On US Taxes, Spending and Deficits

[TGregg]

Check out these stats. In 1960, Uncle Sam dropped $92.191 billion on his population of 179.3 million. That's $514 per head or about $7,011 in today's US Dollars Lite™.

In 2011, the estimates are $3,834 billion (!) on 311 million people. That's about 12.3 large per head, or $5300 per person more using inflation adjusted numbers. We're spending 75% more per person.

$5300 additional spending on 311 million people equals about 1.6 trillion dollars, about equal to our current deficit.

We're not taxing too little, we're spending WAY too $@*&ing much. Meanwhile there is talk about "huge, massive, record setting, ultra-painful" cuts of $100 billion per year. That's like trying to lose weight by switching to lite beer instead of regular when you plow into your weekly deep dish with extra pepperoni. Oh, but if we just hit that tread mill longer in the morning, we'll be fine.

LOL.

 

[morganist]

It really isn't sustainable anymore. I think there will be big problems in a year or two.

 

[Scataphagos]

Quote from morganist:

It really isn't sustainable anymore. I think there will be big problems in a year or two.

But... "if only the rich would pay a little bit more... pay their fair share, we'd be fine"...

 

[morganist]

Quote from Scataphagos:

But... "if only the rich would pay a little bit more... pay their fair share, we'd be fine"...

I don't think you would.

People always blame the rich. I don't think it is as simple as that. Poor people create poverty sometimes when they have children they can't afford. Why is it a rich persons responsiblity to take care of other peoples children and if they do they are like slaves to the rest of society.

Also not everyone contributes to society. Rich people, although not always, are rich for a reason because they have created somethings. Bill Gates benefited the world more through his work than any money he could pay out to people would. The fact that he gave money away is just additional and to be honest of less benefit than his work.

 

[Scataphagos]

Quote from morganist:

I don't think you would.

People always blame the rich. I don't think it is as simple as that.

Whaddaya mean? Odumbo said it is.

 

[morganist]

Quote from Scataphagos:

Whaddaya mean? Odumbo said it is.

Oh, I see you were being sarcastic. It is hard to tell. Perhaps a {} could denote this?

 

[Scataphagos]

Quote from morganist:

Oh, I see you were being sarcastic. It is hard to tell. Perhaps a {} could denote this?

LOL. I don't know the universal symbol for sarcasm... maybe we should have one.

 

[morganist]

Quote from Scataphagos:

LOL. I don't know the universal symbol for sarcasm... maybe we should have one.

I found this. But I think mine is better.

http://news.deviantart.com/article/36011/

 

[achilles28]

The US Guv must cut 38% - across the board - just to run a balanced budget.

That would hasten the inevitable Big D, plunge the US into a recession, which would dry up tax receipts further, making another round of cuts necessary to stay in the black.

Reality, we're looking at somewhere around 45% in Federal Spending cuts to break even and tread water.

So it's either done across the board equally, or some programs are gutted, while others remain relatively intact.

The Cheerleaders maintain Social Security is self-financing, although that assumption in itself is questionable because money is fungible. Technically, yes, Social Security is solvent (barely). But if that's true, very little else is. If SS is left untouched, that implies every other mandatory and non-mandatory program gets axed by 55%. That includes Medicare, Medicaid, all sorts of welfare, the Departments, including Defense. That assumes the US honors it's treasury obligations. If they don't, nearly half of all Treasuries are owned by the FED or intra-Governmental holdings (Pensioneers + SS Trust fund). So who gets the haircut? China holds less than 1 Trillion. If Americans think they can make the Chinese bag-holders, think again.

Bear in mind this is all incredibly deflationary in an economy where consumers (and most business) are leveraged to the absolute hilt... This is why I keep harping that any real attempt to balance the budget or impose a hard cap on the ceiling will precipitate a Depression much worse than the 10-12% contraction implied from a balanced budget. There's a knock-on effect here that people don't acknowledge or realize. Specifically, that 1.6 Trillion we gut, is no longer paid to Defense Contractors, Welfare cases, old grannys and Boomers who who buy cars, homes, consumables, diapers, food, pay for treatments from doctors, hospitals, insurers, who pay their own employees who buy homes, cars, vacations etc. A shitload of people will default on their homes and this will send the banking system down the toilet. I think total contraction could easily surpass 18%. For perspective, the '08 "Great Recession" reduced GDP by 3.3% (officially), from peak-to-trough. Of course those numbers are bs, but the underlying point is salient. We're talking several multiples of '08. Not percentages. Look at the fallout from '08: the hoards of tit-suckers, U99'ers and general societal upheaval. Now imagine something 5 or 6 TIMES worse. This is where we're Headed. I think the Tea Party freshmen only have an inkling of the ultimate fallout, but in truth, understand this cattle prod up the ass of the American Public is the only thing that can save us from a much worse, Dollar Collapse.

 

[Random.Capital]

Quote from TGregg:

We're not taxing too little, we're spending WAY too $@*&ing much.

Well, no, not necessarily, there are plenty of healthy economies that spend similar amounts.

The problem IMO is that the US is running a "we're laissez-faire!" revenue system with a "we're liberal socialists!" spending system. Voters are being fundamentally dishonest with themselves.

Something has to give...and it will...and IMO it will look more like more-spending than it will like less-taxes...because, ultimately, that's what voters actually want.