The cost of paying off the Federal debt.

[oladub]

I was asked a couple of weeks ago to come up with a guesstimate of what would be required to pay down the $13.6T federal debt. There are other people much more qualified to do this so I will borrow some of their ideas and numbers. My numbers will be very rough and not take into account inflation and population growth which have increased 24% and 10% respectively over the last 10 years. I will allow 30 years to pay down the debt just like a typical homeowner.

-The 2011 budget as submitted by President Obama is $3.8T
-Federal spending to date this calender year is $2.1T. Extrapolate and for 12 months it should be about $2.5T.
-That means we will have nearly a $1.3T annual deficit in 2011.

I came the following numbers from Barron's as reprinted on Seeking Alpha.
http://seekingalpha.com/article/2292...e?source=email

Using numbers from the above article:
Remember, the goal here is to figure out how to eliminate the federal debt but let's just start with balancing the 2011 budget before even addressing the debt. By raising the taxes on the rich to Clinton levels [[savings $400B), cutting government spending, all retirement benefits, military spending, and government health care expenditures all by 10% [[savings $330B), we would only have to come up with another $700B to balance the annual budget. That could be done by either slashing federal spending another 58% or by raising all sources of federal revenue across the board by another 28% or by some combination thereof. These figures do not include cutting federal interest because we haven't started reducing the federal debt yet. Let's do that next.

As previously noted, we have about a $13.6T federal debt. At 4.5% interest, we could collectively pay down our federal debt, including interest in 30 years by paying off $827B a year [[from an amortization table). So in addition to federal budget cuts and tax increases in the preceding paragraph, taxes would have to be raised an additional 33 %.

The answer to the question then is that to balance the annual budget and pay off the federal debt including interest at 4.5% interest over 30 years, we will have to increase federal taxes of every sort [[income, payroll, corporate, excise taxes and duties) by 61% and make the 10% cuts as mentioned two paragraphs above. This is, of course, without cost overruns and any starting new federal programs.

-http://en.wikipedia.org/wiki/United_States_federal_budget
-http://www.usdebtclock.org/index.html#

[Papasito]

Considering budgets mapped out for the next 2 - 3 years are upside down, and spending proposal after spending proposal is being thrown out there when the money from the last spending proposal hasn't even been spent yet, the debt will double or triple before it ever goes down.

Obama proposes $50 billion to boost infrastructure
Framing his proposal for a $50 billion "up front" investment in infrastructure improvements as a call to action to increase America's ability to compete in the global economy, Obama said other countries were "thinking bigger," arguing that poor infrastructure like clogged roads and delayed flights costs America billions in lost productivity
http://firstread.msnbc.msn.com/_news/2010/10/11/5272149-obama-proposes-50-billion-to-boost-infrastructure

Wait a minute... wasn't that supposed to be what the LAST $787 billion was supposed to do??

American Recovery and Reinvestment Act of 2009
The measures are nominally worth $787 billion. The Act includes federal tax incentives, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education, health care, and infrastructure, including the energy sector.
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

No matter how much you increase taxes, no matter how much you want to pay off the debt, if you can't follow the simple rule of spending less money than you take in, you are going to fail.

Considering the government is full of supposed "economics geniuses",
they sure act like a bunch of idiots when it comes to economic basics.

[oladub]

Papasito, The last $787B went largely to schoolteachers and other friendlies in blue states. There were cries of horror when it was thought that a lot of the money would be going into infrastructure because those are largely male jobs. The johnny come lately afterthought and recalculation is an effort to woo back males to vote Democrat in the November election. Two years into His regime before infrastructure comes into play is a little late in the game.

My numbers did not include additional federal spending programs.

One correction:
"-Federal spending to date this calender year is $2.1T. "
should read
"-"Federal income to date this calender year is $2.1T.."

It is most curious that the gang is carrying on on the other thread
Ending tax cuts creates disincentive to work . I included the $400B reinstituted taxes on the rich in my calculations and it only accounts for less than a third of the annual federal deficit and a smaller fraction of paying down the Federal debt. Yet they do not comment on how to do that. The fastest growing part of Obama's budget next year is the $250B just to service the national debt. That largely offsets the $400B we could get from re-taxing the rich. The $250B service debt will only get bigger everytime Obama comes up with a new way to spend money or the interest rate goes up. Imagine what would happen if interest rates went up to Carter levels. That $250B would skyrocket into something many times larger.

My guess is that the Fed and the Treasury will have to institute a policy of intentional inflation, a la the Weimar Republic and Zimbabwe, so that government debts can be paid down with cheaper dollars. That will work for awhile.

[Gistok]

Papasito, The last $787B went largely to schoolteachers and other friendlies in blue states. snip......

Oladub, you often make sense... but then occasionally have a brain fart like this doozy.... That $787B went to ALL 50 states... not just the blue ones.

I was driving down Lakeshore Dr. in the Grosse Pointes last week [[about as red as you can get in Wayne County)... and they were repaving the roadway... with signs saying that it was part of the federal "Putting Americans Back To Work" program....

So that "infrastructure" money is also going to Obama "enemy territory"... and not just the blue areas that you so claim....

[oladub]

Oladub, you often make sense... but then occasionally have a brain fart like this doozy.... That $787B went to ALL 50 states... not just the blue ones.

I was driving down Lakeshore Dr. in the Grosse Pointes last week [[about as red as you can get in Wayne County)... and they were repaving the roadway... with signs saying that it was part of the federal "Putting Americans Back To Work" program....

So that "infrastructure" money is also going to Obama "enemy territory"... and not just the blue areas that you so claim....

You're right. Porkulus went to all 50 states but the majority going to schoolteachers went to places and states where people have voted themselves into a hole like California or New Jersey. I doubt that Grosse Pointe, or North Dakota, for theat matter are receiving anywhere near California districts' share of Porkulus for teachers. The other part of this was that not a high percentage of Porkulus money went into infrastructure for reasons I mentioned before.

Michigan is a blue state and Lake Shore Drive isn't a private drive. This wasn't federal money to build a bath house at the Pier. I suspect that Grosse Pointe recieves money from the State and Federal government under the same formula as everyone else. The workers hired to repair roads probably are not Grosse Pointers for the most part. Probably much or most of the traffic on Lake Shore Drive isn't Grosse Pointers either.

[mjs]

Thanks for running all of those numbers. I've been fearing inflation and now alot of CNBC guests are beginning to talk the same thing. Fed Reserve buying mountains of Fed debt with money they print is a little too bananna republic for me, but from the numbers and how DC works, I see no other realistic end result.

Since stocks are going up without sales or employment going up, CNBC was discussing yesterday whether the recent stock market growth is just inflation speculation from expectations on Bernanke's QE2. Welcome back stagflation.

[Gistok]

Michigan is a blue state and Lake Shore Drive isn't a private drive. This wasn't federal money to build a bath house at the Pier. I suspect that Grosse Pointe recieves money from the State and Federal government under the same formula as everyone else. The workers hired to repair roads probably are not Grosse Pointers for the most part. Probably much or most of the traffic on Lake Shore Drive isn't Grosse Pointers either.

LOL... one could almost see a daffy JoAnn Watson type in the Grosse Pointe Shores city council saying that they wanted only local workers on the project... only to be told that they were all away at Ivy League Universities and Grad Schools....

[MCP-001]

There are two gaping holes in that idea.

First off that $13.6T number is a low-ball number to keep people from panicking.

The real number you should be starting off with includes the unfunded liabilities which is much, much higher.

Try about $110.8T.

Second, you are assuming that there cannot be serious cuts in federal spending. If I were to take my copy of the US Constitution and set it down next to a copy of the budget [[and for good measure include all of the off-budget spending as well), and go through those line by line, I can reduce that number significantly!

But unconstitutional entitlement spending buys votes.

And politicians aren't too keen about doing what really needs to be done.

[oladub]

MCP-001. As a compassionate libertarian, paleo-conservative, constitutionalist, or whatever, I was trying to be gentle to those on this board who think that ending the war and taxing the rich will be the necessary fiscal elixers so I didn't get into big messy things like unfunded mandates and state and local fiscal problems.

I agree that having had observed the Constitution would have prevented all this but here we are waking up from a hangover so I was just addressing what would be required just to pay off last night's bar bill.

[ghettopalmetto]

There are just a few problems with your analysis:

1. You mention inflation and population growth, which have nothing to do with the federal debt, yet you make no mention of the growth in GDP, which DOES have a LOT to do as pertains to deficits and debt.

2. Your 30-year repayment term is completely arbitrary.

3. On what do you base your 4.5% interest rate? The federal government isn't applying for a home mortgage from Bank of America. Check rates on T-bills.

4. You'll never get rid of all federal debt, unless, of course, you manage to force all investors to sell their T-bills and Savings Bonds.

5. The first step toward paying down debt is to restore annual budget surpluses, which means we can't endure anymore half-assed tax cuts that don't produce economic benefit. Given that we had the longest economic expansion in U.S. history under the Clinton administration, I think a return to the marginal tax rates of that period isn't out-of-line. Maybe the next time we have a surplus, we won't squander it on questionable wars and tax cuts.

I was asked a couple of weeks ago to come up with a guesstimate of what would be required to pay down the $13.6T federal debt. There are other people much more qualified to do this so I will borrow some of their ideas and numbers. My numbers will be very rough and not take into account inflation and population growth which have increased 24% and 10% respectively over the last 10 years. I will allow 30 years to pay down the debt just like a typical homeowner.

-The 2011 budget as submitted by President Obama is $3.8T
-Federal spending to date this calender year is $2.1T. Extrapolate and for 12 months it should be about $2.5T.
-That means we will have nearly a $1.3T annual deficit in 2011.

I came the following numbers from Barron's as reprinted on Seeking Alpha.
http://seekingalpha.com/article/2292...e?source=email

Using numbers from the above article:
Remember, the goal here is to figure out how to eliminate the federal debt but let's just start with balancing the 2011 budget before even addressing the debt. By raising the taxes on the rich to Clinton levels [[savings $400B), cutting government spending, all retirement benefits, military spending, and government health care expenditures all by 10% [[savings $330B), we would only have to come up with another $700B to balance the annual budget. That could be done by either slashing federal spending another 58% or by raising all sources of federal revenue across the board by another 28% or by some combination thereof. These figures do not include cutting federal interest because we haven't started reducing the federal debt yet. Let's do that next.

As previously noted, we have about a $13.6T federal debt. At 4.5% interest, we could collectively pay down our federal debt, including interest in 30 years by paying off $827B a year [[from an amortization table). So in addition to federal budget cuts and tax increases in the preceding paragraph, taxes would have to be raised an additional 33 %.

The answer to the question then is that to balance the annual budget and pay off the federal debt including interest at 4.5% interest over 30 years, we will have to increase federal taxes of every sort [[income, payroll, corporate, excise taxes and duties) by 61% and make the 10% cuts as mentioned two paragraphs above. This is, of course, without cost overruns and any starting new federal programs.

-http://en.wikipedia.org/wiki/United_States_federal_budget
-http://www.usdebtclock.org/index.html#

[oladub]

There are just a few problems with your analysis:

1. You mention inflation and population growth, which have nothing to do with the federal debt, yet you make no mention of the growth in GDP, which DOES have a LOT to do as pertains to deficits and debt.

I mentioned that I did not attempt to include inflation and population growth in my equation. You are free to come up with all three numbers and work them out but I suspect that GDP relates to population growth although it could be adjusted for unknown inflation. My guess is that the only way to get out of this hole is by allowing a lot of inflation. I chose to just stick with the numbers we have rather than to speculate that an additional 10% or whatever population increase over x years would somehow reduce the debt. So instead of taxes having to increase 61%, if we had a 10% population growth and [[another assumption) growth in GDP, how much are you suggesting taxes would still have to go up?

2. Your 30-year repayment term is completely arbitrary

.

Absolutely. What is your suggestion? 10 years? 200 years? Remember, we can't add any new spending programs to make these numbers come out. 30 years seemed like a prudent arbitrary number becaue we are used to personal 30 year home loans and there are also 30 year Treasury bills.

3. On what do you base your 4.5% interest rate? The federal government isn't applying for a home mortgage from Bank of America. Check rates on T-bills.

I did. Bond rates are at a record low. 30 year T-bills are at 3.76%. The historic odds are that they will be higher if we wait longer. Since nothing of the sort is going to happen and debt will continue piling up, I chose 4.5% as being historically just a little higher than the present 3.76% rate. If you aren't able , I will recalculate at 3.76% for you.

4. You'll never get rid of all federal debt, unless, of course, you manage to force all investors to sell their T-bills and Savings Bonds.

In thirty years, most T-bills will come do.

5. The first step toward paying down debt is to restore annual budget surpluses, which means we can't endure anymore half-assed tax cuts that don't produce economic benefit. Given that we had the longest economic expansion in U.S. history under the Clinton administration, I think a return to the marginal tax rates of that period isn't out-of-line. Maybe the next time we have a surplus, we won't squander it on questionable wars and tax cuts.

I already covered that. How about also returning to the federal spending of Clinton's time allowing for an additional 34% of spending to allow dor inflation and population growth. Otherwise the deal is off. Remember that the higher marginal rates will only bring in enough money to pay for less than one third of Obama deficit spending. Reducing military spending 10% a year would only reduce spending an additional $60B/year. What I have to hear from you is how to bridge the $700B/year gap after raising taxes on the rich, and triming government health, military, and retirement spending 10%. If you don't want to make those cuts then you have to suggest how you are going to cut or tax us more than $700B a year to return to an annual budget surplus as you suggested.

[oladub]

addendum

More useful numbers have surfaced.

The dollar has been collapsing as fast as the Fed has been printing money. This fits into my theory that the hidden inflation tax is part of the fed/treasury plan to pay off the Federal debt in cheaper dollars.

Since August commodity prices have responded by increasing. Oil prices are up 21%, gold +18%, copper +15%, coffee +12% and so on. Meanwhile Social Security recipients will not be recieving cost of living increases.

The interest rate portion of the Federal government is now up to 8-9%. Interest is at historically low interest rates. The interest portion of next year's Obama budget will be about $250,000,000,000 so the bulk of the increased taxes on the rich can be spent paying off interest. 40% of the Federal debt will expire withing two years and 60% within three. For every one percent that interest rates go up, taxpayers will have to pay an extra $100,000,000,000 every year.
http://seekingalpha.com/article/2297...t?source=yahoo

Retirees trying to live off therir savings to whatever degree meanwhile are taking the brunt of artificially low interest rates on their life savings. The following is a posting by eddsco on the Kitco forum.

Seems to me the old folks are getting the shaft from our government lately
A few “CHANGES” listed below.

1-No Raise in social security payments [[see link below)
2-Obamas health care plan robs Medicare of funding
3-Super low interest rates on savings ,money market ,CDs ,Bonds
4-New higher taxes on dividends
5-Price of food is skyrocketing higher
6- Housing prices dropping like a rock
7-Higher energy prices ,even higher with Obama’s cap and trade plans
Retirees Face 2nd Year with No Social Security Increase

Very nice bonus NYT graph showing how next year's Federal money will be spent and how it compares with this year's spending. Note that interest is one of the fastest growing categories.
http://www.nytimes.com/interactive/2...us/budget.html

[Ray1936]

I"m 74 and I don't give a shit. So there.

[mjs]

Perhaps you should. Second year that social security payments won't go up because inflation isn't high enough. However, a stated purpose of QE2 is to create high inflation so holding cash and bonds essentially provide negative returns and so people will fear that the longer they wait to buy something, the more it will cost. Theory is that people will quit saving their money and go out and buy things instead. End result- They are intentionally making your bills go up, but making sure your SS payments will remain the same. And if you have retirement investments of your own, most advisors have you in cash and bonds which are going to lose money once inflation is factored in.

Only way feds can make unmanagable debt managable again is to continue to buy treasuries with printed money. That means a long term trend of lower interest rates on your accounts, less buying power for retirees, less international buying power for all Americans, and higher living costs. Just like the artificial housing bubble they created, its simply not economically sustainable.

[oladub]

This is a bi-partisan proposal to institute a new kind of tax.

This is an interesting approach to balancing the federal budget. Democratic Congressman Chaka Fattah and corrupt Republican Senator John Ensign have proposed a 1% transfer tax on any transaction. The bill proposes that this be voted on during the lame duck session after the election. There are no co-sponsors so far but this is an interesting idea. It would eventually replace the income tax according to it's sponsor. Even when you deposited money into a bank or took money out of an ATM, you would pay 1%.

The bill H.R.4646, S.2853 - see the 'summary'
http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.4646:

[MCP-001]

This is a bi-partisan proposal to institute a new kind of tax.

This is an interesting approach to balancing the federal budget. Democratic Congressman Chaka Fattah and corrupt Republican Senator John Ensign have proposed a 1% transfer tax on any transaction. The bill proposes that this be voted on during the lame duck session after the election. There are no co-sponsors so far but this is an interesting idea. It would eventually replace the income tax according to it's sponsor. Even when you deposited money into a bank or took money out of an ATM, you would pay 1%.

The bill H.R.4646, S.2853 - see the 'summary'
http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.4646:

I'll give him credit, it's a new idea.

It's only 30 pages long, doesn't allow for amendments, has a finite time for debating, and is only good until the end of this session of Congress [[which really applies to all bills, even if it's not spelled out in the bill in question).

Here's why it won't happen.

Congress just LOVES the tax code.

They can use it to perform all the social experimentation they ever want.

Take away the power to directly tax individual citizens, and you effectively take away Congress' power.

Does anyone really think that will happen?

[oladub]

I haven't seen this run as an ad. It did get played on the new though and is getting quite a few YouTube views. Some stations are refusing to air this ad for reasons unknown. Maybe it is thought to side in election 2010 politics without naming specific parties or politicians because it focuses on spending and the debt.

http://www.youtube.com/watch?v=OTSQo...eature=related [[1min3sec)

[Ray1936]

I"m 74 and I don't give a shit. So there.

And now I"m 84, and I still don't give a shit. Bring this back in ten more years, will ya?

[Henry Whalley]

And now I"m 84, and I still don't give a shit. Bring this back in ten more years, will ya?

Ditto Ray

[Dan Wesson]

Them numbers are ridiculous. They have no meaning or relevance anymore. Reset, jubilee or generational repudiation. I would like to see the latter.

Tell 'em to stick it where the sun don't shine.

[Richard]

As we can see,if one tries to follow the Simpson Bowles commission proposal as what has been happening in the last 3.5 years,the general public prefers status quo so they have a reason for opposition.

[oladub]

As we can see,if one tries to follow the Simpson Bowles commission proposal as what has been happening in the last 3.5 years,the general public prefers status quo so they have a reason for opposition.

When the Commission proposal was aired, Republicans and Democrats alike, even Obama who set up the bi-partisan commission, totally ignored it.

Three congressmen whom I regard as the most fiscally conscious members of Congress, Rand Paul, Justin Amash, and Thomas Massie are sidelined. Rand Paul has been shot at and been beaten up by Democrats before getting CV-19. That's one run of bad luck. Justin Amash representing Grand Rapids has been kicked out of the Republican Party. Thomas Massie is in trouble for trying to block wasteful spending. Trump tried to politically destroy Amash and Massie.

[ABetterDetroit]

Absolutely and I am on record as supporting the Simpson Bowles Commission proposal to increase taxes by one dollar for every two dollars of spending cuts. I would prefer that tax increases take the form of tariffs instead of dumping them on middle income taxpayers. How do you suggest, for starters, that we lob off $3T of debt for starters to offset pre CV-19 increases since Trump has been in? I'm on record as promoting less federal debt for at least 10 years according to those posts.

Raise Taxes.

Bump the bottom 2 brackets 3 points and 6 points respectively with a 8th bracket in the 2 Million neighborhood at 50%

Rate	For Single Individuals, Taxable Income Over	For Married Individuals Filing Joint Returns, Taxable Income Over	For Heads of Households, Taxable Income Over
10%	$0	$0	$0
12%	$9,875	$19,750	$14,100
22%	$40,125	$80,250	$53,700
24%	$85,525	$171,050	$85,500
32%	$163,300	$326,600	$163,300
35%	$207,350	$414,700	$207,350
37%	$518,400	$622,050	$518,400

Next, start treating capital gains beyond 80K individual, 160K married as income. Buffett is correct. Him only paying 20% is messed up.

The brackets for high earners back when America was “Great” were far worse. The economy grew damn well back then.

[Richard]

Trump campaigned on the saving dollars for every spent dollar,he merged duplicate government offices that required less staff.

Virus hits and the cry goes out that he fired the very people tasked with dealing with it,wasteful government spending is right at the top of the list and we really do not need 6 people performing the same task,just to have them on the payroll.

I guess he should have started out in a more simpler manner.

Like tweeting out the definition of fired verses merged and what it all means,

The states that have a majority based that is employed by the federal government will protest just as those whose states derive income from military bases will protest.

Things will always change while they remain the same,all the different presidents really do is shuffle pieces around on the chess board in order to give the illusion of change.

People like to say raise taxes etc. but there is no law that prevents them from sending a check to the IRS or volunteering to pay more.

If Warren Buffet was worried about him paying to little at 20% nothing in the world is stopping him from paying more.

But he does not and people still say .. but Buffet said this.

Just like the Disney granddaughter,nobody is preventing them from cutting a check for millions extra to the IRS,they will not send it back.

But yet for some strange reason the ones that claim do not actually do it.

I work for my money and am not going to just give it up that easy just because somebody else thinks they are entitled to it,just because they exist.

When those that seem the most concerned about start showing their receipts where they voluntarily paid their double tax at the end of the year or more then they were supposed to,then I will kick in a little extra.

Look at the millions now upset because their 1200 did not arrive yet,how much ya wanna bet when it does they cash it and when next years EIC comes available they will also take that.

They do not have to and are not required by law to,but they will and they will be protesting government debt.

Personaly I would like somebody to come forward and explain to me why they think they are entitled to my estate after I die,I paid taxes on it and the gains through the years right alongside of the sacrifices that needed to be made in order to achieve it.No different then millions of others.

Just for somebody to have the privilege of it because they were unwilling to do the same thing and feel it is owed to them?

I would do exactly what they do in the other countries that placed a high cost of death taxes,burn it to the ground and make sure none of it goes back into the system.

It is funny how countries like the UK that created heritage foundations that use 100s of millions in taxpayer payer funds in order to preserve estates thousands of years old in order to retain their history.

The exact same estates that were destroyed by implementing high death taxes,now they have to collect taxes in order to preserve history that they could not collect taxes on because they were destroyed by implementing a tax that they could not collect on.

Guess who ends up paying the highest percentage of death taxes,it is not the rich or intended target.

The funniest part even with the whole healthcare thing,the argument is always,well it works in Nordic countries and the UK and Canada we should be doing it also.

We are useing countries that are the size of a tea cup in comparison with a 1/3 of the population and the majority of that population is centered in a few major cities.

The United States was founded on independence,encompasses more land mass then a majority of the other countries and has a population of 325 million spread out all over creation and protected by a constitution and is one of the most diverse populations in the world.

This country was built and founded on less government in our lives and yet everybody is front stage and center trying to get the government involved in every aspect of their life and become dependent on them.

Yes we need to be prudent about government debt,because they are in it for hundreds of years at a time,but yet we are not personally expected to be prudent about our personal debt,3/4 of the country lives well beyond their means and drowning in debt,how are we to tell the federal government to be fiscally responsible and look for them to prop us up when we are not.

Well let’s see,I live in a 200K house while driving a new car with credit cards maxed out,fricking transfer of wealth has me living pay check to pay check,I demand more,if you wipe out my student loan then I can get a new credit card with higher limits.

We do not personally know what fiscal responsibility is let alone practice it but yet demand it from the federal government.

We really are not concerned about the flow of money until it slows down or stops.

That is the difference in those other countries,people buy local,shop local,for the most part practice smart spending,so they lift everybody up so they can afford to pay more,because they are small countries they can accept things in the greater good of the country.

Massive difference in getting 325 million individuals that clearly careless about the greater good to agree on the same things you can get a population of 30 million or less to agree on.

Most Americans do not even know weather we sent billions of dollars to the Sudan last year,and if we did,why,and was it smart spending by the government,they do not care,they only care about how much is in their check come Friday and if it is enough to pay the bills.

If somebody says,I can put more money in your pay check then they will have the vote,you really do not have to say how or if it is even fiscally responsible.

That is another thing with the small teacup countries,they are small enough where the general public actually pays attention to what is going on and makes it their business to know what is going on.

They also do not have the mass media that pulls the wool over their eyes.

Our form of government has always been a constant change over of reform and free spending,it was set up like that by the founding fathers by design.

Bring this back in ten more years, will ya?

Ray nailed it in 9 words,and 10 years from now it will be the same.

[oladub]

ABetterDetroit, Thank you for the reply [[post 24) advancing ideas to raise tax revenue.

Yahoo finance came up with some ideas. "The deficit will now hit at least $3.7 trillion this year and $2.1 trillion next year, according to the Congressional Budget Office. As a percentage of the economy, federal debt this year will be the highest since World War II, and possibly higher if there’s more stimulus spending.Budget hawks have typically called for a combination of tax hikes and spending cuts to lower Washington’s mushrooming debt load. But the federal deficit is now getting too big for conventional therapy, which could require a whole new form of taxation in the future." Ideas found in the article:

1.) Repealing the 2017 Tax Cuts and Jobs Act would raise about $1.5 trillion, which is $1 trillion less than the increase in U.S. debt in the last two months alone. Doing so would eliminate $1.5T which is less than new U.S. debt added in the last two months.

2.) A value-added tax. A 10% VAT would raise around $1 trillion per year. A new $30,000 car would cost an extra $3,000.

I disagree with the article's comment that inflation has been held at bay. Educational and health costs have far exceeded the cost of living. Inflation does not have to show up as rising evenly across the board. Also, it usually takes two incomes to support a family. It used to take just one.

Local governments might also have to raise tax revenue. The Mayor of Nashville has asked for a 32% property tax increase to, in part, make of for other revenue shortfalls associated with CV-19.

Articles suggesting where to significantly reduce federal spending are harder to find.
Rep. Massie says election year causing GOP colleagues to ‘abandon’ conservative principles

"You’ll go to the supermarket and you’ll want to buy chicken but all they’ll have is beef, you won’t go home hungry you’ll just go home thinking you live in Soviet Russia.”