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US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

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Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#151

Post by dragonwriter »

tibbon wrote: post #81
DFHippie wrote: post #72

Earlier quoted context omitted.

> The meaningful number is 2033, the year Social Security is projected to run out of money. This is the year the trust fund runs out of money, at which point Social Security won't be able to meet its full obligations, only what it can cover with current payroll taxes. Social Security can't run out of money unless the taxes that support it are eliminated. "Social Security won't be available for you Gen X'ers" is misle…

Removing the income cap is really a clear way to mitigate this problem greatly. From what I understand it doesn't fix it entirely. I wonder if we could put SS on capital gains, even at 1%. That would help this include investment gains.

Applying the full amount of payroll (both SS and Medicare) tax to income regardless of origin, including capital gains (and the both-halves self-employment style to all non-wage income) or amount (uncapping contributions), while also uncapping benefits (but adding additional “bend points” above the current cap so the revenue-to-obligation ratio for high incomes is better) is a great way to secure the programs, increase fairness of treatment of labor and other income, increase fairness of taxation of low vs. high income, and extend qualification for social insurance to people of moderate means but atypical income patterns.

But it means that people with disproportionate political clout would be taxed more heavily than in the present circumstances, so it would face an uphill battle.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#152

Post by rundmc »

mywittyname wrote: post #138
crobertsbmw wrote: post #82

I don’t understand how social security isn’t a pyramid scheme. It seems to me like something we should just do away with.

It's not a pyramid scheme because there's no promise of returns. One may pay $1,000,000 in social security and receive $0, but other may pay in only $10,000 and receive $100,000 over their lifetime. People who pay into it will get $X, unless the surplus runs out, in which case they get a reduced amount proportional to the amount of money coming in. A pyramid scheme guarantees returns, and those guarantees can, and wi…

Fully agree with the analogy but you disparage tontines!

49/50 US state workers pension will run out of money by 2033 because they are purely run as 'guaranteed' ponzi schemes.

The exception is the state of Wisconsin which operates more like a tontine in the sense that the payments you can expect is adjusted based upon on the mortality of other members in the system.

I know this because I am making progress convincing governments and supranational organisations that the only sustainable pension system is the one we are enabling through our platform at https://tontine.com

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#153

Post by whimsicalism »

jfengel wrote: post #50
rllearneratwork wrote: post #7

Earlier quoted context omitted.

this is a good point. Everybody keep saying that US had a small inflation in the last 2 decades. Yes, prices of eggs/milk maybe didn't go up to0 much. But what about prices of child care, education, housing, health care, retirement. Yes all these have many factors behind their cost rise, but money printing just can't be ignored here.

All of those things are figured into the Consumer Price Index. It's not like they're just guessing over at the Bureau of Labor Statistics. The one thing that's not included is retirement. You're entitled to Social Security, which is inflation-indexed with the CPI. Individual retirement accounts are usually based in the stock market, which has been doing gangbusters -- for those who can afford it. That is becoming una…

> That's where the inflation shows up: asset markets

Because we're encouraging yield chasing in order to lower unemployment.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#154

Post by bscphil »

nradov wrote: post #137
bscphil wrote: post #120

Earlier quoted context omitted.

The real misleading part, to the point of being actively malicious, is "Each Taxpayer's Share: $951k". This is intended to make the median viewer, who will never see that much money at once in their entire life (and will take 20+ years to even make that much before-tax), feel that the Federal government is being irresponsible. It's an obvious push for fiscal conservatism which, crucially may or may not be warranted b…

A sovereign can't literally go bankrupt. Instead when debt service inevitably becomes unmanageable then the Federal government will most likely force creditors to take a cram down.

Sure, not in a literal sense (to the extent they manage internal affairs with a sovereign fiat currency, it's not possible for them to be under water in that currency), but it's possible for them to destroy their own credit due to defaulting on debt obligations to the point that the economy suffers greatly and enters a hard-to-control downward spiral for many years. I think that's what most people understand by the concept of the government going "bankrupt".

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#155

Post by smaryjerry »

jfengel wrote: post #30

It's a misleading way of calculating the number, since it refers to all of the future debt obligations, including Social Security out many decades -- but also ignoring the fact that we'll be collecting taxes all that time. It's a bit like concluding that you're a million dollars in debt because you are going to need to buy food for the rest of your life. I suppose it's true -- it is something you need to plan for. Bu…

I thought it could be misleading as well but it is not just calculating the “food you’ll need,” it is also calculating receipts over the same time that pay for food. It’s like saying you promised to buy a TV for $900 in December and by December you will only have $300. That means you will have to borrow $600 before then to meet that promise. Does that mean you owe $600 now, no, it does mean you either can’t buy the tv or will have to borrow that much more. It is essentially debt.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#156

Post by smaryjerry »

OldHand2018 wrote: post #135
listless wrote: post #106

Earlier quoted context omitted.

If I’ve learned anything during the pandemic, it’s “that’s not how money works”. If it runs out, they’ll just borrow more. The real question is at what point are we so leveraged that we default on bonds because we can’t meet our obligations? 10 years? 100 years? I don’t think anyone can answer this. But this is how it will likely end.

Isn't it more like 3 weeks, according to Janet Yellen?

That’s if we don’t borrow any more money beyond the debt limit before then. The real question is when will people stop lending to the borrower? That will be when inflation gets high enough to our pace the rates you can safely receive elsewhere. For example, if inflation is 3% per year and you are only getting 2% yield, it doesn’t make sense to lend anymore because your getting about -1% return… unless every other country with a guaranteed return is returning even less due to their own inflation. Say Germany’s rates are 0% but inflation is 0%, lenders should simply be holding German dollars and stop lending to the US. Then the US will default dude to not being able to borrow.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#157

Post by smaryjerry »

megablast wrote: post #54
jfengel wrote: post #30

It's a misleading way of calculating the number, since it refers to all of the future debt obligations, including Social Security out many decades -- but also ignoring the fact that we'll be collecting taxes all that time. It's a bit like concluding that you're a million dollars in debt because you are going to need to buy food for the rest of your life. I suppose it's true -- it is something you need to plan for. Bu…

Wouldn’t the date it runs out of money be pushed out further due to increased deaths during the pandemic?

600,000 over the last two years may seem like a lot of deaths at face value but over the same period of time about 4,500,000 died from other non COVID things and 6,000,000 people were born. So the deaths from COVID are relatively small in comparison. Plus the debt only increased due to COVID as they printed and spent trillions upon trillions of dollars.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#158

Post by smaryjerry »

pavlov wrote: post #48
bserge wrote: post #23

Earlier quoted context omitted.

The rest of the world has seen the same price increases.

In many places in Europe, four out of five items on that list are provided or managed by the state (child care, education, health care, retirement). Which IMO explains why Europeans tend to feel more comfortable even with salaries that, on paper, are significantly lower. The American middle class is getting squeezed by this particular class of costs.

Europe is in an even worse position than the US on debt. ECB has already had negative interest rates for the past roughly 5 years. Basically even if you don’t spend money you are losing money just like inflation, then on top of that they have inflation as well.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#159

Post by GoodJokes »

Government finances are not like household finances and I wish people were called out when they use that as a talking point to say we need to deal with the deficit. The dollar is the currency of the world and we actually way more debt capacity than what we currently have.

Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k

#160

Post by belltaco »

bassman9000 wrote: post #127
bscphil wrote: post #120

Earlier quoted context omitted.

The real misleading part, to the point of being actively malicious, is "Each Taxpayer's Share: $951k". This is intended to make the median viewer, who will never see that much money at once in their entire life (and will take 20+ years to even make that much before-tax), feel that the Federal government is being irresponsible. It's an obvious push for fiscal conservatism which, crucially may or may not be warranted b…

feel that the Federal government is being irresponsible. It is. https://tradingeconomics.com/united-states/government-spendi...

If it really is then why are bogus arguments like the OP used to make it seem so?
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