U.S. National Debt Hits $17 Trillion: How Did We Get Here?

Discussion in 'Business & Economics' started by cosmictraveler, Aug 29, 2016.

  1. joepistole Deacon Blues Valued Senior Member

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    Except that's not Joe's answer. That's not what Joe said. Joe said there should be a progressive tax system where taxes are assessed based on public need and ability to pay. Joe said today's tax scheme is overly complex and unfair where wage earners are increasingly bearing a larger share of the tax burden and are paying more as a percentage of their income than the uber wealth like Trump, Romney, Koch, and Buffett. Joe said all income from whatever source should be taxed equally. Joe has said wage income shouldn't be the most heavily taxed income as it is today. If Joe Six Pack is expected to pay 30% of his income, The Donald should at least be expected to pay 30% of his income if not more.

    The fact is the US has the ability to increase taxes as it did in 2013. Taxes are low by historical standards. Joe said taxes were much higher in the past, and that's just a plain and simple fact. And Joe has said US debt is manageable despite all the hoopla and right wing fear mongering and demagoguery.
     
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  3. iceaura Valued Senior Member

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    No, I don't. I just apply it to the tax system overall, and the US economy as a whole - where a major role of the income tax is to balance other factors, and play its role in a fair system.
    Right now, with a tax system so onerously burdening the poor, any further increase in taxes on the poor would have to be balanced by such a huge increase in taxes on the wealthy as to damage the economy. So starting from where we are now, no fair setup can incorporate raising taxes on the poor.

    Otherwise, it depends on the ratio. The bottom half should pay 0 income tax, of course; the ratio of increase among the rest needs to be much more heavily skewed toward the upper brackets than now, to approach fairness overall.

    We have a 17 trillion dollar debt because of the Reagan/W tax cuts for rich people, and the launching of two very expensive land wars on borrowed money. (That's most of it. Most of the rest is side effects of the extra 10% of GDP the US devotes to its second tier health care system, above what anyone else pays for equivalent outcomes.)

    Incomprehension such as yours has been dominating governmental policy since Reagan. That's why the tax cuts for the rich remain in force, despite the obvious problems they have caused - including the growing wealth inequality such unfairness makes inevitable in a capitalist setup.
     
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  5. wellwisher

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    What is causing the national debt are the actions of big government and crony capitalism. For example, Obama, Hillary and the Democrats wanted solar and renewal energy. This was driven by the fear of climate change. To achieve this ends, did their best to regulate oil; justified by fear, using agencies like the IRS and EPA, so the price would rise. In the US, oil did go up to near $4.00/gallon. The higher price was needed to make the fledgling solar energy industries more competitive.

    The problem this created was people are using oil, now, causing costs to rise. Solar is not ready to replace oil. This means people had less deposable income due to higher energy costs. The higher energy costs also impacted business who see increased costs and the need to raise prices. The combined affect of less buying power by the consumer and higher business costs ripples into the economy. Business sees a loss of customers and revenue, causing layoffs and/or fewer hours to avoid paying benefits. This results in more unemployment and the need for more government assistance, which costs money. The net affect is less tax revue and more need for government resources.

    ObamaCare has done the same thing in terms of added costs to the taxpayer. The price of health care did not go down increasing disposable income. Rather one is forced to pay more and have less deposable income or pay a fine. The gross costs of ObamaCare is about $1.7trillion. This means less buying power for other products and more need for government assistance.

    Higher taxes rates on the rich do not fix the problem, under the current system. The reason is, the IRS tax code is about 70,000 pages long. That many pages of tax code is the result of decades of lobbyists, campaign contributions, and tax money laundering deductions. In those 70,000 pages are all types of deductions and loopholes to offset higher tax rates. In you add crony capitalism, large corporations, like GE, can pay no taxes even with a tax rate of 35%. Tax rates mean nothing under the current system of pay-to-play.

    The Democrats never discuss getting rid of the tax code, so there are honest tax rates that can't be scammed away with hidden pay-to-play loopholes in the tax code. They benefit by the campaign contributions and the pay-to-play crony capitalism.

    Trump is a businessman and not a lawyer. He is not about lawyer scams and money laundering, but about running a business. He had to deal with the crony government for decades an may have even benefited, but it is not right. If we got rid of the tax code, this will cut the corruption and crony capitalism at the source. There is no place to hide the loopholes. There is no reason we can't have a one page tax code that is fair. This who have studied this can get the same tax revenue, as today, with three low honest tax rates; little or no deductions. With business not having to invest so much into pay-to-play and tax attorneys to work the scam, there is more to invest into value added.

    Regulation by the Democrats have also increased costs, since resources are diverted to pushing paper, which creates no value added. This is also crony capitalism which benefits the super rich businesses, who can better afford these added costs. The mom and pop business can't afford an on site expert to do the paper work, and end up in the red. Loss of small businesses means less competition and higher prices, which further ripples in the economy and strains government resources.

    Trump will shrink the regulatory pay-to-play scam. Obama added about 30,000 pages of EPA regulations over just his 8 years in office. I am for clean water and air, but can anyone make a list of things to do that requires 30,000 more pages? It is all about a money laundering scam that raises cost and prices for all, through pay-to-play and crony capitalism. Then it requires expansive EPA involvement after they drive business to bankruptcy; clean up sites. Less tax revenue and more government costs.
     
    Last edited: Sep 2, 2016
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  7. joepistole Deacon Blues Valued Senior Member

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    Big or small government debt is obviously the result of actions taken by government. Here is the thing about "big government", while the term is popular among self described "conservatives", I've never meant one who can define what they mean by "big government". I've never met a so called "conservative" who could explain in any meaningful way what they mean by "big government". That should be a problem for these self described conservatives, but it never is.


    The irony here is that the biggest supporters of crony capitalism are these self described "conservatives" i.e. Republicans. Republicans are responsible for Citizens United which has allowed unlimited sums of secret money into our polity. Republicans have steadfastly fought to prohibit anything which would eliminate or even reduce crony capitalism. Their financial supporters are the biggest cronies in country.


    And where is your evidence Obama and Hillary did their best to "regulate oil" and use agencies like the IRS and EPA in order to the price of oil to rise? Now let's address your gasoline price allegations. First, the average US oil price for any given year has never been $4/gallon. There have been areas where gasoline prices have topped $4/gallon and that happened under the Baby Bush administration first. Gasoline prices during the Obama administration have fallen and fallen dramatically because of a oil glut. So if as you have alleged Obama and Hillary have used agencies like the IRS and EPA to dry up oil production, they have done a very poor job of it. Google oil glut and see what you find.

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    Average gasoline prices for all grades last year was $2.52 per gallon. That's not anywhere near the $4 per gallon number you cited. Oil prices first topped $4 per gallon on June 8, 2008. Baby Bush was POTUS then, he was a Republican...oops. And how Hillary's policies had anything to do with regulation is a bit of mystery. She was Secretary of State not Secretary of the Department of Energy, the agency responsible for regulation enforcement. But, hey, none of that maters to you because you are one of those self described "conservatives" who can and do just make shit up as they are wont to do.

    http://www.marketwatch.com/story/average-price-of-gas-hits-4-a-gallon-20086810500

    https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm

    Seriously...you really haven't been paying attention have you? Either that or you are just being blatantly dishonest as Republicans are wont to do. Below is a chart of US gasoline prices in the United States. You do know who was POTUS in 2008? It wasn't Obama. It wasn't a Democrat.

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    Oh, and what costs has Obamacare added to the taxpayer exactly? Some people will pay more and some will pay less. If you weren't paying anything before, if you were being a freeloader before Obamacare, well you are paying more, because you were paying little to nothing before and if you did become ill you were counting on everyone else to bail you out. That's called freeloading. That's not the case today. Under Obamacare everyone is required to pay something for their healthcare insurance. Healthcare in the US is very expensive. It was expensive before Obamacare and it's expensive after Obamacare. What Obamacare has done is give people the opportunity to pay what they can afford for their healthcare insurance. It has made healthcare more available and more affordable to millions of Americans.

    It's more than a little dishonest for you and those like you to focus on the few who have born increased healthcare costs as a result of Obamacare and ignore the millions whose healthcare costs have been reduced by Obamacare.
     
    Last edited: Sep 2, 2016
  8. joepistole Deacon Blues Valued Senior Member

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    What is the problem you are trying to fix? Higher tax rates won't will not fix a complicated tax code. But higher tax rates for the uber wealthy will bring in more tax revenues which was and remains the topic under discussion. The only way you will fix the complicated tax code is if we change the way people are elected to office and the ethical standards expected of them while in office. But no one is talking about that in any serious way. Only Democrats come close. Democrats and Hillary in particular are for repealing the Republican Citizens United ruling which allowed unlimited sums of secret money to flood the election process. Republicans aren't for even that. And Bernie Sanders, a leading Democratic candidate for POTUS was for much more electoral reform.

    Well, yet again, that is simply untrue. Both parties have stated they want to simply the tax code. The problem is in the details. For Republicans tax code simplification means fewer tax brackets and a more regressive tax code. Democrats don't want to make the tax code more regressive, and that's why there is no agreement on tax code simplification. If Republicans were serious about tax code simplification, they could do it tomorrow as they control both houses of Congress. But they haven't and they won't. Because they really don't want tax code simplification. It's a canard for them.

    Trump isn't a lawyer but he has squadrons of lawyers on his payroll to do his bidding, to carryout is scams e.g. Trump University. Getting rid of the tax code without a replacement is a Baby Bush and his band of merry Republicans solution where you don't worry about paying bills you just spend money. Sure, the tax code can be and should be simplified. If Republicans were serious about tax code simplification they could pass it, they control both houses of Congress. But in order to pass it, they would first have to draft a tax code simplification bill, something they haven't done. So unless and until Republicans draft an actual tax code simplification plan, they have no room to complain about it or to point fingers. There no good excuse for not having a tax code simplification plan. If you want something you should be able to define what it is you want in some meaningful way, and Republicans can't do that.

    And where is the evidence to support that one? As with all the others, you have none. You are just mindlessly repeating Republican partisan nonsense where evidence and reason are not needed nor wanted. Deregulation, can be very expensive e.g. The Great Recession.

    As a business owner, as a businessman who has dealt with regulators, I can honestly tell you I love more detail. I don't find thousands of pages of regulations a bad thing. I think it is a good thing. In regulation the worst thing is ambiguity and I'll give you an example. I built commercial structures in the same state using the same regulatory code. But depending upon the county and city, regulators would interpret that same code differently. In one location it would cost significantly more to build a building than it would in another simply because of how regulators interpreted the building code. I thought and still do, the interpretation taken by some regulators was not only more expensive but absurd. So if you are going to regulate something, you need to do it well. You need to spell it out in infinite detail and clarity so you don't have some clodhopper regulator requiring you to do stupid things. So as a businessman I prefer more detail and more pages of regulation if it eliminates ambiguity. I've had some drag out drop down fights with regulators. I've played hardball with them. I've taken my issues to the statehouse.

    If you are for clean water and air then you shouldn't be complaining about regulation. If you are against crony capitalism, then you should be for changing the way we elect our representatives, taking the influence of money out of our election system, and for changing the ethical standards we require of our elected and senior appointed officials. But that's not the case, is it? Republicans are diametrically opposed to those things. It's silly for Republicans to complain about those things and yet oppose anything to fix them. Any reasonable person would have to suspect their sincerity and honesty.
     
    Last edited: Sep 2, 2016
  9. billvon Valued Senior Member

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    11,640
    Yes, you do. "Fair" means equitable, and having 5% provide more than 50% of the people is not equitable.
    No, the major role of income tax is not to "balance other factors" or make the world a better place.

    The major role of income tax is to PAY FOR THE GOVERNMENT YOU WANT. It's not a tool for social engineering, it is a necessary evil that comes with all the spending we do.

    If you are willing to raise taxes (on everyone including you, not "someone else") then you can afford all those programs.

    If you are willing to cut programs (again, across the board, not just "other people's programs") then you can justify not raising taxes.

    Those are your two choices. You can't accept that - which is a great example of why we have a $17 billion debt.
     
  10. iceaura Valued Senior Member

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    That's not what's happening. That's just the relative percentage of income tax revenue.

    It's to balance other taxes and governmental burdens, so that the cost of government does not fall disproportionately upon the poor. The idea is to tax the rich in proportion to their benefits received and costs incurred - which are enormous.
    Nobody is talking about social engineering. We're talking economic fact, here, the structure of the US economy. Taxes are a large factor in the basic economic structure of the country. If you pay for the government in such a way that it burdens the poor and benefits the rich, if you structure your economy in such a way that it becomes an oppression on everyone except a privileged class of the very wealthy, you are making a mistake, screwing up, creating a 17 trillion dollar public debt, etc. And that is exactly what happened.

    Who was it that cut taxes on the rich and expanded taxes on the poor, while cutting benefits to the poor and expanding military expenditures and other gravy trains for the rich? Who was it that cut taxes on the rich and actually launched full scale war on borrowed money - using the lives as well as the credit of the poor?
    And since this is not true of - primarily - Republicans and their allied "conservatives", we know who to blame for the 17 trillion debt. Right?
    I have accepted that, explicitly. Reading comprehension problems?

    And I assure you, I and those like me have had almost no influence on the 17 trillion debt. The entire combination of tax cuts for the rich and expensive warmaking on credit is the work of political forces and factions we have been fighting against for a long time.
     
  11. billvon Valued Senior Member

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    11,640
    The top 5% are paying much more in terms of absolute money than the lower 50%.
    The top 5% are paying much more in terms of percentages than the lower 50%.
    Let's look at that. Government cost per household, by quintile: (From Rector/Kim, 2004)
    Lowest 20% - $8255
    Next 20% - $10602
    Next 20% - $7500
    Next 20% - $5517
    Top 20% - $4717

    So if you were going to be perfectly fair, you would tax the second to lowest quintile the most heavily, since they incur the most costs and use the most benefits. Let's see if that happens. Tax income (both state and federal, and ALL taxes, not just income) per household, by quintile:

    Lowest 20% - $4251
    Next 20% - $9524
    Next 20% - $16426
    Next 20% - $28726
    Top 20% - $69704

    Hmm, it looks like the second to lowest 20% uses the most government resources, and the top 20% pays the most in taxes. Thus the cost of government falls disproportionately on the rich. So if you really believe that the cost of government should be borne by those who incur the costs, then you should be beating the drum to increase taxes on the second to lowest quintile.

    (Note that I don't think there's anything wrong with the system now. It is skewed towards taxing the rich very heavily, and that helps to reduce the divide between rich and poor, which is overall good for society. The above facts do, however, make a mockery of anyone who claims that the rich need to "pay their fair share.")
    Agreed, and further, taxes must support spending.
    The facts tell a different story.
     
  12. iceaura Valued Senior Member

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    21,437
    Of income tax. So?
    And all you have to do, to get it to look like that, is ignore things like who made money off the Iraq War, the various petrochemical deals, the maintenance of the transportation network, the banking system setup, and so forth.

    You also have to pretend that the income you are talking about taxing is equitably calculated in the first place - no mortgage interest deductions allowed, no tax free municipal bonds, no special "capital gains" categories, etc. And you have to ignore most of the tax burden on the bottom 80% - the property tax fraction of rent, etc. And you have to completely shelve any consideration of tax burden in a more complete sense, other than simple dollar amounts (the fact that the sales tax on basic utilities is far more of a burden on the poor, for example, or the fact that increases in wealth not taken as income go untaxed altogether).

    And you probably need some serious drugs, to shut down your higher reasoning faculties.
    It isn't skewed towards taxing the rich. Not even close. And they aren't taxed "very heavily". Not even close.

    If you ever tried to raise taxes on the rich so that they were paying the same total fraction of their gross income to the tax man overall as the poor pay, even just that, you'd hear the squealing to China. The prospect of actually skewing the tax system against them is unimaginable.

    Basically, from a "fairness" pov, the beneficiaries of an economic system - the successful, the wealthy - should pay for it. People who are penalized by it - the poor, the misfits - don't owe it a thing. In an abstract moral sense.

    But if you really want to calculate this "fairness" thing in detail, as if the government were your mom, the rich (or poor) your siblings, and you want the same number of chocolate chips in everybody's cookie dole, you can at least quit talking about the income tax in isolation.

    Because right now you are talking about (for example) raising the income taxes on the middle and lower classes to repay the Social Security trust fund the money they already paid into it once, money borrowed to pay the return to rich people's capital for the Iraq War contracting (a war in which the lower and middle classes contributed yet more of their actual labor, and lives). And this you call fair.
     
    Last edited: Sep 3, 2016
  13. Carcano Valued Senior Member

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    6,865
    How did we get here...now close to 20 trillion less than zero???

    The question goes deep...right to the electoral process.

    One-person-one-vote will always yield an eternal cycle...that moves faster or slower depending on the ignorance of the voting population.

    The people want free stuff...the government borrows to pay for it...the interest on the debt eventually creates a crises...which is solved by devaluing the currency.

    In some latin american nations this cycle rolls over within a decade...the government gives the peso a new name and declares it to be worth one tenth of the old peso, and life goes on until the next crises.
     
  14. joepistole Deacon Blues Valued Senior Member

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    21,480
    So you think the US is spending too much more on interest. How much as a percentage of GDP does the US pay in interest?
     
  15. Carcano Valued Senior Member

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    6,865
    Just to edit my mistake, this should read...the new peso is worth more than ten times the old peso.

    A good extreme example is the Argentina Peso. Called the 'Peso Ley' from 1970-1983 it was replaced by the 'Peso Argentino' at a rate of 1 to 10,000. And that was replaced just two years later by a new unit at a rate of 1 to 1000.

    The only reason the US has managed to escape this cycle is the global demand for dollars...allowing them to effectively 'export inflation'.
     
  16. joepistole Deacon Blues Valued Senior Member

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    21,480
    You haven't answered my question. You think the US is spending too much to service its debt. So how much is the US spending to service its debt, and why is that too much? How much of the "near 20 trillion dollars" in reported debt is real debt, i.e. money it owes to to others?

    If you are serious about this issue and not just demagoging the issue, you should answer the questions I have put to you.
     
    Last edited: Oct 19, 2016
  17. eyeswideshut Registered Senior Member

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    255
    "U.S. National Debt Hits $17 Trillion: How Did We Get Here?"

    -Who cares, just print some more


     
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  18. joepistole Deacon Blues Valued Senior Member

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    21,480
    How about answering my questions rather than continuing the demagoguery of the national debt?
     
    Last edited: Oct 20, 2016
  19. eyeswideshut Registered Senior Member

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    255
    Whats the point calling it debt, debt is something that is supposed to pay back? How in the hell that amount of a debt could ever paid back? It cant be paid back, so its just a numbers game, servitude to pay the interest forever, raise the debt ceiling and print some more... But wait, there is always chance to pay it back by deflating the value of the debt but then is it really debt then?
     
    Last edited: Oct 20, 2016
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  20. joepistole Deacon Blues Valued Senior Member

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    21,480
    What's the point...really? You debt demagogues cannot or will not answer a very simple question which is central to your assertions about the US debt. Once again, how much does the US government pay to service it's debt each year? Since you have expanded the demagoguery, what makes you think the debt is essentially serviceable? What makes you think it cannot be repaid?

    Trump said he can repay the entire national debt in 8 years. So how about a little less demagoguery and a little more fact and reason?
     
  21. iceaura Valued Senior Member

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    21,437
    Most of the borrowing the US has done has been to pay for wars, Wall Street bailouts, and the 50% extra the US pays for medical care.

    Is that what you meant by free stuff people want?
     
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  22. Carcano Valued Senior Member

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    6,865
    I was addressing the general trend cycle for most nations, but you are RIGHT...the US is a special case for a number of reasons. I live in Canada, and yes we pay less for medical care and FAR less for military expenditures.

    This is why I supported Bernie over Clinton or Trump.

    Now one might well ask, isnt economic education at the high school level the answer to the public ignorance of this cycle I described in post #50. Unfortunately this is impossible because the public education system is part of the government...and therefore cant be expected to inform students about the government's economic deception. Just like it cant be expected to dispense accurate accounts of history itself.

    A typical high school history textbook is somewhat like the bible published in Victorian England...highly edited to protect the gentil fainting couch culture from the 'naughty bits'.
     
    Last edited: Oct 22, 2016
  23. Carcano Valued Senior Member

    Messages:
    6,865
    Exactly, the last time the federal debt was paid back was 1835...by a president who actually had experience with real world investment strategies from his private career.
    http://www.npr.org/sections/money/2...he-entire-national-debt-and-why-it-didnt-last
     

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