The national debt has passed the $21 trillion mark. It took only six months to get there from $20 trillion. Unlike the last time the U.S. racked up debt this rapidly, the economy is growing, not in a recession. Blame whomever you want — Boomergeddon is coming. It’s just a matter of time.
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And, it is going up and up with the huge new spending recently. With the tax cuts and the extra Trump spending it will not take another ten years to grow an additional s$10 trillion.
Some believe that this is part of a plan to do away with SS, Medicare and Medicaid. Ryan has not been able to privatize these government entitlements” through the normal budget reductions.
So the plan is to create a huge fiscal crisis that connot be resolved via tax increases so create a crisis and cut the entitlements. It is Ryan’s plan not Trumps and it is coming.
Greenspan warned against this in January.
Once again – we need to distinguish between earmarked taxes and general revenues with regard to what they are spent for – and whether or not they contribute to the deficit and debt.
Social Security – unlike other spending comes from dedicated taxes – FICA taxes – and unlike other spending, it is designed on purpose to reduce payments to be no more than what revenues are bringing in.
If we did other spending that way – we’d not have a deficit nor debt.
Medicare Part A (not Part B) and Obamacare also have dedicated taxes and will not contribute a penny to the deficit and debt.
Medicare Part B, Medicare Advantage and MedicAid DO contribute to the deficit and debt and must be fixed or else they will bring us to Boomergeddon.
Beyond the entitlements – we need to recognize that “defense” and defense spending is not just the 600 billion for the military. When you add in the other spending – like for the VA, the CIA, FBI, NSA, BATF, Border Patrol and all the other alphabet acronym agencies to include the Dept of Energy for nukes and NASA for satellites – you end up with way more than a trillion for “defense”.
Interestingly Ryan and company have been squeezing spending including defense spending for more than a decade now. But now they are opening the flood gates of spending on defense etc.
And, back in 2005 Ryan etc got Bush (W) to propose changing SS to a 409K type retirement. Now things have changed a lot.
I am afraid that we have a crisis brewing.
There use to be a time when wasting one’s money was cause for shame, a sure sign of moral turpitude. People went to jail for it. To take other people’s money and waste it was far worse,. That was badder than a horse thief who wasted another man’s horse, riding it to death. Hanging such a gob of spit scoundrel was too kind a punishment for such a man. But now we got far worse wrongs to punish other folks for, trying to shame them and blame them and their kin, and steal money from them, for the American Civil War that ended 153 years ago.
In terms of 401(K)…. and other retirement options – the government makes it super easy – you can sock away thousands of dollars a year – tax-free if you wish.. lower income folks also can get a credit on their taxes in addition to tax free saving. If you want to put taxed money in a retirement fund – like ROTH – you get it out later without it’s earnings… being taxed.
My point is that there are a lot of ways the government incentivizes savings already but the problem is the lower income who do not make enough to put money aside and Social Security essentially functions as a mandatory savings for retirement program – that you cannot withdraw early – and this is the lesser of the two evils.. the other is if you did not have social security and people did not save – had no savings for retirement and ended up with the govt, other taxpayers paying for their needs. Social Security basically insures that people save their own wages for retirement , cannot withdraw it early and are protected from swings in the stock market.
This is another area where all of the industrialized nations on earth have commonality – i.e. mandatory social security. These are the same nations with the highest levels of literacy and longest life expectancy and fewest elderly people living in poverty on the streets.
Larry,
You should go back and read some of the comments here. You seem to forget them:
https://www.baconsrebellion.com/entitlements-fiscal-limits-looming-age-rage/
Izzo – I surely have done that.. why don’t you bring up the part you are referring to?
Izzo – you seem to like the Singapore system – at least back in those prior comments. Is that where you are still at? Do you realize that their “FICA” tax is about double ours and it includes both retirement AND health care?
is that what you’d like to see ?
here’s an interesting chart to ponder :
https://qph.fs.quoracdn.net/main-qimg-a9514b830cb99db5789135c07b5fb4f8.webp
in the context of deficit and debt – across countries – and especially those countries that have guaranteed health care while in this country we say – basically – it’s at the root of our deficit and debt.
this is a composite put together by Quora which does not provide references to the underlying data they used.
Larry,
They are using a dated snapshot from Wikipedia. https://en.wikipedia.org/wiki/List_of_countries_by_public_debt
I cited the earlier thread because I disagree with your characterization of Social Security and debt and deficits going forward. I’m not going to go into it again, but I thin you should read this:
https://www.factcheck.org/2015/10/sanders-misleads-on-social-security/
As for Singapore, what I like is that the system is not generally PayGo, so it is 1) less subject to abuse by the government 2) less impacted by demographic shifts like declining birthrates and 3) contributes to savings in the sense an economist would recognize it.
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