Posted on 10/16/2015 6:43:29 AM PDT by SeekAndFind
“interest payments alone will account for 45 percent of all federal taxes that will be collected in 2015.”
And that’s overlooking the fact that we’re already spending 150-200% of that revenue.
Obama’s spending spree was to continue the American death spiral. I’m sure Soros has a few hundred million bet against us.
Illinois can’t pay there lottery winners. Today it’s announced they can’t pay state retirees. They may be the first state to declare bankruptcy.
But those riding in the wagon outnumber those pulling it. If it was 47% when Romney was running, it’s worse now. Young people are deluded into thinking Bernie Sanders has good ideas. For liberals, the only cure for the disasters they cause is more liberalism.
The U.S. is headed the way of the Soviet Union. A breakup without a shot being fired due to unsustainable economic policies.
Interesting article. But it proceeds from the charming and incorrect notion that a government must somehow repay it’s debts. Not so. There is a second alternative: monetizing the dedbt. I.e. simply printing more money. In the short run doing that is much more politically palatable. In the long run its actually more destructive than “bankruptcy”, i.e. repudiation of the debt.
It looks to me that we are already monetizing the debt....just a little bit at the time so the public does not realize what is happening.
The frog in the warm pot theory.
This year, the government has brought in $3.2 trillion in taxes. If properly managed, this amount could be doubled with economic growth alone, not higher taxes. But other policies would be needed as well.
1) The ending of several major trade treaties, to force production to return to the US. This is not to harm trading partners, but to require multinational corporations to produce here, be taxed here, and hire American workers if they want access to US markets. No more H1-B visa employees, and closed borders to new immigration.
2) Any corporation “too big to fail” must be subdivided into corporations that *are* able to fail because of market forces, without disrupting our economy as a whole. Investment “gambling” in such unregulated markets as derivatives, while still legal, will entirely be the responsibility of those corporations engaged in it. And the assets they use for such gambling must be entirely international, with no connection to their US assets.
3) 48% of the US federal budget is spent on Social Security and healthcare. This must stop. The end of Social Security will begin by keeping the promise to those receiving its benefits, but prohibiting new entries into the system. Since it is coupled with Medicare via FICA, Medicare coverage will end the same way, by not admitting new enrollees, while continuing to pay benefits.
This has long been a taxation scam by the government, who used the FICA taxes for other things, effectively doubling the income tax. So it will slash government revenues by about half, which means massive reductions in the size of the federal government.
Since new enrollees will no longer be paying FICA taxes, that money will be put in private individual retirement and health care accounts.
4) The only window for this to take place is likely after a massive economic collapse, when the government has a carte blanche to “fix things”, and that government is not a leftist government. It will need to be accompanied by a strong push for a balanced budget amendment to the constitution, which may actually be the easiest part to enact.
The value of our currency will plummet and we will be crossing the Rio Grande in droves trying to get work in Mexico and Trump's prediction about Mexico building the wall for us will come true.
What Kevin D. Williamson doesn't tell us is where do we go to 'declare bankrupcy' and who do we 'default' on? The Chinese have loaned us money... do we refuse to pay them back because 'we've been to some secret bankruptcy court? It's insane.
Or do we default on the money we've held by the American people? Tell them 'the Treasuries they've bought and earn interest on are now worthless?' Gimme a break.
The next time the United States needs money WHO WILL LOAN TO US? NO ONE.
If we default we lose reserve currency status.. we'll be the same as Haiti - won't be able to 'inflate' our money because no one will be holding our dollars but us. Haiti can't 'print more money' to ease their debt because they're financial losers. That's what Kevin D. Williamson wants to turn us into... Some black loser country... this is almost too stupid to comment on.
The public voted for the government to max out the credit cards. No one defrauded them.
Defeatist!
You say that as if not defaulting is an option.
If you can’t make the interest payments, or seriously inflate the currency to cheat at doing so, you default.
Not true. Countries go bankrupt and soon people are lining up to loan/invest money in them. We are going to lose our reserve currency status at some point and that will not turn us into Haiti...no other country has reserve currency status and many are very wealthy. I would argue it would be a good thing to lose that status as it would compel us, and the government, to live within our means. Lots of short term pain, but in the long run we’ll be better off.
We don’t even agree on our facts...
Countries go bankrupt
What facts? That we owe more money that can ever be paid back? Some sort of bankruptcy/reset is the only option unless you prefer hyper inflation. There is no third option at this point. The dollar as a reserve currency will end at some point.
Countries don’t go bankrupt, they default on their debt obligations, there is no legal forgiveness as in BK.
This would have already happened to the US had the US not been the dominant international currency and not been able to keep it’s interest rates at near zero.
If interest rates go back up to normal or above normal for any reason at all, the US will be forced to either sell assets, all of them, or default.
IMO.....
BTW, our advantage is and has been under threat for some time now and that threat largely comes from Russia, China and their allied state actors. Should be enter a default spiral, printing money will no longer be a Fed tool to prevent financial failure.
Countries don’t go bankrupt, they default on their debt obligations, there is no legal forgiveness as in BK.
With the USSR every satellite country claimed the assets within their borders and disclaimed all of the liabilities of USSR except for one.................. (think about it)
Interestingly, Russia took on the international assets and liabilities. I will let you do your own research on the whys and how it played out.....................
I will add that the essence of the formal procedure laws is identifying who will stand first in line for the marbles. If these are not followed then a different procedure is followed.
Remember the GM “bankruptcy”, Obama rearranged the line.
My hope is that when this crisis comes — and it almost certainly is coming — it will prove an instrument of free-market reform.
1) It was like the frontier days there. All the old rules and structures were gone and they could be creative in finding solutions to problems, Entrepreneurship was alive and well even after being suppressed for 80 years.
2) They were rediscovering their heritage, in their case is was Ghingas Kahn and Buddism. In our case I hope it would be God and the Constitution.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.