the national economy

[Zacha341]

Detroit as sanctuary city? Wow.........

Look at the bright side from Miami thier next stop is in Detroit, Free entertainment, Ringling could not compete when it comes to a circus.

Illegal immigration is a big issue and effecting the states of Fl,Texas and California the most,the rest of the country is not really impacted by it directly and maybe it is hard to understand the billions being spent indirectly,Kinda like if you do not see it you are not effected by it.

[Honky Tonk]

Detroit as sanctuary city? Wow.........

I know Hamtramck is...

[Zacha341]

^^^ For their existing community priority-wise I'm certain [[and hope).

[Canadian Visitor]

Given that
-the U.S. has a $22T national debt or $269,113 of federal debt per family of four,
-we at least has to pay the interest on this debt,
-the federal debt is again about to rise at a $1T/year pace,
-we have a $621B annual trade deficit [[2018),
-we have to choose between higher taxes or higher deficits,
-new taxes can be income taxes, tariffs, tolls, fees...,
-Democrats, President Trump. and most Republicans are doing nothing to restrain spending or to increase taxes,
-signs abound that the recovery has peaked and a recession is brewing,
-and we are being entertained with campaign promises of free stuff costing more trillions,
there is the need for a thread to entertain thoughts and proposals to address our situation.

Lets get back to the start of this conversation as it has veered wildly off course.

There are a series of questions explicit and implicit here, I will break these down as follows:

How bad is it?
How much worse can we let it get [[higher debt) before big trouble?
What should we/could we do about it?

1) The answer is 'not good', but could be worse.

If one examines the debt to gdp charts for nations around the world, Japan is by far the worst, at 234% debt to GDP.

It has yet to implode economically, but it is stagnating, and will likely shrink in the years to come.

Worth noting here is the very high proportion of Japanese debt that is held domestically, which gives them a bit more breathing room than most.

That said, I would not seek to emulate their level of indebtedness nor would I be sure of any other developed nation pulling it off.

Look at the chart below, the US has the 12th highest debt to gdp in the world.

It is better than Greece [[which imploded), Italy [[which is wobbly) and Japan which is stable, if stagnating.

On the other hand its worse that most other developed countries and growing faster as well.

http://worldpopulationreview.com/cou...national-debt/
****

This leads us to

2) Its difficult to assess a particular tipping point, and I won't venture a specific prediction. However, if one assumes the tipping point for the U.S is somewhere between the Italian number and where Japan is.....

We might assume somewhere between 150% debt to GDP and 220% debt to GDP would be very problematic.

The question then becomes, how long before the numbers reach that level if nothing changes.

Currently the US is increasing debt to GDP at between 2-3 points per year.

If that trend held, the US would reach a danger zone in 11-28 years.

That, of course, assumes unending economic growth and the current pace, which seems unlikely.

A single year recession would accelerate the timeline by between 2-5 years.

Any which way you look at it, there is time to deal with the situation, though sooner would be better than later.

******

This brings us to #3) Solutions.

As a practical matter, the solutions can not be one-sided. A solution predicated solely on tax hikes would require profound tax hikes which would be destabilizing to the economy and not at all popular politically.

Neither can the solution be all spending reduction. Social security is not generous enough to take much out of it, de-insuring Americans who have medicare/medicaid isn't going to fly either.

The need is also there for infrastructure spending to rise, rather than decline.

That really leaves open to reduction the US military and a panoply of smaller programs ranging from agricultural subsides to corporate welfare to small social programs used by relatively few people.

There simply isn't enough money on the table there to achieve balance without greater tax revenue.

Actions on spending restraint:

- Flatline US military expenditures and phase them down to the same 2% of GDP the US would like to see its NATO allies achieve.

-Minimal US military layoffs, mostly positions eliminated by attrition and voluntary buyouts.

-Direct R&D spending to a drone-sub program, phasing out manned subs would save a bundle of cash.

-Consolidate US bases, eliminating the majority of them overseas and maintain only the strategically appropriate number in the United States itself.

-Cut spending on prisons by eliminating cash-bail and holding people not yet convicted based solely on the risk to the community.

-decriminalize simple drug possession, legalize marijuana [[federally)

-remove most federal crimes where laws overlap state laws needlessly.

-focus more on diversion for non-violent offenders, particularly 1st time offenders.

-reduce minimum and maximum sentences, and eliminate consecutive sentencing and charge-stacking.

-modestly, and with ample warning, raise the retirement age. Its currently rising to 67 over time, this should be increased to 69.

-ensure medicaid focuses on illness prevention/health promotion spending. Its cheaper to give someone addiction treatment that deal w/endless overdoses, its cheaper to help someone lose weight by surgery, medication, or even a gym membership than deal w/the health consequences of obesity and contraception is cheaper than abortion or unwanted pregnancies.

- eliminate most job training programs in favour of a tuition grants for any pre-existing training [[apprenticeship, certificate, college/university) for a profession proven to be in demand. Why duplicate existing programs, just help people afford what's already there.

Raising revenue:

- Legalize marijuana, tax it.
- National Sales Tax of 5%, would not applies to groceries or residential rent and would be refundable, in full, to people earning less than $30,000USD
- Eliminate the mortgage interest deduction, but allow people who have already bought on the basis of that deduction to be grandfathered.
- Eliminate a variety of other personal and corporate deductions but offset this by raising the basic tax-free amount for individual earners and by reducing the corporate rate by 1%

Between those 2 measures, if you can restrain spending growth to roughly inflation in all non-cut areas, that should bring you pretty close to balance.

[Richard]

^ if all of that does not work in Canada,what makes you think it would work here?

Serious question.

First thing everybody starts with is the military but fails to remember when we kept our military within our borders in the past,world wars had a habit of springing up at the cost of hundreds of millions of lives.

In the end it still cost us billions and lives to straighten it out,so it’s a pay me now or pay me later situation,the difference is as it is now it is not costing millions of lives in the process.

Its a deterrent and preventive maintenance of sorts,considering the alternative it’s a small price to pay.

I agree with the decriminalize of weed and not legalized like states are doing.

If the feds follow the decriminalized aspect they open the door for the cartels,who will always look for other means of producing revenue.

The feds can bust weed because it is bulky,fentanyl is being used to supplement the cartel incomes in the states that have legalized weed.

Take a aspirin,cut it into quarters,now take one of those quarters and cut it in half,that half of a quarter is enough to kill four adults immediately.

They have to give the cartels and others a way to generate income,otherwise they start switching to not so very nice ways of generating income,because it is what they do.

The feds spent billions in trying to destroy the American mafia,so they neutered them.

What replaced them? The Russians,Mexican,Jamacian, and every other little street gang that terrorizes cities,it’s like a whole Pandora’s box of evil was opened up.You have to pick necessary evils.

Look at what happened when Reagan declared war on drugs,the first thing they did was stop the flow of weed,so everybody switched to cocaine and crack,how did that work out?

I agree with non privatization of prisons.

People do not go to prison while waiting for trial,they are placed in county jails until the outcome is determined.

I agree on the dropping of the cash bond aspect,but that has nothing to do with the National debt.

I agree with abolishing the irs and flat taxing,but they are the police force of taxes,it’s going to be them or somebody else in charge.

The problem with the National debt is it reflects the citizens,we have become consumers and not producers,when you just consume you have to pay somebody else to produce,they will be the ones making the money and you are the ones spending it.

Recently in Massachusetts a school reporter busted the school because they were paying prisoners 100,000 to recover school seating upholstery,$28,000 under others bids.

The prisoners themselves were being paid $1 per hour and learning a new trade.

Out of those wages deductions were made,incarceration costs,restitution to victims,fine and court cost repayment etc.

Makes sense right?

Nope,the kids in the school petitioned to stop that process because they felt that it was not fair to the prisoners.

So under pressure they stopped the practice.

Its that mindset creating debt and writing checks that generations have to pay for.

If you want to cut the National debt in half,just deport all of the radical left that want to spend trillions on everybody else but Americans.

That is the quickest,easiest and most cost effective way.

[Bong-Man]

Here's what you don't do....

- Lower the corporate income tax from 35% to 21%

- eliminate the inheritance tax

- Lower the capital gains tax [[seriously ? You're actually contemplating this ?)

- Keep the minimum wage the same for 9 years

- Limit immigration when workers are needed now and especially in the future.

- Kick the Social Security can further down the road

- Lower clean air standards when 4 out of 10 Americans are breathing air equivalent to smoking a pack of cigarettes a day. Why does anyone care about global warming with a stat like that ?

[Richard]

I have been smoking a pack of cigarettes per day for the last 44 years,never been hospitalized yet many others that have lived a so called healthy life have passed well before thier time.

Its kinda like the global warming approach,come up with all kinds of costly solutions and regulations that will never change the course of actions.

The only people that benefit from it is the companies that are providing the solutions,people say the amount of pollution has decreased a lot sense the 1970s because of actions taken.

Of course it has decreased along with the factories that produced it,so I guess if one is going to be poor and working 3 jobs at least they are healthy,outside of the adverse affects of the stress of paying the bills.

The only thing that has been accomplished is trading one adverse affect for another,did not really solve anything and the climate will still tread on changing.

[Richard]

Detroit as sanctuary city? Wow.........

“We do not stand down to our commitment to being a sanctuary city,” Castañeda Lopez said. "We don’t stand down to our commitment to being a welcoming city. We do not stand down to our commitment to welcoming refugees.”

https://www.michiganradio.org/post/d...grant-policies


But the mayor feels different

Duggan says Detroit Police have always cooperated with federal immigration agencies, especially Customs and Border Patrol since it sits on an international border. He says they will still do so.
“If Detroit police arrest somebody today for breaking and entering, and in the course of running the ID check find they’re here illegally, they contact customs and immigration,” Duggan said. “Sometimes deporting is a simpler process than prosecuting.”

https://www.michiganradio.org/post/d...ed-trump-order


So one or the other may be a bit confused ?

[canuck]

I have been smoking a pack of cigarettes per day for the last 44 years,never been hospitalized yet many others that have lived a so called healthy life have passed well before thier time.

Its kinda like the global warming approach,come up with all kinds of costly solutions and regulations that will never change the course of actions.

The only people that benefit from it is the companies that are providing the solutions,people say the amount of pollution has decreased a lot sense the 1970s because of actions taken.

Of course it has decreased along with the factories that produced it,so I guess if one is going to be poor and working 3 jobs at least they are healthy,outside of the adverse affects of the stress of paying the bills.

The only thing that has been accomplished is trading one adverse affect for another,did not really solve anything and the climate will still tread on changing.

You should try smoking two packs a day for the next 44 years.

[Zacha341]

I think someone off of Bewick and Mack, or Linwood and Fullerton should be polled on their opinion on all of this.

Not just the activists over-focused on immigration policy related to Trump - not the larger picture beyond his presidency!

“We do not stand down to our commitment to being a sanctuary city,” Castañeda Lopez said. "We don’t stand down to our commitment to being a welcoming city. We do not stand down to our commitment to welcoming refugees.”

https://www.michiganradio.org/post/d...grant-policies

.....

[pjbear05]

Lower taxes, higher taxes, bwahaha. The IRS has neither the personnel or budget to collect taxes assessed and owed. And current laws have hamstrung the Service in doing so. Hey can't allow them jack booted thugs to take control!

[Zacha341]

^^^ Yet they had the will and might to go after 'certain' targeted groups under former president Obama.

[Johnnny5]

A warning about where we may be headed after a decade of artificially low interest rates.

https://finance.yahoo.com/news/why-low-interest-rates-could-cause-a-colossal-reckoning-151351867.html

[Richard]

We need corrections in order to keep the balance otherwise the whole country would be like California and be paying $5000 a month for 27 sqft apartments.

When you look a the big money thier biggest gains come when the economy is in the dumps,bank cash when times are good buy low when there is blood in the streets.

The problem with warnings is the big players pull out monthes before the little guys get stuck with the aftermath,warnings are always to little to late.

[oladub]

We are on track to add $1T to the national debt this year. I blame Trump for allowing the spending cap to be raised so Democrats would reopen the government. I expect very little of Democrats. This kind of spending will be ruinous when interest rates go up. Social Security, defense, health, 'income security', and interest are the big items. They will have to be cut and/or taxes will have to go up significantly to pay for all this or we will go the route of the Weimar Republic, Argentina and Venezuela. Look at what a tiny share of revenue comes from tariffs - presumably included under misc. or customs duties.

from https://www.cnsnews.com/news/article...e-deficit-hits

[Canadian Visitor]

They will have to be cut and/or taxes will have to go up significantly to pay for all this or we will go the route of the Weimar Republic, Argentina and Venezuela.

from https://www.cnsnews.com/news/article...e-deficit-hits

Whoa, whoa, and WHOA!

I happen to agree with you that the budget ought to be balanced.

That the current deficit spending is excessive and reckless.

I won't bother with the partisan nonsense you managed to spew in there as if Republicans don't control the Senate and Presidency and didn't control both houses for much of Obama's term as well.

But......really, Venezuela?

Do you know how ridiculous that makes you look? How much it diminishes your argument?

Come on now.

Suppose your worst nightmare came to pass and the deficit were erased entirely by raising taxes. [[won't happen......but I digress)

The US tax burden, over all is 27.1% of GDP. This is among the lowest of developed nations in the world.

Of that, US Federal taxation is roughly half or just over 13%.

If you wanted to raise 1T in new revenue, at the federal level, you'd be looking at a tax hike of 38% federally [[or 19% overall).

That would raise US Federal taxes to 18.6% of GDP, or an overall tax burden in the range of 32-33% of GDP.

That's not just lower than France or the Scandinavian countries.....

Its lower than New Zealand, or South Korea.

You'd be a hell of a long way from Venezuela.

Exaggeration and hyperbole are not your friends.

The deficit is a poor policy choice, with some consequences in the medium term.

It is not, however, the apocalypse.

https://en.wikipedia.org/wiki/List_o...e_to_GDP_ratio

[oladub]

Canadian Visitor, I am comfortable with my argument. I wrote that "I blame Trump for allowing the spending cap to be raised so Democrats would reopen the government. I expect very little of Democrats." Note that I blamed Trump for caving. If you can name any Democratic candidate for President who has a plan to trim back $1T of federal spending after creating new spending programs of their own, give me a link. Until then, I don't expect anything from Democrats to solve this problem except more taxes and devaluing the dollar.

Unlike Canada, our Party members do not vote in lock step blocks. Democrats tend to vote more one way or the other than Republicans. The blame is not black and white. In 2011, Members of the Republican Party opposed raising the debt ceiling. In 2013, the government had a partial shutdown with Obama on one side and Republicans on the other. In 2014, the debt ceiling was increased by more than $1T under Obama; the sixth time in seven years. Two of those years Congress was run by Democrats. In 2019, faced with including for $5.7B for a wall or shutting down the government, Democrats chose to shut down the government. Republicans again caved. In September the debt ceiling will have to raised again partly to pay for taking care of everyone who wanders across the border. Who needs borders when we can just raise the debt ceiling over and over -not that that is the only issue.

Venezuela sits on one of the largest oil deposits in the world. Oil is a fungible commodity. Yet, Venezuela's economy is crashing. "The key element of a currency reform is devaluation, which in principle is meant to stimulate domestic economic growth. ... Devaluation of the bolivar will not change the price paid for Venezuelan crude." -Google's bold print

Elizabeth Warren has suggested adjusting our currency to the same end. I could have added Uganda to my list. Devaluing currency is a politically astute way of transferring the value of a currency from its individual owners to government's over spenders. FDR significantly reduced the value of U.S. currency to balance his books during his depression. Republicans are not above this either. Nixon took us off the gold standard.It is my belief that the U.S. will not catastrophically collapse like Venezuela, the Weimar republic, or Uganda. More likely, we will atrophy more like Argentina and be unable to keep pace with China.

[Richard]

Re Venezuela,When Chavez was in office,the United States was importing 70 % of our oil from there at a price above market rate.

We were actually subsidizing his reign of terror,thier oil values were based on what we were paying them,China now has a lien on future production for loans with trading not in USD.

We will not collapse because we owe China to much,they play in economic warfare and worst case scenario they with team up with Russia and not go by the USD like they are already doing in petroleum dollars.

They will just phase our currency out over time.

Banks are already gearing up for a major shift to crypto currency because they do not physically have to deal with money,you can run an international bank from a laptop.

[oladub]

With both Bernie and Warren promoting a 'wealth tax', I wanted to compare the early history of Woodrow Wilson's income tax. To pave the way for an income tax, the 16th. Amendment was passed allowing an income tax.

Wilson's " Revenue Act of 1913 lowered average tariff rates from 40 percent to 26 percent. It also established a one percent tax on income above $3,000 per year; the tax affected approximately three percent of the population. A separate provision established a corporate tax of one percent, superseding a previous tax that had only applied to corporations with net incomes greater than $5,000 per year. Though a Republican-controlled Congress would later raise tariff rates, the Revenue Act of 1913 marked an important shift in federal revenue policy, as government revenue would increasingly rely on income taxes rather than tariff duties. " -wikipedia
jjjjj
I didn't realize that the same legislation that instituted the first income tax also lowered tariff taxes. $3,000 in 1913 = $77,445 today because there has been a 2492% inflation rate since 2013. But the initial income tax was on only 1% of income over $3,000[[$77,445 today).

Fast forward to Elizabeth Warren and Bernie's plans to tax wealth. According to this, it takes in more of the population. Everyone would have to list all their wealth on their tax form. There hasn't been any mention of amending the Constitution to allow a new wealth tax. There hasn't been any mention of a cost of living adjustment so this tax could creep along with inflation just like the income tax did. Neither has there been any mention of cutting tariff or income taxes.

[oladub]

Correction and rewrite of the last paragraph of my previous post 44:
Fast forward to Elizabeth Warren and Bernie's plans to tax wealth. Everyone would have to list all their wealth on their tax form. Neither has mentioned amending the Constitution to allow a new wealth tax. There hasn't been any mention of a cost of living adjustment so the wealth tax won't creep along with inflation and make the middle class pay like the income tax did. Neither has there been any mention of cutting tariffs, income taxes or the national debt. Anticipated wealth taxes have already been dedicated for new spending programs. What happens when the rich find foreign loopholes, the dollar is devalued and/or the economy crashes? Does anyone really believe that the middle class won't also be paying a wealth tax and the rates will be stagnant? Canadian Visitor made a good point that property taxes are a wealth tax we already pay. A federal wealth tax would also be an additional real estate property tax.

[Richard]

This is a pro net worth tax implementation argument but they do bring up some of the complexities of actually implementing it.

One factor that may partially explain why the United States does not have a federal net worth tax is that there is debate as to the constitutionality of a federal net worth tax.

Estimates of the revenue raised by a net worth tax are highly uncertain, as they depend on both the detailed specification of the tax and assumptions about how families would respond to the tax, for which little guidance is available in the academic literature. One important ingredient in this estimation is the elasticity of taxable wealth, which summarizes the various behavioral responses to the tax. Those responses affect the amount of wealth that taxpayers would report on their tax returns. To reduce their net worth tax liabilities, high-wealth individuals might, for example, hide wealth abroad or increase their spending [[thus reducing their wealth).

https://equitablegrowth.org/wealth-t...rk-in-the-u-s/

So basically it sounds good when we say,tax the rich but implementing it is a whole nother animal.

It is easy to see the ramifications of doing so by looking at what happened to other countries when they went down that road.

[rb336]

It is easy to see the ramifications of doing so by looking at what happened to other countries when they went down that road.

Examples, please.

[Richard]

^ you can do a case study on Argentina,once one the richest countries in the world.

Do to thier love of Peronism and think social programs are the answer they have spent 53 years out of 54 providing more social programs that they could pay for,outside of the billions that were stolen by the husband and wife consecutive presidential appointments.

In order to increase revenues they instituted high corporate taxes and personal taxes,which causes dis-investment.

Notice the common thread in multiple countries that are currently on the skids because of their tax the rich and corporations in order to pay for it all.

Here is a little homework

https://m.youtube.com/watch?v=WfGj13vREPA

Watch What is going on in Berlin at the moment.

Because of the high cost of real estate much like London,Paris,New York city etc.

There is a movement being pushed by the residents for the government to take the buildings from the owners and make them social dwellings.

It was started by a group that had a punk bar for 30 years and received an eviction notice and he feels he has a right to the building but not have to pay for it.

https://m.youtube.com/watch?v=X7sb-AziEn4

It is a Vice Video funded by Soros.

Which I find to be an interesting character,a billionaire that made money on capitalism but yet uses it to push socialism,maybe because he already got his?

[rb336]

^


https://m.youtube.com/watch?v=WfGj13vREPA

Watch What is going on in Berlin at the moment.


https://m.youtube.com/watch?v=X7sb-AziEn4

Yeah, videos that give oversimplified and distorted views of the exceptionally complex goings on of Argentina's economy are great for disinformation.

Anyone who thinks they can gain accurate information from those things - whether produced by the right or left - is a fool. Many doctoral dissertations have been written on the subject, as have numerous peer reviewed papers and discussion sessions. The only thing there is anything like a consensus on is that one of the biggest issues has been a lack of steady policy. Even under Peron, each 5 year plan contradicted the previous one.

[Richard]

If everybody else is a fool how come you are not in charge of the socialization of America.?

It actually takes a fool not to see that your preferred system has proven time and time again,the money flows to the top while everybody else stays poor.

It is simple mathematics,no country can create enough revenue to the point of the social freebee benefits outweigh the average income.

It All has to be paid for one way or another.

See what is happening in Ecuador with the rioting in the streets because the austerity measures dictated that the government can no longer provide subsidized gasoline?

All of these countries have tax and chased the rich out of the country and out of existence,pander to the voters with free stuff then go running to the IMF for a loan because it is a unsustainable concept.

What does the IMF say? You want the money in order to save your country then rein in the costs,they do and there is rioting and bloodshed in the streets.

But yet here in America everybody is a fool because they cannot grasp the concept of how everybody should just be poor outside of those in power,I guess eating dirt does relieve a lot of stress on what to cook for dinner every evening,so there are some positives.

You are trying to push something like it is the best thing for the country sense sliced cheese.

Guess What,There is no system that you can put out there that has not been tried,so it’s not like the obvious is not staring one in the face.

Everybody already knows what happens when you jump off of a 50 story building,all this is saying is let’s jump off of the building wearing blue pants and that will change the end results.