly in a dramatic manner rather than the slow decline they are presently realizing.

The U.S. dollar would be dethroned as the world’s primary reserve currency and the Yuan could conceivably replace it. Such a development would be unprecedented in size and magnitude and the impact on Americans and the economy would be massive and severe.

It's for all of these reasons that the Fed has so far adopted a policy of low inflation (though they have planned to increase inflation in a limited way moving forward to help offset the mounting debt). Reversing this policy in favor of a policy of debt monetization and high inflation would be a radical departure in policy and practice. It would be the economic equivalent of a scorched earth policy for the vast majority of Americans.

I don't see the Fed willingly doing such a thing; however, the skyrocketing national debt is definitely going to bring a serious slowdown in the economy combined with higher taxes and a frantic desperate fight by all who live off the government for a shrinking piece of the pie. This will include everyone who lives off government from public employee unions, senior citizens, welfare recipients, etc... even corporations that are used to corporate welfare are going to be severely affected.

Imagine what such an economy will be like for newly graduating students who are presently the most indebted ever to enter the job market in the history of the U.S..

I don't see how the liberals can maintain their tax and spend ideology in the economic environment that's coming. Illegal aliens are going to take it on the chin as they become a seriously marginalized group in the rioting and fighting over a shrinking pie. These may be the very best years for them in the U.S. in our lifetime.

Since we're on a pure fiat currency, it's less likely that the government would reintroduce Executive Order 6102 which they did when the dollar was still on the gold standard to fight severe deflation (e.g. a decrease in the general price level of goods and services) which increases the real value of debt, impedes economic recovery, and can lead to a deflationary spiral; however, they might if the currency valuation situation warrants it.

This national debt escalation problem is serious and the consequences are already unavoidable. The car's going to crash unless exactly the correct reforms are actually implemented.

I know what needs to be done and I'm telling you they aren't going to do it. They are going to MICKEY MOUSE the situation with band aids. No politicians wants to tell a voting block that they can't have more government money and few have the competency and character to do what needs to be done.

Historically, from the fall of Rome to the fall of Greece, this situation has run it's course with everyone sticking their head in the sand (e.g. denial), engaging in escapism (e.g. fiddling while Rome burns), and playing politics (e.g. putting band aids on a dying patient) until the point at which it collapses. Then there's what can only been described as "hell to pay."

1. Can the problem be fixed? Yes.
2. Does it hurt to fix the problem? Somewhat, but the sooner you fix it the less it hurts. Understand that the problem should not have and never needed to exist to begin with.
3. Does it mean politicians have to admit they were wrong and reform what they did to what works? Absolutely, there's no other way.
4. Would it be unpopular and unpolitically correct to fix the problem? Yes, definitely.
5. Will they fix it before it gets much worse? No, because of #4.

Plan accordingly...

Ah, The Entitlements.
IMHO:

The public has learned that it can vote itself money.

I think that the entitlement issue with Social Security can be handled by freezing the payments while inflation runs on, increasing the tax revenue figure. I think this is already being done. Then a little euthanasia can be thrown in.

One thing seems a big lie to me: the idea that overspending is a tax on our grandchildren. I think it is a tax on the current savers, who will find that their money is worth very little. The grandchildren won't have any trouble paying off debts which are inflated to nothing. Those who have savings will be the payers as their savings will be worth very little. I figure the baby-boomers will soon find that their investments & savings aren't worth a diddle. And those who hid gold under their mattresses will have it confiscated by the government, as under FDR.

 

[JimJimmers]

Ageofknowledge: You seem to have been studying economics and politics for quite some time. In your opinion, would repealing the 16th amendment help force Congress to stop the wild spending? (I realize Congress would have to repeal it, I'm just putting out a scenario here.)

 

[Atwood]

Income Tax; 16th Amendment

would repealing the 16th amendment help force Congress to stop the wild spending? (I realize Congress would have to repeal it, I'm just putting out a scenario here.)

Stopping Income Tax is a virtual impossibility without replacing it, as it would mean that the federal govt would retract in size to such a small power, that most would not accept it. But a grave error was made by not restricting the size of the income tax.

IMHO:

Real Estate Tax should be abolished, as it is a claim by the govt to own all property, including Naboth's Vineyard.

Sales tax should be abolished as a restraint on trade & a promotion of black market.

Income Tax is a Biblical Tax. It is the only tax we should have, I mean a tax on one's "increase." As I recall Samuel so gravely warned the people that when they got a king, why the scoundrel would take 10 percent of your income!

Given the realities of modern life, income tax for all purposes except military, should be limited to a 10 percent tax total and the only tax, except import duties. The 10 percent limit would cover all levels of government (I am not sure how much state, local, & federal government should get out of the total 10 percent pie -- but that would be all they got, and they would be limited to spending what they collected).

Qualification of the above:

I would limit the percent restriction to the first million dollars per year a man earned. Above a million dollars, I am not averse to having a higher percent. And the million dollars should be adjustable for inflation. I also would allow property tax on property above a million dollars in value, adjustable for inflation. Also, the 10 percent restriction would not apply to retirement programs. In other words, forced savings for retirement, like Social Security, should be kept separate from the general budget & revenue. Social Security would be a mostly closed system run on an actuarial basis.

 

[SonInMe]

Cure for the debt...

spend less than you bring in.

I ain't no economist but its not that complicated.

 

[Jackson123]

[h=3]That is because,

1. 60 percent federal tax goes to Vatican See bellow.

60% of US tax revenue goes to The Vatican[/h]

Now, before The Great Slag-Off WASP commences read this. Then draw a logical and sensible conclusion.

One Evil: The Jesuits

Also;

On the most recent episode of Flow of Wisdom Radio, I had an opportunity to interview Mrs. Karen Hudes. Karen served as the Sr. Council for the World Bank for at least two decades. During her tenor at the World Bank she uncovers corruption and was then fired illegally.
During the interview, we discuss how the Jesuits and the Vatican is a core component to the corruption involving the World Bank and 60% of the U.S. tax revenue goes to the Vatican.

Another point she mentioned was Germany requested to receive their gold which is being held by the Federal Reserve and they denied Germany and told them they need to wait for seven years, which is an act of war. And because of that, Germany no longer shares its intelligence with the U.S.

She also brought up the fact that a nuclear bomb was ignited 600 miles off the coast of South Carolina several weeks ago and high-ranking officials were fired for going against orders to ignite the bomb on land that would have caused thousands of casualties on American soil.
http://www.gcnlive.com/CMS/index.ph...jesuit-and-vatican-ties-to-banking-corruption

And;

The Jesuits, like the Knights Templar before them, were created by the Illuminati to infiltrate and destabilise Catholicism. Both orders were suppressed: the Templars permanently and the Jesuits for a few decades. The Jesuits, by the time they were reinstated, had been purged of virtually all traces of the Illuminati, although it is worth pointing out that in more recent times French Jesuit Pierre Teilhard de Chardin, in his theories concerning the Omega Point and Noosphere, independently created ideas that are not far distant from the tenets of Illumination, the religion of the Illuminati.

Illumination: the Secret Religion - Illuminati Jesuits?



2. Federal reserve the one that print the money from paper is not belong to Us Government.

This institution print the money from paper not backup by anything and loan it to Government.
All they need is ink, computer, paper is only a cent and print it 20 dollar then people pay for the interest

That why tax is so high.

1. [h=3]Vatican behind banks, governments, global co's & your mortgage ...[/h]www.goldismoney2.com › ... › Beginner's Forum
   
   
   
   
   May 25, 2012 - 5 posts - ‎4 authors
   Untold Truth: Vatican is behind world's top banks, governments, global ... which have been confiscated belonging to real British subjects; and also of the ... and theirFederal Reserve bankers, which is controlled by the Vatican.
   
   
   
   1. [h=3]17a: dismantling the us federal reserve system - Personal ...[/h]www.mind-trek.com/reports/tl17a.htm
      
      
      
      
      
      President Woodrow Wilson's role; A license to steal - how fractional reserve ... to the bankers, signed the Federal Reserve Act legislation which sold our country ...
      
      
   
   
   

 

[AgeofKnowledge]

The answer is no. I do not see a supermajority of both houses passing the legislation required to nullify the Sixteenth Amendment followed by the president signing it into law or the required three-fourths of the states legislatures attending a Constitutional Convention and nullifying the Sixteenth Amendment in this economic and political environment dominated by liberal ideology. It's beyond the pale. And even if such a thing did occur, the Supreme Court would still have to allow it... something less likely moving forward as the Reagan appointed conservatives on the high court pass into history.

Article I, Section 8, Clause 1 of the United States Constitution is known as the Taxing and Spending Clause which gives the federal government of the United States its power of taxation stating:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States"

Note the last part. Article I, Section 9 of the Constitution states: "No capitation, or other direct Tax, shall be laid unless in Proportion to the Census or Enumeration."

Important considerations within the Constitution include requirements for the apportionment of direct taxes and the uniformity of indirect taxes, the origination of revenue bills within the House of Representatives, the disallowal of taxes on exports, the General Welfare requirement, the limitation on the release of funds from the treasury except as provided by law, and as you point out the apportionment exemption of the Sixteenth Amendment.

Conservative and libertarian advocates of a flat income tax system are the ones who usually argue for the repeal of the Sixteenth Amendment as they are the ones that would benefit from such a move. Liberals strongly oppose doing so as they are the ones who would be hurt by it.

It's important to understand that 400 Americans own about half of the nation's wealth. Income disparity is so bad in the U.S. that it's currently at a level not seen since 1928.

Source: U.S. income inequality, on rise for decades, is now highest since 1928 | Pew Research Center

Read: Trends in the Distribution of Household Income Between 1979 and 2007 - CBO
Read: http://eml.berkeley.edu/~saez/saez-UStopincomes-2012.pdf

This study made me chuckle (even though the topic is serious) because it was able to show that income disparity is worse today than in 1774: American Incomes 1774-1860

Now read these articles I wrote: Help Fix America First: Economy

So despite the propaganda of flat income tax advocates that a flat tax "makes everyone richer" the truth is that it makes the rich richer and the poor poorer (even if you close the loopholes that presently allow many of the wealthiest Americans to "pay less than their salaried secretaries" as Warren Buffet famously said by paying only a 15% capital gains tax and no income tax whatsoever), and that's the problem with it.

But what if there weren't many poor? Could you societally justify repealing the Sixteenth Amendment and implementing a flat tax sans-loopholes for the top 0.1%? Sure, you bet.

BUT since repealing the Sixteenth Amendment isn't going to reduce the number of poor and create a flat income tax that rewards the wealthy and hurts the poor in an environment in which most Americans are now poor and getting poorer, how do you reduce the number of poor? The answer is: YOU CREATE A STRONG DOMESTIC LABOR MARKET DOMINATED BY GOOD PAYING JOBS FOR THEM TO WORK AND THEN THEY ARE NOT POOR ANY LONGER!

Lol. Read: Income Inequality Is Another Disastrous Side Effect of “Free Trade” | Economy In Crisis

As you can see, reforming our trade policy is a necessary ingredient to accomplishing that. Let's put tariffs in their historical perspective. The founding fathers were committed to starting the U.S. federal government out on a sound financial basis with good credit and a regular, easily collected source of income. Customs duties (tariffs) on imported goods, as set by tariff rates, were the source of about 80-95% of all federal revenue up to 1860 and though declining markedly from 1900 represented in U.S. federal revenue until WWII. As of 2010, tariffs make up only 1.3% of the U.S. federal revenue.

Having just fought a war over taxation (among other things) the U.S. Congress wanted a reliable source of income that was relatively unobtrusive, brought in enough money to pay off the debt and pay for the relatively low cost federal government (then) and be relatively easy to collect. Tariffs met all these criteria. America was built on tariffs and rose to supremacy on the back of tariffs in the same way China presently is through tariffs, value added taxes (VATs), etc...

If you want to see a scholarly thesis on reforming trade, read 'Free Trade Doesn't Work: What Should Replace It and Why" by Ian Fletcher who compellingly argues for a flat tax on all imported goods and services into the United States. Would such a move increase inflation? Yes. Would such a move create good paying jobs for the domestic labor market all over the U.S. and reverse income disparity? Yes, especially if combined with a hard reduction in immigration. Would such a move dramatically increase revenue into the federal treasury from import taxes, income taxes (both income and corporate)? Yes.

Achieving economic success for most Americans requires a complete reversal of trade policy combined with reform in taxation, fiscal policy, political reform, immigration reform (e.g. reducing the number of immigrants to create more demand for domestic labor and increase their compensation), etc... etc... etc...

Pretty much the opposite of most of what we do today, in other words.

Ageofknowledge: You seem to have been studying economics and politics for quite some time. In your opinion, would repealing the 16th amendment help force Congress to stop the wild spending? (I realize Congress would have to repeal it, I'm just putting out a scenario here.)

 

[AgeofKnowledge]

Also relevant to this discussion is the topic of monopoly capitalism: Cornered: The New Monopoly Capitalism and the Economics of Destruction: Barry C. Lynn: 9780470928561: Amazon.com: Books

 

[AgeofKnowledge]

Wealth amassed by the richest 1% will overtake the amount owned by the rest of the people in the world, according to a study by charity group Oxfam: BBC News - Richest 1% to own more than rest of world, Oxfam says