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Will America's debt doom us?

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Re: Will America's debt doom us?

#131

Post by MuffinFlavored »

wang_li wrote: post #99
MuffinFlavored wrote: post #68

Earlier quoted context omitted.

This is a dumb unrelated question on my end but are the returns of Social Security very bad? If you put 6.2% (12.4% total with employer contribution) of your income away into index funds that grew at 7% per year, at $100k/yr gross salary ($12.4k/yr) from ages 25 - 65 (40 years), you would end up with $2.6m (in today's dollars). $2.6m converted into dividend funds with a 3% yield would be $6.6k/mo. I don't know anybod…

>I don't know anybody getting $6.6k/mo from Social Security... Of course you don't. The maximum benefit in 2019 is $3,770/mo for people who retire at 70. If you retire at 66, then the max is $2,861/mo. And these are only what you get if you maxed out 35 years of SS payments. Besides, SS is designed to only replace 40% of your pre-retirement income.

> The maximum benefit in 2019 is $3,770/mo for people who retire at 70.

How much would you have had to contribute between 18-70 to achieve this number?

Re: Will America's debt doom us?

#132

Post by MuffinFlavored »

pedasmith wrote: post #91
MuffinFlavored wrote: post #68

Earlier quoted context omitted.

This is a dumb unrelated question on my end but are the returns of Social Security very bad? If you put 6.2% (12.4% total with employer contribution) of your income away into index funds that grew at 7% per year, at $100k/yr gross salary ($12.4k/yr) from ages 25 - 65 (40 years), you would end up with $2.6m (in today's dollars). $2.6m converted into dividend funds with a 3% yield would be $6.6k/mo. I don't know anybod…

Essentially, all your numbers are subtly wrong and all of their wrongness is making the final number look much larger. You have to adjust for inflation, including 'weird' inflation. You have to account to suddenly becoming disabled after 20 years. Including the employer contribution is arguably misleading. Social security is security: no matter how I get screwed, I'm only poor when I'm old, not poverty stricken and d…

I think you might be right. Could you please rerun them with inflation accounted for just to make sure I didn't miss anything?

Re: Will America's debt doom us?

#133

Post by ikeboy »

cryptica wrote: post #113

It seems like the whole financial system depends on the time delay between people agreeing to get a certain salary/price and then actually getting paid and spending it. By the time they actually get paid, the money is actually worth less than what they had originally agreed to. It seems that large corporations should be able to make a profit on that delay alone, even if they produce nothing of actual value. I guess i…

Every company tries to accelerate revenue and delay expenses.

Nothing wrong with that, and if everyone knows about it it's hardly misleading anyone. They all take it into account.

Re: Will America's debt doom us?

#134

Post by abecedarius »

JackFr wrote: post #36
topkai22 wrote: post #26

Earlier quoted context omitted.

His proposed alternate metric, interest as a percentage of tax revenue is also deeply flawed- it misses the obligation to pay the principal, which has tripled since the low point in the early 2000s. I like the finance wonks word for debt- leverage. Taking on debt is like going out further on a lever- the debter is more exposed to swings in the overall economy. While it's worked out fine so far, a high debt to gdp rat…

> it misses the obligation to pay the principal But you never really have to do that. You can just keep rolling them. If we could keep the debt at the same absolute level inflation and productivity increases would drive it into insignificance. Of course the idea of keeping it at the same level is a fantasy.

I wonder how people reconcile how it's OK to rely on progress to grow our way out of a debt burden but also incredibly irresponsible to expect progress to cope with our carbon problem. Both seem defensible to me but like they kind of need an adaptor to fit in the same worldview.

Re: Will America's debt doom us?

#135

Post by wang_li »

MuffinFlavored wrote: post #131
wang_li wrote: post #99

Earlier quoted context omitted.

>I don't know anybody getting $6.6k/mo from Social Security... Of course you don't. The maximum benefit in 2019 is $3,770/mo for people who retire at 70. If you retire at 66, then the max is $2,861/mo. And these are only what you get if you maxed out 35 years of SS payments. Besides, SS is designed to only replace 40% of your pre-retirement income.

> The maximum benefit in 2019 is $3,770/mo for people who retire at 70. How much would you have had to contribute between 18-70 to achieve this number?

They use the highest 35 years of earnings. So I would assume that you'd need to be over the inflation adjusted annual cap to max out the benefit.

Re: Will America's debt doom us?

#136

Post by mgkimsal »

MuffinFlavored wrote: post #128
kevin_thibedeau wrote: post #107

Earlier quoted context omitted.

As opposed to the Republican platform of spending more money while cutting tax revenue?

What do Republicans advertise they are going to spend money on? I'm only familiar with Democrats calling for free health care, free college, universal basic income, etc.

free military

Re: Will America's debt doom us?

#137

Post by [deleted] »

theflyinghorse wrote: post #60
dustingetz wrote: post #20

Earlier quoted context omitted.

The book "Looting Greece" by progressive economist Jack Rasmus explains in technical detail the "twin deficit" strategy budget deficit is balanced by trade deficit, which hints at why USA has aircraft carriers stationed around the world, projecting power that tilts the free markets in its favor which is what makes this strategy work. Here is an excerpt: http://www.dustingetz.com/:rasmus-usa-twin-deficit/

I don't understand why US having military presence around the globe tilts the free markets in their favour. Realistically, no military outside of perhaps Russian could stand up against the US but I don't think US are outright forcing trade agreements at a gun point, or am I wrong?

[deleted]

Re: Will America's debt doom us?

#138

Post by nikofeyn »

MuffinFlavored wrote: post #15
crusso wrote: post #4

Like the housing bubble, our debt hasn't been a problem and it's not going to be a problem right up until it is a problem. It will be a black swan event and afterward everyone will claim that they saw it coming and "the other guy" ignored it.

In the mean time, are us Americans ever going to get a president that focuses on paying down the debt? How much would taxes have to go up (because spending can't go down, right?) for citizens to contribute their fair share of paying down the debt?

> How much would taxes have to go up (because spending can't go down, right?) for citizens to contribute their fair share of paying down the debt?

this seems like a weird statement. what is "fair share"? i am a middle class person with a job with fantastic benefits, yet i easily pay over 30% in taxes (probably closer to 40% if one really counts all the "hidden" taxes) and still have to put up with shit infrastructure, terrible public transportation, expensive non-public transportation, expensive insurance, etc. at what point is it considered that i and others are paying our "fair share"?

Re: Will America's debt doom us?

#139

Post by bobby444 »

The debt to GDP ratio has been a major concern for years. That's why I recently moved me and my family to Texas. Texas is a no income tax state and I need to keep more of my money and then reinvest it in gold. Maybe I am a little paranoid but also now have all of my info going to a PO box like a company, https://physicaladdress.com just in case gov goes crazing with trying to take more and more of my hard-earned income.

Re: Will America's debt doom us?

#140

Post by [deleted] »

simplecomplex wrote: post #53

Some say debt to GDP does not matter, because we can print dollars. My question to them is: Would a 1000% matter? 100000%? At some point people will start demanding the government provide everything because they’ve been told debt doesn’t matter and we can print money. It looks like we’re reaching that point because “Main Street” seeemingly realized in 2008 that there was no limit. That it’s a game of chicken with the…

[deleted]
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