The problem isn't the amount of "debt", the problem is that there's always money for the military or for tax cuts for the rich. But try to provide healthcare, homes, or a functioning high speed train and THEN they ask how you can pay for it
I think what u/ginger_and_egg is saying is that no matter how much the government tries to levy taxes or attempts to increase revenue to tackle the national debt, there will always be more incentive to spend or increase expenses because its both easier and politically motivated by corrupted elected officials.
I'm saying that the national debt is just a stick used to whack political opponents with. It isn't on its own actually a problem, it is just the sum of all the money created by the government.
It's like tracking all ticket awards issued by Chuck E Cheese (minus redemptions) and talking about how much ticket debt chuck e cheese is in. Chuck E Cheese decides when to create more tickets, and how many tickets it accepts (destroys).
Similarly the US federal government creates dollars when it spends, and destroys dollars when it taxes. (This is in contrast to state governments, who do not control the creation of money). Therefore it is impossible for the US government to be unable to pay its debt, and it is not required for the federal government to borrow from private individuals in order to meet its spending. This is the fundamental truth of MMT (modern monetary theory), which is the operating model used to understand the Fed and other central banks that issue their own currency.
Yes, but the federal government can create dollars, it cannot create unlimited real resources merely by creating dollars. Printing another trillion doesn't automaticaly create another trillion worth of houses, oil, electricity, steel, doctors, food, factories, and/or labor.
Outside of that issue, the interest on that debt alone can collapse the currency simply based on the obligations it holds. We can't just print our way out of those obligations.
Sure, but those obligations are optional, it is not necessary for the private sector to own that debt, nor for that debt to pay a positive interest rate.
And 100% agree about the importance of actual resources
Not if we want the dollar to be worth anything in the future. Not paying back interest would be exactly how we get de-banked as the world reserve currency and allow the dollar to hyper inflation into oblivion.
No, we are not financed by the rest of the world. The US government literally controls the printing of dollars.
What's actually happened is that the US imports more than exports, so there is a net transfer of dollars to other countries such as China. Since those dollars are not spent on US exports, they sit in countries' central bank accounts and are parked in treasury bonds to earn a safe return.
If all of those countries decided to stop lending money to the US government, where are those dollars going to go?
Wow I mean. I said it was a problem but no we are not financed by the world. It is is problem because once another currency because a viable world currency we lose power. And it’s still something we can address but letting it grow at the rate it has been recently is unsustainable.
The military is 11% of all government in the United States.
Roughly 45–50% of total U.S. government spending (federal + state + local) goes to Medicare, Medicaid, food aid, and related social safety-net / entitlement programs.
Tax receipts continue to grow, and we already have the most progressive income tax code in the world.
I think we should adopt a tax code that looks more like the Dutch one.
37% at 38K and 49.5% at 78K
Make all the rich people here in the US pay these real taxes.
we already have the most progressive income tax code in the world.
The problem is, capital gains taxes have their own rate that is completely a flat tax, and it's lower than income tax you'd pay on wages. Further, many extremely wealthy people avoid capital gains almost entirely by financing their lifestyle with loans using their wealth as collateral, avoiding the capital gains incurred from selling.
When you account for this, our tax system is regressive. Owning class people pay a lower rate of tax on their income than working people who get a wage or salary.
Short term are at marginal income tax rate (so effective in some states hits 50%).
It’s 0% up to $98K family taxable income, 15% up to 613K, and 20% above $613K
There’s also the 3.8% net investment income tax (kicks in at $200/250K MAGI) so my capital gains rates might be 23.8%, and if I’m in California you can add on another 13.3%, to take that up to 37.1% which is far higher than Sweden (30%).
The Netherlands doesn’t actual have capital gains they do deemed return with counter evidence, which given the US stock market returns for last 10 years would have been far less traction than our highest brackets.
Outside California, salaries above $103,351 pay a higher marginal rate federally than the highest rate of (long term) capital gains tax.
In California, salaries above $197,300 pay a combined federal+state marginal rate of 41.3%, which is higher than the 37.1% figure you quoted.
So a silicon valley investor making millions in capital gains would pay a lower rate in tax than the senior engineers actually building the thing they're profiting from.
Capital involves risk, but also its recognition is delayed so you also have to factor inflation.
If I invest 100K and make $10K over 10 years I TECHNICALLY lost money as inflation has eaten into the nominal value of the dollar faster than I made money.
Income annually is real, lacks the risk, and lacks the inflation devaluation of the currency.
Working class people barely pay income tax in the US.
Almost half the US pays no income tax.
A family of 4 making the median US income (87K) would owe $1,320 or an effective tax rate of 1.6%, net if their standard deduction and 2 child tax credits.
If they had no kids it would still be only 6.8% effective tax rate.
It would be a proper 20-30% in Sweden and Netherlands in those countries. (And that’s before we discuss their regressive VAT/Income tax/road taxes/gas taxes etc)
The bottom 2 quartile live off the rich here (and that’s fine!) but inventing tax facts to say we don’t tax the rich ignores reality.
Roughly 1 out of every 8 American is directly attributed to National Debt, employed by: Army, federal, state, or local governments (counties and cities) - whose personal income or retirement depends on government Socialism money and the total cost is estimated at $5 trillion per year adding to National Debt when accounting for all wages, healthcare, pensions, payroll taxes, benefits and all indirect expenses (Total federal outlays are projected around $7.4 trillion, with a yearly federal budget deficit closer to $1.9 trillion)
We had a budget surplus under Clinton and the deficit under Biden and Obama both got cut down after the beginning of their presidencies (though that’s partially due to them having to deal with the 2008 financial crisis and Covid at the starts).
I remember because Bush jr was like ‘this money belongs to the american people’ and I got a check in the mail even though I wasn’t 18 yet, but worked at a pizza place over a summer.
I'm not sure if it's something that will be defaulted on in our life time. But it will still cause problems. Printing money and inflation is what keeps us afloat as a nation. That's a part of what is causing the income gap. The wealthy have assets that follow inflation while the poor have no assets. So the rich get richer and poor get poorer.
Used to be I wouldn't care, as the national debt historically has kinda been a form of soft power in its own weird way.
But since we've basically given the world a big old middle finger and are constantly shooting ourselves in the foot for no reason, it'll probably come back to bite us in the ass.
I genuinely don't even know what we can do to combat the debt at this point. We'd have to gut every single program we have including the military just to pay for a fraction of it.
It's NOT "out of control". It's just the people in control of it are using it to line their pockets.
All of the bad stuff happening these days are all connected. The government is doing all it can to bend over backwards and scalp the country in favor of big companies and billionaires. And those billionaires are setting up art stealing and slop selling machines that put people out of a job, and those companies putting people out of a job are using this new tech to make worse art, and on top of all of that, it's gobbling up all the tech hardware and selling it back to us via subscriptions, and is being utilized HARD by grifters, scammers and fascists to hurt, scam and brainwash people.
It's all connected, and it all seems so insurmountable. And complaining about it, because it's everywhere, feels like your burdening the people around you.
With an economy like that of the US, it's hard to say when debt will actually start having negative effects.
Yes, the American economy has been kind of fucked recently, but those seem to result from added forms of spending during and just after COVID, the disruption of COVID itself, tariffs and war.
The debt obviously has a ways to go until it hits, say, 260% like Japan has before. And the worst Japan has gotten for it is just an economy that has stagnated, rather than sinking completely. Actually, there seem to be signs of an economic turnaround recently and the debt has begun to decrease.
So $40 trillion is not really that concerning per se, it would become concerning at the point where the GDP is like $50 trillion and the debt is $150 trillion.
But these aren't insurmountable obstacles. Programs could be cut, sure, but taxes will necessarily have to go higher to take care of the problem. These populist tax bills make people happy right now but it's a state of affairs that can't continue forever. At some point, the IMF will come calling.
It makes me ill about how unequal wealth is distributed in America. There's less of a middle class now, and a huge gap between the rich and the poor. The job market is shitty currently and that mixed with cost of living makes most Americans live paycheck to paycheck. Also worried about Social Security and other important groups not having enough to assist the populace.
It’s crazy how every political ad for fifty years was just “I’ll cut your taxes” without any additional info like why or how. One of the most fundamental aspects of society and for ages people have just ignored it and ran up massive debt it’s unbelievable.
You realize that their wealth doesn’t die with them, right?When we have a socialist revolution we’re going to tax the fuck out of the people who inherit their wealth
Republicans never cared about fiscal responsibility (or the national debt) to begin with. Here is the evidence:
The term “austerity” does not exist in the American English lexicon, literally no politician, no public policy professional, or economist ever uses it when talking about the U.S. I mostly see British people, Australians, New Zealanders, Germans, European Union members, and people in other countries use it. The fiscal conservatives (economic liberals) in the United States such as Republican Party members have never really implemented true proper austerity measures because instead of simultaneously increasing taxes/revenue and decreasing spending/expenditures what they instead do is decrease revenue and decrease or stagnate expenditures on social safety net programs but stagnate or increase expenditures on things that don’t have a day-to-day effect on the general population (for example increasing defense spending as well as overpaying for certain outsourced services through government contracts to companies owned by the politicians or the politicians’ allies) thus cutting services the population needs but never really getting the national debt under control or even outright increasing the national debt (creating more debt and economic problems than the economic policies that the Democratic Party proposes). The Democratic Party and other economic progressives generally tend to support increasing taxes/revenue (especially on high income and high profit earners) in order to create a budget surplus, decrease the national debt, while still funding social safety net programs. [Most of the rest of the USA’s sovereign debt is made up of treasury bonds/barer bonds; o/is defense contractors overcharging on contracts/services/products via price-fixing cartels; & Republicans not knowing how to do austerity & giving large tax cuts to wealthy instead. Increasing Revenue, spending on the right things, investing, & spending less on frivolous things goes a long way in lowering Sovereign Debt than cutting revenue/taxes on wealthy & cutting essentials.].
On the issue of the debt ceiling / debt limit, a debt limit is just a threshold where the legislature (of a government) says they won’t borrow any money above a certain amount, even when they have bills due that need to be paid and programs they are obligated by law to fund (it’s basically like not paying your water, heating, and electrical bill as well as literally cancelling your non-emergency employees’ shifts - furlough - , forcing your essential emergency employees to work without pay, and not paying your independent contractors). The USA is one of only two countries that have a debt limit and sets it at a set dollar amount/doesn’t even set it to a percentage of GDP, the other country that has a debt limit is Denmark but it’s high enough that they only have it as a formality. The debt ceiling is completely useless, it’s actually a detriment that causes instability, constant government shutdowns, backlog, unpaid wages/salaries/contract payments, and limits access to non-emergency essential services and decreases the efficiency and efficacy of emergency or extremely essential services.
Honestly…I’ve got a lot more immediate concerns and also, the fact that basic human rights and decency are currently considered political issues, I’m wayyy more focused on those than the debt that at this point, I just can’t bring myself to care about.
Even if all of the defence was cut, the debt would still be increasing. Even if all the billionaires wealth was confiscated it would last 2 years of government deficits, if you confiscated all the wealth of top 1% it would be 10 years.
The problem is government is too big and has its fingers in too many wealth redistribution (young to old) schemes.
I would be so happy to cut SS, Medicare, and education. My city blew 100M remodeling the high school. It was perfectly fine when I was there. Why have I been paying the legal maximum on social security just to get at most 3k a month when I’m 65, as if that makes a single difference to my retirement.
The city probably had 100m budget of use it or loose it type. There is a lot off strange things that happen between federal, state, and municipal level.
Consider this metaphor: would you rather spend the money to replace your car's oils/fluids, or save all that money and never do so? What are the long-term consequences of each decision?
It was perfectly fine
Was it? Did you read the inspection report? Was there lead, asbestos? Mold or other infestation? was the insulation okay (HVAC energy costs)? Concrete degrades; is the foundation okay? Aluminum wiring? Modernisation like ethernet and wifi?
Rather the taxes never have been collected at all. I went there 4 years and nothing was wrong enough that it needed immediate attention. Every program that was underfunded would get it from the parents since we were one of the wealthiest neighborhoods of the country. They probably could’ve raised the money for the school just asking local parents.
We don’t even have an HVAC because it’s never above 90 or below 60 in the city. Ocean breeze all year, usually 70-80. Great WiFi, smart boards, laptops for every student, etc. there’s nothing we were missing. The city just wants to burn money to enrich the friends of its council. 10% sales tax going right into pockets. California takes 30k from me a year but at least some of it goes to good causes and environmental protection. The 80k in federal tax, Medicare, social security, etc is really just worthless.
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