How does a MAGA define winning?
- Thread starter Bloom.
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no, it is just conservatives that cut taxes on the wealthy and increase spending on the military. Also, the first round of covid relief was by conservatives. So was the grossly mismanaged PPP loans.
Neither party behaves like the debt matters....unless they can use it politically when the other party is in charge.
May be mere coincidence that the ship seems to crash under Republicans but it definitely doesn't lend itself to "it's all the fault of the evil libs" either.
I can't stress this enough. Military spending is not only not on a growth path, it's towards the lower end of the range that it's been since WWII.
It's no particular sacred cow to me. I've advocated across-the-board cuts, while fully recognizing that it would be a terribly sloppy way to approach the problem. But it helps to diminish the political obstacles such that it may be the only plausible way to approach it.
Still, it's the autopilot growth path of entitlements that is the cause of pretty much all of our fiscal pain. And we have to stop deflecting from that reality if we have any hope of repairing it. I think a lot of people have convinced themselves that the monetary route is the least painful way to deal with it. But that's only true in a political sense. It's far from the case in an economic sense.
Here's defense spending as %GDP since 1950.
And then here's the federal spending on Pensions (SS), Healthcare (Medicare/Medicaid/VA), and Interest since 1950.
These items went from a total of about 2% GDP in 1950 to over 15% of GDP today. Tax revenues typically chime in around 16% or 17%.
If we don't confront this problem, it is going to manifest in some really awful ways. To hell with focusing on blame, it doesn't matter who got us here. What matters is what we do, given where we're at.
Understood re percent of gdp. Twenty agrees with you. That said it’s still a trillion and has gone up 60 percent since 80. I’m with you re across the board. It’s the only way to depoliticize itI can't stress this enough. Military spending is not only not on a growth path, it's towards the lower end of the range that it's been since WWII.
It's no particular sacred cow to me. I've advocated across-the-board cuts, while fully recognizing that it would be a terribly sloppy way to approach the problem. But it helps to diminish the political obstacles such that it may be the only plausible way to approach it.
Still, it's the autopilot growth path of entitlements that is the cause of pretty much all of our fiscal pain. And we have to stop deflecting from that reality if we have any hope of repairing it. I think a lot of people have convinced themselves that the monetary route is the least painful way to deal with it. But that's only true in a political sense. It's far from the case in an economic sense.
Here's defense spending as %GDP since 1950.
And then here's the federal spending on Pensions (SS), Healthcare (Medicare/Medicaid/VA), and Interest since 1950.
These items went from a total of about 2% GDP in 1950 to over 15% of GDP today. Tax revenues typically chime in around 16% or 17%.
If we don't confront this problem, it is going to manifest in some really awful ways. To hell with focusing on blame, it doesn't matter who got us here. What matters is what we do, given where we're at.
If you call being forced to fund a ponzi scheme for one's entire earning career an entitlement, then you have little chance of understanding how to 'fix' the supposed problem.
The problem is not that we've deprived ourselves of tax revenues we could and should have otherwise gotten. With the exception of extraordinary economic events (stagflation, dot-com boom/bust, subprime meltdown and ensuing Great Recession, Covid, etc.), tax revenues have been pretty much flat since 1950. And that includes long stretches where marginal income tax rates went to 91% and 70%, the Clinton-era tax regime, capital gains rates up to 39%, the Obama-era tax regime with a Medicare surtax (which is still in place)...as well as the TCJA-era tax regime.
It doesn't matter which one of those you choose, they have all generated revenues within a narrow range. The single best year we've ever had was a tick over 19%, and that was the year before the dot-com bubble burst. Spending is currently at 23%...and rising.
I've posted this before. But here is the history of tax revenues as %GDP. The notion that our tax laws post-Reagan have resulted in a Treasury starved of tax revenues and that this is how can repair the shortfall is just simply not true. The data is clear and unambiguous.
I think looking at these things as %GDP is the most informative way to do it -- no different than looking at what percentage of somebody's income is spent on housing, food, transportation, etc. But we can examine them in terms of $, too.
Here's defense spending in 2017 US Dollars since 1980. It's gone from $422B to $1.03T.
And here's Pensions, Healthcare, and Interest. It's gone from $608B to $3.41T
So, yes, these have both contributed. But our social spending growth has outpaced output by a healthy clip. And it's simply unsustainable.
We already have people like Jason Furman and Paul Krugman suggesting that the Fed should permanently raise its inflation target from 2% to 3%. That may not sound like a big deal -- but it's a big deal. And it's an admission that we're likely staring at a future of significantly higher chronic inflation....which is a hidden tax that makes all of us poorer.
I have never been a proponent of eliminating the major entitlements -- even if it was politically viable.
But we do have to stop treating them as a third rail. Even if that's the case for politicians, the third rail all of us ought to be worried about is the consequences of leaving them alone. If you've sacrificed over your life and career to safe up $750K in a retirement fund, I wouldn't think you'd want to live out your retirement years where that $750K ends up only having the purchasing power of $550K or wherever that lands.
By all means, everything should be on the table to get the ship righted. But anybody harboring hopes that we can just keep the programs we have, as presently constituted, and extract the tax revenues needed to do so from rich people, needs to let that fantasy go.
We couldn't raise that much in taxes if we wanted to.
Remember Yellen's report: 75 years, $175T underfunded. To put that timeframe into some perspective, it was 25 years ago (one-third of it) when we had Bush v. Gore in Florida.
Ugh. That interest trend line is bad. When you have too much debt, you pay a shitload of interest.I think looking at these things as %GDP is the most informative way to do it -- no different than looking at what percentage of somebody's income is spent on housing, food, transportation, etc. But we can examine them in terms of $, too.
Here's defense spending in 2017 US Dollars since 1980. It's gone from $422B to $1.03T.
And here's Pensions, Healthcare, and Interest. It's gone from $608B to $3.41T
So, yes, these have both contributed. But our social spending growth has outpaced output by a healthy clip. And it's simply unsustainable.
We already have people like Jason Furman and Paul Krugman suggesting that the Fed should permanently raise its inflation target from 2% to 3%. That may not sound like a big deal -- but it's a big deal. And it's an admission that we're likely staring at a future of significantly higher chronic inflation....which is a hidden tax that makes all of us poorer.
I think you might be artificially limiting what counts as a conservative in this post. An example:
Plus, if your politicians don't do anything to change the institution when they have power, can't we say they "defended" that institution?
I've often wondered if you're this stupid in real life or if this is just an online persona
You're damn right it is. And guess what happens to rates when debt loads increase, downgrades become more commonplace, etc.
Of course, the world is now filled with MMTers who feel cocksure to point out that we hold a lot of our own debt, that sovereign nations can't go bankrupt, that the USD is the world's reserve currency, and all these other things they think fly in the face of any concern about debt -- be it what we have now or what we're slated to have in the future.
All of it traces back to the concept that we can print our way out of it without causing too much disruption to our well-being. After all, taking the Fed's target from 2% to 3% is just a 1% hike, right? Well, that's one way of looking at it. Another way is that it's a 50% increase -- and may well be too conservative.
I never thought I'd see a downgrade in US Treasuries. But, yet, it's happened -- twice, I believe. And I suspect we're going to start seeing a lot more things we never thought we'd see...because we've been so negligent in allowing this problem to fester.
That sounds scary. What should one do to protect themselves from this fiat currency debasement Ponzi Scheme?
I've already said that I have no problem faulting Republicans/conservatives for being derelict in not confronting the problem. What more do you want? And, sure, there are Republican fingerprints on some aspects of the construction, too.
I'm simply saying that the welfare state we have is by and large the handiwork of two presidencies: FDR's and LBJ's. And that general ethos dominated our politics between the Great Depression and Reagan's election. The era itself may be long over, but a good part of the infrastructure they built is still very much standing....even as it's on the verge of implosion, however that's manifested. And to make matters worse, Congress long ago deemed much of this to be "non-discretionary" spending....which just means that they don't have to bloody each other up with it every year in appropriations. That clearly hasn't helped anybody but them.
And am I the only one who is dumbfounded that, at the same time a Democratic Treasury Secretary estimates that Medicare is $106T underfunded over the coming decades, we simultaneously have serious politicians advocating that we expand it from covering 65 million people to covering 350 million people?
Anyway, as I said before, who is to blame for where we are really is of no consequence. I'm far more interested in finding leaders who have the wherewithal to bite the bullets that need to be bitten to at least minimize the deleterious impacts of this self-inflicted problem.
I bet someone thinks this will make it better:
Gov. Mike Braun signs 'historic' property tax relief bill into law, critics call it a 'lose-lose'
Indiana's major property tax reform package is now law, as Governor Mike Braun signed the measure Tuesday.
www.wfyi.org
That sounds scary. What should one do to protect themselves from this fiat currency debasement Ponzi Scheme?
Check the year-to-date chart here:
BTC-USD Interactive Stock Chart | Bitcoin USD Stock - Yahoo Finance
At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life.
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Bitcoin's YTD chart looks a lot like the S&P chart.
And the most hate for SB 1 comes from the right. They didn’t want a lower property tax rate. They wanted no property tax, education and local services be damned. The fact that Braun didn’t see this coming is mind boggling. Like missing the Beckwith move, it’s just bad at doing politics.I bet someone thinks this will make it better:
Gov. Mike Braun signs 'historic' property tax relief bill into law, critics call it a 'lose-lose'
Indiana's major property tax reform package is now law, as Governor Mike Braun signed the measure Tuesday.www.wfyi.org
A ponzi scheme is hardly ever up for a vote every 2 years but here we are. Mas - we've accepted as a nation we like and desire entitlement programs (social safety nets) and that what we disagree about it WHO it should beenfit and HOW it's funded.
Covering all Americans might be the only way to save it. Which is another argument entirely but why don't we have it. Medicare polls tremendously** well as do issues related to increased spending on health issues/programs. That's the will of the people. Now, do our politicians have an obligation to lay out the pros/cons of a for profit vs. govt funded healthcare scheme? Yes. Will they? Probably not.
But we should discuss this openly as a nation. It's a moonshot but we should honestly look at it without rose colored glasses (progressives) or laser beams for eyes (conservatives).
** https://www.kff.org/health-costs/po...other-priorities-for-incoming-administration/
Is there enough waste/fraud/abuse in these entitlements to make up the savings? I don't know. But, as a liberal, I would wholeheatedly endorse weeding out any WFA we could find, including increased sentencing for Medicare/SSDI fraud. I would also endorse tightening the requirements for getting on SSDI. I have a personal taste in my mouth related to that having worked in a business that dealt with many folks on SSDI (or other disability programs, including military) who had no business receiving those bennies.I have never been a proponent of eliminating the major entitlements -- even if it was politically viable.
But we do have to stop treating them as a third rail. Even if that's the case for politicians, the third rail all of us ought to be worried about is the consequences of leaving them alone. If you've sacrificed over your life and career to safe up $750K in a retirement fund, I wouldn't think you'd want to live out your retirement years where that $750K ends up only having the purchasing power of $550K or wherever that lands.
By all means, everything should be on the table to get the ship righted. But anybody harboring hopes that we can just keep the programs we have, as presently constituted, and extract the tax revenues needed to do so from rich people, needs to let that fantasy go.
We couldn't raise that much in taxes if we wanted to.
Remember Yellen's report: 75 years, $175T underfunded. To put that timeframe into some perspective, it was 25 years ago (one-third of it) when we had Bush v. Gore in Florida.
I sure don’t have any idea how much WFA there is. But, Musk’s sensationalist claims notwithstanding, I’d guess that it’s a small number relative to the overall budget.
Sure, let’s capture all that we can. Few people will oppose that. But that seems like pulling out a bucket to save a listing ship.
As for SS, the Senate discussions have reportedly been centered on a combination of raising the retirement age, investing borrowed funds in an SWF, raising the contribution limit with a flatter benefit curve at the top end, and pushing down on COLA. If I had to guess, it will also probably include another OASDI rate increase above the 6.2/12.4%. But I haven’t seen that mentioned anywhere.
All of these things are going to suck - basically making what is already a bad deal into an even worse deal. But it’ll at least extend the life…probably with the hope that the population/age curve will look better in a couple decades. And both the OASI and DI benefits on the low end, aside from the higher eligibility age, will be left intact.
I'm interested in the SWF. Don't know how well it fits with a country this large and diverse but it makes sense as a pile of cash to have moving forward.
Assuming "raising the contribution limit" incorporates some lift on teh cap? We are going to have to eat pain but how? We've told people for 30-40 years (those approaching retirement) that this is the paradigm. Now, if we change it, how do we account for those who depended on that scheme or do these changes only pay off 20 years from now (which we should do anyway even if there isn't a right now benefit).
And, Trump's tariff announcements impacted ordinary Americans by screwing the markets right in the middle of tax season. The market began falling ~Feb. 20 and had another big drop beginning April 2.
April 15 was the deadline for both estimated tax payments and the filing of returns. Millions typically sell off a few investments to make required payments. Any of them who had to sell in that time period likely had to sell at a far lower price than inauguration day.
Then, Trump's 90-day retreat from his announced tariff policies means that the market will remain in chaos through mid-July, with little chance to return to the inauguration day Biden levels until August or later.
Apparently, Wall Street and Main Street intersect. 62% of Americans own stock.
How Many Americans Own Stock? More Than You Think | The Motley Fool
How many Americans own stock? 62% of American adults, or around 158 million people, own stock. But there's more to the story.www.fool.com
More than half of American households own mutual funds.
Share of U.S. households owning mutual funds 2023| Statista
In 2023, 52 percent of the households in the United States owned shares in a mutual fund.www.statista.com
At some point, Trump's chaos will also affect retirees who have to sell from their IRAs at lower prices to make their required RMD's this year based on the values of their IRAs as of 12-31-24 (i.e. close to the inauguration day level). May be advisable to wait as long as possible to make those RMDs in hopes that the market will go back up, so those sales/RMDs likely will be compressed into the last 4-5 months of 2025 rather than be spread throughout the year. Trump's erraticism makes it impossible to plan ahead.
Your post is so silly on many levels.
Most Americans' holdings in equities are in qualified accounts, not non-qualified accounts. Only about 10% of Americans file a schedule D, which details transactions in NQ accounts, and that is the account a person would trade to raise cash for taxes as you say. Rarely does anyone sell to pay taxes. Over my 26 years as an advisor, I can only think of one.
As for chaos, most Americans who invest do it via a 401k, 403b, 457, etc and are dollar cost averaging. Therefore, on a monthly basis, they are buying at lower levels. Wonderful deal for them.
As for RMD's, you're clueless. First, most retirees are not 100% in equities. They have a blend of equities and fixed income. Considering the RMD amount us roughly 4-5%/yr, many can easily use the fixed income portion to cover the RMD. Or, many can do in-kind distributions, so no selling needed.
No problem for me to plan for my clients.
But 2022 was hard as Biden's policies in 2021 WRT energy, ARP, free rent, etc added to inflation, per the SF Fed. So, in 2022, SP500 down 18%, AGG down 13% (worst ever), and Nasdaq down 33%. To do RMD's in Biden's 2022 economy was brutal.
I spoke specifically of 2022. Gold up .4%. Yes, better than the main indexes, and yes it was good during Biden's time. Think about that.
I had real estate in '22 so don't have first hand knowledge of the metals market in '22.
Guys have been shilling for the exchanges for years.
Nothing new about it...
This shite has been going on for a few decades now. Everything is about demonising the other side. Binary. (This approach applies to foreign policy, which is just plain dumb, considering that we live in a nuclear age.)
But following that, how does one expect to compromise with the other evil side, then?
You have now pissed off the ''bad guys'' – and you would look foolish (if you do compromise) with your own supporters). Credibility used to be the currency that flowed in politics to enable things to happen and work. But that's all gone now.
It's above virtue signalling and vibes''. On both sides.
It's all in the game now. Manipulation, gaslighting, indoctrination.
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Why Is U.S. Inflation Higher than in Other Countries? - San Francisco Fed
Inflation rates in the United States and other developed economies have closely tracked each other historically. Problems with global supply chains and changes in spending patterns due to the COVID-19 pandemic have pushed up inflation worldwide. However, since the first half of 2021, U.S...
www.frbsf.org
I know you don’t let the fact that you don’t read the articles stop you from having irrelevant and asinine responses, but I’ll link it again for you. Look at page 4. It has the heading “What changed from December to April”.
Why Is U.S. Inflation Higher than in Other Countries? - San Francisco Fed
Inflation rates in the United States and other developed economies have closely tracked each other historically. Problems with global supply chains and changes in spending patterns due to the COVID-19 pandemic have pushed up inflation worldwide. However, since the first half of 2021, U.S...
Price spikes from supply-chain disruptions are not true inflation. And this is evidenced by the fact that prices revert quickly as the supply disruption is resolved.
Inflation is always and everywhere a monetary phenomenon.
Inflation was high around the world because central banks everywhere did the same thing ours did.
I agree and it spiked higher in the U.S. because we did direct transfer payments this time. The velocity of money matters as well. It's much more difficult to hide inflation (through population growth, productivity growth, or exporting it to other countries) when you helicopter it from the sky and dummies like snarlcakes start making it instantly rain at the local gentlemen's club. Also, this is why tariffs are not inflationary 😁
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Exactly. You can literally watch it spike based on what you wrote and the month by month. People were instantly flush and sat home ordering shit overheating the economy
I agree and it spiked higher in the U.S. this time because we did direct transfer payments this time. The velocity of money matters as well. It's much more difficult to hide inflation (through population growth, productivity growth, or exporting it to other countries) when you helicopter it from the sky and dummies like snarlcakes start making it instantly rain at the local gentlemen's club. Also, this is why tariffs are not inflationary 😁
Yes, it does. If the Fed printed $10T and buried it in a secret location, this would not be inflationary.
This is why central banks moved away from the “Quantity Theory of Money” - in that they rely less on money supply and more on rates to temper the cycle.
MMTers tend to get this confused. They believe that the turn away from QTM meant that money supply itself doesn’t matter. But that isn’t true at all. It just means that velocity does - and adjusting overnight rates is a more efficient way to affect economic conditions.
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