Government

We are the richest country in the world, we can afford …

NO WE CAN’T

The United States is headed for a debt crisis. We cannot afford the promises already made to our citizens.

Every day we are digging a deeper hole for ourselves and woe be to us if (perhaps when) other countries conclude we can’t pay our debts and stop lending. Foreign countries currently hold over $6 trillion in US debt.

The deficit was bad enough before the Trump tax cuts, now it’s much worse. Amazingly, in light of our fiscal state there are calls from citizens and politicians for more government programs, expanded programs and benefits, more spending, more obligations, more liabilities.

Social Security trustees have been warning for decades that the longer the delay in making the program solvent, the more difficult and painful it will be to make the fix. The same holds true for Medicare. Their warnings have been ignored.

What the hell are people thinking?

Some will argue we should simply raise taxes on business like that has no serious consequences in a global economy.

Others say tax the rich, they don’t pay their fair share. Well, yes they do.

And even if we significantly raised taxes on whatever “wealthy” Americans may mean, they can’t carry the burden for the entire population.

The US has over $115 trillion in unfunded liabilities for promises already made. What are people thinking?

Before we talk about spending on anything new, wouldn’t it make sense to figure out how to get our deficits and debt to reasonable levels? Wouldn’t it make sense to make sure Social Security and Medicare are permanently solvent?

Wouldn’t it make sense to determine what we have to do with taxes to make all that happen BEFORE we talk about spending on new programs and the taxes needed to do that?

What are people thinking?

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4 replies »

  1. Many politicians, policy experts, economists and technocrats realize the path we are now on cannot be sustained and will likely end only after a crash of some kind.

    Once politicians and policy gurus leave office, they often become much more candid. An example are those former politicians who served on the Bowles-Simpson panel.

    But the political divide is now so deep among serving politicians that no compromise solutions of any sustaining importance can be reached.

    Because economies are so tightly intertwined, any large downturn in America’s economy, which is inevitable, will be part of a worldwide recession if not depression.

    We have borrowed the wealth of the future to pay for today’s spending. Eventually, the future will run out of money too.

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  2. It would be great if other countries stopped buying U.S. debt. Maybe then the Congress would cut spending. It needs to be cut to the bone. We only have a debt problem because, the government spends more than it takes in each year. The government needs to freeze spending for 5 years, then the economy would grow enough and tax receipts would balance spending. Even with the tax cuts, government revenues are higher this year than last year, proof we have a SPENDING problem, it has nothing to do with the tax cuts.

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    • The problem is the great majority of spending is on SS, Medicare, Medicaid and other social programs plus defense. Cutting other things means very little.

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  3. We are not “headed” to a debt crisis, we are there. A little debt at the national level must be permitted, but ask anybody with a mortgage or student loan if that is a good thing. Each one of us own over $66,312 for the federal debt as of this morning. http://www.usdebtclock.org/

    I don’t agree with all the tax cuts, nor in raising taxes, but new unfunded programs is going to make the day of reckoning even worse. Nobody paid attention to what happen to Greece only a few years ago.

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