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#1 Interest payments on our national debt will slowly rise by $150,000,000,000, as new debt is issued at the new higher rate, & as short-term debt is moved to long-term debt.
So what?
Well, to pay for the newly added interest expense, we can:
A) cut spending by $150 Billion to offset this new added expense
B) raise taxes to pay for it, which slows economic growth
C) print more Monopoly money, adding to our money supply aka "M1"
If we choose A), cut spending, where will Congress cut $150B from? Is Congress even capable of cutting $150B in spending?
If we choose B), raise taxes, Biden will have to renig on his promise not to raise taxes on people who make <$400k. 99.38% of Americans make <$400k, which leaves only .62% of Americans to increase taxes on to get the $150B from. Or, they can increase corporate taxes, which causes corporations to raise prices, which increases inflation.
If we choose C), printing more Monopoly money, it will fuel even more inflation:
The Fed has raised interest rates many times before without anybody else having to do anything else, and the sky has not fallen. Why should this time be any different?
Quote:
Originally Posted by beach43ofus
#1 Interest payments on our national debt will slowly rise by $150,000,000,000, as new debt is issued at the new higher rate, & as short-term debt is moved to long-term debt.
So what?
Well, to pay for the newly added interest expense, we can:
A) cut spending by $150 Billion to offset this new added expense
B) raise taxes to pay for it, which slows economic growth
C) print more Monopoly money, adding to our money supply aka "M1"
If we choose A), cut spending, where will Congress cut $150B from? Is Congress even capable of cutting $150B in spending?
If we choose B), raise taxes, Biden will have to renig on his promise not to raise taxes on people who make <$400k. 99.38% of Americans make <$400k, which leaves only .62% of Americans to increase taxes on to get the $150B from. Or, they can increase corporate taxes, which causes corporations to raise prices, which increases inflation.
If we choose C), printing more Monopoly money, it will fuel even more inflation:
#1 Interest payments on our national debt will slowly rise by $150,000,000,000, as new debt is issued at the new higher rate, & as short-term debt is moved to long-term debt.
So what?
Well, to pay for the newly added interest expense, we can:
A) cut spending by $150 Billion to offset this new added expense
B) raise taxes to pay for it, which slows economic growth
C) print more Monopoly money, adding to our money supply aka "M1"
If we choose A), cut spending, where will Congress cut $150B from? Is Congress even capable of cutting $150B in spending?
If we choose B), raise taxes, Biden will have to renig on his promise not to raise taxes on people who make <$400k. 99.38% of Americans make <$400k, which leaves only .62% of Americans to increase taxes on to get the $150B from. Or, they can increase corporate taxes, which causes corporations to raise prices, which increases inflation.
If we choose C), printing more Monopoly money, it will fuel even more inflation:
What should the Fed, Congress, and Joe Biden do, and why?
I’ll give you this - you have correctly identified the fact that Presidents, and government in general, can’t do much to control the economy. Recessions, stock markets, unemployment should not be blamed or credited to the President.
What the Fed should do is follow up with more interest rate hikes until inflation comes back down to reasonable territory. Rescind the Trump tax cuts to ameliorate effects on the deficit. As you said, tax increases slow economic growth, which is our problem right now. Inflation = too much growth.
imagine if we only spent 565 Billion on our military and made it focus on defending us instead of the 715 billion we spend to be the world police.
I will say this-Trump was right about getting other NATO nations to contribute as they are supposed too.
Imagine if we disbanded every ineffectual, inefficient, bloated bureaucracy in DC. The place would empty out overnight. There would be exactly 0 bureaucracies left.
I'll believe it when I see it. Somehow I don't think they have the balls to do what needs to be done, collapse the everything bubble and restore a sense of fiscal responsibility and allow mass bankruptcies to eliminate the zombie companies from the system.
I suspect we are going to maintain $1+ trillion deficits permanently and QE is not going to stop, and inflation will continue unchecked. This is the path of least resistance for our species to pay for the ever increasing numbers of welfare parasites on both the top and bottom not to mention our unfunded liabilities.
I’ll give you this - you have correctly identified the fact that Presidents, and government in general, can’t do much to control the economy. Recessions, stock markets, unemployment should not be blamed or credited to the President.
What the Fed should do is follow up with more interest rate hikes until inflation comes back down to reasonable territory. Rescind the Trump tax cuts to ameliorate effects on the deficit. As you said, tax increases slow economic growth, which is our problem right now. Inflation = too much growth.
Uh no. Giving more money to the Federal Government to invariably **** away solves absolutely nothing. The Feds need to cut spending and they need to do it yesterday.
Let's start with a 50% budget cut and a 50% tax cut to go with it.
Uh no. Giving more money to the Federal Government to invariably **** away solves absolutely nothing. The Feds need to cut spending and they need to do it yesterday.
This is why I support a Constitutional Convention to add a 'Balanced Budget Amendment'. This is what we needed to do yesterday, too.
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