Annual Interest on Debt Surpasses $1 Trillion

[Individual]

Raise taxes.

What I've been suggesting would raise taxes of the very highest income earners while reducing taxes of very lowest.

 

[Helix]

What I've been suggesting would raise taxes of the very highest income earners while reducing taxes of very lowest.

In the past, I've supported taxing all income as income above a cap. I'd be willing to negotiate using that as a starting point.

 

[Econ4every1]

You seem to be including business/corporations while I'm simply talking about taxing the income of private individuals.

No, I'm including both. Private sector = businesses + individuals

Business and private individuals are all in the private sector. It makes no sense to believe that you could increase or decrease taxes/ spending to one group and it wouldn't effect the other. That's like saying you can add/ remove water from one side of a pool and not the other, impossible.

How is what government now doing reducing the division of wealth between the bottom 90% and the top 10%?

Nothing.

The division between the top 10% and the bottom 90% is growing.

An argument might be that government action has slowed the growth of division and without government the division would be greater and occur faster.

I'm still not seeing how you see taxes taking money out of the economy.

Now that I've definitively illustrated this point using an accounting approach, do you understand how increasing taxes in my example decreases income component to the private sector?

Specifically, I said:

Are you arguing that spending and taxes should be balanced?

And you replied,

When possible.

Do you understand my claim that increasing taxes (again in the aggregate) reduces income to the private sector and further, if your population is increasing by an average of 295k people per month (over the last 40 years) AND productivity increases by 0.26% per month (which might sound small but over 40 years that's 128% over 40 years) then reducing income in an economy with more people who are increasing their productivity over time will reduce the ability to put productive capacity to use and increase unemployment reducing productive economic growth.

That said, I think that tax increases can be an effective way to slow an overheating economy exactly because it can reduce the private sectors capacity to put pressure on limited supply, however, targeting cuts on the areas that are putting pressure on demand is key, however because the government makes a budget once a year, the ability to react to changing market conditions is extremely limited. Which is why the Federal reserve exists. The Fed can make changes more quickly, but the Feds targeting mechanisms are limited because they are monetary where Congress' tools are fiscal.

Thus:

The government is slow, but can be more discriminating on how it deals with supply pressures (demand driven inflation pressure) by creating incentives or disincentives with spending and tax policy
The Fed on the other hand can act quickly, but its tools mostly affect the banking system and large corporate structures. Changes to Fed policy can have a lot of collateral damage.


So, given all of that, when has it been possible, in the past 50 years, for the net of spending and taxes to be reduced in a meaningful way?

Keep in mind that we have a documented history of deficit spending reduction (the net reduction of taxes and spending) and historically recessions are almost always preceded by attempts to reduce deficit spending.

Look at this graph. Each recession is preceded by a period of deficit reduction.

The mistake that most people make when debating someone, like me, that believes that sovereign money school of economic thought are correct, is that they think that we're saying that the deficit should never be reduced, but that's not what we're saying.

It's like the gas and the brake in a car. If people believe that pushing the brake is what powers the car and I tell you that the car isn't limited by the brakes to move forward and the response is, "Oh! So you think you can drive a car without using the brakes!!!!"

No, what I said was, you don't need to hit the brake to go forward, they are two separate things. The need to brake is the result of other factors.

Similar, spending is not limited by taxing or borrowing....

"Oh, so your saying that spending doesn't matter!!!"

No, I'm making the point that, reductions in spending are the result of other factors.

 

[Individual]

In the past, I've supported taxing all income as income above a cap. I'd be willing to negotiate using that as a starting point.

I believe what I've been suggesting basically accomplishes that by eliminating the FICA tax, adjusting wages to compensate for the previously employer paid portion of the FICA tax, which would then make SS and Medicare a mandatory budget item paid from the general revenue fund.
The progressive tax table would begin at 15%, slightly less than the FICA tax previously paid but applicable to ALL income.
The tax tables would be set by an algorithm each year based on the GNI per person, with the lowest income earners, currently those earning about $80,000 or less paying a 15% tax rate.

 

[Individual]

No, I'm including both. Private sector = businesses + individuals

Business and private individuals are all in the private sector. It makes no sense to believe that you could increase or decrease taxes/ spending to one group and it wouldn't effect the other. That's like saying you can add/ remove water from one side of a pool and not the other, impossible.


Nothing.

The division between the top 10% and the bottom 90% is growing.

An argument might be that government action has slowed the growth of division and without government the division would be greater and occur faster.


Now that I've definitively illustrated this point using an accounting approach, do you understand how increasing taxes in my example decreases income component to the private sector?

Specifically, I said:

And you replied,

Do you understand my claim that increasing taxes (again in the aggregate) reduces income to the private sector and further, if your population is increasing by an average of 295k people per month (over the last 40 years) AND productivity increases by 0.26% per month (which might sound small but over 40 years that's 128% over 40 years) then reducing income in an economy with more people who are increasing their productivity over time will reduce the ability to put productive capacity to use and increase unemployment reducing productive economic growth.

That said, I think that tax increases can be an effective way to slow an overheating economy exactly because it can reduce the private sectors capacity to put pressure on limited supply, however, targeting cuts on the areas that are putting pressure on demand is key, however because the government makes a budget once a year, the ability to react to changing market conditions is extremely limited. Which is why the Federal reserve exists. The Fed can make changes more quickly, but the Feds targeting mechanisms are limited because they are monetary where Congress' tools are fiscal.

Thus:

The government is slow, but can be more discriminating on how it deals with supply pressures (demand driven inflation pressure) by creating incentives or disincentives with spending and tax policy
The Fed on the other hand can act quickly, but its tools mostly affect the banking system and large corporate structures. Changes to Fed policy can have a lot of collateral damage.


So, given all of that, when has it been possible, in the past 50 years, for the net of spending and taxes to be reduced in a meaningful way?

Keep in mind that we have a documented history of deficit spending reduction (the net reduction of taxes and spending) and historically recessions are almost always preceded by attempts to reduce deficit spending.

Look at this graph. Each recession is preceded by a period of deficit reduction.

The mistake that most people make when debating someone, like me, that believes that sovereign money school of economic thought are correct, is that they think that we're saying that the deficit should never be reduced, but that's not what we're saying.

It's like the gas and the brake in a car. If people believe that pushing the brake is what powers the car and I tell you that the car isn't limited by the brakes to move forward and the response is, "Oh! So you think you can drive a car without using the brakes!!!!"

No, what I said was, you don't need to hit the brake to go forward, they are two separate things. The need to brake is the result of other factors.

Similar, spending is not limited by taxing or borrowing....

"Oh, so your saying that spending doesn't matter!!!"

No, I'm making the point that, reductions in spending are the result of other factors.

What I am talking about is the income earned by individuals, which is spent consuming the products/services of businesses/corporations.
As for the swimming pool analogy, what I'm suggesting is more like changing from a 50 gallon per minute filter system to a 100 gallon per minute filter system. No water is removed from the pool, but simply cleaned and returned to the pool.
Low income earners would have more after tax money to spend in he market, and perhaps even save/invest some as well, while the highest income earners would pay a little more tax which government could put to use funding social programs without incurring Federal debt and reducing the need of inflation.
No one who earned more than another would pay less tax then someone who earned less than they. Each dollar of income would be taxed progressively.

 

[Lord Tammerlain]

I’d need to dig up the post where I did the math, but as of a few years ago all we needed to do was freeze federal spending and historical tax revenue growth would erase the annual deficit with 6 or 7 years. Retiring the debt would take a decade or two from there.

The problem is, of course, neither party is interested in managing the budget. They’re too busy bribing us with our own money.

Retiring debt would take much longer than a decade or two.

The federal government has tax revenues of around 18% of GDP. The federal government debt is over 100% of gdp.

So unless the federal government runs a surplus equal to 3% of gdp each year it would take many decades to retire the debt. ( if no inflation or economic growth 5% surplus would require 20 years)

There is no way the US federal government would run a consistent surplus for more than 5 years

 

[Econ4every1]

What I am talking about is the income earned by individuals, which is spent consuming the products/services of businesses/corporations.

This started out because you said that you thought taxes should be increased.

I said that increasing taxes will reduce income. Because you didn't mention anything else, I assumed that all other things would remain the same. You said you didn't understand why that would be the case. I then put the cycle of spending, taxes and bond sales and demonstrated the accounting.

So I'm just not sure how raising taxes to pay down debt will help. I've pointed out that taxing to keep the disparity lower between the top 10% and the bottom 90% is a good idea and I've explained why.

As far as your comment.

Individual spending is earned by individuals that work for those businesses. And individuals spend. Both individuals and corporations exist in the private sector.

My point was that if you try to net increase taxes you reduce money to the private sector. If you want to take more from the highest earners and less from ,low earners, that might help the folks on the low end of the scale, but that ignores the macroeconomic affects.

As for the swimming pool analogy, what I'm suggesting is more like changing from a 50 gallon per minute filter system to a 100 gallon per minute filter system. No water is removed from the pool, but simply cleaned and returned to the pool.

Is the pump moving dollars?

What is the filter in this analogy?

Low income earners would have more after tax money to spend in he market

Ok, with you so far.

while the highest income earners would pay a little more tax which government could put to use funding social programs without incurring Federal debt and reducing the need of inflation.

Now you've explained using generalities, here's the problem I see.

It sounds like you are trying to balance taxes between the lowest and the highest income earners.

First problem. The wealthiest families often earn money as investment income, much of that income is earned in asset portfolios. Investment assets are often considered unrealized gains until you sell them. For example Elon is worth more than 100 billion, but much of that is in Tesla stock. If he doesn't cash in the stock, he pays no tax on it. Even if he does, he pays the capital gains rate, which is lower than the 39% income tax bracket for people like him.
Should we tax unrealized gains?

No one who earned more than another would pay less tax then someone who earned less than they. Each dollar of income would be taxed progressively.

Again, let's say I have a net worth of $100 billion. I earn a salary of $1 and instead am paid in stocks, which have no value until sold. If I need money, I borrow from a bank and pitch my assets as collateral. Because the loan is fully secured I pay 1-2% than the federal funds rate (basically the rate floor). Meanwhile my assets are earning an average of 10%, so even with the 2% I pay on my loan/s I net earn 8% vs cashing in my stock, losing the earning value AND I have to pay taxes on that money. Thus, in theory that sounds good, but I'm not sure if you're aware of the sheer number of ways the wealthy can avoid taxes.

 

[Econ4every1]

I’d need to dig up the post where I did the math, but as of a few years ago all we needed to do was freeze federal spending and historical tax revenue growth would erase the annual deficit with 6 or 7 years.

Except the economy would crash in to a deep depression long before that.

ho claims taxes alone are the solution?

Assuming I understand your statement....I'm kinda curious how you can reduce federal debt without taxes.

One of the great lies about how to address the debt is the assertion that we need to raise taxes. I’d have to dig up the link for this, but back in the 70’s the University of Ohio ran a study on tax increases and spending.

Oh wait....Here's a claim.

How does decreasing spending address the debt, exactly?

If history is a guide, we every reason to believe increasing taxes will only increase the size of the debt.

Wow.....No that's not how it works. I posted this in another thread, but I'll share the accounting of federal spending, taxes and borrowing....



Now tell me, if we decrease spending, how does that change anything?

If you want I can share my spreadsheet and you can fill it in.

 

[Econ4every1]

And borrowing rather than taxing is the preferred method of funding such increased spending?

What comes first, borrowing or spending?

 

[NatMorton]

Except the economy would crash in to a deep depression long before that.

Why do you believe that's true?

 

[NatMorton]

Retiring debt would take much longer than a decade or two.

The federal government has tax revenues of around 18% of GDP. The federal government debt is over 100% of gdp.

So unless the federal government runs a surplus equal to 3% of gdp each year it would take many decades to retire the debt. ( if no inflation or economic growth 5% surplus would require 20 years)

There is no way the US federal government would run a consistent surplus for more than 5 years

... and for @csbrown28, found the math I did earlier.

FYI:

Do conservatives think massive debt created by upper class tax cuts is okay?

Now you’re agreeing it’s a spending problem. No, I am saying in basic accounting you have to balance debits and credits, taking money out of the revenue pool is not revenue neutral. Do you think a company or household would not create more debt if it reduced the amount of money it would take in?

debatepolitics.com

 

[Mach]

Assuming I understand your statement....I'm kinda curious how you can reduce federal debt without taxes.

"Taxes alone..." He claimed it was the sole way, I'm simply pointing out that it's typically part of the mix.
Some claim if you raise taxes, the rich hide/evade taxes to the point it doesn't raise revenue, and use that as a reason to promote not raising taxes on them.
Convenient right?

 

[Econ4every1]

Why do you believe that's true?

Because debt reduction has been attempted in the past, and any period of 3 or more years of debt reduction has resulted in economic depression.

For example....
1804-1812: U.S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U.S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U.S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U.S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U.S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U.S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U.S. Federal Debt reduced 36%. Depression began 1929.

Now let's look at your chart....



At the top you claim a "growth rate", what is it that's growing?

Respectfully, I don't think you understand the accounting of what's really happening. I'm happy to explore this with you to see if it is you or I that is misunderstanding.

If you respond, please do me the courtesy of answering at least this question:

Can we agree that spending, individual, cooperate or government, always results in another group or individual receiving an income? Please don't get fancy, I'm asking a fundamentals question, the question is, does spending=income. Just to be sure we're 110% clear what I'm asking, if I spend $20 and buy something and get something in return for my $20, then my spending has equaled someone else's income dollar for dollar. Giving, remitting, repayment etc, is not spending so please don't get confused.

You give a period of 20 years and you want to maintain similar spending levels. This would result in a deflationary spiral and a deep economic crisis. Why?

The best way to understand is to simply look at the last 20 years.

I grabbed data from 2000-2020:

The population has increased by 50 million

Of that roughly 63% or 31.5 million net new people of working age enter the workforce and are looking for work. So between 2000-and 2020 there are 31 million more workers competing for jobs and ultimately money.

However, that's not the end of the story, because as I'm sure you know, technology is always making it possible for fewer workers to achieve the same level of output, ofr the same number of workers to achieve greater output.

Said another way if we have 100 workers and they are given tools that enhances their output by 50%, then we can say that compared to the period prior to the change in technology, they are doing the work of 150 people. Of course if there is only enough work for the output of 100 people and output increases by 50%, then it now takes 67 people to do all the work that needs to be done and 33 are left unemployed. Unless the 66 get to share the salaries of the 33 that were laid off, there is now less consumption capacity because the salaries of the remaining workers is saved. Now, of course, the savings was likely used to buy the technology and technology employs people, however, in order to be worthwhile, the net when totaling everything is fewer workers. But we'll set that fact aside for a sec.
The real numbers based on Census data and data here that shows increases in real output are 72% increase between 2000and 2020. This means that we take 31 million more people x 72% and we get an increase in potential productive output of 53 million. That means, that either the economy can supply the equivalent of 53 million more workers worth of productivity OR if productivity levels remain the same it now takes over 8 million less peopleor about 23 million people to do the work of 31 million compared to 2000 when you began holding spending the same and increasing revenue.

Now, looking at your chart, I don't know exactly what you mean by revenue, but as long as that money is coming from the private sector and paid to the government, then it is true to say that if the difference of revenue-spending is positive, that means that money is flowing out of the private sector and to the government, reducing the amount of money (all other things being equal) circulating in the private sector by the positive amount.

Since you hold spending flat, we need just look at your government surplus and total it.....You want to remove $40 trillion dollars from the economy. You want $40 trillion dollars to be taken from the private sector and applied to the government's outstanding debt, which by the way does not result in the government having $40 trillion more dollars it allows the government to reduce it's debt, or +40 trillion applied to -$0 trillion = zero.

Thus your plan would result in MASSIVE unemployment, the destruction if tens of thousands perhaps million of companies while the government institutes your austerity plan and all for ZERO real gain.

If I need to show this in a spreadsheet, let me know.

Thoughts?

 

[Econ4every1]

"Taxes alone..." He claimed it was the sole way, I'm simply pointing out that it's typically part of the mix.

I would agree that "taxes", at least by that name, aren't the sole way to remove dollars from the private sector and shift them to the government. For example, The Federal makes billions of dollars in profit, 6% of that is used to run the Fed and pay out dividends to regional banks among other things. The other 94% is returned to the government.




Take each year, 94% of all the money earned in this chart is given back to the government, meaning that this money is shifted from the private sector to the government sector. We don't call this a "tax" but functionally it's no different.

 

[Individual]

This started out because you said that you thought taxes should be increased.

I said that increasing taxes will reduce income. Because you didn't mention anything else, I assumed that all other things would remain the same. You said you didn't understand why that would be the case. I then put the cycle of spending, taxes and bond sales and demonstrated the accounting.

So I'm just not sure how raising taxes to pay down debt will help. I've pointed out that taxing to keep the disparity lower between the top 10% and the bottom 90% is a good idea and I've explained why.

As far as your comment.

Individual spending is earned by individuals that work for those businesses. And individuals spend. Both individuals and corporations exist in the private sector.

My point was that if you try to net increase taxes you reduce money to the private sector. If you want to take more from the highest earners and less from ,low earners, that might help the folks on the low end of the scale, but that ignores the macroeconomic affects.


Is the pump moving dollars?

What is the filter in this analogy?


Ok, with you so far.


Now you've explained using generalities, here's the problem I see.

It sounds like you are trying to balance taxes between the lowest and the highest income earners.

First problem. The wealthiest families often earn money as investment income, much of that income is earned in asset portfolios. Investment assets are often considered unrealized gains until you sell them. For example Elon is worth more than 100 billion, but much of that is in Tesla stock. If he doesn't cash in the stock, he pays no tax on it. Even if he does, he pays the capital gains rate, which is lower than the 39% income tax bracket for people like him.
Should we tax unrealized gains?



Again, let's say I have a net worth of $100 billion. I earn a salary of $1 and instead am paid in stocks, which have no value until sold. If I need money, I borrow from a bank and pitch my assets as collateral. Because the loan is fully secured I pay 1-2% than the federal funds rate (basically the rate floor). Meanwhile my assets are earning an average of 10%, so even with the 2% I pay on my loan/s I net earn 8% vs cashing in my stock, losing the earning value AND I have to pay taxes on that money. Thus, in theory that sounds good, but I'm not sure if you're aware of the sheer number of ways the wealthy can avoid taxes.

I've been trying to begin a discussion on CHANGING the Federal income tax code.

Your last paragraph is a good example of something which would change by eliminating ALL deductions and taxing gross income AND eliminating the FICA tax with the progressive tax table beginning with a 15% tax rate.

 

[Individual]

What comes first, borrowing or spending?

Income. With no means of at least paying the interest on what is borrowed it would be foolish to lend.

 

[NatMorton]

Because debt reduction has been attempted in the past, and any period of 3 or more years of debt reduction has resulted in economic depression.

For example....
1804-1812: U.S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U.S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U.S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U.S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U.S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U.S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U.S. Federal Debt reduced 36%. Depression began 1929.

Now let's look at your chart....

View attachment 67539503

At the top you claim a "growth rate", what is it that's growing?

Respectfully, I don't think you understand the accounting of what's really happening. I'm happy to explore this with you to see if it is you or I that is misunderstanding.

If you respond, please do me the courtesy of answering at least this question:

Can we agree that spending, individual, cooperate or government, always results in another group or individual receiving an income? Please don't get fancy, I'm asking a fundamentals question, the question is, does spending=income. Just to be sure we're 110% clear what I'm asking, if I spend $20 and buy something and get something in return for my $20, then my spending has equaled someone else's income dollar for dollar. Giving, remitting, repayment etc, is not spending so please don't get confused.

You give a period of 20 years and you want to maintain similar spending levels. This would result in a deflationary spiral and a deep economic crisis. Why?

The best way to understand is to simply look at the last 20 years.

I grabbed data from 2000-2020:

The population has increased by 50 million
(Snip)

If I need to show this in a spreadsheet, let me know.

Thoughts?

My first thought is no one is ever going to accuse of you excessive brevity.

Back to the point, my worksheet was a simple back-of-the-envelope model. It wasn’t intended to be a demonstration of GAAP accounting principles, so you can drop that nonsense.

Second, let’s take your analysis one post hoc at a time. You’re making the argument that federal debt reduction somehow caused the 1929 crash and the depression that followed. Can you cite any creditable analysis to support this assertion?

 

[Econ4every1]

My first thought is no one is ever going to accuse of you excessive brevity.

My first thought to your first thought is you don't know how to respond to my post and instead resort to a backhanded slight. It's ok, I can be that way as well, mostly with people who don't argue in good faith.

Back to the point, my worksheet was a simple back-of-the-envelope model.

Which while the math was correct, the obvious (obvious to anyone who has a reasonable grasp on econ) consequences of your suggestions would be so dire it would functionally, not only set this country back decades, it would also affect the global economy and almost certainly lead to humanitarian disaster and war.

ou’re making the argument that federal debt reduction somehow caused the 1929 crash and the depression that followed.

I gave you the data, and pointed out that every single meaningful attempt to reduce the debt has lead to depression. Further, historically the overwhelmingly, attempts to reduce positive spending (the deficit) have resulted in recession, even before we get to the point of debt reduction and the government has responded by heaving private sector debt upon itself (increases in private debt are the counter to decrease in government debt) to prevent an economic crisis.

Can you cite any creditable analysis to support this assertion?

Absolutely, I prefer not to, because then we end up arguing who's source is correct, I prefer to have a discussion of facts, but since you didn't answer the one very simple question I asked you to answer above all others, it's obvious you aren't really interested in a good faith discussion. Seems to me you are obfuscating to avoid the possibility that I may expose your "back of the napkin" idea for what it is. Unreasonable and irresponsible nonsense.

That said, I suggest you look at the work of Steve Keen who has developed a sophisticated software program that models interactions between various agencies and the private sector.



Oh and can I get an answer to the following?

Can we agree that spending, individual, cooperate or government, always results in another group or individual receiving an income? Please don't get fancy, I'm asking a fundamentals question, the question is, does spending=income. Just to be sure we're 110% clear what I'm asking, if I spend $20 and buy something and get something in return for my $20, then my spending has equaled someone else's income dollar for dollar. Giving, remitting, repayment etc, is not spending so please don't get confused.

 

[NatMorton]

My first thought to your first thought is you don't know how to respond to my post and instead resort to a backhanded slight. It's ok, I can be that way as well, mostly with people who don't argue in good faith.

An inability (or unwillingness) to be concise is not my problem, and there's no sense whining about it.

Which while the math was correct, the obvious (obvious to anyone who has a reasonable grasp on econ) consequences of your suggestions would be so dire it would functionally, not only set this country back decades, it would also affect the global economy and almost certainly lead to humanitarian disaster and war.

No, I disagree. It is not obvious to such people, and your claim it would be doesn't make it so

I gave you the data, and pointed out that every single meaningful attempt to reduce the debt has lead to depression. Further, historically the overwhelmingly, attempts to reduce positive spending (the deficit) have resulted in recession, even before we get to the point of debt reduction and the government has responded by heaving private sector debt upon itself (increases in private debt are the counter to decrease in government debt) to prevent an economic crisis.

That it simply untrue. You did not provide data that deficit reduction led to the 1929 crash. You merely asserted that it did.

I ask you again, can you cite a credible analysis that supports your claim, yes or no? If yes, please cite it.

Absolutely, I prefer not to, because then we end up arguing who's source is correct, I prefer to have a discussion of facts, but since you didn't answer the one very simple question I asked you to answer above all others, it's obvious you aren't really interested in a good faith discussion. Seems to me you are obfuscating to avoid the possibility that I may expose your "back of the napkin" idea for what it is. Unreasonable and irresponsible nonsense.

That said, I suggest you look at the work of Steve Keen who has developed a sophisticated software program that models interactions between various agencies and the private sector.



Oh and can I get an answer to the following?

Can we agree that spending, individual, cooperate or government, always results in another group or individual receiving an income? Please don't get fancy, I'm asking a fundamentals question, the question is, does spending=income. Just to be sure we're 110% clear what I'm asking, if I spend $20 and buy something and get something in return for my $20, then my spending has equaled someone else's income dollar for dollar. Giving, remitting, repayment etc, is not spending so please don't get confused.

Yes, federal spending benefits some groups and harms others, just as reducing federal spending benefits some groups and harms others.

 

[Econ4every1]

Yes, federal spending benefits some groups and harms others, just as reducing federal spending benefits some groups and harms others.

That is not what I asked.

Does:

Spending=Income

Yes/No.

 

[NatMorton]

That is not what I asked.

Does:

Spending=Income

Yes/No.

No, spending does not equal income. Did you really need that clarified?

 

[Econ4every1]

No, spending does not equal income. Did you really need that clarified?

Yes actually. Now demonstrate it. Show me how spending is not earned by another entity as income in equal amount.

<grabs some popcorn>

 

[NatMorton]

Yes actually. Now demonstrate it. Show me how spending is not earned by another entity as income in equal amount.

<grabs some popcorn>

Certainly. Income is a function of many things, and just because I spend money on something doesn’t meant someone else ultimately derives income from it; they may have sold me the item at a loss.

I think what you’re trying to say, and I hope this doesn’t take away from the enjoyment of your popcorn, is that spending from one generates revenue for another, and as the person who sold you that popcorn can attest, revenue is not income.

 

[expat_panama]

Which data says you can't pay down debt with additional tax revenue? (none)
Who claims taxes alone are the solution? (no one?)

More tax revenue would be great, but the powers that be can only raise rates, not revenue and there's some doubt as whether higher rates will generate more revenue or not. We used to have a top bracket income tax rate of 97%. People just stopped working and we got less revenue. Now the top bracket is (iirc) 37% and we get a lot more revenue.

Meanwhile the interest payments on the national debt continue to rise. Here's graph of our interest payments as a % of total spending....


--and w/ rising interest rates it's beomming less and less sustainable. What I see is that our only way out is spending cuts.

 

[CaughtInThe]

Hooray, Fun New Roadmark

Back in 2021, when we were noting that Interest on the debt had risen from $325 Billion in 2018 to half a trillion, I asked:



Current rate on a 10 year Treasury is 4.08%.

The Biden administration rang up a budget deficit topping $1.8 trillion in fiscal 2024, up more than 8% from the previous year and the third highest on record, the Treasury Department said Friday...​

​

One aggravating factor for the debt and deficit picture has been high interest rates from the Federal Reserve's series of hikes to fight inflation.​

​

Interest expense for the year totaled $1.16 trillion, the first time that figure has topped the trillion-dollar level. Net of interest earned on the government's investments, the total was a record $882 billion, the third-largest outlay in the budget, outstripping all other items except Social Security and health care...​

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As a share of the total U.S. economy, the deficit is running above 6%, unusual historically during an expansion and well above the 3.7% historical average over the past 50 years, according to the Congressional Budget Office....​

Are you for Trump's (obvious lie) of eliminating income tax which would skyrocket the debt?