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The SS & Medicare funds in the so-called "trust funds" are just another form of printed money. It's a miracle the house of cards we've created has held up for so long. That doesn't mean it always will.
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Originally Posted by Reynard32
Meanwhile, there are no funds in any of your bank accounts either. Those balances you think you own were all long ago spent by the bank for its own purposes. All you have is their word that they will pay you back if you ask nicely for the money.
The whole way the banking system is set up is certainly not for our benefit...but that is a whole other can of worms.
What percentage of Germany's debt is in the form of intragovermental holdings? A better comparison would be with regard to debt held by the public. That's currently $13,046.7 billion or about 73% of our Q2 real GDP of $17,913.7 billion.
I don't know about Germany's. But I think not counting intragovernmental holdings is cheating to make the number look better.
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Originally Posted by Reynard32
By the way, health care systems are supposed to care for people. Period. We don't deny them care because they like a second helping of mashed potatoes.
And ours does a terrible job all the way 'round. It's not efficiently run by big business or government and the citizens don't take care of themselves very well either. Heck, even Bill Maher said the same thing about Americans not taking care of themselves, and he's as liberal as they come:
Correct me with i'm wrong but the US is in a lot of debit, the most since WWII or something? Why then is it that they can't produce balanced or almost balanced budgets like other countries that have similar tax rates, far better and more extensive welfare systems, government funded health care, low unemployment and similar living standards? I thought military spending may have been a factor, but as % of GDP wise it isn't that significant I thought it's probably not...So what gives, surely with what I've outlined they would be running massive surpluses.
We're in the situation we are because we keep electing politicians who put self interest before everything else.
The SS & Medicare funds in the so-called "trust funds" are just another form of printed money. It's a miracle the house of cards we've created has held up for so long. That doesn't mean it always will.
Your payroll taxes are actual cash. They are used first to pay current benefits. The rest are not currently needed. In accordance with the dictates of fiduciary responsibility, those excess funds are put into the trust funds and invested in US Treasury securities so that they will earn a competitive, market-based rate of return until they are needed. This is ordinary, garden-variety cash management. The exact same thing happens with any of about 180 federal trust funds that maintain a positive balance.
I don't know about Germany's. But I think not counting intragovernmental holdings is cheating to make the number look better.
LOL! The point is that the US is the only country that has significant intragovernmental holdings. The apples and oranges come from comparing US debt to that in a country that funds all its programs on a pay-as-you-go basis.
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Originally Posted by mysticaltyger
And ours does a terrible job all the way 'round. It's not efficiently run by big business or government and the citizens don't take care of themselves very well either. Heck, even Bill Maher said the same thing about Americans not taking care of themselves, and he's as liberal as they come:
Bill Maher is an entertainer. He is not an expert on public finance, household finance, or any other aspect of economics.
Yes, defense spending needs to be trimmed HOWEVER it is the growth in health care costs that is going to kill us. We can not afford to spend 20% of our GDP on health care. No other developed nation does. Why do we?
Our budget isn't balanced because the political process is broken. Way back when, Ronald Reagan convinced voters that tax cuts always brought in more money. People actually believed that and look where we are now. Nobody wants to pay taxes, but we all want government services. And because we have the world's reserve currency, we've been able to print more and more money with much of that money staying overseas. Hence, lower inflation than would otherwise be the case. It all works great until one day when the rest of the world wises up.
Government revenue almost doubled during the Reagan years. Tax cuts are not the problem; government overspending is.
Government revenue almost doubled during the Reagan years. Tax cuts are not the problem; government overspending is.
Constant dollar receipts increased by 20% between FY 1981 and FY 1989. Real outlays increased by 22%. Real receipts declined from FY 1981 due to the tax cuts and did not recover to the same level until FY 1985, by which time several of Reagan's tax increases had taken effect.
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