Why America has no Budget

[skydivr]

A fairly, non-partisan description in mathematical terms of why the US is in huge trouble.

No amount of tax the rich or rob defense is going to solve it without also painfully changing entitlement programs. We have put it off so bad for so long and continue to do so that we are making the eventual solution even worse.

We are Greece and Greece is US...

[video=youtube_share;EW5IdwltaAc]http://youtu.be/EW5IdwltaAc[/video]

 

[skydivr]

Another evaluation:

More Fodder for the Tax Debate

The two sides on the tax debate have been dug in for some time and there is very likely nothing that will
change their positions. On one side are those who assert that the wealthy should be taxed more in order to
reduce the level of income inequality that exists in the country. It is taken as an article of faith that an income
gap is in and of itself a bad thing. This seems to be a belief rooted less in the amount of money a given person
has than in the notion of fairness. The other side of the debate asserts that all wealthy people are devoting the
majority of their money to economic growth and job expansion. It is assumed that this money works its way
smoothly through the economy and eventually benefits all. Both points of view have an element of validity but
both can be taken too extremes. The debate over the tax reductions implemented during the Bush
administration have served to focus attention on the two points of view but that has not advanced the chances
of a compromise and has done little to shed much light on the issue of economic growth or what is meant by
fairness.

This short piece is not going to do much to alter that debate but there are some studies that have started to
emerge that may play a big role in the months to come. The Congressional Budget Office has just released a
study that asserts that lower taxes on the wealthy do little to promote overall economic growth. Since the end
of the Second World War the top individual tax rate has fallen from 94% to 35%. The decline in the capital
gains tax has been dramatic as well – falling from 25% before 1965 to 15% today. In general the tax rates have
fallen on the very rich and have tended to rise on the upper middle class and middle class. The rates for those
classified as lower income have all but vanished and today roughly 50% of the population pays no income tax
at all.

Analysis:
The CBO report found that there was very little correlation between higher incomes, lower taxes
and increased investment and this weakens the argument that it takes high income earners to promote
development and entrepreneurialism. What gets lost in all this are the differences between those who
qualify as wealthy. There are as many types of wealth as there are people and the ways that each category
spend is of critical importance if economic growth is the issue. The most unhelpful form of wealth tends to be
that which is inherited as it is generally money spent on the generation that inherited it and little seems to go
towards building or maintaining the business that created it in the first place. In contrast there is the
“wealthyâ€￾ business owner whose income and that of the company are intertwined. Not only is their wealth
only on paper but these are the people who plow that cash back into the business and really are the ones
doing all the hiring.

In the end the majority of the population is uninterested in either extreme. There is not a demand for the
entire population to earn the same income and there is no interest in enabling the lifestyles of the rich and
famous. The majority just want to see the economy grow and to have taxation play a positive role.

 

[zukracer]

yeah, there's some others out there saying similar things. While investing in the US is a great idea, I've been slowly shifting some of my stuff to international markets and into other currencies. We have this and then the Chinese and Russians pushing to go back to the gold standard instead of the USD standard. Either of those things will cause massive financial impacts. If the first happens the second will almost certainly be looked at more favorably by world markets. What folks dont realize is that a shift to the gold standard would essentially cripple the US as we do not have near enough gold reserves to cover our debts or even the current valuation of the dollar.

Its gonna be an interesting 2013

 

[skydivr]

I've read the scare about the gold standard too.

The US, even with it's troubles, is still the BEST currency in the world. As the dollar/US goes, so does the rest of the world. The Chinese are in economic MAD with the US holding all our debt, and the Russians have too much corruption to be trusted as the standard bearer. Sure makes me want to buy more ammo, or a cave with some farmland in the middle of no-where...

 

[zukracer]

It is still currently, however if there is a slide or rapid tumble with no real chance of coming back without drastic measures (like Greece) then perhaps the gold standard becomes more functional. I suspect that it would be the EU (germany) that would hold the standard. We are definitely sitting on the closer edge to the slippery slope than what I think most folks understand. I'll bring ammo/weapons and take a few acres on your middle of no where ranch

 

[skydivr]

I've got a quarter section in SD, but it's awefully cold out there in the winter...

 

[chrisjp]

i want to switch my money to goods... ammo...precious metals...

 

[Gpmo]

i want to switch my money to goods... ammo...precious metals...

This reminds me of a song... Couple "S" words used

 

[dadofthree]

As always, I've worked my entire life, saved, invested, and just as I near retirement it all evaporates and I can't even hunt or fish, dayum.

 

[StromBusa]

As always, I've worked my entire life, saved, invested, and just as I near retirement it all evaporates and I can't even hunt or fish, dayum.

I'm a baby boomer, I've expected it forever... too many of us. sux to see it coming to reality though. At least I live where I can feed myself/family....well.

 

[smedly]

Personally I'm putting all my money in gummi bears .

 

[RYC1966]

Imagine if the 401k fail like the housing mkts / loan systems

 

[MelodicMetalGod]

The trouble with an healthy economy that's predicated on growth is that it assumes that GROWTH is possible in perpetuity. I hate to say it, but, folks, we're in a closed/finite system. At some point, growth is no longer an option.