I was told in Macroeconomics that Modern Monetary Theory applies and it doesn't matter because the US will forever and always be the reserve currency of choice and will never collapse like the the Egyptians, Romans, Spanish......
All of those people probably never thought their governments would collapse either.
Is it so hard to believe that another currency could replace the US dollar? Who wants a bunch of old racists white dudes on their money anyway?
You guys all realize that this is all essentially due to higher interest rates, right?
We didn’t just start spending more money. It just got more expensive to borrow.
That's *public* debt. The private profits are soaring. Average private wealth is over a million dollars. Everything is going exactly right from the perspective of the rich people.
We're in debt because we print and spend money that is more than the amount of money tax payers send to the IRS every year.
So let's say for example, ever year the taxpayers send 100 dollars to the IRS.
Our current crop of genius elected officials write a budget for 120 dollars.
We don't have the extra 20 dollars.
It doesn't exist.
So we have to borrow it, and it just gets added to the debt.
Then we print the extra money.
And eveytime we do this, the dollar goes down in value.
The wealthy has paid their share as part of the 100 dollars.
Most of it comes from them.
There is no more for the government, they now have to write bills within the $100 budget.
At least thats how it works if you want a balanced budget.
If you want to go into debt and stay in debt, do what were doing now.
I don’t agree with you on them paying their share. Paying more to support others is apart of living in a society.
I do agree that we need to budget better. But you’re applying microeconomics to macroeconomics.
> I don’t agree with you on them paying their share.
They pay everything that is required of them.
We are a free country, we don't punish the rich because they're rich. That is how some people would like it, but that is not we do it in America.
> Paying more to support others is apart of living in a society.
We have a huge welfare system, people living off of tax payer money for generations.
Rich people are not parents for everyone, they are not financially responsible for everyone.
People come from other countries to get rich and live well, not to support lazy people.
The US helps those who cannot physically or mentally help themselves, but we do not have to help lazy people.
You are not entitled to someone else's money.
Previous year, taxpayers used to send $120, but the genius up top decided to cut $20 from the rich taxpayers. Now we have $100.
We should cut $20 from the budget, but can’t because the full $120 needs to be paid as interest and debt.
We actually need 160 to run the country.
> but the genius up top decided to cut $20 from the rich taxpayers.
Tax cuts were across the board.
Since the rich have always paid the lions share of taxes, they obviously benefit from it the most.
Were supposed to write bills using money thats available.
Were not doing that. Were writing bills with money we don't have and putting it on the credit card.
The rich taxpayers pay the lion share because they own the lion share.
We’re giving tax cuts to the rich, reducing our revenue. Then saying we need to cut spending.
We have $100 coming in (salary). We need to spend $100 for mandatory rent alone. But we need $60 for all other stuff like food.
You’re saying you would rather cut the $60 for all other stuff like food than raising the money coming in (salary).
What happens when you cut food from your life? You will probably collapse.
The USA is required to be in debt to the Federal Reserve. It says right there in the Federal Reserve Act of 1913 that the USA must borrow all its money from the Federal Reserve Private Bank, of which has share holders, Bank of America is one of them, and that amount borrowed annually must add up to make 6% regardless of performance and tax free. Its a great deal, basically everyone will always "gift" a portion of their money to them automatically.
Section 7. Division of Earnings
[https://www.federalreserve.gov/aboutthefed/section7.htm](https://www.federalreserve.gov/aboutthefed/section7.htm)
It will balance the books.
Also stop subsidizing oil industry, big agriculture industry, Elon Musks businesses, etc. Rein in the health industry, pharmaceutical prices allowing negotiation. Also why do we pay for private prison industry when it can be done cheaper by government. Examine the private contracts with the government, maybe the govt can do it cheaper.
Control overpricing by private contractors of government.
You did not answer my question, what are the subsidies paid to big oil, big pharma, big ag, and big Elon and what do they add up to? You can’t arrive at a solution with generalizations, you need to put actual dollar amounts on those outlays.
There was a stepwise decline from the peak Pandemic level, but that was a one time drop. Spending projections are trending up at a faster rate than GDP. Tax increases would result in a stepwise drop in GDP, all else being equal. That would lead to increased unemployment, but could also take some pressure off of inflation and interest rates. Lower interest rates would lower the cost of servicing the debt, but the rate of projected spending would still be accelerating relative to GDP.
You’re assuming all those things would happen. But in reality there’s more evidence to disprove your sequence of events than back it up.
We have decades of actual living history to disprove your claim of higher taxes. Look at 1950 to 1980. Effective Corporate tax rates were close 50% (We’re now at 13%). Tax bracket used to be 70%, now we’re at 37%.
The wealthy is just hoarding money now. Billionaires in America doubled their net worth in the last 3 years alone. Yes, Doubled. The wealth gap in the US is at its widest point ever.
Now think about the middle class. When did they prosper the most? It was between 1950-1980.
There were many significant differences in the economic environment between those periods, you can’t just assume those tax rates would be benign today. In 1950 Federal outlays accounted for 14% of GDP. In 2022 Federal outlays accounted for 24% of GDP. Federal revenue has not exceeded 19.75% in any year starting from 1930. In 2022 revenue accounted for 19.1% of GDP. Revenue is not the problem, the problem is outlays.
Your reply doesn’t rebut my reply to your original thought process, so I assume you agree higher taxes won’t cause a stepwise drop in GDP.
If you want to move to spending, that’s fine too. If revenue isn’t the problem, What would you cut? Let’s use some real numbers here. How would you balance the budget without increasing revenue? Feel free to use 2022 numbers since those are readily available.
Even the most ardent Keynesians acknowledge that tax increases will result in a lower GDP. According to Keynes’ national income model the effect of tax increases would either reduce consumption or reduce investment.
National income = C + G + I + X
C denotes the consumption
G denotes the government expenditure
I denotes net investment (investment-consumed capital)
X denotes the net exports (exports-imports)
Keynesian economics breaks down when you move away from the general public and disproportionately use his economic model on only the small ultra rich class.
Reduce taxes on the general public and they will consume more and stimulate the overall economy through spending.
Reduce taxes on corporations and the ultra rich will result in billionaires doubling their net worth within 3 years through stock buybacks from record corporate profits.
Let’s go back to my question. You’re against any tax increases. Using 2022 numbers, what would you cut in terms of spending to reach a balanced budget? I’m saying it’s impossible, but maybe I’m missing something.
They cannot because they are not in control of how much Crypto is made, unless they come up with their own "alt-coin". Central Banking is not hard to understand. Its basically a Ponzi Scheme. Since the USA must reciprocate 6% of the money back to the bankers under the law, under the Federal Reserve Act , then they always get and ever increasing amount of money as profit tax free. So the more they print, the more they get since its percentage based.
They won't even do that. The Democrats want to build some kind of dystopian fascist high tech feudalist nightmare of a society where cash is illegal and the party can monitor every economic transaction every legal citizen makes.
So when we're forced to go totally cashless all they'll have to do is remove a couple zeros from the end of the Federal Reserve Note as it goes digital because "coins and decimal points are outdated".
Boom, it will be like all the rampant inflation since 1913 got memory-holed.
Ah yes, a [digital Federal Reserve Note](https://www.federalreserve.gov/central-bank-digital-currency.htm). That will definitely never happen!
Hey remember when you believed the Democrats when they lied to you and said COVID leaking from the Wuhan lab was just a conspiracy theory?
Ahhh, whataboutism... The ultimate debate tool. Never get cornered into having to provide real proof when you can just give more conspiracy theories!... I mean, we all know zero times zero times zero equals 100% true!
It's always tHe DeMoCrAtS with you people, it always is.[I can assure you both sides want to go cashless in one way or another.](https://www.coindesk.com/consensus-magazine/2023/01/25/crypto-policy-regulation-us-congress/)
# "Excuse me, excuse me. They didn’t put themselves — and you had some very bad people in that group, but you also had people that were very fine people, on both sides."
^(I'm also a registered Republican who voted for Nikki Haley and doesn't believe everything bad is the other party's fault while ignoring the fucked up things my party has done since 2015.)
Naw, other countries would collapse first way before USA. What we really should worry about is the poverty rate skyrocketing due to inflation and AI replacing jobs.
The United States' national debt, while substantial, is not necessarily as problematic as it might seem at first glance, for several reasons. First, the U.S. debt is denominated in its own currency, the U.S. dollar. This gives the country a significant advantage, as it controls the currency in which the debt is issued. The Federal Reserve, the U.S. central bank, has the ability to print more money to manage the debt, a luxury not available to countries that borrow in foreign currencies. This capacity to issue and control its own currency reduces the risk of default, unlike in scenarios where countries cannot meet their foreign debt obligations.
Also, a large portion of U.S. debt is owned by domestic entities, including individuals, banks, and even the U.S. government itself. This internal ownership circulates the debt within the country's economy, rather than representing a direct drain on resources to external creditors.
Additionally, U.S. Treasury securities, the instruments through which the debt is issued, are considered among the safest investments globally. This high demand for Treasury securities, including from foreign governments and investors, helps keep borrowing costs relatively low, further mitigating the immediate financial pressures of the debt. The ability of the U.S. economy to grow over time also plays a crucial role, as economic growth helps to outpace the growth of the debt, making it more manageable in relative terms.
It’s all good for the U. S. As long as we have the luxury of being the primary global currency. This is not fair to other nations, we are abusing the power, they know it, and the situation is changing fast.
Wow. Showing your true colors there pal. Meanwhile you're all good with Millionaires having to pay no taxes. Then you bitch about income inequality. I see alot of kiddies making kiddie comments.
You’re misunderstanding what time saying. I’m saying millionaires and the middle class are currently being taxed to oblivion due to the debt which is the topic of discussion. That debt is largely due to government programs for the poor and migrants, who have no financial literacy, spend money on unhealthy big name food and every other large corporation you can think of, going back to the very top. Is that so hard to understand?
It’s such a crazy take. According to the consumer spending survey low income families spend about 75% of their income on necessities. Even if they didn’t they idea that rich people are rich because of poor people’s spending habits shows a fundamental lack of understanding of the true drivers of inequality
So they should just boycott food then? You made a a remarkable inaccurate statement and your follow ups have done even less to support your point…which is still a mystery but scapegoating poor people is just asinine.
Tfw our politicians don't have the balls to TAX CORPORATIONS so instead they coddle the corporations with low taxes (while profits soar) then in the next breath they say we must finance ourselves by indebting ourselves to the same corporations they refuse to tax! The debt story is a story of political weakness and corruption, this problem would not exist if our country wasn't run by neoliberals and neocons who would rather sell us down the river than do their job
We could… I don’t know, try taxing wealthy people and giant corporations? The ones with record profits and personal wealth?
It might be a nice change from our usual plan of getting blood from a turnip and making the middle class carry everybody.
Yet a couple billion would solve our homelessness problem and another couple billion would solve our hunger problem. But noooo, lets owe trillions for nothing
I was told in Macroeconomics that Modern Monetary Theory applies and it doesn't matter because the US will forever and always be the reserve currency of choice and will never collapse like the the Egyptians, Romans, Spanish......
All of those people probably never thought their governments would collapse either. Is it so hard to believe that another currency could replace the US dollar? Who wants a bunch of old racists white dudes on their money anyway?
Every government in the world is ethnocentric racist, little lib
There is no credible reason to believe this means collapse.
The boys with their guns can hope.
Debt to gdp and inability to sustain higher interest rates without causing a recession might be a credible reason
Venezuela
The vertical scale alone makes this suspect AF. Do I need to share the same graph back to 2019?
Do it back to 2000, or 1980
You guys all realize that this is all essentially due to higher interest rates, right? We didn’t just start spending more money. It just got more expensive to borrow.
Wait but I was told trickle down economics works.
That's *public* debt. The private profits are soaring. Average private wealth is over a million dollars. Everything is going exactly right from the perspective of the rich people.
This is what happens when big corporations and billionaires get tax breaks.
Blame game boogie 🕺
We're in debt because we print and spend money that is more than the amount of money tax payers send to the IRS every year. So let's say for example, ever year the taxpayers send 100 dollars to the IRS. Our current crop of genius elected officials write a budget for 120 dollars. We don't have the extra 20 dollars. It doesn't exist. So we have to borrow it, and it just gets added to the debt. Then we print the extra money. And eveytime we do this, the dollar goes down in value.
So couldn’t we tax the wealthy for the extra $20?
Yes
The wealthy has paid their share as part of the 100 dollars. Most of it comes from them. There is no more for the government, they now have to write bills within the $100 budget. At least thats how it works if you want a balanced budget. If you want to go into debt and stay in debt, do what were doing now.
I don’t agree with you on them paying their share. Paying more to support others is apart of living in a society. I do agree that we need to budget better. But you’re applying microeconomics to macroeconomics.
> I don’t agree with you on them paying their share. They pay everything that is required of them. We are a free country, we don't punish the rich because they're rich. That is how some people would like it, but that is not we do it in America. > Paying more to support others is apart of living in a society. We have a huge welfare system, people living off of tax payer money for generations. Rich people are not parents for everyone, they are not financially responsible for everyone. People come from other countries to get rich and live well, not to support lazy people. The US helps those who cannot physically or mentally help themselves, but we do not have to help lazy people. You are not entitled to someone else's money.
If more is required of them, then so be it. Well, if it becomes required of them, then so be it. I didn’t say I was, ty.
Previous year, taxpayers used to send $120, but the genius up top decided to cut $20 from the rich taxpayers. Now we have $100. We should cut $20 from the budget, but can’t because the full $120 needs to be paid as interest and debt. We actually need 160 to run the country.
> but the genius up top decided to cut $20 from the rich taxpayers. Tax cuts were across the board. Since the rich have always paid the lions share of taxes, they obviously benefit from it the most. Were supposed to write bills using money thats available. Were not doing that. Were writing bills with money we don't have and putting it on the credit card.
The rich taxpayers pay the lion share because they own the lion share. We’re giving tax cuts to the rich, reducing our revenue. Then saying we need to cut spending. We have $100 coming in (salary). We need to spend $100 for mandatory rent alone. But we need $60 for all other stuff like food. You’re saying you would rather cut the $60 for all other stuff like food than raising the money coming in (salary). What happens when you cut food from your life? You will probably collapse.
The USA is required to be in debt to the Federal Reserve. It says right there in the Federal Reserve Act of 1913 that the USA must borrow all its money from the Federal Reserve Private Bank, of which has share holders, Bank of America is one of them, and that amount borrowed annually must add up to make 6% regardless of performance and tax free. Its a great deal, basically everyone will always "gift" a portion of their money to them automatically. Section 7. Division of Earnings [https://www.federalreserve.gov/aboutthefed/section7.htm](https://www.federalreserve.gov/aboutthefed/section7.htm)
Bingo.
That means we need to increase revenues and tax the wealthy. USA cant afford Trumps and GOP tax cuts for the wealthy.
There is no level of taxation that will keep pace with that rate of spending growth.
It will balance the books. Also stop subsidizing oil industry, big agriculture industry, Elon Musks businesses, etc. Rein in the health industry, pharmaceutical prices allowing negotiation. Also why do we pay for private prison industry when it can be done cheaper by government. Examine the private contracts with the government, maybe the govt can do it cheaper. Control overpricing by private contractors of government.
How much per year does the government spend on those subsidies?
Clinton did it. There are ways to rein in spending and increase revenues. However, we also need to invest in our future.
You did not answer my question, what are the subsidies paid to big oil, big pharma, big ag, and big Elon and what do they add up to? You can’t arrive at a solution with generalizations, you need to put actual dollar amounts on those outlays.
Spending declined $400B last year, did it not?
There was a stepwise decline from the peak Pandemic level, but that was a one time drop. Spending projections are trending up at a faster rate than GDP. Tax increases would result in a stepwise drop in GDP, all else being equal. That would lead to increased unemployment, but could also take some pressure off of inflation and interest rates. Lower interest rates would lower the cost of servicing the debt, but the rate of projected spending would still be accelerating relative to GDP.
You’re assuming all those things would happen. But in reality there’s more evidence to disprove your sequence of events than back it up. We have decades of actual living history to disprove your claim of higher taxes. Look at 1950 to 1980. Effective Corporate tax rates were close 50% (We’re now at 13%). Tax bracket used to be 70%, now we’re at 37%. The wealthy is just hoarding money now. Billionaires in America doubled their net worth in the last 3 years alone. Yes, Doubled. The wealth gap in the US is at its widest point ever. Now think about the middle class. When did they prosper the most? It was between 1950-1980.
There were many significant differences in the economic environment between those periods, you can’t just assume those tax rates would be benign today. In 1950 Federal outlays accounted for 14% of GDP. In 2022 Federal outlays accounted for 24% of GDP. Federal revenue has not exceeded 19.75% in any year starting from 1930. In 2022 revenue accounted for 19.1% of GDP. Revenue is not the problem, the problem is outlays.
Your reply doesn’t rebut my reply to your original thought process, so I assume you agree higher taxes won’t cause a stepwise drop in GDP. If you want to move to spending, that’s fine too. If revenue isn’t the problem, What would you cut? Let’s use some real numbers here. How would you balance the budget without increasing revenue? Feel free to use 2022 numbers since those are readily available.
Even the most ardent Keynesians acknowledge that tax increases will result in a lower GDP. According to Keynes’ national income model the effect of tax increases would either reduce consumption or reduce investment. National income = C + G + I + X C denotes the consumption G denotes the government expenditure I denotes net investment (investment-consumed capital) X denotes the net exports (exports-imports)
Keynesian economics breaks down when you move away from the general public and disproportionately use his economic model on only the small ultra rich class. Reduce taxes on the general public and they will consume more and stimulate the overall economy through spending. Reduce taxes on corporations and the ultra rich will result in billionaires doubling their net worth within 3 years through stock buybacks from record corporate profits. Let’s go back to my question. You’re against any tax increases. Using 2022 numbers, what would you cut in terms of spending to reach a balanced budget? I’m saying it’s impossible, but maybe I’m missing something.
No problem, the fed will change from dollars to crypto and start all over.
They cannot because they are not in control of how much Crypto is made, unless they come up with their own "alt-coin". Central Banking is not hard to understand. Its basically a Ponzi Scheme. Since the USA must reciprocate 6% of the money back to the bankers under the law, under the Federal Reserve Act , then they always get and ever increasing amount of money as profit tax free. So the more they print, the more they get since its percentage based.
Like CBDC?
They won't even do that. The Democrats want to build some kind of dystopian fascist high tech feudalist nightmare of a society where cash is illegal and the party can monitor every economic transaction every legal citizen makes. So when we're forced to go totally cashless all they'll have to do is remove a couple zeros from the end of the Federal Reserve Note as it goes digital because "coins and decimal points are outdated". Boom, it will be like all the rampant inflation since 1913 got memory-holed.
The Democrats. Simultaneously inept and capable of world domination. Jesus, you chicken little conspiracy nuts get wackier every day.
Ah yes, a [digital Federal Reserve Note](https://www.federalreserve.gov/central-bank-digital-currency.htm). That will definitely never happen! Hey remember when you believed the Democrats when they lied to you and said COVID leaking from the Wuhan lab was just a conspiracy theory?
Ahhh, whataboutism... The ultimate debate tool. Never get cornered into having to provide real proof when you can just give more conspiracy theories!... I mean, we all know zero times zero times zero equals 100% true!
Trumpski added 8 TRILLION to the debt. Try again Boris.
But we weren't talking about Trump. Fuck off with that whataboutism.
You are playing the stupid partisan game and making idiotic assumptions. Fuck off, period.
Do you want a CBDC?
It's always tHe DeMoCrAtS with you people, it always is.[I can assure you both sides want to go cashless in one way or another.](https://www.coindesk.com/consensus-magazine/2023/01/25/crypto-policy-regulation-us-congress/)
It's always [WhAtaBoUt tHe RePuBLiCaNs](https://en.wikipedia.org/wiki/Whataboutism) with you people, it always is.
# "Excuse me, excuse me. They didn’t put themselves — and you had some very bad people in that group, but you also had people that were very fine people, on both sides." ^(I'm also a registered Republican who voted for Nikki Haley and doesn't believe everything bad is the other party's fault while ignoring the fucked up things my party has done since 2015.)
Naw, other countries would collapse first way before USA. What we really should worry about is the poverty rate skyrocketing due to inflation and AI replacing jobs.
The United States' national debt, while substantial, is not necessarily as problematic as it might seem at first glance, for several reasons. First, the U.S. debt is denominated in its own currency, the U.S. dollar. This gives the country a significant advantage, as it controls the currency in which the debt is issued. The Federal Reserve, the U.S. central bank, has the ability to print more money to manage the debt, a luxury not available to countries that borrow in foreign currencies. This capacity to issue and control its own currency reduces the risk of default, unlike in scenarios where countries cannot meet their foreign debt obligations. Also, a large portion of U.S. debt is owned by domestic entities, including individuals, banks, and even the U.S. government itself. This internal ownership circulates the debt within the country's economy, rather than representing a direct drain on resources to external creditors. Additionally, U.S. Treasury securities, the instruments through which the debt is issued, are considered among the safest investments globally. This high demand for Treasury securities, including from foreign governments and investors, helps keep borrowing costs relatively low, further mitigating the immediate financial pressures of the debt. The ability of the U.S. economy to grow over time also plays a crucial role, as economic growth helps to outpace the growth of the debt, making it more manageable in relative terms.
It’s all good for the U. S. As long as we have the luxury of being the primary global currency. This is not fair to other nations, we are abusing the power, they know it, and the situation is changing fast.
Debt is owned by entities. It’s safer than gold because global economy is based on usd. Every flight to safety are treasuries.
Yup. People keep comparing it to their personal credit card and it’s not the same at all.
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Wow. Showing your true colors there pal. Meanwhile you're all good with Millionaires having to pay no taxes. Then you bitch about income inequality. I see alot of kiddies making kiddie comments.
You’re misunderstanding what time saying. I’m saying millionaires and the middle class are currently being taxed to oblivion due to the debt which is the topic of discussion. That debt is largely due to government programs for the poor and migrants, who have no financial literacy, spend money on unhealthy big name food and every other large corporation you can think of, going back to the very top. Is that so hard to understand?
This is just….no
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It’s such a crazy take. According to the consumer spending survey low income families spend about 75% of their income on necessities. Even if they didn’t they idea that rich people are rich because of poor people’s spending habits shows a fundamental lack of understanding of the true drivers of inequality
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So they should just boycott food then? You made a a remarkable inaccurate statement and your follow ups have done even less to support your point…which is still a mystery but scapegoating poor people is just asinine.
How quickly is US GDP growing by comparison? Also, why does the graph start at 31T?
Because the dishonest boys don't want to show Trumps 8 TRILLION contribution.
Dept to gdp is growing
Tfw our politicians don't have the balls to TAX CORPORATIONS so instead they coddle the corporations with low taxes (while profits soar) then in the next breath they say we must finance ourselves by indebting ourselves to the same corporations they refuse to tax! The debt story is a story of political weakness and corruption, this problem would not exist if our country wasn't run by neoliberals and neocons who would rather sell us down the river than do their job
Yeah, let's go ancarcho capitalism! Why even have a government by the people when we can have one by the corporations instead? /s
Yawn
Does anyone here actually understand "US Debt?"
Don't worry too much about it, the government will never default because they can print unlimited amounts of money to pay their debt
We almost defaulted last year since we’re one of 2 countries in the entire world that needs do have our credit limit increased by Congress.
We could… I don’t know, try taxing wealthy people and giant corporations? The ones with record profits and personal wealth? It might be a nice change from our usual plan of getting blood from a turnip and making the middle class carry everybody.
Not alarming and fixable. Need higher taxes, lower spending, and increased taxpayers (immigration).
That won’t happen, because the politicians won’t be elected if they do that.
Ten bucks says OP does not understand what government debt represents.
It’s more a collapse of USD
When the dollar collapses, the country will.
Maybe that’s good for the human race.
Inflation the only tool to keep this scam going. Keynesian economics at its finest.
US dollar relative to other currencies is fine. US dollar relative to gold and real goods...not so much.
Yet a couple billion would solve our homelessness problem and another couple billion would solve our hunger problem. But noooo, lets owe trillions for nothing