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Author Topic: Newt, The Debt Limit, and Taxes - Or: Are We Going to Destroy Ourselves?  (Read 13003 times)

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Online Vekseid

Well, what would happen is the value of gold would increase to compensate. It's essentially a transfer of wealth to those who currently have gold. So naturally, those who currently have gold want their special type of rock to be the basis for the new world currency.

Online ReijiTabibitoTopic starter

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A lot of the fearmongering about the federal reserve is straight up hoax and conspiracy nut material. Yes, they should be more transparent, but pulling us off the gold standard was not a sin.

I'm not disputing that.  One of the more 'eh' parts of the book is about how the US Council on Foreign Relations is deliberately working to take America down from the inside, in exchange for being given places of power in the New World Order.

But, the system being the way it is, the US government will never be able to pay off the national debt, because the way that the system works now demands that there be debt in order to function.

Plus, the original book was written some time ago (1994), what I have is the 5th edition, and a lot of what happened in the book has indeed transpired since then.  Ever heard the phrase "Too Big To Fail"?  This guy was one of the first to say it.

Offline Asuras

Quote from: Vekseid
Well, what would happen is the value of gold would increase to compensate. It's essentially a transfer of wealth to those who currently have gold. So naturally, those who currently have gold want their special type of rock to be the basis for the new world currency.

Which (I think you'll agree) is ridiculous.

The amazing thing to me about gold is that it's not safe. People invest in it because its "safe". And for the last ten years it has been but there's no reason that the thing can't drop like the rock it is at any point, it's a commodity with little intrinsic value.

Quote from: ReijiTabibito
But, the system being the way it is, the US government will never be able to pay off the national debt, because the way that the system works now demands that there be debt in order to function.

We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

Offline Revolverman


We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

Why would you need debt to build credit? and credit with who?

Offline gaggedLouise

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Which (I think you'll agree) is ridiculous.

The amazing thing to me about gold is that it's not safe. People invest in it because its "safe". And for the last ten years it has been but there's no reason that the thing can't drop like the rock it is at any point, it's a commodity with little intrinsic value.

Absolutely agree - staple gold is no more of a bulletproof value, in the long run, than wine or paintings by famous artists. And if it's set as the only ultimate parameter of value it can skew conflicts in strange ways. Imagine how much more difficult it would have been to bring an end to the apartheid system of South Africa if gold (and, buttressed by it, diamonds) had still been the base of evaluation of assets everywhere. The motivation to foreign powers to support the white ruling classes would have been all but impossible to get around, and it would have been harder to bring out the injustice of it all, because of the need to have a hand on the assets that the rulers of South Africa controlled.

Quote
We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

Agree. Few advanced countries really plan on becoming completely free of national debt: what they want is to have a manageable amount of debt relative to taxes and GDP, and that's not the same as a fixed-size debt, but a debt that allows them to be proactive and plan for the future. If the government of a country says "we shall never incur debt" they, and the nation, won't get anywhere, there's only so much you can do from taxes and private initiatives in a country without modern roads, railways, airports, energy infrastructure and so on. And that kind of thing costs huge money to set up in the first place, before you can get to use it.

Keeping the economy going in a modern trading nation, set in a world of competitive and hungry rivals, demands investment programs now and then (or running maintenance) on a scale that no private company is going to be willing to pay for by themselves. And no modern nation tries to pay for that kind of thing simply from the surplus of the budget as it would look if all loans were taken away. Taking up loans (plus raising the taxes a bit) is the way most countries operate if they are planning to expand their railways, invest in education and so on.
« Last Edit: July 07, 2011, 08:13:31 PM by gaggedLouise »

Offline Maxwell Malamute

I don't think the debt is as bad as people think; the US has vast wealth, and could easily pay the debt down if it wanted to. Wall Street is back to making record profits, and the gap between the rich and poor ans never been greater. The top richest 1% have more money than ever due to tax cuts and loopholes for the rich, and it has not created a trickle-down effect of them investing and creating jobs. For too long, we have let Wall Street and the Super Rich take advantage of the country that brought them the stability that made the accumulation of their wealth possibly; if we rolled back the tax cuts on these elites, held big banks accountable, and brought Wall Street to task, we wouldn't have to be taking it out on teachers and workers and those struggling to get by. The entire debt crisis is a tool of the right to make people think the sky is falling, and to give up even more, so the rich can take even greater advantage of the system. I have seldom seen a movement so blatantly stupid as the Tea Party, in terms of self preservation.

Offline Jude

The June jobs report is certainly making me feel more pessimistic.

Offline Hurricane

I don't think the debt is as bad as people think; the US has vast wealth, and could easily pay the debt down if it wanted to. Wall Street is back to making record profits, and the gap between the rich and poor ans never been greater. The top richest 1% have more money than ever due to tax cuts and loopholes for the rich, and it has not created a trickle-down effect of them investing and creating jobs. For too long, we have let Wall Street and the Super Rich take advantage of the country that brought them the stability that made the accumulation of their wealth possibly; if we rolled back the tax cuts on these elites, held big banks accountable, and brought Wall Street to task, we wouldn't have to be taking it out on teachers and workers and those struggling to get by. The entire debt crisis is a tool of the right to make people think the sky is falling, and to give up even more, so the rich can take even greater advantage of the system. I have seldom seen a movement so blatantly stupid as the Tea Party, in terms of self preservation.

These are exactly the kind of sentiments that make me furious.

The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?


Offline Maxwell Malamute

"The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?"

This does not translate that the top 10% are taxed at a rate of 68%, as you seem to imply. In fact, the rich pay nothing above $100,000 as far as social security goes; as far as federal taxes go, the highest bracket is 35%, and laden with many times the loopholes the middle class are able to take advantage of.

Thus, nobody is coming up to me and asking for 68%, and this would remain the case whether I made $30,000 or $30 million.


So yes, I do think the wealthiest people are not going to be overly burdened by giving back to the nation that maintained the stability and the very environment for them to become wealthy. It sounds perfectly fair to me. Humane and civil, even. When you have people working full time, and still struggling to afford basic things like medical and dental care, I think there is a huge problem.

Let's face facts: tax cuts for the rich have not helped create jobs, nor the average person. They've only helped money become increasingly concentrated in the hands of a few, where it stagnates and fails to circulate and keep the economy moving.

« Last Edit: July 08, 2011, 08:03:36 PM by Maxwell Malamute »

Online Vekseid

These are exactly the kind of sentiments that make me furious.

And your sentiments make me angry. Especially your non sequitur. Please try to refrain from those in the future, as Maxwell addressed.

Quote
The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?

In addition to Maxwell's statements, you are also making a lie of omission by avoiding discussion of regressive taxes like sales taxes and fees.

As Maxwell alluded to, most people's basic needs and wants are in the first $70k of their income. This means that income over that, people are happier and more willing to support civilization. Obviously, if you're making less than $70k, you're going to be more stressed. Even when people making $50-80k per year are convinced that they are making a lot of money. I believe it was Thomas Jefferson who argued that an income tax should have a cutoff below which no tax is paid. It's hardly a new concept.

Two-thirds of households making over $200k per year want to be taxed more. This is almost certainly going to include some otherwise liberal folks living in more upscale parts of the country who are on the edge and can't really afford it there. During World War II and the 50's, many of this nation's most lauded entrepreneurs did actually pay around two-thirds of their total income as tax. During this period of the 90% top bracket, the United States, without relying on exports (which were anemic) came to outproduce the rest of the world combined. We fought in several wars, landed a man on the Moon, created the world's fastest plane, the first commercial jumbo jet - a feat which took the rest of the world decades to match. This all with the top bracket between 70% and 94%.

What did dropping it to 20% get us? We had the Great Depression.

The fact is the rich disproportionally benefit from a secure and safe society. To paraphrase Anatole France, the law, in its magnanimous equity, forbids the rich as well as the poor to live in their vehicles on the street. It forbids the rich as well as the poor from declaring bankruptcy unless paying thousands of dollars in fees first. It forbids the rich as well as the poor to rummage through garbage for food. It forbids the rich as well as the poor from doing drugs where they can be seen. It protects the rich as well as the poor from having their goods stolen. In its glorious equality, it mandates that the rich as well as the poor pay the same fines and fees.

The majority of income for the rich is rentier income - interest, rent, and dividends. You are, in effect, paying these people taxes as you speak. Out of nearly every good you buy, out of every service you use, as long as it isn't directly from someone self employed or close to it, they take their cut for doing nothing but help ship your job overseas.

This has reached a point where there is now a net transfer of about ~5% of this nation's wealth from the bottom 85% to the top 5% each year.

That isn't sustainable. Whether you believe in austerity fairies or not, eventually, that house will come crashing down. People in the bottom 85% are getting more and more squeezed for money each year, and eventually, they won't have any more to give.

And then this nonsense ends, one way or another. I hope it is not the end painted by clinging to delusions and spreading them through liberal application of fallacies such as your post there.

Online ReijiTabibitoTopic starter

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These are exactly the kind of sentiments that make me furious.

This is a civil discussion thread.  I may not be a god, but I am the one who started this thread, so I can delete and lock it just as much as they can.  Keep things civil.  I don't want anyone to get banned or put in the Pillory because of random statements like this.


The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?

This is...so erroneous and full of holes that it's not even worth discussing.  Here are a few more things for you.  The wealthiest parts of the country earn far more than they ever spend in the economy.  And that's after taxes, not before.  I heard the disparity between percentage earned by the top one percent and the percentage spent is about ten percent - that is, they're taking ten percent more out of the economy than they're putting into it.  And that money doesn't just come from nowhere, the money that they take and keep out of the economy has to come from somewhere, and that somewhere is the rest of the country.

Maxwell and Vekseid are right.  When you've got a society that has people struggling at the bottom to just take care of their basic needs day after day, and giants at the top who have more money than they spend in a given year, something is wrong.  While some of the statistics and ideas within the book The Creature From Jekyll Island are suspect, a few are quite sound. 

One: fewer and fewer people retire every year at 65.  A family friend of mine is a cardiologist at a hospital, making well over $250K a year, with a spouse and three kids to support.  Ten years ago, when I was in high school, they were going to continue to work past 65, but so that they could keep doing good work, and not for the money.  I talked to this same cardiologist a year ago, and they told me flat out that they're not retiring until the scalpel is taken out of their hands - the economy was too bad, things are getting pricier, and there's no sign of recovery at the moment.

Two: The average income is getting lower.  My wife and I both work, for a combination of around 60 hours a week, and have enough to pay our bills and set aside some for savings, but any huge emergency expense - like fixing a car or a hospital visit - would easily wipe out those savings.  And we don't work minimum wage jobs, either.  Compare this to past generations, where one income earner was enough to supply the needs of a whole family.

Three: In 2006, the amount of tax revenue being spent by the federal government on the interest on the national debt was 39%.  This is not to help pay off the debt.  This is the interest on the debt.  Furthermore, payments in interest on the debt took about 17% of total federal revenue (more than just income taxes).  It is now the single largest expenditure on the budget.  More than defense, and greater than the total cost of running 10 different federal departments, some of which are: Agriculture, Education, Justice, and State.

All the Democrat and Republican arguments over tax boost/spending cuts aren't the real solution.  Even a balanced-budget law isn't the solution.  The solution is that Congress needs to be cut off.  Spending cuts aren't the solution, a spending cap is.  Raising taxes on the rich, and cutting spending for programs that serve no real purpose sound nice, and they need to be done, but neither of those are truly capable of solving the problem, which is Congress' irresponsibility with money.  As long as Congress spends more money than it brings in, or as much money as it brings in, we're not going to see things get better.

Also, and Obama talked about this...entitlements.  They have to be dealt with if we're going to reduce the debt and try and jumpstart the economy again.

And I've kinda lost my train of thought, so I'll stop here.

Online Vekseid

Three: In 2006, the amount of tax revenue being spent by the federal government on the interest on the national debt was 39%.  This is not to help pay off the debt.  This is the interest on the debt.  Furthermore, payments in interest on the debt took about 17% of total federal revenue (more than just income taxes).  It is now the single largest expenditure on the budget.  More than defense, and greater than the total cost of running 10 different federal departments, some of which are: Agriculture, Education, Justice, and State.

Wrong. It has never exceeded our defense budget. Total military spending last year was $685 billion.

Quote
All the Democrat and Republican arguments over tax boost/spending cuts aren't the real solution.  Even a balanced-budget law isn't the solution.  The solution is that Congress needs to be cut off.  Spending cuts aren't the solution, a spending cap is.  Raising taxes on the rich, and cutting spending for programs that serve no real purpose sound nice, and they need to be done, but neither of those are truly capable of solving the problem, which is Congress' irresponsibility with money.  As long as Congress spends more money than it brings in, or as much money as it brings in, we're not going to see things get better.

Congress does not have responsibility issues. Federal spending as a percentage of revenue has been remarkably consistent since the end of World War II, tending to hover around 20% of GDP. What we have is a revenue crisis, driven solely by shifting the tax burden from the rich to the middle class. What is interesting is that even though the middle class's tax burden is now greater, their share of overall tax revenues has gone down. The effect has been to hollow out the American middle class.

Which makes Hurricane's point rather amusing - the most sensible way to reduce the tax burden on the rich is to actually raise their taxes.

Because then they'll stop paying themselves as much. Because then they'll invest more. Because then the three trillion dollars that corporations and banks have locked up gets released back into the economy, wages and median income rises again.

Online ReijiTabibitoTopic starter

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Wrong. It has never exceeded our defense budget. Total military spending last year was $685 billion.

Last year.  I'm talking 2006, not 2010.  According to figures, the amount spent by the DOD on defense in 2006 was around $406 billion, which is as much as we spent on interest.  The fact that the gap between the two has gotten bigger, in the direction of more defense spending and not less, is not a good sign, especially when it's to the tune of about $280 billion in the past four years.  And this coming from the President who said that he was going to get us out of foreign wars, out of the money sink quagmires that were Iraq and Afghanistan.


Congress does not have responsibility issues. Federal spending as a percentage of revenue has been remarkably consistent since the end of World War II, tending to hover around 20% of GDP. What we have is a revenue crisis, driven solely by shifting the tax burden from the rich to the middle class. What is interesting is that even though the middle class's tax burden is now greater, their share of overall tax revenues has gone down. The effect has been to hollow out the American middle class.

And how do you think that tax burden shift came about?    It's not like Congress got out of bed one day and decided to do things differently.  Congress does have responsibility issues.  Namely, in the fact that being elected to the post of US Congressperson means that you have a duty, an obligation, a responsibility to uphold the laws of the land, and to serve all the people, not just the ones with gigantic pocketbooks and toilets made of gold.  Congress has gotten more concerned with being reelected and accumulating political power for whatever side elected them than actually doing their job.  And if we didn't treat Congress like the throwaway job position it is today, if we actually continued the trends for Congressmen that started way back when this country was first founded, and right up to the Second World War, we might not be in this mess.

Because then they'll stop paying themselves as much. Because then they'll invest more. Because then the three trillion dollars that corporations and banks have locked up gets released back into the economy, wages and median income rises again.

Call me a pessimist, call me crazy, call me whatever you like, but I don't think so.  Corporations and banks and rich people have been figuring out ways to dodge around laws and government agencies and find ways to hold on to their precioussssssssssssssssssss money for a long time.  They have lawyers, they have lobbyists, and they are going to fight tooth and nail to keep that money in their hands, because somehow rich people have it in their heads that they earned it, that they're entitled to it, and they're not gonna let anyone take it away from them.

Do I have a distorted view of the rich?  Maybe.  But that doesn't change the fact that everywhere I seem to look, the rich and powerful seem to be only adding to the misery of the middle class, not helping it.

Online RubySlippers

http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

I'm going to direct you to section four of the 14th Amendment its on Wiki but its verbatim.

[The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.]

As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.

It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

Offline Zakharra

Quote
Which makes Hurricane's point rather amusing - the most sensible way to reduce the tax burden on the rich is to actually raise their taxes.

 No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the emkiddle class and lower classes to actually pay incomne taxes and NOT gety a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

Offline Zakharra

http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

I'm going to direct you to section four of the 14th Amendment its on Wiki but its verbatim.

[The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.]

As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.

It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

 By that reasoning, why bother with Congress at all? The President could just issue executive orders taking the money the programs need and fuck the Congress or public opinion polls.

Online RubySlippers

Not really I would make the case in setting up the program or agency they give the authorization and obligation until they say so in the law that made it that its to be funded as a national obligation.

I will note the three words authorized by law, does it say funding bill every year?

Section 8 of the US Constitution:

1:  The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

2:  To borrow Money on the credit of the United States;

Now one could make the case here but save for the 14th Amendment which has equal and as an amendment higher standing that is being a later addition to the document has a higher standing as the states and people of the nation changed this. That in effect the Congress may do these things but if they fail the default is the existing program or agency under the later amendment MUST BE funded if lawfully established. That would fall to the chief officer of the United States the President.

Congress to counter this would have to amend the law creating the agency for example to limit funding to Congress in every case one by one and also every program one by one, this includes funds for active war.

Its never been done before that doesn't mean this would be unconsitutional until the Federal Courts overrule the executive order so he should do it then lets see how the courts fall on this. At least until its decided the Treasury department could add debt until they decided it under a 90 day emergency powers declaration then he could always do another.

Offline Oniya

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No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the middle class and lower classes to actually pay income taxes and NOT get a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

Incorrect.  Look at your paycheck, and you'll see a section marked 'Taxes'.  There are entries for W/H (with-holding), OASDI (Social Security), Medcar (Medicare) - all for Federal - and a second W/H for the state.  When you fill out your Human Resources forms upon gaining employment, you are telling your employer how much of your paycheck to allocate to your taxes.  At the end of the year, when you get your W-2's from the state and the feds, and fill out all the little boxes on your 1040, you are calculating how much more you paid than necessary - or less, for that matter.  In the latter case, you end up paying out to the IRS and/or state.

Offline gaggedLouise

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Apparently Boehner and the Tea Party people are bent on sending their country into federal bankruptcy, or as close as possible. Talk about electioneering in the senate.

Online Vekseid

Last year.  I'm talking 2006, not 2010.  According to figures, the amount spent by the DOD on defense in 2006 was around $406 billion, which is as much as we spent on interest.  The fact that the gap between the two has gotten bigger, in the direction of more defense spending and not less, is not a good sign, especially when it's to the tune of about $280 billion in the past four years.  And this coming from the President who said that he was going to get us out of foreign wars, out of the money sink quagmires that were Iraq and Afghanistan.

Your figure for 2006 ignores the wars.

Quote
And how do you think that tax burden shift came about?    It's not like Congress got out of bed one day and decided to do things differently.  Congress does have responsibility issues.  Namely, in the fact that being elected to the post of US Congressperson means that you have a duty, an obligation, a responsibility to uphold the laws of the land, and to serve all the people, not just the ones with gigantic pocketbooks and toilets made of gold.  Congress has gotten more concerned with being reelected and accumulating political power for whatever side elected them than actually doing their job.  And if we didn't treat Congress like the throwaway job position it is today, if we actually continued the trends for Congressmen that started way back when this country was first founded, and right up to the Second World War, we might not be in this mess.

Well, for the most part, we are electing fundraisers, rather than the best this country has to offer. The only way to fix that is going to be a constitutional amendment, and the only way to enact that is going to be through a mass effort at the state level, as Congress isn't going to vote it in. After a few more years of this, I think popular unrest could be strong enough to see a new Bill of Rights enacted through this method.

Quote
Call me a pessimist, call me crazy, call me whatever you like, but I don't think so.  Corporations and banks and rich people have been figuring out ways to dodge around laws and government agencies and find ways to hold on to their precioussssssssssssssssssss money for a long time.  They have lawyers, they have lobbyists, and they are going to fight tooth and nail to keep that money in their hands, because somehow rich people have it in their heads that they earned it, that they're entitled to it, and they're not gonna let anyone take it away from them.

Like I said, two-thirds of wealthy households want their taxes raised.

To me, that doesn't sound like it's a problem with a rich. It sounds like it's a problem with sociopaths and narcissists being able to game the system.

Quote
Do I have a distorted view of the rich?  Maybe.  But that doesn't change the fact that everywhere I seem to look, the rich and powerful seem to be only adding to the misery of the middle class, not helping it.

Bill Gates' Giving Pledge, Warren Buffet has been lobbying for needed economic reforms for a decade. The threat this country faces has money, it does not have all of it.

No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the emkiddle class and lower classes to actually pay incomne taxes and NOT gety a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

As Oniya said, you are wrong. The average income tax burden is quite low, but this is true into the very rich because of the ridiculously low capital gains tax rate.

By that reasoning, why bother with Congress at all? The President could just issue executive orders taking the money the programs need and fuck the Congress or public opinion polls.

Congress authorized the budget. Saying that they won't pay for the budget they passed is petulant and childish.

Offline elone

Just a crazy idea, but when it comes to incomes and taxes, everyone seems to focus on percentages. Why not look at the dollar amounts.

For instance, If I make $30,000/yr and pay $2,000 in income tax, I am living on $28,000. Not so easy these days.

If I make $20,000,000/yr and pay $15,000,000 in income tax, I am living on $5,000,000. I think I could manage that. The rich just might have to cut down on their lavish expenses. Things like CEO pay versus hourly wage for employees has become totally unbalanced. Not only that, but the middle class in this country is disappearing, a large part because we have lost so much of our manufacturing ability to outsourcing and wage stagnation.

We have too many problems for politicians to focus on "No New Taxes." We also need to stop being the world's policeman and cut defense spending. I think we spend more on defense that the rest of the world combined, a lot of it just waste, I've seen it.

And as said before, even the poor pay taxes, they are deducted from their paychecks. There are also all types of fees, gas tax, sales tax, to name a few.

I have a t-shirt that says "Quit your bitchin'. start a revolution"  At some point when people get so sick of living hand to mouth while others live in luxury it will happen, unless our politicians see the writing on the wall and start doing what is good for the country, instead of doing what they need to do to get reelected. The two party system is totally out of control and unworkable. We need to rethink the hold they have on government thru either term limits or more open access in elections for third and fourth parties.

Of course we can always get China to bail us out and restore order.

I know I have rambled all over the place here, it is late and I'm tired.



Offline Zakharra


As Oniya said, you are wrong. The average income tax burden is quite low, but this is true into the very rich because of the ridiculously low capital gains tax rate.[/qupte]

  Look at what I was responding to. Aside from the Medicare and those taxes, the poor do NOT pay income tax. they get everythng back and a large portion of the middle class does to. My mate makes just over $10,000 a year and she gets over $3,000 back from the federal govermnent ever year. That means she isn't paying a single cent in income tax. True she does pay in her paychecks, but when tax time rolls around, she gets is ALL back. Alot of the lower middle class get full refunds too.

 Raising the taxes on the wealthy will only make the percentage of the tax revenue they pay even larger. Unless you add more people to the tax rolls, the number of tax payers doesn't change.

Quote
Congress authorized the budget. Saying that they won't pay for the budget they passed is petulant and childish.

 Look at what I was responding to;
Quote
As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.
 It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

  That was reading that it might be legal for the President to completely bypass the Congress to fund a 'neccessary' program or to raise the debt ceiling without Congress's approval.

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If I recall history, Jefferson needed to raise money to buy the Louisiana Territory (though originally, all he wanted was New Orleans and the Mississippi River, the rest got thrown in as part of the deal), and when Congress refused to budget him the monies to do it, he threatened to hold a national lottery in order to raise the funds to do so.  Congress, of course, not wanting to be undermined, immediately put it in the budget...

Offline Zakharra

Quote
Like I said, two-thirds of wealthy households want their taxes raised.

 I'm calling bs on that.  Right now, there is nothing keeping every one of those households from writing a monthly check to the government for any extra money they feel they have. If they wanted to have higher taxes, they can voluntarily send anything they don't need to the government and it will be glad to take it.  The fact that they aren't is suggestive that if higher taxes were enacted, a lot would find ways to not pay them.

 Basically, they are not putting their money where their mouth is.

Offline Asuras

I'm going to go to what the writers at The Economist (the smartest guys in the room) have to say about this:

Quote from: The Economist
IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.

...

This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.

And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer.

Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note.

This is what David Brooks says, a (sane) conservative: (excerpted)

Quote from: David Brooks
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter how sweet the terms.

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

The members of this movement have no economic theory worthy of the name.

If the debt ceiling talks fail, independent voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.

As a Canadian and a New York Times columnist, he is not given to strong language, so this is about as close to profanity as he is capable of.

I had a longer post, but, Christ...

On August 2, the Treasury will be forced to choose between: Do we fund soldiers in the line of fire? Do we pay seniors their social security checks we promised them? Do we fund medicare recipients who need this to get the health care treatment we promised them?

And at the same time, credit markets will freeze. People and businesses won't be able to get loans or mortgages because treasuries are tanking. And then people lose jobs. Lots of people.

How did we get to the point where the Republican Party is threatening this? This is terrorism. They're threatening to blow up the American economy - hell, the world economy - to get what they want.

I'm not a Democrat because I love the party - I'd love to have two choices. But right now, I have to move to New York City to find a Republican congressional candidate that isn't insane. Do you remember when there was discussion about Democrats defunding Bush's war in Iraq? The Democrats made the right choice, and now what are the Republicans threatening. Defunding half of everything, why aren't more people pissed off with this?

The scary thing is that people who actually trade and understand US government debt are already afraid of what happens after August 2, so people are taking out bets that we will default.

The nightmare scenario is that Congress will vote down a bill at the eleventh hour. They did it before in 2008 and it sent the stock market spiraling into oblivion but no one has bothered to blame them for that.