Spending our future now

Well, the proposed tax increases are becoming clearer and true to the presidents pledge, they don’t affect those with incomes below $400,000 a year… sort of.

That’s if you agree that having one of the highest corporate total tax rates in the world and higher taxes overall on business does not have consequeces for consumers, workers and investors.

The higher tax revenue is being spent on new programs which create additional and growing liabilities, not on lowering the deficit or fixing Social Security or Medicare or the highway trust fund. In fact, at this point the new taxes will not even cover the new spending.

It’s quite interesting that in evaluating the risks of increased spending, increased deficits and debt and higher taxes, you can find a wide difference in opinion among economists. When looking at cost and revenue projects, you can find different assumptions and results among different government agencies.

It’s all a shot in the dark. Some naive people trying to do the right thing, some buying votes and political power. In the end, few of these policy makers and pundits will be around when we have the final results.

Why should we expect and more prudent behavior?

The actions by politicians reflect the attitudes and actions by most Americans when it comes to money. Live for today, charge it, save little or nothing, invest nothing for the future, set wants above needs, live above ones means.

The really sad part of all this is that Americans accept that this government largess can be provided and sustained by higher taxes only on higher income Americans and businesses. If that is the case, the United States will be the only country in the world to pull it off.

6 comments

  1. Don’t forget, when it comes to public finance and taxation, incidence seldom is the same as impact. We will all share in a malaise reminiscent to the Carter debacle.

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  2. Correction, We SPENT our future, our children’s future, and our grandchildren’s future and more.

    The US national debt is at $86K+ per citizen or $228K+ per taxpayer. If Americans can’t pay off their student debt (2020 average is $29K), how are we ever going to pay off our national debt.

    From as far as I can tell, (have not taken a deep drive into the budgets), the $3.5T Infrastructure bill only has $1.2T for infrastructure which I’ll call a hard asset for our country and will be around for several decades. The other $2.3T is going where? Social, feel-good, vote buying welfare that will last until the next election? This is not how I wish my tax dollars to be spent, but I am a minority in this country.

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    1. You should add that the US Federal Reserve has been expanding the money supply to accommodate financing the rapidly increasing Federal debt. What effects will this have on the US currency. Will this lead to hyperinflation of the dollar value? If so, most everyone loses…including the poor.

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    2. Dwayne – We are never going to pay off the national debt. All we have to do is make the interest payments and we can borrow that money also, each and every year, until this PONZI scheme crashes the world economy. The FED has already said that they will be the buyer of government bonds to fund this crazy spending, even if no one else wants to buy U.S. bonds. Even if it never crashes, we will all have a lower standard of living, as our dollars, buy less and less every year, no matter what the COLA or pay raise is, it will never be enough. As always any COLA you receive is 12 months behind the increased cost of everything. .

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      1. Totally agree. The Feds will keep printing money and buying US Bonds. The problem will be when the rest of the world refuses the dollar. There is already a move to stop trading oil in dollars. You think there is a chip shortage now for cars and electronics, wait until the US is forced to manufacture our own chips and can’t buy the raw materials on the global market because our dollar is worthless.

        On the bright side, once the socialist get in total control, they will just cancel everybody’s debt, default on our debt, and nationalize all industries. It has worked so well in other countries. Depending on how you define governments / civilizations / empires, the United States at 245 years might have exceeded it’s lifespan.

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      2. Just wait until the dollar collapses and the FED issues their new digital dollar. The NDD may even have a expiration date, spend it, or lose it. They can limit what you spend it on and tell you to get the Covid shot or your NDDs will not be deposited this month. There will be no dollars in circulation. Read your bible, The Mark of the Beast, Revelation 13:17
        “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.”
        I believe we are very close to the end of this age, corruption is rampant in all aspects of human life around the world. GOD is the only one that can fix this mess, do not believe or put your faith in any man. The politicians have been promising that things will get better, yet things get worse every day. One crisis after another, with no end in sight.

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