The yield on the 30-year Treasury bond has climbed back to where it stood in 2007, north of 5 percent, and it pushed a little higher again this week after the Federal Reserve left its own rates alone.
Are you bummed yet? Well, things can get much, much worse than Erick has described. If one knows anything about how the business of lending money works, you won't need an economics degree to understand why.
The interest rate that a lender offers a prospective borrower depends upon how sure the lender is that the borrower is "good for it." One's' credit rating, for example, is basically the lending industry's best estimate of whether you're "good for it," and as anyone knows who has looked into why her credit rating is what it is, how much debt one is already in is a major factor in determining that rating. The more debt, the lower the credit rating AND THUS, the higher the interest rate will have to be in order to induce any given lender to lend. With me so far? Now here's how things can get really, really ugly.
Once one's lenders start raising your interest rates DUE TO THE AMOUNT OF DEBT ONE IS ALREADY IN, if you end up borrowing the money needed to cover this increased cost of borrowing (which, absent increased revenue, our federal government will almost certainly have to do), one has taken the first step on the road to disaster. Why? Remember that one's interest rate is partially determined by how much debt one is already in. Once the interest rate one has to pay in order to induce the next loan starts going up (the situation about which Erick is sounding the alarm here), with that next loan driving one even further into debt, that higher debt level means you will have to pay an even higher interest rate in order to secure the next loan. That next loan drives one further into debt. which increases your interest rate, which increases your debt, which increases your interest rate, which increases your debt . . . .
"The public sector cannot fund itself. Every road, every benefit check, every soldier’s paycheck is ultimately paid for by taxes drawn from a working, growing private economy."
This is a really good explanation of the free market.
I think we are in a very precarious place. I think we may have crossed the event horizon of the fiscal cliff and are watching in slow motion.
The argument for borrowing was always to grow the economy with investing capital, and building public infrastructure lowering business risks and spark new commercial activity.
But when government borrows to simply pay debt they are doing nothing but sucking the life blood out of the private sector.
If the private sector is jolted by a contraction the tax base will shrink.
Roughly 130 to 150 of the largest companies account for 90% of the total market value in the S&P 500. While the top 10 giants make up around 38% to 40% of the index.
AI is the driving factor of the GDP. We are sitting at the poker table with a borrowed mountain of cash saying "all in" on the flop.
You want to know how a civilization collapses? It follows the same pattern going back thousands of years. It starts out slowly, gradually, then collapses in a quick, spectacular fashion… It goes like this:
1. It always starts with the economy: A civilization is based on whatever economic system that the people believe is real, be it gold, silver, grain, bottle caps, or whatever. The moment that system starts to wobble, everything built on top of it starts to wobble as well. When a government tries to fix the wobbling economy, or starts to go broke, they will do what governments always do: Raise taxes on the people while devaluing/debasing the currency. Don’t have enough money? Go ahead and print more. Reduce the gold/silver content in their currency. The problem with doing this is that people will notice. Prices rise. Commerce slows down. Which leads to less tax revenue, the economy gets worse, etc. It’s a classic downward spiral.
2. The government stops working: Every civilization has a moment when the government stops being able to govern. Not all at once, but slowly. Policies that used to work will stop working. Public officials who used to be effective and professional become corrupt and incompetent. Short-term personal gain starts to trump the long-term planning for a society’s continued viability. Laws that used to govern everyone become selectively applied (or not), often for political purposes. The people notice this and begin to lose faith in their government. And that is the key thing here… Faith. People who expect that everyone will be held to the same standards under the law will begin to reject government authority when they see some being punished for breaking the law, while others are allowed to walk away smirking. Worse yet, the government doesn’t care, and in fact, will simply double-down on it. When enough people lose faith in their government, it creates a fertile ground for revolution. And while people may notice the government isn’t working, people in the government have already known for years, but have done nothing useful about it.
3. The climate stops cooperating: This one is the BIG historical wildcard. History has a way of kicking a civilization when it’s down, and bad or unpredictable climate/weather patterns are the way. Long-term droughts and crummy growing seasons mean less food. This can cause mass migration into areas that before were just fine, but now can’t handle the influx. People start abandoning the cities to group up with others for their own mutual protection and benefit. There’s a lot more competition for things; People start to fight with each other over dwindling resources, be it food, water, land, fuel, housing, health care, education, etc. Sure, folks today might think that things kinda suck, but as long as the lights turn on, there’s cold beer in the refrigerator, and a ball game on TV, most people are going to be content. But drastically reduce the food and other real necessities of life, and that’s when things start to get really ugly.
4. Invaders from the outside come in: This starts out slowly, then rapidly increases. The native population gradually stops having kids, especially the upper classes. They even get hostile to the mere idea. Then, the men begin to lose their sense of purpose. They are very comfortable, and have everything they need..... except purpose. Abortion rates skyrocket, since women don’t want kids either. Most people stop having kids, and their family bloodlines end. Meanwhile, the outsiders are still having lots of kids.... and these people come into the country, taking the place of the native population. A large portion of the native population gets replaced, because they just stopped showing up. People from other countries or regions trickle in and settle. Word spreads, and the trickle becomes a flood. This leads to even more strain on the available systems and competition for resources. People begin to fight over dwindling resources. The outsiders bring in their own culture, customs and language. The society that was once cohesive now begins to unravel, as its original unified culture begins to get too diluted and disappear. In Rome's case, it wasn't a screaming fall, but a long, slow yawn.
Epilogue: And the craziest thing is….. hardly anyone sees it coming, except for maybe a few folks. The collapse starts out gradually, then goes suddenly. As their civilization is imploding, most people don’t understand what’s really going on. They feel that something is wrong, and it’s getting worse. Internal political divisions become sharply divided and increasingly toxic as different groups try to pin the blame on one factor or another, but ultimately they can’t figure it out…… until things completely collapse around them.
They become victims of something known as “Normalcy Bias”….. Meaning, they are used to living their lives a certain way, and believe it will always be that way. The thought of their lifestyle suddenly changing is unthinkable; it’s not on the radar for the vast majority of the people.
It’s been the same pattern going back to antiquity…. Indus Valley, Mesopotamia, Hittites, Canaanites, Mycenaean, Babylon, Persia, Sumerians, Egypt, Han Dynasty China, Ming Dynasty China, Greece, Carthage, Rome, Olmec, Maya, Kuhmer, Spain, France, Qing Dynasty China, Japan, Ottoman, etc. No one is immune.
So why does it keep happening?
The main reason is actually pretty simple. The warning signs are always visible, yet usually ignored by those in power. Every civilization had people inside it who saw what was happening, and were sounding the alarm, but the people in power ignored those warnings. They always put their own interests ahead of the good of the civilization.
All that being said, most civilizations don’t get completely erased when they fall into ruin and collapse…. They hit a really low point, then eventually morph into their successors. New political institutions and laws get put into place, a new culture emerges, and viable new economies get going. Many elements of the old culture, religion and modes of production do survive to some extent.
The sign of a health company is one that grows. While not always the case especially for family run small business, the idea is successful governance manifest as a growing company.
Now for government it is the opposite. A success government will stay as small as possible. Government exists to protect life, liberty, and the pursuit of happiness. It will of course grow as the population grows, but not proportionate. As the population is stable so should be governments size.
A bloated government is a sign the government is inefficient and ineffective.
I think these are less sequential steps than a convergence parallel tracks.
#4 and the epilogue are what I see happening which will facilitate #1 and #2.
We are sending people to the US Congress that literally hate America and will be lying when they take the payoff office.
The invaders came in after WWII, the Soviet Union's demoralization, destabilization, crisis, normalization (KGB defector Yuri Bezmenov). The program was wildly successful by the KGB's assessment in the 80's.
The Founding Fathers were well versed on world history and very savvy. The 17th Amendment, direct election of United States senators and the 16th Amendment, Income Tax, went a long way to breaking the structure they put in place.
If I had the power to change one thing which would stay in place forever.... I would repeal the 17th Amendment and give the selection of US Senators back to the State Legislatures.
Otherwise.... as for the 16th Amendment... Prior to it's ratification in 1913 (and there's debate around whether or not it was even ratified properly by the states), in 1895 the Supreme Court ruled the income tax unconstitutional. Now, the constitution already gives the federal govt the power to collect two types of taxes: direct and indirect... but they all must be apportioned, i.e., evenly distributed. So, for the life of me, I fail to understand why we still have several tax brackets based on your W2 (wages and labor)... because that sure doesn't seem very "apportioned" to me.
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
Lol, well so much for me praying that you will continue to disconnect on your vacation! Ok, I'll bite. Two words, twice. Newt Gingrich. Balanced Budget. For me, 1995 was a triumph for Newt and the Republicans as they stood firm and forced Clinton to accept the goal of a balanced budget, which was achieved. They rejected all calls for increases in social program spending, as I recall. But unfortunately, the Republicans rarely get any credit. Before this, it was in the Eisenhower years that it last happened. It is possible but I'm fearful that we've gone too far over the edge. Now, Erick, go hit some golf balls.
Exactly why we need a balanced budget amendment, and why we have needed it for years. Right now we have a Democratic Party that wins votes by spending and a Republican Party that wins votes the same way… and by cutting taxes at the same time. A BBA would force a correction, and through their votes the American people can decide which priorities should get their tax dollars. Having a budget busting Republican president has not exactly strengthened the party’s claims of being fiscally responsible.
He can also sign the legislation into law. Those are his only 2 choices. And if he had vetoed a government spending bill, you would be criticizing him for that decision.
Because he is an insurrectionist, a con man, and a criminal. Why do you insist on making excuses for everything he has done? Oh, wait, you defend criminals fora living.
You lie about an insurrectionist. He is not a con man or a criminal. And your TDS blinds you to anything positive. Because you are a sad, hateful soul.
This is a result of the adoption of Modern Monetary Theory (MMI).
MMI states you can continually expand the balance sheet of the Nation to fund socioeconomic policies (War on Poverty, War on Terror, DEI, The Green New Deal, ObamaCare, tax cuts for the rich, pick your favorite slogan, etc. etc. etc.).
This will be resolved in 2028 and 2030 elections. The presdient elected in 2028 will face the reckoning of social security insolvency in 2032. The House in 2030, will have to pass the legislation to fix social security insolvencey in 2032. Whoever wants to get reelected in 2032 will face this difficult task.
Set aside all the good points made by Erick, the reality is simple. The financial structure of the New Deal, Great Society, and Obamacare must be revisited. No more pay as you go. We must align each socioeconomic policy with proper fiscal tools.
The tax rates that remained the same were scheduled to expire when Trump cut taxes in his first term, thus creating those rates. That is, rates were scheduled to go back up. The temporary nature of those original tax cuts was the budgetary sleight of hand that allowed Republicans to downplay the fact that they were cutting revenue to levels that could not help but perpetually increase the national debt.
Then Trump gets reelected and this time, the budgetary sleight of hand is exactly as you've just described it: "tax rates remained the same." (Spending cuts were a further enhancement to the ruse.) However, by keeping rates where they were instead of raising them back up to their previous (already inadequate) levels, the ultimate impact of the "big beautiful bill" was exactly as the Planter has described it when he says that it busted the budget with revenue cuts. Revenue that we were supposed to be bringing in upon the expiration of temporarily lowered rates, disappeared.
The American people are already grossly overtaxed. The problem is spending. Government spending is causing debt. Allowing people to keep their own money, and spend it on their priorities, does not create debt. Tax cuts are not spending. Money belongs to those who earn it, not government. And it is CRIMINAL, IMMORAL, AND UNCONSTITUTIONAL for government to take from some, and redistribute that income to others.
Then government should cut spending. Does that not make sense to you? Especially when more than 2/3 of federal spending is unconstitutional? Or do you not care about the spending? Is all your balanced budget blather just posturing?
OBBBA is adding trillions per year to our national debt - it's an objective fact. Also FRED tracks government spending by quarter - please point out the quarter under Trump's tenure when it has decreased. Trump used his power over the party to force his budget through congress that completely abandoned any semblance of fiscal responsibility. He is bad for the deficit, bad for inflation, and bad for the economy. People with objectivity can see these obvious truths...
CBO estimates that Public Law 119-21 will result in a net increase in the unified budget deficit totaling $3.4 trillion over the 2025-2034 period, relative to CBO’s January 2025 baseline updated to reflect enacted legislation. That increase in the deficit is estimated to result from a decrease in direct spending of $1.1 trillion and a decrease in revenues of $4.5 trillion.
What will happen (least-worst-case scenario) is that taxes will go up to the Laffer max (which will be a broad-based tax hike) and spending will be drastically cut, across the board. Government spendaholics will scream bloody murder.
Where things go from least-worst to worse is if the commies whose parents aren't married insist on "soaking the rich" out of sake of "faaaaairness", and to hell with the macroeconomic/Laffer effects. Or if everyone wants an exception from the spending cuts.
The economy won't like any of this even in the least-worst case, but as Judge Smails said to Spalding, you'll get nothing and like it.
Social Security will get "fixed" by letting the benefit cuts kick in, right as GenX starts to collect it. Just like with the 21 drinking age 40 years ago and many such cases since, Society will again fix its problems on the backs of GenX, and while we'll put up with it since we don't really have a choice, I'll say loudly and often "YOU'RE WELCOME!!!". BOHICA. Kiss me before you do me like that.
Yep... Gen-X.... we're completely screwed. They will keep pushing the "full benefits" date out farther and farther.... if we end up getting anything at all...
They already ARE yelling bloody murder. I live in a mostly red state & my state never expanded Medicare. The Democrat candidate running for governor is screaming about our state not having done that, allowing people to die. She wants to spend MY tax dollars to buy votes. Meanwhile, those of us who know of her actions during the BLM era know she's pandering in true Democrat fashion to the rest of the state. They were NOT affected like we in the area of the state she was in already KNOW how unhinged she is.
Come on Erick, if a catastrophe is not imminent it isn't far off into the future. Our economy is building up into the perfect storm which our elected government and our populace do not have the intestinal fortitude to address and continues along a financial road of doom.
Our national debt is 4 times as much as it was a mere 19 years ago. Social Security is quickly approaching the point payments will exceed taxes collected despite there being talk of social security reform every few years since at least the 1980s. We have a younger generation raised on the belief that government has all of the answers, that they are entitled to whatever their wants may be and that working hard is not something to embrace but to run away from.
Democrats continue the same old song and dance that the "rich" don't pay their fair share of taxes while handing out tax credits and other benefits to their chosen base. The socialists within the party are making gains. The Republicans want to cut taxes and assume the resulting booming economy will generate the missing tax revenues needed to finance their pet projects. Both bases follow their elected officials with blinders on, thinking if only the other side will see that we are right and they are wrong.
Where are the candidates for public office with the gumption to get the country back om the right track while weaning it from the insatiable taxing and spending habits that are only getting greater? How will they get elected and enjoy the popular support to enact the financial changes needed to halt the outrageous spending, bringing benefits back into control and actually reducing the total debt rather than brag about the savings made to lower the growth of the national debt.
If it's any solace, we are not Greece or Italy or any other non-consequential world economy. This is the United States of America and when that catastrophe strikes, the world will suffer. Pretty crappy way to look at things but denying it doesn't change the truth.
I need to point out one correction. Since 2022, social security benefit checks have exceeded social security tax receipts. Since the major reform in the early 1980s, Social security had amassed over $2 trillion in excess tax receipts. This is acconted for in the budget. When there was an excess, the budget deficiet was lower. Since 2022 there has been a deficiet, increassing the federal deficiet. This accrual account will hit zero in the 2032 -2033 time frame, whicih is when the problem (if not addressed) will create havok becasue by law, every social security check must be reduced to ensure the taxes paid equals the checks issued.
Does anyone beleive someone living only on social security with a minium benefit check will have their check reduced? While many americans with other sources of income from a 401K/benefit will be able to demand their checks not be cut?
Thank you for the correction. I was never given the choice as to whether or not I paid into social security or how much I needed to pay. If true social security reform had been completed 10 or more years before I retired I would have been able to accept a benefit reduction in exchange for the opportunity to invest my money differently. If I and/or my wife have 401(k) or IRA funds to draw from it's because we made those investments, pay taxes on any withdrawal we make and no one has the right to tell us we need to sacrifice more so that the "less fortunate" may benefit. Far too many of the "less fortunate" have made terrible choices throughout their lives or have been unwilling to put the hard work into their careers to enjoy financial success. Not my problem!
The basic financial structure of Social Security is flawed. Think of a person with minimal skills (low IQ, physical limitations, family background, neighborhood, etc.) who works part time but near or at mimum wage for most of their life. Or works at McDs/CFL and gets continual raises and is earning 2x mimum wage by age 30 (shift manager etc.). They have paid the US treasury 7.65% of their income to the US treasury for FICA and MCARE. Plus their employer matched that amount, penny for penny. Essentially they have saved 15.3% of their income during their working life. If this money had benn invested in a SPX/VOO type index fund and earned 9% plus on average during their working life, how much would they have in savings? At age 60? or 55? They did save but though Social Security not through personal savings.
A defined beneift plan never works for most people. They move, change industries, get married, have kids, etc. A individual retirement/savings account invested in simple index funds, untouched over a work lifetime wins ever time.
The trump account is the structure we should embrace. When you are born, the $1000 deposited by the US Treasury provides the basic income for everyone. It grows to $250K. If you enter the work force part time at age 16-18 and work at low skill occasional jobs for the rest of your life and 6.2% FICA and your employor's match are deposited into this account, how big a benefit check could you draw? Do you touch the principal? Do you draw down the principal? These are managable questions if the account is over $1 million rather than if your social security check is $1,000 and the program is bankrupt.
We can also set up a limited federal support insurance plan that steps in for those unfortunate people (drug addicts, disabled, menatlly ill, abused) that arrive at age 65 with nothing. How? We know 4,342,231 babies were born this year. An accurailaist can "guess" 2,342 or these people will "fall through the cracks" and need assistance at age 65. So, we will invest another $2K per the 2,342 annomouys souls to build an account to help these people when they show up in 65 years.
No, but in their current tax bracket they may be poor but they will get all the credits due to their low income. I, on the other hand, will still get no choice in those credits because I am, fortunately, too well off.
What was Clinton's final defense budget? $281.6 Billion. IN 1989 it was $304 billion.
Set aside the war on terror, and what you see is a nation that reduced defense spending over a 10 year time frame. We called this the peace dividend. Add in welfare reform, the internet productivity surge etc. and the US was sitting in a good spot.
So what happened? 9/11, Obamacare, War on terror, and most importantly, the Left's adoption of MMI. Washington thought it could spend spend spend spend. Left and right. Spend Spend Spend.
MMT was adopted by left and right. The last 4 years of Obama administration it was declining and started up under first three years of Trumps first term. Then, of course, came Covid and huge spikes up. But first year of Trumps second term it has gone up again. Biden did no better with it though.
Not sure what the point is. Deficits were declining in last 3 years of Obama administration and started back up for first 3 of first Trump term. By saying it was same Congress you are agreeing that it was the presidential influence.
During Bill Clinton's presidency, the U.S. experienced a significant turnaround in its fiscal situation, moving from large deficits to budget surpluses. By the end of his administration, the federal government recorded a budget surplus of approximately $128.2 billion in 2001, marking a notable achievement in reducing the national deficit.
Now: As of the latest reports, the U.S. federal deficit for FY2025 is projected to be approximately $1.8 trillion, reflecting ongoing government spending and revenue shortfalls
And you don’t see the problem, you live on a budget? The current congress doesn’t know how to live on one.
Who’s to blame?
Government Spending Control
Understanding how spending is managed in the U.S. government is crucial.
Legislative Branch — Congress, comprising the House and Senate, is responsible for making laws and controlling spending policies.
Fiscal Policy — Congress shapes fiscal policy through budget resolutions and appropriations bills, influencing economic stability
.
Executive Role — While the executive branch implements laws and oversees spending, it requires Congressional approval for budget allocations
.
Checks and Balances — The Constitution ensures that Congress has the authority to levy taxes and approve spending, limiting executive power
Good write up. The debt is what will ultimately end our country. When you account for all of the future obligations and unfunded liabilities that don't show up in the headline number and look at the individual state debts (unfunded pensions, etc.) it paints a terrifying picture. Trump has presided over nearly 40% + of our debt. At the end of that term the number will probably exceed 50%. Maybe electing a guy whose track record includes bankruping several companies/casions by saddling them with more debt than they could service was not the brightest fiscal move of our populace. Congress is pathetic. Anyone that signed onto the One Big Budget Busting Asshat that Trump rammed through has permanently lost the credibility to speak on fiscal restraint ever again. This includes the freedom (from testiclular fortitude) caucus.....
You'll notice in my comment that I do blame congress, but in spite of formal constitutional roles the truth is Trump controls the agenda, and more importantly the entire Republican party. They do as he says and he forced them into signing onto his OBBBA / threatened to primary anyone who didn't get on board. At this point he singularly owns the national debt and economic woes more than anyone in the country. Again only a mouth-breathing trump leg humping fool wouldn't be able to see that.
Mr. Trump does not control the agenda. And it matters not how much influence he maintains with the Republican members of Congress. What matters is who is responsible for what. You cannot blame the President for Congress's failures. Mr. Trump does not "singularly own[] the national debt and economic woes". The federal government for decades--under Bush, Bush, Obama Trump, and Biden--has incurred debt, spent recklessly, and overstepped its Constitutional authority. And the prime--in most cases, sole--driver of these actions is Congress. The Democrats mostly, but there are also plenty of Republicans to blame. And you can stick your gratuitous insults up your posterior.
Obamacare had noting to do with the budget shortfall? The New Green Deal? The Great Society? Medicare/Medicaid? Social Security? The New Deal? Entitlement spending is driving the budget. Tax receipts usually grow significantly year to year. But spending just grows faster.
I never said anything about Obamacare and am not a fan - It has probably cost my family 10s of thousands of dollars at this point above what we should have paid for incredibly krappy coverage. However, now that you bring it up, Obamacare was originally paid for when it was enacted via a combination of new taxes and fees, penalties, and reduced medicare provider payments. So even that krappy policy at least attempted to not bust the budget. Trump's bungled fiscal response to COVID with the dumbass stimulus, ppp, and just plain printing of trillions of dollars with no corresponding revenue added more to the national debt (and likely the resulting inflation) than everything you describe yet I notice you never seem to want to fault him / anything related to Republican fiscal irresponsibility. Gee, I wonder why that is Pool...
Covid response was a bad deal. But the broad socioeconomic structure of the US is based on the 16th admendment, the New Deal (social security and all the associated Federal government regulatory structure) and the Great Society (many new entitlement social spending programs). Obamacare, PPP, Stimulus, The new green Deal, and any other dem/republican fiscal policy you care to highlight are just built on top of the income tax and the New Deal and Great Society spending programs.
Clinton got the peace dividend. He reformed Welfare. We got the Dot.Com boom etc. Life looked pretty good. Then 9/11, TARP, QE, Obamacare, COIVD.
How do you reverse the typical Federal resonse to socioeconomic disruptions?
Fundamentally you make people feel the pain of their actions more quickly vs. what we do now which is allowing them to avoid the pain / push it on to their kids and grandkids. If your dog pees on the rug you rub his face in it immediately, you don't wait to rub the face of his grand-pups in it. So we raise tax revenue by the amount of our spending every year after we spend it. Feeling the actual affects of our spending will naturally cause us to want to cut the spending. There is virtually no incentive to cut the spending in our current dynamic.
Warren Buffet also had some good ideas about how to end deficit spending: "Pass a law stating that if the national budget deficit exceeds 3% of GDP in any given period, all sitting members of Congress become immediately ineligible for re-election" - Make congress feel the pain of their spending individually as well.
I am saying something different. I am saying to recognize the liabiity when you incurr the liability. Once you recognize the liability you have to pay it. IN this case, when you are born, you can assume you will live to be 65 and no longer able to be a "positive economic contributor to society" and thus need financial assistance to survive. So we are taught to save now to provide your your needs in the future. The trump account recognizes this fact. You are born and you will need money when you "retire". So lets start saving today for when you "retire".
That is feeling the pain today. But it is the easiest pain to suffer. You get a shot in the arm to avoid a worse illness. The nation drops $4 billion in 4 million accounts (about how many kids are born in the US a year) to establish a future account (invested in the private capital markets earning 9% or so a year) that provides for a basic retirement (the same social contract underpinning social security made by FDR in 1932). In this case we fund the promise today by investing today when the promise must be fulfilled in 65 years.
So yes, pay the piper today. impose the cost today. But Social Security, Medicare are future expenditures that we failed to recognize when the liability was incurred (the day your were born with the promise that you will be eleigble for these programs).
Remove the Social security and medicare programs from the Federal Budget and tell me if there would not be a significant change in the political fight in DC over tax and spending.
I don't like the concept of the Trump accounts either because people generally don't value things they are gifted / didn't have to earn. These accounts will just add to the entitlement culture problem we have and through some loophole in 20 years will simply be tapped into (with some type of penalty that they don't care about) by the next generation to buy vapes or whatever the hell the young people will be doing then. It's not a good solution.
Consider this: the party which controls the primary and secondary education systems- the one we trust to educate (babysit) our kids, is dominated by people who have zero real understanding of or experience in the private economy. As more of this “education” seeps into society, we will vote for a party that pushes us towards a European style welfare state-at best. Taxes will go up astronomically to pay for it and at least nurse the debt. We will no longer be able to afford, much less prioritize, a global military force. The world will naturally gravitate either to a great powers concept, or a one-world order. America will not be capable of, much less willing to, lead the world. The America-and world-we grew up in is gone. At least those who know Jesus-our Lord and Savior- can take comfort in knowing this is likely the kind of world that precedes His return.
Until one elected representatives get serious, nothing will happen. Trump’s Achilles heel is he Likes to spend money and does. We need a true deficit hawk and a fiscal conservative.
You need a lot more than "a" true deficit hawk and "a" fiscal conservative to address our debt. You need an army of them to take control of the governments at federal, state and local levels in order to enact the changes that must be made. As a senior citizen, my view is I paid taxes my entire working and retired life no matter how little I earned never benefitting from earned income credits or any of the other credits and benefits that excludes half of our working age populace from paying income taxes. They reduce my monthly benefits and I will be enraged.
It's sooo depressing...I voted for the orange man multiple times now, figuring he was the lesser of the two evils. It's sad that it's that way...instead of a good man or woman, we are always picking the lesser of two evils. He was supposed to drain the swamp...but instead he basically built a bunker and hunkered down into the swamp claiming his little section. Any drainage he did has completely been off set by other actions. The country is becoming a corporatocracy, which started happening in the 90s and AI (yes it has benefits but in my field it has taken much more jobs then provided and is only half baked but the CEO swear it's the best thing since sliced bread) has only made it worse. Erick please please convince me why should even bother coming out to vote..I wonder if the fall of Rome felt like this…
I fear we’re headed towards something akin to what Greece went through in 2009, but due to the sheer depth of the hole Congress has allowed themselves to dig, it will be far more painful.
Howdy, closing attorney here... real estate is super slow, with high rates hurting families seeking to buy a home or refinance to save money. High bond yields = high mortgage rates. If we could get rates down, even a half-point to just below 6%, we'd see a lot of positive activity. Alas, Congress remains worthless and there's no chance for anything to happen because it's more important to posture for the midterms (both sides!) and there are some who would do anything to keep DJT from getting a real or perceived 'win'. #termlimitsnow
I've been in residential real estate for 25+ years and other than starting out 2025 was my worst year ever. 2026 so far is slightly better thanks to VA foreclosures. Looking for other options but at my age there aren't many!
Are you bummed yet? Well, things can get much, much worse than Erick has described. If one knows anything about how the business of lending money works, you won't need an economics degree to understand why.
The interest rate that a lender offers a prospective borrower depends upon how sure the lender is that the borrower is "good for it." One's' credit rating, for example, is basically the lending industry's best estimate of whether you're "good for it," and as anyone knows who has looked into why her credit rating is what it is, how much debt one is already in is a major factor in determining that rating. The more debt, the lower the credit rating AND THUS, the higher the interest rate will have to be in order to induce any given lender to lend. With me so far? Now here's how things can get really, really ugly.
Once one's lenders start raising your interest rates DUE TO THE AMOUNT OF DEBT ONE IS ALREADY IN, if you end up borrowing the money needed to cover this increased cost of borrowing (which, absent increased revenue, our federal government will almost certainly have to do), one has taken the first step on the road to disaster. Why? Remember that one's interest rate is partially determined by how much debt one is already in. Once the interest rate one has to pay in order to induce the next loan starts going up (the situation about which Erick is sounding the alarm here), with that next loan driving one even further into debt, that higher debt level means you will have to pay an even higher interest rate in order to secure the next loan. That next loan drives one further into debt. which increases your interest rate, which increases your debt, which increases your interest rate, which increases your debt . . . .
Can you see the problem?
"The public sector cannot fund itself. Every road, every benefit check, every soldier’s paycheck is ultimately paid for by taxes drawn from a working, growing private economy."
This is a really good explanation of the free market.
I think we are in a very precarious place. I think we may have crossed the event horizon of the fiscal cliff and are watching in slow motion.
The argument for borrowing was always to grow the economy with investing capital, and building public infrastructure lowering business risks and spark new commercial activity.
But when government borrows to simply pay debt they are doing nothing but sucking the life blood out of the private sector.
If the private sector is jolted by a contraction the tax base will shrink.
Roughly 130 to 150 of the largest companies account for 90% of the total market value in the S&P 500. While the top 10 giants make up around 38% to 40% of the index.
AI is the driving factor of the GDP. We are sitting at the poker table with a borrowed mountain of cash saying "all in" on the flop.
You want to know how a civilization collapses? It follows the same pattern going back thousands of years. It starts out slowly, gradually, then collapses in a quick, spectacular fashion… It goes like this:
1. It always starts with the economy: A civilization is based on whatever economic system that the people believe is real, be it gold, silver, grain, bottle caps, or whatever. The moment that system starts to wobble, everything built on top of it starts to wobble as well. When a government tries to fix the wobbling economy, or starts to go broke, they will do what governments always do: Raise taxes on the people while devaluing/debasing the currency. Don’t have enough money? Go ahead and print more. Reduce the gold/silver content in their currency. The problem with doing this is that people will notice. Prices rise. Commerce slows down. Which leads to less tax revenue, the economy gets worse, etc. It’s a classic downward spiral.
2. The government stops working: Every civilization has a moment when the government stops being able to govern. Not all at once, but slowly. Policies that used to work will stop working. Public officials who used to be effective and professional become corrupt and incompetent. Short-term personal gain starts to trump the long-term planning for a society’s continued viability. Laws that used to govern everyone become selectively applied (or not), often for political purposes. The people notice this and begin to lose faith in their government. And that is the key thing here… Faith. People who expect that everyone will be held to the same standards under the law will begin to reject government authority when they see some being punished for breaking the law, while others are allowed to walk away smirking. Worse yet, the government doesn’t care, and in fact, will simply double-down on it. When enough people lose faith in their government, it creates a fertile ground for revolution. And while people may notice the government isn’t working, people in the government have already known for years, but have done nothing useful about it.
3. The climate stops cooperating: This one is the BIG historical wildcard. History has a way of kicking a civilization when it’s down, and bad or unpredictable climate/weather patterns are the way. Long-term droughts and crummy growing seasons mean less food. This can cause mass migration into areas that before were just fine, but now can’t handle the influx. People start abandoning the cities to group up with others for their own mutual protection and benefit. There’s a lot more competition for things; People start to fight with each other over dwindling resources, be it food, water, land, fuel, housing, health care, education, etc. Sure, folks today might think that things kinda suck, but as long as the lights turn on, there’s cold beer in the refrigerator, and a ball game on TV, most people are going to be content. But drastically reduce the food and other real necessities of life, and that’s when things start to get really ugly.
4. Invaders from the outside come in: This starts out slowly, then rapidly increases. The native population gradually stops having kids, especially the upper classes. They even get hostile to the mere idea. Then, the men begin to lose their sense of purpose. They are very comfortable, and have everything they need..... except purpose. Abortion rates skyrocket, since women don’t want kids either. Most people stop having kids, and their family bloodlines end. Meanwhile, the outsiders are still having lots of kids.... and these people come into the country, taking the place of the native population. A large portion of the native population gets replaced, because they just stopped showing up. People from other countries or regions trickle in and settle. Word spreads, and the trickle becomes a flood. This leads to even more strain on the available systems and competition for resources. People begin to fight over dwindling resources. The outsiders bring in their own culture, customs and language. The society that was once cohesive now begins to unravel, as its original unified culture begins to get too diluted and disappear. In Rome's case, it wasn't a screaming fall, but a long, slow yawn.
Epilogue: And the craziest thing is….. hardly anyone sees it coming, except for maybe a few folks. The collapse starts out gradually, then goes suddenly. As their civilization is imploding, most people don’t understand what’s really going on. They feel that something is wrong, and it’s getting worse. Internal political divisions become sharply divided and increasingly toxic as different groups try to pin the blame on one factor or another, but ultimately they can’t figure it out…… until things completely collapse around them.
They become victims of something known as “Normalcy Bias”….. Meaning, they are used to living their lives a certain way, and believe it will always be that way. The thought of their lifestyle suddenly changing is unthinkable; it’s not on the radar for the vast majority of the people.
It’s been the same pattern going back to antiquity…. Indus Valley, Mesopotamia, Hittites, Canaanites, Mycenaean, Babylon, Persia, Sumerians, Egypt, Han Dynasty China, Ming Dynasty China, Greece, Carthage, Rome, Olmec, Maya, Kuhmer, Spain, France, Qing Dynasty China, Japan, Ottoman, etc. No one is immune.
So why does it keep happening?
The main reason is actually pretty simple. The warning signs are always visible, yet usually ignored by those in power. Every civilization had people inside it who saw what was happening, and were sounding the alarm, but the people in power ignored those warnings. They always put their own interests ahead of the good of the civilization.
All that being said, most civilizations don’t get completely erased when they fall into ruin and collapse…. They hit a really low point, then eventually morph into their successors. New political institutions and laws get put into place, a new culture emerges, and viable new economies get going. Many elements of the old culture, religion and modes of production do survive to some extent.
With respect to #2 I had a thought...
The sign of a health company is one that grows. While not always the case especially for family run small business, the idea is successful governance manifest as a growing company.
Now for government it is the opposite. A success government will stay as small as possible. Government exists to protect life, liberty, and the pursuit of happiness. It will of course grow as the population grows, but not proportionate. As the population is stable so should be governments size.
A bloated government is a sign the government is inefficient and ineffective.
I think these are less sequential steps than a convergence parallel tracks.
#4 and the epilogue are what I see happening which will facilitate #1 and #2.
We are sending people to the US Congress that literally hate America and will be lying when they take the payoff office.
The invaders came in after WWII, the Soviet Union's demoralization, destabilization, crisis, normalization (KGB defector Yuri Bezmenov). The program was wildly successful by the KGB's assessment in the 80's.
The Founding Fathers were well versed on world history and very savvy. The 17th Amendment, direct election of United States senators and the 16th Amendment, Income Tax, went a long way to breaking the structure they put in place.
If I had the power to change one thing which would stay in place forever.... I would repeal the 17th Amendment and give the selection of US Senators back to the State Legislatures.
Otherwise.... as for the 16th Amendment... Prior to it's ratification in 1913 (and there's debate around whether or not it was even ratified properly by the states), in 1895 the Supreme Court ruled the income tax unconstitutional. Now, the constitution already gives the federal govt the power to collect two types of taxes: direct and indirect... but they all must be apportioned, i.e., evenly distributed. So, for the life of me, I fail to understand why we still have several tax brackets based on your W2 (wages and labor)... because that sure doesn't seem very "apportioned" to me.
1933 Arkansas Default...
https://en.wikipedia.org/wiki/State_defaults_in_the_United_States
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
Lol, well so much for me praying that you will continue to disconnect on your vacation! Ok, I'll bite. Two words, twice. Newt Gingrich. Balanced Budget. For me, 1995 was a triumph for Newt and the Republicans as they stood firm and forced Clinton to accept the goal of a balanced budget, which was achieved. They rejected all calls for increases in social program spending, as I recall. But unfortunately, the Republicans rarely get any credit. Before this, it was in the Eisenhower years that it last happened. It is possible but I'm fearful that we've gone too far over the edge. Now, Erick, go hit some golf balls.
Best explanation I have ever read of the debt trouble we are in!
Exactly why we need a balanced budget amendment, and why we have needed it for years. Right now we have a Democratic Party that wins votes by spending and a Republican Party that wins votes the same way… and by cutting taxes at the same time. A BBA would force a correction, and through their votes the American people can decide which priorities should get their tax dollars. Having a budget busting Republican president has not exactly strengthened the party’s claims of being fiscally responsible.
The President has no role in determining Congressional spending.
Actually, he does. It is called a veto.
He can also sign the legislation into law. Those are his only 2 choices. And if he had vetoed a government spending bill, you would be criticizing him for that decision.
Blah, blah, blah, Glen. No direct role, but certainly a very influential one. Why are you so slow to comprehend the obvious?
Why do you insist on blaming the President for everything under the sun? You do it everyday. Your TDS is really quite tiresome
Because he is an insurrectionist, a con man, and a criminal. Why do you insist on making excuses for everything he has done? Oh, wait, you defend criminals fora living.
You lie about an insurrectionist. He is not a con man or a criminal. And your TDS blinds you to anything positive. Because you are a sad, hateful soul.
Not lies, Glen. Open your eyes.
This is a result of the adoption of Modern Monetary Theory (MMI).
MMI states you can continually expand the balance sheet of the Nation to fund socioeconomic policies (War on Poverty, War on Terror, DEI, The Green New Deal, ObamaCare, tax cuts for the rich, pick your favorite slogan, etc. etc. etc.).
This will be resolved in 2028 and 2030 elections. The presdient elected in 2028 will face the reckoning of social security insolvency in 2032. The House in 2030, will have to pass the legislation to fix social security insolvencey in 2032. Whoever wants to get reelected in 2032 will face this difficult task.
Set aside all the good points made by Erick, the reality is simple. The financial structure of the New Deal, Great Society, and Obamacare must be revisited. No more pay as you go. We must align each socioeconomic policy with proper fiscal tools.
Good points all, Pool. But you might want to add Trump’s Big Beautiful Budget Busting Bill to your list.
It is what we both fretted about at the time, now coming true.
The BBB actually cut spending. Sorry to have facts get in the way of your gratuitous Trump bashing.
Cut some spending, but busted the budget with revenue cuts.
The revenues were not cut. The tax rates remained the same. And in any event, debt does not increase when people are allowed to keep their own money
The tax rates that remained the same were scheduled to expire when Trump cut taxes in his first term, thus creating those rates. That is, rates were scheduled to go back up. The temporary nature of those original tax cuts was the budgetary sleight of hand that allowed Republicans to downplay the fact that they were cutting revenue to levels that could not help but perpetually increase the national debt.
Then Trump gets reelected and this time, the budgetary sleight of hand is exactly as you've just described it: "tax rates remained the same." (Spending cuts were a further enhancement to the ruse.) However, by keeping rates where they were instead of raising them back up to their previous (already inadequate) levels, the ultimate impact of the "big beautiful bill" was exactly as the Planter has described it when he says that it busted the budget with revenue cuts. Revenue that we were supposed to be bringing in upon the expiration of temporarily lowered rates, disappeared.
The American people are already grossly overtaxed. The problem is spending. Government spending is causing debt. Allowing people to keep their own money, and spend it on their priorities, does not create debt. Tax cuts are not spending. Money belongs to those who earn it, not government. And it is CRIMINAL, IMMORAL, AND UNCONSTITUTIONAL for government to take from some, and redistribute that income to others.
Debt increases when then government must borrow money to pay its bills. It’s math, Glen.
Then government should cut spending. Does that not make sense to you? Especially when more than 2/3 of federal spending is unconstitutional? Or do you not care about the spending? Is all your balanced budget blather just posturing?
OBBBA is adding trillions per year to our national debt - it's an objective fact. Also FRED tracks government spending by quarter - please point out the quarter under Trump's tenure when it has decreased. Trump used his power over the party to force his budget through congress that completely abandoned any semblance of fiscal responsibility. He is bad for the deficit, bad for inflation, and bad for the economy. People with objectivity can see these obvious truths...
Incorrect. How do you contend that the BBB is "adding trillions per year to our national debt? Because that is untrue.
CBO estimates that Public Law 119-21 will result in a net increase in the unified budget deficit totaling $3.4 trillion over the 2025-2034 period, relative to CBO’s January 2025 baseline updated to reflect enacted legislation. That increase in the deficit is estimated to result from a decrease in direct spending of $1.1 trillion and a decrease in revenues of $4.5 trillion.
because I can do math and look at the tools available to track our national debt
Glen is a lawyer. The main reason people get law degrees is because they are not good at math.
That is not an answer. Apparently you do not know, and are just making stuff up. Very sad.
We are going to hit a day of reckoning soon.
What will happen (least-worst-case scenario) is that taxes will go up to the Laffer max (which will be a broad-based tax hike) and spending will be drastically cut, across the board. Government spendaholics will scream bloody murder.
Where things go from least-worst to worse is if the commies whose parents aren't married insist on "soaking the rich" out of sake of "faaaaairness", and to hell with the macroeconomic/Laffer effects. Or if everyone wants an exception from the spending cuts.
The economy won't like any of this even in the least-worst case, but as Judge Smails said to Spalding, you'll get nothing and like it.
Social Security will get "fixed" by letting the benefit cuts kick in, right as GenX starts to collect it. Just like with the 21 drinking age 40 years ago and many such cases since, Society will again fix its problems on the backs of GenX, and while we'll put up with it since we don't really have a choice, I'll say loudly and often "YOU'RE WELCOME!!!". BOHICA. Kiss me before you do me like that.
Yep... Gen-X.... we're completely screwed. They will keep pushing the "full benefits" date out farther and farther.... if we end up getting anything at all...
They already ARE yelling bloody murder. I live in a mostly red state & my state never expanded Medicare. The Democrat candidate running for governor is screaming about our state not having done that, allowing people to die. She wants to spend MY tax dollars to buy votes. Meanwhile, those of us who know of her actions during the BLM era know she's pandering in true Democrat fashion to the rest of the state. They were NOT affected like we in the area of the state she was in already KNOW how unhinged she is.
Come on Erick, if a catastrophe is not imminent it isn't far off into the future. Our economy is building up into the perfect storm which our elected government and our populace do not have the intestinal fortitude to address and continues along a financial road of doom.
Our national debt is 4 times as much as it was a mere 19 years ago. Social Security is quickly approaching the point payments will exceed taxes collected despite there being talk of social security reform every few years since at least the 1980s. We have a younger generation raised on the belief that government has all of the answers, that they are entitled to whatever their wants may be and that working hard is not something to embrace but to run away from.
Democrats continue the same old song and dance that the "rich" don't pay their fair share of taxes while handing out tax credits and other benefits to their chosen base. The socialists within the party are making gains. The Republicans want to cut taxes and assume the resulting booming economy will generate the missing tax revenues needed to finance their pet projects. Both bases follow their elected officials with blinders on, thinking if only the other side will see that we are right and they are wrong.
Where are the candidates for public office with the gumption to get the country back om the right track while weaning it from the insatiable taxing and spending habits that are only getting greater? How will they get elected and enjoy the popular support to enact the financial changes needed to halt the outrageous spending, bringing benefits back into control and actually reducing the total debt rather than brag about the savings made to lower the growth of the national debt.
If it's any solace, we are not Greece or Italy or any other non-consequential world economy. This is the United States of America and when that catastrophe strikes, the world will suffer. Pretty crappy way to look at things but denying it doesn't change the truth.
I need to point out one correction. Since 2022, social security benefit checks have exceeded social security tax receipts. Since the major reform in the early 1980s, Social security had amassed over $2 trillion in excess tax receipts. This is acconted for in the budget. When there was an excess, the budget deficiet was lower. Since 2022 there has been a deficiet, increassing the federal deficiet. This accrual account will hit zero in the 2032 -2033 time frame, whicih is when the problem (if not addressed) will create havok becasue by law, every social security check must be reduced to ensure the taxes paid equals the checks issued.
Does anyone beleive someone living only on social security with a minium benefit check will have their check reduced? While many americans with other sources of income from a 401K/benefit will be able to demand their checks not be cut?
Thank you for the correction. I was never given the choice as to whether or not I paid into social security or how much I needed to pay. If true social security reform had been completed 10 or more years before I retired I would have been able to accept a benefit reduction in exchange for the opportunity to invest my money differently. If I and/or my wife have 401(k) or IRA funds to draw from it's because we made those investments, pay taxes on any withdrawal we make and no one has the right to tell us we need to sacrifice more so that the "less fortunate" may benefit. Far too many of the "less fortunate" have made terrible choices throughout their lives or have been unwilling to put the hard work into their careers to enjoy financial success. Not my problem!
The basic financial structure of Social Security is flawed. Think of a person with minimal skills (low IQ, physical limitations, family background, neighborhood, etc.) who works part time but near or at mimum wage for most of their life. Or works at McDs/CFL and gets continual raises and is earning 2x mimum wage by age 30 (shift manager etc.). They have paid the US treasury 7.65% of their income to the US treasury for FICA and MCARE. Plus their employer matched that amount, penny for penny. Essentially they have saved 15.3% of their income during their working life. If this money had benn invested in a SPX/VOO type index fund and earned 9% plus on average during their working life, how much would they have in savings? At age 60? or 55? They did save but though Social Security not through personal savings.
A defined beneift plan never works for most people. They move, change industries, get married, have kids, etc. A individual retirement/savings account invested in simple index funds, untouched over a work lifetime wins ever time.
The trump account is the structure we should embrace. When you are born, the $1000 deposited by the US Treasury provides the basic income for everyone. It grows to $250K. If you enter the work force part time at age 16-18 and work at low skill occasional jobs for the rest of your life and 6.2% FICA and your employor's match are deposited into this account, how big a benefit check could you draw? Do you touch the principal? Do you draw down the principal? These are managable questions if the account is over $1 million rather than if your social security check is $1,000 and the program is bankrupt.
We can also set up a limited federal support insurance plan that steps in for those unfortunate people (drug addicts, disabled, menatlly ill, abused) that arrive at age 65 with nothing. How? We know 4,342,231 babies were born this year. An accurailaist can "guess" 2,342 or these people will "fall through the cracks" and need assistance at age 65. So, we will invest another $2K per the 2,342 annomouys souls to build an account to help these people when they show up in 65 years.
No, but in their current tax bracket they may be poor but they will get all the credits due to their low income. I, on the other hand, will still get no choice in those credits because I am, fortunately, too well off.
When Bill Clinton left office the budget was balanced. 1 million seconds is 11.57 days. 1 trillion seconds is 11,574,074.07 days or 31,688 years.
What was Clinton's final defense budget? $281.6 Billion. IN 1989 it was $304 billion.
Set aside the war on terror, and what you see is a nation that reduced defense spending over a 10 year time frame. We called this the peace dividend. Add in welfare reform, the internet productivity surge etc. and the US was sitting in a good spot.
So what happened? 9/11, Obamacare, War on terror, and most importantly, the Left's adoption of MMI. Washington thought it could spend spend spend spend. Left and right. Spend Spend Spend.
MMT was adopted by left and right. The last 4 years of Obama administration it was declining and started up under first three years of Trumps first term. Then, of course, came Covid and huge spikes up. But first year of Trumps second term it has gone up again. Biden did no better with it though.
Same congress
Not sure what the point is. Deficits were declining in last 3 years of Obama administration and started back up for first 3 of first Trump term. By saying it was same Congress you are agreeing that it was the presidential influence.
During Bill Clinton's presidency, the U.S. experienced a significant turnaround in its fiscal situation, moving from large deficits to budget surpluses. By the end of his administration, the federal government recorded a budget surplus of approximately $128.2 billion in 2001, marking a notable achievement in reducing the national deficit.
Now: As of the latest reports, the U.S. federal deficit for FY2025 is projected to be approximately $1.8 trillion, reflecting ongoing government spending and revenue shortfalls
And you don’t see the problem, you live on a budget? The current congress doesn’t know how to live on one.
Who’s to blame?
Government Spending Control
Understanding how spending is managed in the U.S. government is crucial.
Legislative Branch — Congress, comprising the House and Senate, is responsible for making laws and controlling spending policies.
Fiscal Policy — Congress shapes fiscal policy through budget resolutions and appropriations bills, influencing economic stability
.
Executive Role — While the executive branch implements laws and oversees spending, it requires Congressional approval for budget allocations
.
Checks and Balances — The Constitution ensures that Congress has the authority to levy taxes and approve spending, limiting executive power
.
Now we got a dumbass dropping million dollar bombs like they are free in a war he started without a plan while living in the poor house.
look now but it is the very SAME congress.
Good write up. The debt is what will ultimately end our country. When you account for all of the future obligations and unfunded liabilities that don't show up in the headline number and look at the individual state debts (unfunded pensions, etc.) it paints a terrifying picture. Trump has presided over nearly 40% + of our debt. At the end of that term the number will probably exceed 50%. Maybe electing a guy whose track record includes bankruping several companies/casions by saddling them with more debt than they could service was not the brightest fiscal move of our populace. Congress is pathetic. Anyone that signed onto the One Big Budget Busting Asshat that Trump rammed through has permanently lost the credibility to speak on fiscal restraint ever again. This includes the freedom (from testiclular fortitude) caucus.....
Congress controls spending, not the President. It is not Mr. Trump's responsibility or fault.
You'll notice in my comment that I do blame congress, but in spite of formal constitutional roles the truth is Trump controls the agenda, and more importantly the entire Republican party. They do as he says and he forced them into signing onto his OBBBA / threatened to primary anyone who didn't get on board. At this point he singularly owns the national debt and economic woes more than anyone in the country. Again only a mouth-breathing trump leg humping fool wouldn't be able to see that.
Mr. Trump does not control the agenda. And it matters not how much influence he maintains with the Republican members of Congress. What matters is who is responsible for what. You cannot blame the President for Congress's failures. Mr. Trump does not "singularly own[] the national debt and economic woes". The federal government for decades--under Bush, Bush, Obama Trump, and Biden--has incurred debt, spent recklessly, and overstepped its Constitutional authority. And the prime--in most cases, sole--driver of these actions is Congress. The Democrats mostly, but there are also plenty of Republicans to blame. And you can stick your gratuitous insults up your posterior.
Obamacare had noting to do with the budget shortfall? The New Green Deal? The Great Society? Medicare/Medicaid? Social Security? The New Deal? Entitlement spending is driving the budget. Tax receipts usually grow significantly year to year. But spending just grows faster.
I never said anything about Obamacare and am not a fan - It has probably cost my family 10s of thousands of dollars at this point above what we should have paid for incredibly krappy coverage. However, now that you bring it up, Obamacare was originally paid for when it was enacted via a combination of new taxes and fees, penalties, and reduced medicare provider payments. So even that krappy policy at least attempted to not bust the budget. Trump's bungled fiscal response to COVID with the dumbass stimulus, ppp, and just plain printing of trillions of dollars with no corresponding revenue added more to the national debt (and likely the resulting inflation) than everything you describe yet I notice you never seem to want to fault him / anything related to Republican fiscal irresponsibility. Gee, I wonder why that is Pool...
Covid response was a bad deal. But the broad socioeconomic structure of the US is based on the 16th admendment, the New Deal (social security and all the associated Federal government regulatory structure) and the Great Society (many new entitlement social spending programs). Obamacare, PPP, Stimulus, The new green Deal, and any other dem/republican fiscal policy you care to highlight are just built on top of the income tax and the New Deal and Great Society spending programs.
Clinton got the peace dividend. He reformed Welfare. We got the Dot.Com boom etc. Life looked pretty good. Then 9/11, TARP, QE, Obamacare, COIVD.
How do you reverse the typical Federal resonse to socioeconomic disruptions?
Fundamentally you make people feel the pain of their actions more quickly vs. what we do now which is allowing them to avoid the pain / push it on to their kids and grandkids. If your dog pees on the rug you rub his face in it immediately, you don't wait to rub the face of his grand-pups in it. So we raise tax revenue by the amount of our spending every year after we spend it. Feeling the actual affects of our spending will naturally cause us to want to cut the spending. There is virtually no incentive to cut the spending in our current dynamic.
Warren Buffet also had some good ideas about how to end deficit spending: "Pass a law stating that if the national budget deficit exceeds 3% of GDP in any given period, all sitting members of Congress become immediately ineligible for re-election" - Make congress feel the pain of their spending individually as well.
I am saying something different. I am saying to recognize the liabiity when you incurr the liability. Once you recognize the liability you have to pay it. IN this case, when you are born, you can assume you will live to be 65 and no longer able to be a "positive economic contributor to society" and thus need financial assistance to survive. So we are taught to save now to provide your your needs in the future. The trump account recognizes this fact. You are born and you will need money when you "retire". So lets start saving today for when you "retire".
That is feeling the pain today. But it is the easiest pain to suffer. You get a shot in the arm to avoid a worse illness. The nation drops $4 billion in 4 million accounts (about how many kids are born in the US a year) to establish a future account (invested in the private capital markets earning 9% or so a year) that provides for a basic retirement (the same social contract underpinning social security made by FDR in 1932). In this case we fund the promise today by investing today when the promise must be fulfilled in 65 years.
So yes, pay the piper today. impose the cost today. But Social Security, Medicare are future expenditures that we failed to recognize when the liability was incurred (the day your were born with the promise that you will be eleigble for these programs).
Remove the Social security and medicare programs from the Federal Budget and tell me if there would not be a significant change in the political fight in DC over tax and spending.
I don't like the concept of the Trump accounts either because people generally don't value things they are gifted / didn't have to earn. These accounts will just add to the entitlement culture problem we have and through some loophole in 20 years will simply be tapped into (with some type of penalty that they don't care about) by the next generation to buy vapes or whatever the hell the young people will be doing then. It's not a good solution.
Consider this: the party which controls the primary and secondary education systems- the one we trust to educate (babysit) our kids, is dominated by people who have zero real understanding of or experience in the private economy. As more of this “education” seeps into society, we will vote for a party that pushes us towards a European style welfare state-at best. Taxes will go up astronomically to pay for it and at least nurse the debt. We will no longer be able to afford, much less prioritize, a global military force. The world will naturally gravitate either to a great powers concept, or a one-world order. America will not be capable of, much less willing to, lead the world. The America-and world-we grew up in is gone. At least those who know Jesus-our Lord and Savior- can take comfort in knowing this is likely the kind of world that precedes His return.
Until one elected representatives get serious, nothing will happen. Trump’s Achilles heel is he Likes to spend money and does. We need a true deficit hawk and a fiscal conservative.
I just don't think people will buy into it. No one is willing to feel the pain.
You need a lot more than "a" true deficit hawk and "a" fiscal conservative to address our debt. You need an army of them to take control of the governments at federal, state and local levels in order to enact the changes that must be made. As a senior citizen, my view is I paid taxes my entire working and retired life no matter how little I earned never benefitting from earned income credits or any of the other credits and benefits that excludes half of our working age populace from paying income taxes. They reduce my monthly benefits and I will be enraged.
It's sooo depressing...I voted for the orange man multiple times now, figuring he was the lesser of the two evils. It's sad that it's that way...instead of a good man or woman, we are always picking the lesser of two evils. He was supposed to drain the swamp...but instead he basically built a bunker and hunkered down into the swamp claiming his little section. Any drainage he did has completely been off set by other actions. The country is becoming a corporatocracy, which started happening in the 90s and AI (yes it has benefits but in my field it has taken much more jobs then provided and is only half baked but the CEO swear it's the best thing since sliced bread) has only made it worse. Erick please please convince me why should even bother coming out to vote..I wonder if the fall of Rome felt like this…
I fear we’re headed towards something akin to what Greece went through in 2009, but due to the sheer depth of the hole Congress has allowed themselves to dig, it will be far more painful.
Howdy, closing attorney here... real estate is super slow, with high rates hurting families seeking to buy a home or refinance to save money. High bond yields = high mortgage rates. If we could get rates down, even a half-point to just below 6%, we'd see a lot of positive activity. Alas, Congress remains worthless and there's no chance for anything to happen because it's more important to posture for the midterms (both sides!) and there are some who would do anything to keep DJT from getting a real or perceived 'win'. #termlimitsnow
I've been in residential real estate for 25+ years and other than starting out 2025 was my worst year ever. 2026 so far is slightly better thanks to VA foreclosures. Looking for other options but at my age there aren't many!
The last three years (including 2026) have been lame...