America on the road to bankruptcy?

[dark_isz]

Here's a graph of the tax rates since the 60's:

See how high the tax rate used to be? Especially on the top 1%? Then, notice how the tax rate on the elite-upper-class drops significantly when Reagan gets into office. The rate continues to decline through Bush #1's term. Then Clinton takes office and raises the tax rate for the richest-of-the-rich. Then Bush#2 takes office and the tax rates for the uber-pooper-rich gets cut again.

NOW-

Go back to the graph of US Debt from earlier.

See how the national debt was decreasing until Reagan took office? That's because we were generating more revenue due to the higher tax rates on the mega-richie-riches. See what happened to the national debt when Regan and Bush cut those tax rates? Yep, the Debt increased.

In summary, to pay down the debt, we need to raise taxes. History shows that raising taxes on the richest Americans is the most effective way to lower the amount of debt we carry.

 

[Cuba]

Here's a graph of the tax rates since the 60's:

See how high the tax rate used to be? Especially on the top 1%? Then, notice how the tax rate on the elite-upper-class drops significantly when Reagan gets into office. The rate continues to decline through Bush #1's term. Then Clinton takes office and raises the tax rate for the richest-of-the-rich. Then Bush#2 takes office and the tax rates for the uber-pooper-rich gets cut again.

NOW-

Go back to the graph of US Debt from earlier.

See how the national debt was decreasing until Reagan took office? That's because we were generating more revenue due to the higher tax rates on the mega-richie-riches. See what happened to the national debt when Regan and Bush cut those tax rates? Yep, the Debt increased.

In summary, to pay down the debt, we need to raise taxes. History shows that raising taxes on the richest Americans is the most effective way to lower the amount of debt we carry.

See how it's a vertical line for Obama? Explain how that is a good thing please. Specifically.

 

[Cuba]

So you think it's better that our money and debt is in control of a private corporation that has absolutely no oversight, and is the ultimate authority and not even the president can do anything to them?

The treasury department is supposed to be a treasury department, not a money printing department, as that's all they do. Congress is the elected, representative legislative body of the united states. You can bitch and moan all you want about them, but they are the ultimate authority and even they have no control over the FED.

I think the money owned by banks should be controlled by banks. There should be regulation, within reason, but a bank should be able to set it's own lending policies. You are of course fully aware that the Federal Reserve is comprised of a public/private entity that was a compromise between two competing philospohies on the subject, one that championed private control, and one that believed in government control. And of course you already know that the POTUS appoints the board of governors for the FED, which are then confirmed by the senate, right?

The treasury department are political appointees, just like those in the FED, not elected officials. The difference is the FED is controlling it's OWN assets. They are private property, not public. Geithner is currently attempting to bestow upon himself powers that are unconstitutional. He want's to control private industry. That is National Socialism. It's been done before. Don't forget his personal role in this financial crisis, when he was president of... the FED.

If the source of the problem was loose credit going to people that can't afford what they were buying, then tighten up the borrowing standards. Perhaps instead of the government forcing private banks to make high risk loans to the utterly uncreditworthy and then attacking them for doing so, they should have allowed private enterprise to make its own risk assesments. Don't forget how this started. Banks wouldn't make loans to poor people because they were extremely high risk of default. The government felt that this wasn't "fair" so they intervened.

 

[dark_isz]

See how it's a vertical line for Obama? Explain how that is a good thing please. Specifically.

You mean the Bailout II? Yeah, I'm not happy about the banks getting my tax money. But, what is the alternative? Let the banks, insurance companies, and US automakers all fail? Do you have any idea what that would do to the US economy? Worse yet, the world economy? If you don't, try Google. I don't have the time or inclination to explain it to you, seeing as how it's completely unrelated to the point I was making about raising taxes the top 1%.

Every time I make a point here, you turn around and ask "But what about (insert unrelated topic here)" without even addressing the factual information and logical argument I presented.

So, I guess you don't want to talk about how raising taxes on the richest 1% would help pay down our debt?

 

[Cuba]

You mean the Bailout II? Yeah, I'm not happy about the banks getting my tax money. But, what is the alternative? Let the banks, insurance companies, and US automakers all fail? Do you have any idea what that would do to the US economy? Worse yet, the world economy? If you don't, try Google. I don't have the time or inclination to explain it to you, seeing as how it's completely unrelated to the point I was making about raising taxes the top 1%.

Every time I make a point here, you turn around and ask "But what about (insert unrelated topic here)" without even addressing the factual information and logical argument I presented.

So, I guess you don't want to talk about how raising taxes on the richest 1% would help pay down our debt?

Raising taxes wasn't the topic here. Bankruptcy through over spending was. For the 15th time though, please explain how these unbelievable spending policies will work given the fact that virtually every economist on both sides of the fence is saying that they won't. Explain how printing money to spend your way out of a recession is a good plan.

My point is that you have no argument for why we should support Obama's plan, all you can do apparently is point out that everyone else was irresponsible too. Just on a magnitude far less than what we are seeing today. Sooooo... you support these policies why? Specifically? Blind faith?

 

[H3LR4ZR]

You mean the Bailout II? Yeah, I'm not happy about the banks getting my tax money. But, what is the alternative? Let the banks, insurance companies, and US automakers all fail? Do you have any idea what that would do to the US economy? Worse yet, the world economy? If you don't, try Google. I don't have the time or inclination to explain it to you, seeing as how it's completely unrelated to the point I was making about raising taxes the top 1%.

So, I guess you don't want to talk about how raising taxes on the richest 1% would help pay down our debt?

Capitalism is all about survival of the fittest.

The Banks who made bad loans go under. (mostly huge multinationals) They get replaced by smaller local banks and credit unions who have lended responsibly throughout the years and for the most part haven't take much if any tarp money.

Insurance Companies like AIG go under for making short sighted bets and get replaced by the likes of State Farm, Progressive, Geico, Farmers, et al; who have practiced smart (or at least smarter than AIG) business pracitices.

Car companies like GM, Chrysler and Ford file for bankruptcy, get a clean start and the ability to renegotiate all the bad deals they are tied up in. Looks like they are headed that way anyways despite the money that was given to them. Let them go down, and come back stronger than before. Yes it will hurt in the short term to let them go bankrupt, but will it hurt as bad as us shelling out billions and having to repay it back PLUS interested over the next 50 years? If anything when the economy comes back, the Japanese car makers will have to expand their american workforces to meet the demand.

 

[dark_isz]

Raising taxes wasn't the topic here. Bankruptcy through over spending was. For the 15th time though, please explain how these unbelievable spending policies will work given the fact that virtually every economist on both sides of the fence is saying that they won't. Explain how printing money to spend your way out of a recession is a good plan.

My point is that you have no argument for why we should support Obama's plan, all you can do apparently is point out that everyone else was irresponsible too. Just on a magnitude far less than what we are seeing today. Sooooo... you support these policies why? Specifically? Blind faith?

The bankruptcy of America, the original topic, can be averted by two methods. Yes, one way is to cut spending. But, as history shows us, no politician, Democrat or Republican, has historically been able to do that. Irresponsible government spending has been a part of our nation for as long as I can remember. In the 80's, Reagan's DoD bought toilet seats for $500 and hammers for $200. In 2006 Bush's DoD spent $998,798 to overnight 2 19-cent washers to Iraq. As long as politicians are spending someone else's money, it will be spent in the most effective way to line their buddies pockets. Don't get me started on no-bid contracts. Irresponsible spending is the status quo. Nothing, short of a full replacement of our government, is going to change that.

The other option for preventing America's bankruptcy is to increase revenue. The government can and has done that by increasing taxes and it worked, as shown in the graphs above.

So, we have 2 solutions. One of which is impossible without completely gutting the current government and replacing it with another.

The other solution, increasing revenues, is feasible and has been historically proven to work. To me, the choice is a no-brainer. That is my argument for how to prevent America's bankruptcy.



Contrary to what you believe, I am not in 100% agreement with all of Obama's policies. I believe in investing in our country's infrastructure. I believe the most important things to all people are good health and a good education. I believe we are obligated to look for alternative energy sources, and ways to curb our fossil fuel consumption. I believe we are responsible for the damage we are doing to the environment, and we should take action to repair current damage and prevent future damage. I believe government money should be spent, but spent wisely. I believe when the guy before you leaves a huge mess to clean up, you'll have to do things you don't want to while cleaning it up. Most importantly, I believe we, as a unified country, are much stronger than a country of self-centered individuals.

 

[wrightme43]

 

[wrightme43]

 

[wrightme43]

 

[wrightme43]

 

[wrightme43]

 

[wrightme43]

Here is a great big huge imporant one, but it is really meaningless unless you study on the number of retired persons receiving social security and medicare compared to the number of workers paying into, and adjust for inflation.

 

[wrightme43]

Picture the President, in 2000, going on TV and telling the American people: "We have a new 'truth-in-government policy, more transparency and openness', and that's why I make this address of 9 points - and add a picture-chart at the end:

1. When at the end of 1998 we told you we ran a $70 billion surplus in fiscal year 1998, and then again at the end of 1999 we told you we ran a $115 billion surplus in 1999, we forgot to also mention federal government debt increased $113 billion in 1998 and the debt total increased another $130 billion in 1999, despite collecting the highest general tax revenue (as a share of the economy) in history. If, instead of using fiscal years we use calendar years, then I must tell you that during calendar year 1999 (12/31/98 to 12/31/99) total debt increased $162 billion, an even higher amount than the $130 billion increase for the12-months ending 9/30/99 for Fiscal year 1999. So, we are moving right along. I'm sure you understand why politicians would rather brag about surpluses than to tell you they really ran operational deficits both years - - not a surplus, and they are using money that's not theirs. (by the way, as an up-date, we must tell you that we increased total debt again in Fiscal Year 2000 and in 2001, and even faster in 2002 - each to new record highs).
2. If you ask how could we claim a budget surplus of $185 billion (70+115) those two fiscal years when our debt increased $243 billion (113+130), I must come clean and tell you we are sorry you ask that pointed question as that forces me to admit that since debt increased $243 billion in those years this is proof the general government ran a $243 billion deficit in its operations - - not a surplus. That's a $428 billion swing from what we told you - - meaning, claims by political leaders of a hundreds of billions in surpluses was a purposeful mislead (or error) by $428 billion. Some say 'smoke and mirrors' - maybe they are right.
3. If now you ask from where did we magically get that $428 billion (equivalent to $1600 per man, woman and child in the nation) to cover those two operational deficit years, I must confess that since we wanted to spend more than we had we siphoned-off that amount from in-coming surpluses to various trust funds, including social security. You see, in those years various trust funds received from citizens $428 billion more in cash than needed for current trust fund spending - and, if a trust fund didn't spend it on intended trust fund programs then we arranged for the general government to spend it on other stuff. Yes, some could say it kind of sounds like one spending his grandmother's retirement savings account on himself.
4. One of the trust funds which we siphoned enough to clean it out was the Social Security Trust Fund - - from which we got over half of the $428 billion we needed to cover operational deficits. If you want to be specific, in just one year, 1999, we took out $109 billion from the social security trust fund - which was 17% more than we took out the prior year - - every penny spent on non-pension things. And, we got a lot from that the prior year, too. Other parts of the total came from other trust funds in FY 98, such as $34 billion of surpluses from the federal employees pension trust, $16 billion from the Federal Disability Trust fund, etc..We got even more in FY99, another $70 billion combined. In FY 1999 we siphoned off a total of $228 billion from all trust funds, of which 78% came out of the three just mentioned. Had we not consumed that $228 billion on general spending the 1999 deficit would have been $228 billion higher than stated. We recognize there are laws in every state against private sector firms siphoning-off their pension trust funds for non-pension spending for consumption and credit by companies, but we in government design things so we can play by different rules.
5. Yes, I know you might say that when you and your employer paid FICA social security taxes via payroll deductions last year you thought any surplus of such taxes over and above what the trust fund had to pay-out in pensions to current retirees would be kept safe and arms-length in free & clear marketable assets for future retirees in such a way that you workers (and your children) would not have to again pay those funds. I recognize it is possible you thought we would never raid trust funds for spending on other stuff, especially since we were telling you social security has big financial problems looming in the near future and we had been yelling 'save social security first'. But, I'm embarrassed to tell you that those trust fund surpluses were just too tempting - - and so we spent it all on non-pension stuff, and its all gone - - and that's how we 'save social security first.' If you ever want us to pay that back to the trusts then I must tell you that we don't have the money, its all gone, and you and your children will either have to pay it to us again in even higher taxes and/or let us borrow those amounts again creating even higher debt loads for your kids to cover. That extra FICA you are paying is in effect a hidden income tax to enable us to spend it on other stuff without counting that spending in the budget deficit calculations.
6. By the way, to come clean you should know that the amount we siphoned from the trust funds last year was not only a new all-time record high and 13% more than the prior year but it was 118% above 1991 - - and, we plan to siphon-off another new record high in following years. In fact, if our Treasury Department's data are correct, in the 7-year period 1991-99 we siphoned off and consumed $1.1 trillion from the trust funds (including $507 billion from the Social Security Trust, itself a 198% increase). That $1.1 trillion total from all trusts is about $4,100 per man, woman and child - or about $16,400 per family of 4. Additionally, projections show plans to siphon another $2.5 trillion (another $40,000 per family of 4) between now and the time the trust goes bust. I thought you might like to know that. (adding siphon amounts of the period prior to 1991 to the $1.1 trillion siphoned-off since 1991 shows to date the general government has siphoned-off and consumed (on other stuff) $2 trillion from those trusts - including from other trust funds (such as highway trust, railroad trust, unemployment trust, etc.). The net grand total siphoned-off to-date is now up to $4 trillion, as the first chart shows - which on a per-capita basis works out to $13,300 per man, woman and child - - or $53,000 per family of 4).
7. But, I want you to know that we put some non-marketable IOUs in the trusts fund box to cover our tracks of dipping in your cookie jar in case you look in there. Yes, I know we don't have any money to pay back those IOUs, in fact we don't even have a published plan to pay it back - - but one day (maybe, and hopefully after I have left political office) someone will raise tax rates - - or float some more debt on the backs of your kids to cover our butts for those IOUs - - and also cut benefits tremendously for your own retirement or just go broke, so as to cover up our tracks. And, guess what? The Federal Reserve Bank doesn't even recognize those internal IOUs as official debt because they are not marketable and because there is no official budget plan to pay it off. If you borrowed against your own (or your mother's) private pension and spent it all to pay for your current life-style what would be available come old age? Well, that's what we did to your trust funds). Any way, the real free & clear money you paid in for your future has been spent for other things, and any interest we think we should pay on those IOUs is not in cash but just a few more IOUs. Neat plan.
8. You have heard some call the trust fund a pay as you go system, when it is actually you pay more than the trust needs because we told you future retirees might need some surplus, but we spend all the surplus as fast as it comes on other stuff right now - - and let your kids figure it out later. We didn't think we need tell you that we never fund our trust funds with real arms-length marketable assets with fixed maturates and plan to repay, as we require of private sector pension funds by law. Meanwhile we are telling you the social security trust fund is going to be in trouble with the approaching baby boomers (and it is), with hopes you will agree to less benefits and higher FICA tax rates to create even more short-term surplus for our siphon activities, so we can do even more non-pension spending to make us look like we care, so you will keep us in office. We just can't say NO.
9. My last point of openness is: please don't mis-understand us when we told you we had a surplus of billions - - because 'now you know the whole story' - - but, what are you going to do about it?

I hope you appreciate our new attempt to be more open, and I hope you don't ask me why we didn't tell you the full story the first time or ask when we will stop siphoning out of the trust funds or pay-back that taken out to-date so we can really save social security, or ask if we in Washington would go to jail if we engaged in this pension fund siphon practice for private sector trust funds - - as such questions fall under our 'don't-ask-don't-tell policy."
Although the above is a satirical presentation, the numbers are real (right out of the U.S. Treasury Dept. published accounts, such as ftp://ftp.publicdebt.treas.gov/). You will note that I use the word "siphon-off" for spending trust fund surpluses for non-trust fund purposes, while Senator Ernest Hollings calls it "looting the trust", and Mr. Bartlett (formerly of Treasury) calls it "raiding the trust". Take your pick.

 

[wrightme43]

Sorry but the graph above is BS. Its not to be mean, its just that almost every bit of information coming from our elected officials is a lie.

 

[wrightme43]

 

[wrightme43]

WHAT IS THE CPI (Cost of Living Index)? And - WHAT IS IT NOT?
Here's what IS included in the official CPI.
The left chart shows the components of the official consumer cost of living index, and the percentage each represents of the total CPI.
Note food and housing account for 58% of the total.
However, it must be pointed out that the housing component shown in this chart significantly understates housing, since this is based on rental price changes - - and does not account for the huge inflation in new and existing home prices, as discussed below.
And, we have all heard it reported we pay more in taxes than we do for food and housing - - yet taxes are NOT included in the official CPI. Why not, you should ask.
We know property taxes have not gone down, nor our sales taxes, nor federal taxes, nor social security payroll taxes, nor excise taxes, nor _ _ _ .
Have you ever heard of a tax going down, and staying down?
If they go up, which they do, or if they add more taxes at federal, state, or local government levels, which they do - - that is inflation that should be in the CPI, so individuals and families better understand total inflation - - not just a manipulated inflation index.
Yet - - taxes are not included in the CPI computation, yet the cost of government is the largest component (43%) of the economy. Question: Why Not? This Inflation Report WILL NOT IGNORE that biggie!!

Notice the large housing component of the CPI in this chart. As mentioned above, this component is understated and significantly distorts the CPI reported to the public. Right? Well, some years ago, the way the housing component is measured was changed. It no longer tracks the inflation in housing prices (note below charts showing huge increases in house price inflation). This component now only tracks what it calls the rental value of owner-occupied housing which moves much slower - - especially recently as record low interest rates manipulated by the Federal Reserve have driven more renters to become home owners which lowered rental prices due to lower rental demand as it also drove up house price inflation. This altered measure of housing has nothing to do with housing inflation, so the CPI housing component significantly understates true inflation. Why would government wish to understate the CPI? One reason is to fool workers and social security recipients into accepting lower cost of living adjustments. Another is to fool investors into thinking the economy is better than it is and to allow the government to pay lower interest rates on its mounting debt. Should such manipulation be allowed ??​

 

[wrightme43]

In the 80's, Reagan's DoD bought toilet seats for $500 and hammers for $200. In 2006 Bush's DoD spent $998,798 to overnight 2 19-cent washers to Iraq. As long as politicians are spending someone else's money, it will be spent in the most effective way to line their buddies pockets


However neither one of them are personally responible for the screwups in the DOD. The idiots who did this should be punished.




"Nothing, short of a full replacement of our government, is going to change that."


This ^^^^^^^ This is exactly what I am advocating.
Government should be less than 20% of the entire economy. NOT The 75% we are moving towards WITH BOTH PARTIES OF EVIL SCUMBALLS.

Bush is not a evil genius, Obama is not a evil genius. They are both just power hungry politicians. Creeping government is destroying the ability of country to exist. The OLD are eating the youth.

I want to say that again. The OLD are eating the YOUNG.
Each one of us under the age of 40 will NOTHING from the dollars we are paying into SS, Medicare, Fica. Our children have no prayer of paying for us to retire. Our "greatest generation" has allowed a government to promise them something it can not deliver. The Boomers could work and pay for a smaller number of people to recieve benifits that could not be continued. On top of that the people who would benifit from it the most have run the government in a way that insures that SS, Medicare, Fica can never become solvent by spending any money over what is needed each to pay what is required instead of investing it.

Here is just one more map. The cities are controlling the government.

 

[wrightme43]

Jay on this I completly disagree with you.

"See how the national debt was decreasing until Reagan took office? That's because we were generating more revenue due to the higher tax rates on the mega-richie-riches. See what happened to the national debt when Regan and Bush cut those tax rates? Yep, the Debt increased.

In summary, to pay down the debt, we need to raise taxes. History shows that raising taxes on the richest Americans is the most effective way to lower the amount of debt we carry"


It has actually be proven by the IRS itself that the most effective way to increase tax revenue is to lower the tax rates.


On the note of taxing the hell out of the super rich.
I hope they leave. I hope they say screw this, I am taking my cookies and moving to Belize. I hope they move all of thier money off shore and just say screw these thieving lying bastiches. Taking someones money because you want it is theft.

If your hungry and you take a mans cheeseburger because he has two and you have none it is theft.

Taxes should quite simply be a universal sales tax. NO INCOME tax, NO Profit tax. ONLY tax money when it is spent.

Seriously they should leave and be like well now what are you going to do? how are you going to pay for it now?

That is the wrongest of wrong.

My friend has 6 cars, I dont get one cause he cant drive all of them at one time. They whole concept is so morally and mentally repugnant to me I just cant stand it. That concept is the begining of the end of the ideal of America. That it can even be allowed to pass with out huge amounts of scorn and ridicule really really bothers me.

I like you and I think you are cool, but man this is just wrong.

 

[H3LR4ZR]

please try to keep the discussion on topic. interesting debate so far.

btw..the only thing we know for sure is that the GAO (Government Accounting Office...its a nonpartisan organization as in not hand picked by any president) has concluded that it is not possible to grow our way out of our deficit.

So hopes to 'stimulate' the economy in order to increase tax revenue cannot work. The growth rate of the U.S. is simply not enough to keep pace with the growth of federal spending.

http://www.gao.gov/cghome/d071164cg.pdf

Edit:I'm also in favor of some sort of implementation of the "FairTax" style of national sales tax. It's believed to be more friendly towards exports business, however it will increase the burden on the bottom end of the tax bracket, even with the rebate system. That is one way in the right direction. Part 2 to this problem is getting rid of social security. I MIGHT be in favor of some sort of government 'encouragement' to save for retirement. Maybe a match fund for those who can't really afford to put much away each month. But i'm afraid they would make it too complicated and it would just get abused.