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The US Federal Government is bumping up against it's debt limit, again, it happens quite often. It's currently $14.3 TRILLION. Imagine if Congress does not increase it, the US Gov. would have to live within it's means? They have to think about this?
Heck, what would it be like if we couldn't have our Visa, Mastercard and Sears limits increased all the time? The pain!
Counting one number a second by one's, as in 1, 2, 3, ..... and assuming all numbers take just 1 second (average) to say (which isn't true, as longer numbers take longer), then
(((1 trillion seconds / 3600 sec/hr) / 24 hr/day) / 365.25 days/year) = 31,688 years 32 days and a few minutes. That's one TRILLION, now do it 14.3 times! Why debate this? It'll never be gone.
If they had to immediately balance the budget, guess what? We would be in for an immediate and painful tax increase. They surely won't get to balance purely on spending cuts.
If they had to immediately balance the budget, guess what? We would be in for an immediate and painful tax increase.
There's NO WAY that increasing taxes - painful or not - could put a dent in the federal budget deficit.
If you took ALL the earnings of EVERY American, from work, pensions, interest, capital gains, inheritance -- literally everything that constitutes "income" or can be taxed, and took it ALL (not 10%, 15%, 30% or whatever) the total amount would not even come close to 14.3 trillion.
There is simply no way that they can balance the budget...even if they 'got religion' and stopped spending (ain't gonna happen).
This is why I say, we are in deep doo-doo and there is no way out -- except of course the printing press, which they are using heavily non-stop, and it will devalue our currency in a hurry.
There is no requirement the debt has to be paid off in a day, be realistic. The concept here is if there was a balanced budget requirement which would require a little more than $1 trillion in taxes or spending cuts.
If we basically cut the military in half and didn't spend any development money on military projects I think we'd be close to balanced, but that is not politically palatable. If we cut social security payments and government salaries by 5-10% we'd get close, but that isn't likely to happen either. If we reduce payments to doctors taking Medicare by 10-20% we'd make a big dent in the spending, but good luck with that working without doctors refusing many patients.
Bottom line is that it is good to talk about a balanced budget and to understand the painful cuts it would take, plus inevitable tax increases, but the average American is too damn selfish and stupid to accept it. A combination of all of the above plus tax reform which yields additional revenues is what we must do, but we can't do it in 3 months. As for paying off the debt in the future, of course it is not going to be paid off. The world needs and expects the US government to carry a debt. Investors both domestic and international depend on US debt, if it was gone it would create some great confusion and discomfort.
Having a debt is not a bad thing, having too much debt is. It may be noble to think one can live a debt-free life, but fact of the matter is only a modest percentage of families do. Whether its a person or a company or a country, the greatest assets each have are the intangible assets of earning ability, not physical items.
The US Federal Government is bumping up against it's debt limit, again, it happens quite often. It's currently $14.3 TRILLION. Imagine if Congress does not increase it, the US Gov. would have to live within it's means?
Unfortunately, it is a lot more complicated than this... if they don't increase the ceiling, the U.S. government will technically be in default on its bonds which will mean complete loss of confidence in the U.S. and its economy which will be quite catastrophic.
I'm afraid to live within it's means will probably mean higher income taxes, VAT, cut in all entitlement programs and all areas of government, hike in gas taxes, etc. all of which are not palatable right now. It will take a lot of courage for politicians to face the dire scenarios. There are no magic silver bullets.
The point is that the House of Representatives is going to use this as a bargaining chip to get the budget cuts they are pushing. It will also help them to force a hard line on bail outs for States with budget crises. I see desperate days ahead for many government workers.
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