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Solution to US debt crisis is severe austerity triggered by a fiscal calamity

fortune.com

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Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#21

Post by s0sa »

rayiner wrote: post #8
jmclnx wrote: post #7

No, solution is to go back to a tax structure we and in the 1950s, were the very rich and corporations paid real taxes. Starting with Reagan, taxes cuts corporations and the rich has been the main driver of the debt. And I will add to that, falling wages for the middle and lower classes based upon inflation.

The tax level is about as high as it ever has been: https://fred.stlouisfed.org/series/FYFRGDA188S

I’d love to see a breakdown of where the tax revenue is coming from (e.g. demographics) over the same period of time.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#22

Post by Taikonerd »

akamaka wrote: post #11

Rather than reading this opinion piece, you can learn more about the “debt crisis” by just studying this chart which shows what percentage of the federal budget goes toward paying off the debt: https://fred.stlouisfed.org/series/FYOIGDA188S The situation is similar to what it was in the late 1980s, and it can mostly likely be managed with the same level of spending restraints we saw in response to that.

IANA economist, but if there were a debt crisis, it would ultimately be about the psychology of the investors who would buy government debt. They want to be very, very confident that they will be paid back (which is why they're willing to accept a low interest rate).

If those investors are satisfied with a return to a late-80s fiscal posture, then great. But if they're worried that spending would just creep up again once the pressure is off, they might "demand" further cuts.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#23

Post by nobodyandproud »

phil21 wrote: post #5
nobodyandproud wrote: post #4

Earlier quoted context omitted.

Gen-X here. I’ve grown up with the warning non-stop that Social Security will become insolvent. My question is this: If I can’t get some or most it, why can’t I steer the money to where I believe the money ought to go?

Because social security tax is simply a tax like any other, and social security is a pay as you go means tested entitlement program like any other. Current workers pay for current retirees. There is no account anywhere with your name on it earmarked for your retirement. It was enacted with lawmakers well knowing this - it was simply marketed in such a way to make it politically possible to enact and keep around long-…

I understand the perspective and I don't disagree with it, but the problem that spawned social security doesn't go away. It takes a crushing amount of time and money to take care of your aging parents, unless we go down a very dark route, and many elderly are abandoned and it becomes a societal mess.

Some approaches I was mulling over:

1. The easiest way is to dilute SS without pushing the years down even further is to remove the required COLA adjustments.

It's probably the easiest; also the least imaginative; and may be too slow.

2. The other is what the other poster mentioned: Real social security really comes down to your kids; and this is what I think should be the basis for a "new deal".

This has to be done very carefully--I can see so many ways this can be abused--but longer-term I think giving some sort of tax break or even tax credit--based on the social security numbers of the parents--allocated by the parent(s).

For the family that can't do it full-time, they can then use that credit or offset to hire some help.

Thoughts?

Edit: I went through this but with hired help. It was both necessary and awful; and I wish I had an option to help my parents directly full-time, but I didn't have the means at the time (I suppose I still don't).

Edit 2: Fixing social security alone doesn't address the wider fiscal problem. It's almost a drop in the bucket. Healthcare is the problem.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#24

Post by burnt-resistor »

Austerity for military pork and welfare for the rich first, because there is critical underinvestment in economic and social infrastructure. Cutting healthcare and welfare the poor isn't going to solve anything except increase net costs and drive regional rural hospitals into insolvency. To the former, curtailment in an un-DOGE, organized, and evidenced-based manner would be appropriate.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#25

Post by Taikonerd »

I got interested enough in the national debt to do some research: is there a single-issue NGO that's working on the national debt? With a platform that you could imagine a Democrat or a Republican supporting?

I found the Concord Coalition [0], and their sister organization Concord Action [1].

I haven't done enough research to endorse them, but I'm just saying: they exist and this is their issue.

[0]: https://concordcoalition.org

[1]: https://concordaction.org/

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#26

Post by PopAlongKid »

rayiner wrote: post #8
jmclnx wrote: post #7

No, solution is to go back to a tax structure we and in the 1950s, were the very rich and corporations paid real taxes. Starting with Reagan, taxes cuts corporations and the rich has been the main driver of the debt. And I will add to that, falling wages for the middle and lower classes based upon inflation.

The tax level is about as high as it ever has been: https://fred.stlouisfed.org/series/FYFRGDA188S

Are you equating receipts with tax level? Tax is a rate applied to an income or wealth amount. Note that GDP includes government spending, which is not subject to tax but is based in part on debt.

https://www.pgpf.org/article/six-charts-that-show-how-low-co...

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#27

Post by rayiner »

PopAlongKid wrote: post #26
rayiner wrote: post #8

Earlier quoted context omitted.

The tax level is about as high as it ever has been: https://fred.stlouisfed.org/series/FYFRGDA188S

Are you equating receipts with tax level? Tax is a rate applied to an income or wealth amount. Note that GDP includes government spending, which is not subject to tax but is based in part on debt. https://www.pgpf.org/article/six-charts-that-show-how-low-co...

No. The chart shows "Federal Receipts as Percent of Gross Domestic Product"

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#28

Post by potato3732842 »

simonsarris wrote: post #6
nobodyandproud wrote: post #4

Earlier quoted context omitted.

Gen-X here. I’ve grown up with the warning non-stop that Social Security will become insolvent. My question is this: If I can’t get some or most it, why can’t I steer the money to where I believe the money ought to go?

There's no steering anything. You are not paying for yourself, you are paying for current retirees on the hopes that there will be enough people to pay for your. Current retirees are not getting enough from that, so they are accumulating debt to pay themselves even more, hence the article. Since the population pyramid has not worked that way, you will simply have a worse time, and younger people even worse, unless yo…

>Since the population pyramid has not worked that way, you will simply have a worse time, and younger people even worse, unless you can convince the people after to take on even more debt.

Why is "just pay current recipients enough to get them to STFU and phase out the program" not an option?

It's not like anyone under 60 didn't at least have some expectation SS might go tits up. Younger genx on down have been raised to expect nothing so they won't be too sad. They'll be happy to stop paying if anything.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#29

Post by ls612 »

akamaka wrote: post #16
mapleoin wrote: post #14

Earlier quoted context omitted.

> can mostly likely be managed with the same level of spending restraints we saw in response to that. so... austerity? Like the article suggests?

Was the 1990s austerity “severe”? I remember a lot of complaining at the time, but it doesn’t seem too bad in hindsight.

Given the security situation today repeating the peace dividend is not an option, so it would be much tougher than the early 1990s was.

Re: Solution to US debt crisis is severe austerity triggered by a fiscal calamity

#30

Post by eqvinox »

rayiner wrote: post #8
jmclnx wrote: post #7

No, solution is to go back to a tax structure we and in the 1950s, were the very rich and corporations paid real taxes. Starting with Reagan, taxes cuts corporations and the rich has been the main driver of the debt. And I will add to that, falling wages for the middle and lower classes based upon inflation.

The tax level is about as high as it ever has been: https://fred.stlouisfed.org/series/FYFRGDA188S

Tax level, sure, but not tax distribution.
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