U.S. debt was already over $150,000 per taxpayer, in 2018 - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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#15172548
This was written three years ago in 2018. It's probably worse now.


The U.S. federal government debt level has reached somewhere in the range between $122,500 to $174,000 per taxpayer.

50% of taxpayers claim less than $38,000 income. (Note this only includes people who actually pay taxes)

Only about 53% of the population pays any federal income tax (not counting withholdings or Medicare/Social Security taxes, primarily due to income level and tax benefits).
https://money.howstuffworks.com/only-53 ... me-tax.htm

The amount of interest that would have to be paid on $140,000 at 5% would be $7000.
Interest rates were above 5% between 1978 and 1998.

That's on top of personal debt.
A new study from Northwest Mutual finds that nearly three-quarters of Americans are in debt, with nearly half owing at least $25,000, excluding mortgages. The average debt load is $37,000, excluding mortgages, and more than 10 percent of survey respondents said they owe more than $100,000.
https://www.aol.com/article/finance/201 ... /22060294/


The average credit card holder owes $4000.
https://www.creditkarma.com/studies/i/a ... d-on-rise/

There is $8.88 trillion mortgage debt in the U.S. That's $113,000 per household that owns their home.
https://www.cnbc.com/2018/02/13/total-u ... llion.html

There's also $1.4 trillion in student loan debt. That's $31,800 on average for every person with student loan debt.
https://www.cnbc.com/2017/07/03/this-is ... loans.html

Try and yank more taxes out of people and it could potentially cause a large credit default.
#15172549
For those of you who are inevitably going to bring up the issue of GDP, here's something else to think about...

GDP to population ratio, and ability to pay down the debt

Some people claim that the National Debt is nothing to worry about, that it's not so terrible when you compare it to the country's GDP. Well here's something to think about: The country's (U.S.) GDP to population ratio. It has not been moving in a good direction over the last 25 years. It's one thing to take 40% of someone's income in taxes who's earning $80,000 a year. It's a very different thing to take 40% of their income when that person is earning $30,000 or $20,000. This "GDP" isn't just yours to take for the picking, to effortlessly pay off the government's debt. For many people already scraping by, it could mean destitution. Many of these people have substantial debts of their own.

Now if in our look at the economy we exclude the sale of real estate from the GDP calculation, it paints an even worse picture. Yes, a lot of our GDP isn't even "productive" GDP, it's just the sale of an asset from one owner to another. You can't just tax this and view it as free money, not without some substantial extraneous economic effects. Now this little side subject is too complicated to get into here, but consider how much expansion of the money supply the Fed has gone to trying to prop up asset prices in the economy. I mean, if this wasn't an important issue why would the Fed, the issuer of our money supply, be essentially spending hundreds of billions to try to make this move in a certain direction? You tax that part of the GDP and it will make it move in the opposite direction, negating intended outcome of all those hundreds of billions that have been dumped out by the Fed. (And this is yet another example of the inextricable connection that exists between government spending/debt and inflation from the Fed's monetary policy)

Sorry if I lost you there but some of you will know what I'm talking about. I'm basically saying if you take that money, it's not a free lunch. Then it will cost even more to try to do other things in the economy. It's not an isolated effect. You take money out of one area of the economy, it will take money out of other areas. That's about as simple as I can put it for you.

So the country's overall GDP might be higher than it was 25 years ago, but there are also a lot more people. The population expanded by a greater percentage than the GDP. That effectively means the nation's GDP isn't as accessible as it once was to taxation. You can't just take take take without taking it away from families who may not have a lot of money and are relying on that. A "wealthier" country (and I mean per capita) might be able to afford that but not a poorer country. So we really need to be more careful than ever about accumulating more national debt. There might not be enough rich people to pay for it all.
#15172564
US GDP per capita has increased over the last 25 years (i.e. the population has not "expanded by a greater percentage than GDP").

Govt 'debt' is almost never paid off with taxes. Bond holders are always repaid but the bonds are rolled over along with new issuance - unless the govt is in surplus, i.e. very rarely and only tiny proportions of the stock of outstanding debt.

Matters of historical record, not opinion.
#15172565
Puffer Fish wrote:

Try and yank more taxes out of people and it could potentially cause a large credit default.




BS.

The actual proposal would hit the top 0.03%.

That's less than one half of one percent of the top earners, the truly rich.

They can afford it, and easily...

Republicans have been cutting taxes (and doing other things) to benefit the rich since the 80s. They didn't need it then, they don't need to be welfare bums now...
#15172590
SueDeNîmes wrote:US GDP per capita has increased over the last 25 years (i.e. the population has not "expanded by a greater percentage than GDP").

Is that still true even adjusting for inflation?

year - National debt - population - GDP
1990 , $3.2 trillion , 250 million , $6 trillion
2020 , $26.7 trillion , 331 million , $20.93 trillion

$1 in 1990 would be equivalent to $1.98 in 2020


It looks like you are totally wrong here, if inflation is taken into account.
#15172593
Puffer Fish wrote:
But if we were talking about large tax increases on those beyond just the super rich (something which is very likely), then you admit I might be correct here.



Thanks, first actual laugh of the day.

Yes, if I was to join your fantasy, and Biden and Congress had completely lost their minds, you would have a point.
#15172602
late wrote:Thanks, first actual laugh of the day.

Yes, if I was to join your fantasy, and Biden and Congress had completely lost their minds, you would have a point.

If "just taxing the super rich" is such an easy solution as you think it is, why is it that your side never seems to be able to tax them BEFORE spending the money?? (If they did that, they wouldn't have to increase the country's debt to increase spending)
Wouldn't that be the safer, more prudent, and more responsible course of action?

That's sort of like being totally sure you're going to get a new job with a big paycheck, so you go to a payday lender and borrow a big chunk of money to start spending, even before your first day on the job.

Face it, for whatever reason, it's not so simple for Biden to raise taxes to pay for this spending. This spending is not being paid for through tax increases; it is being paid for through inflation and more debt.

When has your side ever increased taxes and not increased spending? No, scratch that; when has your side ever even increased taxes by more than they've increased spending. Face it, you can't control yourselves. You will immediately spend it as soon as you have your hands on it.
#15172605
US GDP per capita has increased over the last 25 years (i.e. the population has not "expanded by a greater percentage than GDP").

Puffer Fish wrote:Is that still true even adjusting for inflation?

Yep: https://www.multpl.com/us-real-gdp-per-capita.

year - National debt - population - GDP
1990 , $3.2 trillion , 250 million , $6 trillion
2020 , $26.7 trillion , 331 million , $20.93 trillion

$1 in 1990 would be equivalent to $1.98 in 2020


It looks like you are totally wrong here, if inflation is taken into account.

Nah.
#15172608
Puffer Fish wrote:This was written three years ago in 2018. It's probably worse now.


The U.S. federal government debt level has reached somewhere in the range between $122,500 to $174,000 per taxpayer.

50% of taxpayers claim less than $38,000 income. (Note this only includes people who actually pay taxes)

Only about 53% of the population pays any federal income tax (not counting withholdings or Medicare/Social Security taxes, primarily due to income level and tax benefits).
https://money.howstuffworks.com/only-53 ... me-tax.htm

The amount of interest that would have to be paid on $140,000 at 5% would be $7000.
Interest rates were above 5% between 1978 and 1998.

That's on top of personal debt.
A new study from Northwest Mutual finds that nearly three-quarters of Americans are in debt, with nearly half owing at least $25,000, excluding mortgages. The average debt load is $37,000, excluding mortgages, and more than 10 percent of survey respondents said they owe more than $100,000.
https://www.aol.com/article/finance/201 ... /22060294/


The average credit card holder owes $4000.
https://www.creditkarma.com/studies/i/a ... d-on-rise/

There is $8.88 trillion mortgage debt in the U.S. That's $113,000 per household that owns their home.
https://www.cnbc.com/2018/02/13/total-u ... llion.html

There's also $1.4 trillion in student loan debt. That's $31,800 on average for every person with student loan debt.
https://www.cnbc.com/2017/07/03/this-is ... loans.html

Try and yank more taxes out of people and it could potentially cause a large credit default.


Moden debt thinking has moved on since 2008 financial crysis. Our favourite of MMT is kinda correct and they won. There is no real cap or reason to look at gdp to debt ratio. The main thing that the countries need to take in to account is the servicability of the debt.

When Europe or US borrows at 0.00001% of interest is not the same when Russia borrows for 10% or China for 5%. This is a bit of an exaggeration but it gets the point across. There are certain benefits that countries have when they have their main currencies as world wide reserve currencies who has been stable for decades or even centuries.

As long as there are no problems with debt servicing then this means that increased borrowing already probably boosted your economy by percentage points short term and a dozen of percentage points long term which will eat at the debt along with moderate to minor inflation of 1 to 2% per year. Compound interest in reverse so to speak just for growth.

Most forget that goverment bonds are mostly used as a sort of safe investment hence the real interest rate is non-existent for Europe or US and some other countries. It is much more complicated for developing countries or other bad state actors.
#15172610
JohnRawls wrote:
Moden debt thinking has moved on since 2008 financial crysis. Our favourite of MMT is kinda correct and they won. There is no real cap or reason to look at gdp to debt ratio. The main thing that the countries need to take in to account is the servicability of the debt.

When Europe or US borrows at 0.00001% of interest is not the same when Russia borrows for 10% or China for 5%. This is a bit of an exaggeration but it gets the point across. There are certain benefits that countries have when they have their main currencies as world wide reserve currencies who has been stable for decades or even centuries.

As long as there are no problems with debt servicing then this means that increased borrowing already probably boosted your economy by percentage points short term and a dozen of percentage points long term which will eat at the debt along with moderate to minor inflation of 1 to 2% per year. Compound interest in reverse so to speak just for growth.

Most forget that goverment bonds are mostly used as a sort of safe investment hence the real interest rate is non-existent for Europe or US and some other countries. It is much more complicated for developing countries or other bad state actors.



Indeed, and if these Trumptards want to point at who's raising the debt too much, it's the fucking moron Republicans that lie to them.

Notice how when TRump was president, these asshats never brought up this "issue". Because they are a bunch of weaselly spineless pieces of shit.
#15173518
@Puffer Fish,
I have asserted that the UK(aka England) has had a national debt for 325 years now.
That seems like strong evidence that the UK will never need to pay-off the national debt.
If this is the case, then is it really a debt at all. MMTers assert that the so-called national debt can be rolled over forever and as such is really the private sector's interest bearing part of the money supply.

So, can you take a stab at explaining just why you seem to believe that it is OBVIOUSLY true that the US national debt will have to be paid-off someday? That is why can't the US keep rolling it over forever?

.
Last edited by Steve_American on 21 May 2021 12:25, edited 1 time in total.
#15173519
Steve_American wrote:@Puffer Fish,
I have a sserted that the UK(aka England) has had a national debt for 325 years now.
That seems like strong evidence that the UK will never need to pay-off the national debt.
If this is the case, then is it really a debt at all. MMTers assert that the so-called national debt can be rolled ovr forever aand as such is really the private sectors interest bearing part of the money supply.

So, can you take a stab at explaining just why you seem to believe that it is OBVIOUSLY true that the US national debt will have to be paid-off someday? That is why can't the US keep rolling it over forever?

.


It can keep it rolling forward forever as long as the debt interest is serviceable and economy is growing with inflation being adjusted as needed.
#15173524
JohnRawls wrote:It can keep it rolling forward forever as long as the debt interest is serviceable and economy is growing with inflation being adjusted as needed.


Indeed. The government has the benefit of having an "infinite" timeline. An additional point to what you've said is, so long as the US also remains a stable and relatively free country as well. As I've said before, people always talk about the Yuan dethroning the USD, but that will not happen so long as the Yuan is controlled by an authoritarian regime. This relative freedom in the US actually strengthens the USD further. There's a reason rich people in Russia and China like to park their money in the west.

Many people generally believe that currency manipulation is bad. An authoritarian regime can do just that more easily. If government manipulation is bad, then authoritarian government mannipulation is even worse.

LET THE EASY MONEY FLOW!!!
#15173618
Puffer Fish has not responded yet.

One thing I've thought of this week is, that as long as the US Gov. deficit spending is 100% off-set with bond sales to the private sector and the Fed. does not buy them on the secondary market, then there is almost zero inflation risk. This is because 100% of the defict spending has gone into a savings account, i.e. the bonds.

MS economists love to call this "printing money", but it just is not the same as when Lincoln in the Civil War or Weimar Germany did print and spend cash into the economy.
OTOH, now fully 40% of the Japanese national debt has been bought by the BoJ and so it is a lot more like "printing money". Yet, this has not caused even moderate inflation for 30 years now.
#15173621
Steve_American wrote:
OTOH, now fully 40% of the Japanese national debt has been bought by the BoJ and so it is a lot more like "printing money". Yet, this has not caused even moderate inflation for 30 years now.




The thing I find interesting about that is they experimented with negative interest rates. Yes, banks were basically paid to take money.

"Negative interest rates were announced by the BOJ in January 2016 as the latest iteration in monetary experimentation. Six months later, the Japanese economy showed no growth, and it's bond market was a mess.

There are two reasons why central banks impose artificially low-interest rates. The first reason is to encourage borrowing, spending, and investment. Modern central banks operate under the assumption that savings are pernicious unless they immediately translate into new business investment.

The second reason for adopting low-interest rates is much more practical and far less advertised. When national governments are in severe debt, low-interest rates make it easier for them to afford interest payments."

https://www.investopedia.com/articles/m ... -japan.asp

The problem is central banks are running out of ammunition. There are tons of money in the global market, adding more doesn't seem to help.

One traditional way to talk about is this: inflation is too much money chasing not enough goods and services.

There's too much money, but it's not chasing goods, services and productive investments. Demand is low, partly due to income inequality, which in turn is largely a result of corrupt politics and rent seeking.
#15173627
US economy shows no real growth. Government spending is a trick to fool people.

China added tens of millions of new jobs with private sector expanding while the US just added uncreative and non-valuable jobs over decades. The US will have to pay off its debt at some point because it won't be world's largest economy in a decade. I don't think you will be able to do that. You will fall slave to China.
#15173633
late wrote:The problem is central banks are running out of ammunition. There are tons of money in the global market, adding more doesn't seem to help.

One traditional way to talk about is this: inflation is too much money chasing not enough goods and services.

There's too much money, but it's not chasing goods, services and productive investments. Demand is low, partly due to income inequality, which in turn is largely a result of corrupt politics and rent seeking.

In other words, there are too many rich people doing this with their money....

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