US National Debt / Deficit - How does it end?

[mmortal03]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

[ScreamnShout]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

If you pay no federal federal income taxes then you are receiving benefits from the federal government (national defense, food security, protections from federal regulations) but are paying nothing in return.

FICA taxes are a zero sum game because they should get a cash benefit from these taxes in the future.

[RoadTrain]

He was arguing that you could prevent recessions by doing exactly what you are suggesting the government do.

IF the Kensians were correct then anytime there was a contraction in real GDP, the government could simply spend more money to "create" economic growth which would stop such recession.

Do you know that it's exactly what US government did in a latest recession? Do you know that in a recession the budget deficit rises naturally (it's called automatic fiscal stabilizers). It's hard to measure the efficacy of government efforts in the latest recession since a lot of support went to the financial sector, but it certainly helped mitigate the recession.

The fact that US is doing relatively well now is because they don't have austerity unlike the depressed Europe.

And a government can spend its way out of a recession, but it's very sluggish in such kind of actions (usually actions are taken only after a recession starts, when it already has momentum).

[polynesia]

He was arguing that you could prevent recessions by doing exactly what you are suggesting the government do.

IF the Kensians were correct then anytime there was a contraction in real GDP, the government could simply spend more money to "create" economic growth which would stop such recession.

Do you know that it's exactly what US government did in a latest recession? Do you know that in a recession the budget deficit rises naturally (it's called automatic fiscal stabilizers). It's hard to measure the efficacy of government efforts in the latest recession since a lot of support went to the financial sector, but it certainly helped mitigate the recession.

The fact that US is doing relatively well now is because they don't have austerity unlike the depressed Europe.

And a government can spend its way out of a recession, but it's very sluggish in such kind of actions (usually actions are taken only after a recession starts, when it already has momentum).

The problem is that it does get difficult to cut back on spending once you are out of a recession.
There are various special interest groups, which have a vested interest in ensuring that there are no cuts.

[cellard]

There will be an huge bailout and no one is going to help you after that so you can spend your money on stuff. Hopefully, before all that happens people is smart enough to diversify and keep a big % of their wealth in metals and Bitcoin.

[RoadTrain]

He was arguing that you could prevent recessions by doing exactly what you are suggesting the government do.

IF the Kensians were correct then anytime there was a contraction in real GDP, the government could simply spend more money to "create" economic growth which would stop such recession.

Do you know that it's exactly what US government did in a latest recession? Do you know that in a recession the budget deficit rises naturally (it's called automatic fiscal stabilizers). It's hard to measure the efficacy of government efforts in the latest recession since a lot of support went to the financial sector, but it certainly helped mitigate the recession.

The fact that US is doing relatively well now is because they don't have austerity unlike the depressed Europe.

And a government can spend its way out of a recession, but it's very sluggish in such kind of actions (usually actions are taken only after a recession starts, when it already has momentum).

The problem is that it does get difficult to cut back on spending once you are out of a recession.
There are various special interest groups, which have a vested interest in ensuring that there are no cuts.

I agree, it's sometimes difficult politically, that's why many spending increases are designed as temporary "packages", so that governmet has some flexibility when they expire.
Still, any changes require political will.

Also, when you are out of a recession, the deficit decreases naturally, as does countercyclical spending (like unemployment insurance outlays), while revenues increase.

[krodmandoon]

it doesn't end. what is the incentive for ending it.

[jjacob]

it doesn't end. what is the incentive for ending it.

The end might not be in America's hands. 

[marryXmas]

He was arguing that you could prevent recessions by doing exactly what you are suggesting the government do.

IF the Kensians were correct then anytime there was a contraction in real GDP, the government could simply spend more money to "create" economic growth which would stop such recession.

Do you know that it's exactly what US government did in a latest recession? Do you know that in a recession the budget deficit rises naturally (it's called automatic fiscal stabilizers). It's hard to measure the efficacy of government efforts in the latest recession since a lot of support went to the financial sector, but it certainly helped mitigate the recession.

The fact that US is doing relatively well now is because they don't have austerity unlike the depressed Europe.

And a government can spend its way out of a recession, but it's very sluggish in such kind of actions (usually actions are taken only after a recession starts, when it already has momentum).

The problem is that it does get difficult to cut back on spending once you are out of a recession.
There are various special interest groups, which have a vested interest in ensuring that there are no cuts.

This is why you should not try to "stimulate" yourself out of a recession. You need to make it easier to conduct business in your country (by easing regulations) and by giving incentives to conduct business (via temporary tax cuts)

[mmortal03]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

If you pay no federal federal income taxes then you are receiving benefits from the federal government (national defense, food security, protections from federal regulations) but are paying nothing in return.

If it actually worked that way, you would be correct, but it doesn't.  In actuality, any surplus money, of which you can consider the lower income brackets to be contributing a certain proportion of, has gone into treasury bonds, meaning intra-governmental debt has been created so that other areas of the government can spend it.  The government always finds a way to do whatever it wants with the money it gets from people.

[Cortex7]

it doesn't end. what is the incentive for ending it.

All fiat systems fail eventually, this article explains it well:

http://goldsilverworlds.com/gold-silver-insights/research-shows-all-paper-money-systems-failed/

[a447513372]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

If you pay no federal federal income taxes then you are receiving benefits from the federal government (national defense, food security, protections from federal regulations) but are paying nothing in return.

If it actually worked that way, you would be correct, but it doesn't.  In actuality, any surplus money, of which you can consider the lower income brackets to be contributing a certain proportion of, has gone into treasury bonds, meaning intra-governmental debt has been created so that other areas of the government can spend it.  The government always finds a way to do whatever it wants with the money it gets from people.

if someone was paying their fair share in taxes then the government would need to borrow a little bit less then what it otherwise would need to. If the entire 47% of the people who pay no federal income taxes paid their fair share of taxes then the government would need to borrow a lot less (or potentially be running a budget surplus)

[mmortal03]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

If you pay no federal federal income taxes then you are receiving benefits from the federal government (national defense, food security, protections from federal regulations) but are paying nothing in return.

If it actually worked that way, you would be correct, but it doesn't.  In actuality, any surplus money, of which you can consider the lower income brackets to be contributing a certain proportion of, has gone into treasury bonds, meaning intra-governmental debt has been created so that other areas of the government can spend it.  The government always finds a way to do whatever it wants with the money it gets from people.

if someone was paying their fair share in taxes then the government would need to borrow a little bit less then what it otherwise would need to. If the entire 47% of the people who pay no federal income taxes paid their fair share of taxes then the government would need to borrow a lot less (or potentially be running a budget surplus)

Again, it's not 47%, but please don't blame these individual people. Worker efficiency has been going up, while salaries have been declining. Any lack of tax revenue is simply due to structural reasons in the economy, including large corporations paying as low a wage as they possibly can, jobs being outsourced to foreign countries, etc.

[Traffic4u]

unless you are part of the 47% who pay no taxes and rely exclusively on government

This is factually wrong. While 47% of households paid no federal income tax for 2009, only 14% paid neither income nor payroll tax. Also, people pay sales taxes at the state and local levels.

If you pay no federal federal income taxes then you are receiving benefits from the federal government (national defense, food security, protections from federal regulations) but are paying nothing in return.

If it actually worked that way, you would be correct, but it doesn't.  In actuality, any surplus money, of which you can consider the lower income brackets to be contributing a certain proportion of, has gone into treasury bonds, meaning intra-governmental debt has been created so that other areas of the government can spend it.  The government always finds a way to do whatever it wants with the money it gets from people.

if someone was paying their fair share in taxes then the government would need to borrow a little bit less then what it otherwise would need to. If the entire 47% of the people who pay no federal income taxes paid their fair share of taxes then the government would need to borrow a lot less (or potentially be running a budget surplus)

Again, it's not 47%, but please don't blame these individual people. Worker efficiency has been going up, while salaries have been declining. Any lack of tax revenue is simply due to structural reasons in the economy, including large corporations paying as low a wage as they possibly can, jobs being outsourced to foreign countries, etc.

I think you should have to pay federal in come taxes even if you make min wage. Corporations will pay what the market will support so if people are willing to work for low wages (because they have no skills and receive government benefits) then there is no reason for a corporation to pay more.

Also a very high percentage of people who pay no federal income taxes will also receive some kind of government benefit (read: welfare)

[mmortal03]

Corporations will pay what the market will support so if people are willing to work for low wages (because they have no skills and receive government benefits) then there is no reason for a corporation to pay more.

You do realize that a corporation benefits from whatever welfare their workers are receiving from the government, by not having to pay that amount themselves to keep their own workers afloat? Do you really support having your tax dollars go to prop up corporations in this manner, while their CEOs take bonuses?

Corporations have the power and money to be able to make a difference by creating programs to train these workers with "no skills", and to pay them wages that will create demand in the economy, the one in which their workers will inevitably spend their earnings in.

For some reason, you focus on the poor individual as if they somehow hold all the power and are simply parasites, but then allow the corporations (who actually do hold the power) to take no flack for the consequences of their larger scale, parasitic behavior? There is only so much that individuals on the poor end of the spectrum can do to change their own circumstances, whereas corporations have the capability to do great things for the community, given their resources. Instead, you give these corporations some sort of merit in their decision to make it a race to the bottom?

[money420weed]

Corporations will pay what the market will support so if people are willing to work for low wages (because they have no skills and receive government benefits) then there is no reason for a corporation to pay more.

You do realize that a corporation benefits from whatever welfare their workers are receiving from the government, by not having to pay that amount themselves to keep their own workers afloat? Do you really support having your tax dollars go to prop up corporations in this manner, while their CEOs take bonuses?

Corporations have the power and money to be able to make a difference by creating programs to train these workers with "no skills", and to pay them wages that will create demand in the economy, the one in which their workers will inevitably spend their earnings in.

For some reason, you focus on the poor individual as if they somehow hold all the power and are simply parasites, but then allow the corporations (who actually do hold the power) to take no flack for the consequences of their larger scale, parasitic behavior? There is only so much that individuals on the poor end of the spectrum can do to change their own circumstances, whereas corporations have the capability to do great things for the community, given their resources. Instead, you give these corporations some sort of merit in their decision to make it a race to the bottom?

It is not a corporation's job to provide an unskilled worker skills to do a job they are not qualified for. This kind of training is very inefficient and will likely result in the corporation never receiving a return on this investment.

Corporations do not benefit from welfare as workers often give up opportunities for advancement, more hours and better pay in order for them to stay on welfare. People believe they are entitled for something in exchange for nothing.

I think the best solution would be to shut off welfare so the lazy cannot give up the above opportunities. When this happens, maybe workers will demand to get paid higher wages

[CMMPro]

"It is not a corporation's job to provide an unskilled worker skills to do a job they are not qualified for."

This is absolutely wrong. Corporations take these chances every day and they most often pay off.
It's not their "job" to train workers per se, but they would be stupid to neglect the ability to get quality employees for far less than they are potentially worth.

[mmortal03]

"It is not a corporation's job to provide an unskilled worker skills to do a job they are not qualified for."

This is absolutely wrong. Corporations take these chances every day and they most often pay off.
It's not their "job" to train workers per se, but they would be stupid to neglect the ability to get quality employees for far less than they are potentially worth.

Especially given the fact that you hear all these companies out there complain that they always struggle to find the talent that they're looking for. What this really means is that they either don't want to pay someone enough who has the talent, or they aren't willing to develop the talent themselves.

[redHeadBlunder]

"It is not a corporation's job to provide an unskilled worker skills to do a job they are not qualified for."

This is absolutely wrong. Corporations take these chances every day and they most often pay off.
It's not their "job" to train workers per se, but they would be stupid to neglect the ability to get quality employees for far less than they are potentially worth.

When a corporation takes a chance on a worker they are investing in the worker. Someone with zero skills is a high risk investment. If it turns out the worker is lazy or is not smart enough to grasp the concept of what is being taught him then they will still have an unskilled employee on their payroll that is not productive and will not be able to get a return on their investment.

A corporation will likely be able to pay someone they will train a somewhat lower wage. If the employee they are training is very smart and can do what is being taught them very well then the employee can take those newly learned skills (that the corporation just paid for) and go to another company that can offer more money.

It is a lose-lose situation to hire and train a no-skilled worker for a job that requires skill

[CMMPro]

"It is not a corporation's job to provide an unskilled worker skills to do a job they are not qualified for."

This is absolutely wrong. Corporations take these chances every day and they most often pay off.
It's not their "job" to train workers per se, but they would be stupid to neglect the ability to get quality employees for far less than they are potentially worth.

When a corporation takes a chance on a worker they are investing in the worker. Someone with zero skills is a high risk investment. If it turns out the worker is lazy or is not smart enough to grasp the concept of what is being taught him then they will still have an unskilled employee on their payroll that is not productive and will not be able to get a return on their investment.

A corporation will likely be able to pay someone they will train a somewhat lower wage. If the employee they are training is very smart and can do what is being taught them very well then the employee can take those newly learned skills (that the corporation just paid for) and go to another company that can offer more money.

It is a lose-lose situation to hire and train a no-skilled worker for a job that requires skill

Again...totally wrong. They will swing for the fence 9 times out of 10 and if they hit one home run it is all worth it.

"they will still have an unskilled employee on their payroll that is not productive and will not be able to get a return on their investment"

Not true at all, no one guarantees you a job...if you don't make the cut you are out on your ass. It happens every day.

I'm actually a stunning example of this...but it is a long story no one cares to hear.