Is the US going bankrupt?

Is this the beginning of the end of being a superpower?

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Nope, the beginning was 35 years ago.

I like Glen Beck... watch him nearly every day..


GREAT to see you, PCF!

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First ProC,

thanks for posting this video.

second, I would like to point out something:

not one time in the video was there any mention of corporate taxes.

the only mention was household taxes.

third, when I was born 40 years ago 75% of all income taxes were paid by corporations.

today corporations pay far less than 20% of taxes and 90% of all corporations pay no income tax.

a couple years ago it was pointed out that the oil industry which made record profits were given more than 40 billion dollars in US grants (that is free money). At the same time the oil price problem was blamed on lacking and aging refineries- how much of that 40b do you think went into solving the oil "crisis" ?

Why are they saying the burden has to go on households and not a single- no not a single mention is made for making corporations pay their fare share of the tax burden ?

That was the most interesting point of the entire interview. That and the comment about how taxing the rich would not help solve the problem.

BAFRIEND said:

First ProC,

thanks for posting this video.

second, I would like to point out something:

not one time in the video was there any mention of corporate taxes.

the only mention was household taxes.

third, when I was born 40 years ago 75% of all income taxes were paid by corporations.

today corporations pay far less than 20% of taxes and 90% of all corporations pay no income tax.

a couple years ago it was pointed out that the oil industry which made record profits were given more than 40 billion dollars in US grants (that is free money). At the same time the oil price problem was blamed on lacking and aging refineries- how much of that 40b do you think went into solving the oil "crisis" ?

Why are they saying the burden has to go on households and not a single- no not a single mention is made for making corporations pay their fare share of the tax burden ?

That was the most interesting point of the entire interview. That and the comment about how taxing the rich would not help solve the problem.

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Because the is the current ecomomic model used in the US.

The idea is that if you allow rich people to keep their money they will invent and spend it on things that will be provided to them by less rich people who work.

This is call trickle-down ecomonics. It is also called conservative economics, Lazaie Faire capitalism and, before he became VP under Ronnie Raygun, George HW Bush called this VooDoo ecomonics.

Like communism, it works well on paper on so good in practice. The problem is rich people allowed to keep more of their money tend to invent in finincial instrments and not things that need to be built or that require labor.

Hence, no trickle down.

Rich Corporations tends not to buy new stuff and much as give out bigger profits to rich people who own lots of stock.

No trickle down there either.

Sooooooo...

We have rich corporations and rich people benefiting from tax cuts that allow them to keep more money and the lack of taxes from them falls on the middle class.

Which is heavily overtax since the burden is completely on them.

Of course this is an economic model that will destroy the middle class, which it is doing quite nicely.

For taking these deliberate actions that caused so much pain and poverty in this country Ronnie is seen as a hero who should have his bust on Mt. Rushmore.
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I don't get it,

but that's me.

Look, there is no question that the national debt is a problem. People were aware of this in the 80s when the Graham-Rudman bill was floating around trying to require at least a balanced budget so we wouldn't incur more debt. Ross Perot called further attention to it in the 1990s. And President Clinton signed the first balanced budget in 40 years during his term. What should have happened after that was that we kept the budget balanced and slowly started to pay down the debt.

Instead, what actually happened was that Republicans and Democrats started to wrestle over what to do with the "surplus" and President Bush won and decided to use it to cut taxes for the rich. Then, there was the war in Afghanistan, which we had to do, and I was for, but that was an expense. Then there was the war in Iraq, which is tremendously expensive, and a great enough yearly expense that it would dwarf the cost of even providing things like universal health care. Meanwhile, we have and are going to have more and more folks who are retired relative to the number who are working. So, needless to say, we're now once again running deficits. Part of this isn't Bush's fault, but a lot of it is. We were on the road to fixing these problems in the 1990s. But that's in the past.

Now, the first thing that a lot of Republicans will do is look at things and say we need to cut programs that most benefit people in need, people who rely on things like their social security check for food and shelter. That is a strategy that would work from a purely financial perspective, and it's an acceptable strategy if you're Satan, but it's not really a very charitable or loving one.

Here's what I propose instead to start to move this country into the black and preserve our programs for the elderly, the disabled, and the poor, with the caveat that it will have to wait until we dig ourselves out of the recession we're heading into (a lot of these proposals can only be done in a time of economic normalcy -- during a recession you actually need to be, if anything, increasing government spending and lowering taxes, for reasons that would be too complicated to sum up here). But after the recession is over, here's what you do:

- Partially repeal the Bush tax cut, repealing it specifically on income earned in excess of $200,000.

- Apply the payroll tax to all earned income (Currently it only applies to the first $97,000 or so; meaning Bill Gates pays the same exact dollar figure as someone in the upper-middle class)

- Pull combat troops from Iraq and leave a small strike force that can defend the embassy and take out terrorists.

- Legalize our immigrants so they start paying into Social Security. We actually need more young workers to pay the pay roll tax. Very few people think about the problem from that perspective, but if you have a lot of elderly folks relative to young folks that the young folks have their taxes paying for -- having more young folks could help tremendously. Obviously, though, we do need to protect our borders better from a security prospective so we know who is here and we weed out criminals and terrorists.

- Phase out our troop commitments in Europe a bit. The European Union is becoming an economic power that is going to rival the United States on the world stage at some point, probably in the next 50-100 years. They can begin to slowly pay for more of their own defense, on a gradual basis.

No trickle down there either.

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Like when Ronald Reagan gave all those low interest tax loans to the corporations claiming they would expand and create tons of new jobs- which they did by using the money to relocate overseas ?

BAFRIEND said:

Like when Ronald Reagan gave all those low interest tax loans to the corporations claiming they would expand and create tons of new jobs- which they did by using the money to relocate overseas ?

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There you go.

You're starting to sound like a progressive.

or at least an old school conservative

Here I am - the voice in the wilderness.

First, the simple reality is that the United States of America has been bankrupt for generations depending on how you measure it. At least since the Civil War there has been a national debt. It was exacerbated by WWI and WWII and, at present, as a percentage of GDP is lower than those levels.

I love the attacks on Republican tax cuts for the wealthy. My brother is a member of the Teamsters Union and loads boxes for UPS and, guess what, he got a tax cut under Bush. I did, as well, even though I lacked the tax writeoffs (mortgage and children) that he had. In fact, anyone who pays taxes got a tax cut from Bush, so that must mean that anyone who can pay income taxes must be wealthy. America must have a huge surplus of wealthy folks.

As for trickle-down economics, I can give first-hand proof that it is real. I have a very wealthy, very liberal, client. When Bill Clinton ran for the first time I had a meeting with my client during which he went into a rant about how the country was headed into eternal damnation if the evil Bush was reelected. I calmly told him that I was quite cerrtain that Mr. Clinton would be elected and, when elected, he would keep one campaign promise, if only one. He asked me what that was. I looked him squarely in the eye and said, "He will raise your taxes." My client utterly denied that poassibility and I assured him that Mr. Clinton had been running with a strong message of making the wealthy pay their "fair share" of taxes to which I said, "And you are wealthy." He could not deny that.

In March, following the election, we met again to discuss upcoming work for the year and he bemoaned the fact that he had just received his tax bill and his income had been significantly reduced, meaning that he would have to cut back on the work. At that point, I looked him squarely in the eye again and said, "And don't tell me that trickle-down economic doesn't work."

Fast-forward to the present. My client is now wealthier than ever and is as liberal as can be. Like Warren Buffett, he bemoans the fact that he is not being taxed enough, although when pressed on the matter, he readily admits that he is not donating to the U.S. Treasury more than he owes in income taxes. However, my work for him has also increased significantly. I hope and pray that the Bush tax cuts remain in force forever.

Instead, what actually happened was that Republicans and Democrats started to wrestle over what to do with the "surplus" and President Bush won and decided to use it to cut taxes for the rich. Then, there was the war in Afghanistan, which we had to do, and I was for, but that was an expense. Then there was the war in Iraq, which is tremendously expensive, and a great enough yearly expense that it would dwarf the cost of even providing things like universal health care. Meanwhile, we have and are going to have more and more folks who are retired relative to the number who are working. So, needless to say, we're now once again running deficits. Part of this isn't Bush's fault, but a lot of it is. We were on the road to fixing these problems in the 1990s. But that's in the past.

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True.

As for trickle-down economics, I can give first-hand proof that it is real.

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True

I hope and pray that the Bush tax cuts remain in force forever.

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I hope that the US gets a balanced budget, that is unlikely to happen when the same political party controls both the excecutive and the legislative. Bill Clinton was blessed in that part. Bush with the reeps controllinge everything was a curse in disguise. Sadly I thing that for the new US election the Dems will control the Executive and Congress so the band will be still playing.
As for taxes increases, the only thing to do was to deepen the US economic troubles while making the Dems look good. As happened with the New Deal. Roosvelt actually prolonged the depression, sank the US into a World War and is revered as a hero.
I guess that this how politics works.

resoto said:

As for taxes increases, the only thing to do was to deepen the US economic troubles while making the Dems look good. As happened with the New Deal. Roosvelt actually prolonged the depression, sank the US into a World War and is revered as a hero.
I guess that this how politics works.

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I lack both the energy and the patience to argue with you but I will piont ou two things in the hopes the other reading your come the correct conclusion about your views:

1) In fact, FDR did prolong the depression. He did so by institutiing tax cuts on the rich in the hope of getting some trick down effect. After two years did he went back to the basics of the New Deal and things took off from there.

2) The US got into WWII because it was attacked by an Axis power, specifically Japan. Japan attacked the US in the hope of making the Pacific Ocean an undisputed Japanees lake.

They were, in fact, terrorified of US industrial might and of our powerful ecomonic engine.

So much for "sinking" into world war, yeah ?

Japan attacked the US in the hope of making the Pacific Ocean an undisputed Japanees lake

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Japan was interested in making an empire out of Asia, not a Pacific lake and in China they were bitting more that they could chew.

The US practically cornered them into war with economic sanctions.

A war the Japs knew the could not win unless they destroy the US fleet by surprise.
And surprise the incompetence or worse of some provided.

90% dont pay taxes?

I think you have your %'s mixed up BAF.
It is about 90% who do pay.

The 10% who dont are foreigners who came here.
And no, the big rich are not ones who dont pay taxes.
They a lower % than other co's.

Its tiered.

I think every person should pay $2 towards the deficit and then not allow the gov to put their grubby hands on it.

And companies could pay like $10 for the deficit.

When we are a rate of closing in on the deficit, then the 'tax' should be removed.

How many ppl live in America?
Then x's 2.

How many companies are left after NAFTA [Clinton's child]?
Then x's 10.

It would come back down in a few years.

WarriorAngel said:

90% dont pay taxes?

I think you have your %'s mixed up BAF.
It is about 90% who do pay.

The 10% who dont are foreigners who came here.
And no, the big rich are not ones who dont pay taxes.
They a lower % than other co's.

Its tiered.

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He was speaking about companies, not individuals.

david01 said:

First, the simple reality is that the United States of America has been bankrupt for generations depending on how you measure it. At least since the Civil War there has been a national debt.

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I don't know about reality being simple but I was going to ask about how national debt factors into "bankruptcy".

If I understand how value-by-fiat works, I can't imagine the US going bankrupt.

As I said, the US has, technically, been bankrupt for generations. Although it will probably never delare bankruptcy or default on its debt payments, as Argentina has done, to mention but one country, the US government lacks the physical assets to pay off its debt. However, it has the ability to tax its citizens. It is this hidden asset, that the private sector lacks, which enables any government to avoid declaring bankruptcy. Technically, the indebtedness of the US government could simply be eliminated by the stroke of a pen raising taxes to a level to not only balance the budget, but also to pay off the debt. That would, of course, result in utter economic chaos, so politicians are quite content to systematically increase the debt, believing it is just paper, anyhow.

david01 said:

As I said, the US has, technically, been bankrupt for generations. Although it will probably never delare bankruptcy or default on its debt payments, as Argentina has done, to mention but one country, the US government lacks the physical assets to pay off its debt. However, it has the ability to tax its citizens. It is this hidden asset, that the private sector lacks, which enables any government to avoid declaring bankruptcy. Technically, the indebtedness of the US government could simply be eliminated by the stroke of a pen raising taxes to a level to not only balance the budget, but also to pay off the debt. That would, of course, result in utter economic chaos, so politicians are quite content to systematically increase the debt, believing it is just paper, anyhow.

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Being in debt isn't being bankrupt. Being bankrupt only comes when debt surpasses one's ability to pay it off.