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In the past, perhaps. The cap on the Medicare tax was removed in 1993, over 20 years ago.
The 3x rule still holds now. Will it go lower via future means testing? I doubt it. Our future cost increases are much stronger and more dependent on our unfortunate demographics of huge numbers of middle class folks retiring soon and then not paying much in the way of Medicare taxes at all.
Means testing may make sense to some, it's just not powerful enough to have much overall impact. For instance wealthy retirees can choose to take low incomes. And then possibly even qualify/get subsidies!
May be true on paper, but not in reality. Any Federal tax, fee, fine or premium exposed to the general fund goes toward funding Federal programs like almost any other. Only especially sequestered funds taken in by the Federal Gov't and not subsequently raided are immune. Like The Highway Fund. Oh wait, it's been raided too!
If thats true, then you must count the social security obligations into the federal debt..
Are you sure you want to do that? By some accounts, the total federal unfunded obligations exceeds $100 Trillion....
You should as that's the main way foreign entities end up with US debt..
Quote:
Originally Posted by Mircea
Now is not forever, and again, myopic short-sightedness and economics do not play well
together.
Of course nothing is forever. But look back to post-WW2, quite a long time. And today there are still no rivals to the USD. I would bet though that in a 10 year to a generation's period of time, that the Yuan will emerge as a substantial world reserve currency, and China will allow and be thriving like we are, with many national, internal and private sector investments for the rest of the world to enjoy. And I would bet if I am still alive, that I will have significant Chinese based, or Yuan based investments in my portfolio by then. I would also bet that plenty of my US based and USD denominated investments are still viable and doing well.
How do you suppose China and Yuan will emerge and grow in our world without following a similar path as we did post-WW2 until now? And they won't even need the war, as they will use their smarts. And some luck of course. Answer - money and debt creation!
Quote:
Originally Posted by Mircea
Tell us again why the US was threatening Iran and is spending $Billions of your tax-dollars over
the last 18 years to influence events in Ukraine?
The USA has been very good at waging large scale war, but IMO we don't these sorts of wars to accomplish some of our national size goals of today. I don't mind continuing our current external economic schemes and sanctions, along with waging our current high tech, information based and clandestine methods of war. How effective or satisfying will the endpoints be, I certainly can't say.
Quote:
Originally Posted by Mircea
You have had Inflation.
You have Inflation right now, with gasoline prices, and also with beef prices.
Of course we have inflation, I never said we didn't. But why did you mention such poor examples?
Gas is the same today as 3 or 4 years ago, for all sorts of reasons beyond simple money debasement. And beef is up
dramatically due to local climate anomalies and all sorts of industry related externalities.
Quote:
Originally Posted by Mircea
it will be at least 10 more years before you get hammered by Real Hyper-Inflation.
Simple money debasement via sensible deficit spending is not going to cause hyper on its own. There would have to be a very drastic concomitant development to create a hyper situation. Our longstanding and current low grade inflation won't do it. Even '70's style onerous inflation won't. There would have to be a serious crash of our overall domestic productivity, or central or massive and diffuse central governmental malfeasance to allow hyper. Loss of a major war, an asteroid hit, the foolish relinquishment of our monetary sovereignty. There would have to be some very serious external factors involved. Not just 'money printing'.
If thats true, then you must count the social security obligations into the federal debt..
Are you sure you want to do that? By some accounts, the total federal unfunded obligations exceeds $100 Trillion....
Of course they are! By and large all future Federal guarantees will be future National Debt. Has to be!
Our future seniors will not be going without the bulk of their guaranteed HC.
The money (debt) is not and will not be the problem. No! Not today and not tomorrow.
The real problem will be our overall HC productivity, and if we can muster what will be needed in terms of future current HC related real goods and services. Not the money.
The reality might be more like the younger in our future society saying 'enough is enough' to the future seniors. Not anything close to hyperinflation or National Bankruptcy.
Of course they are! By and large all future Federal guarantees will be future National Debt. Has to be!
Our future seniors will not be going without the bulk of their guaranteed HC.
The money (debt) is not and will not be the problem. No! Not today and not tomorrow.
The real problem will be our overall HC productivity, and if we can muster what will be needed in terms of future current HC related real goods and services. Not the money.
The reality might be more like the younger in our future society saying 'enough is enough' to the future seniors. Not anything close to hyperinflation or National Bankruptcy.
Quote:
But if current laws do not change, the period of shrinking deficits will soon
come to an end. Between 2015 and 2024, annual budget shortfalls are projected to
rise substantially—from a low of $469 billion in 2015 to about $1 trillion from
2022 through 2024—mainly because of the aging population, rising health care
costs, an expansion of federal subsidies for health insurance, and growing
interest payments on federal debt. CBO expects that cumulative deficits during
that decade will equal $7.6 trillion if current laws remain unchanged. As a
share of GDP, deficits are projected to rise from 2.6 percent in 2015 to about 4
percent near the end of the 10-year period. By comparison, the deficit averaged
3.1 percent of GDP over the past 40 years and 2.3 percent in the 40 years before
fiscal year 2008, when the most recent recession began. From 2015 through 2024,
both revenues and outlays are projected to be greater than their 40-year
averages as a percentage of GDP (see the figure below).
Such high and rising debt would have serious negative consequences. Federal
spending on interest payments would increase considerably when interest rates
rose to more typical levels. Moreover, because federal borrowing would
eventually raise the cost of investment by businesses and other entities, the
capital stock would be smaller, and productivity and wages lower, than if
federal borrowing was more limited. In addition, high debt means that lawmakers
would have less flexibility than they otherwise would to use tax and spending
policies to respond to unexpected challenges. Finally, high debt increases the
risk of a fiscal crisis in which investors would lose so much confidence in the
government’s ability to manage its budget that the government would be unable to
borrow at affordable rates.
Over the long term rising USD based debt is certain as long as we continue to grow and progress as a nation. The future economic implications of all this cumulative debt are simply not known. So far real impacts have been nominal.
Some implications of not increasing national debt might include less future educational funding and resultant poorer student outcomes and success. Less central investment in research, and loss of potential technical breakthroughs. Reduced HC spending and the worsening health of our people. Loss of a war due to lack of adequate military funding. And finally further economic recession or even depression. Some of these negatives might be more easily quantifiable than the effect of adding further national debt.
Most likely me and my wife will have more and ongoing serious medical bills. I actually look forward to entering Medicare, just for the lower rates and more ease of access in a few years. I have paid in the max since the late '70's. My wife hasn't paid in much, but is almost guaranteed to need it.
Another dumber idea is raising the Medicare enrollment age.
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