“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.
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.
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.
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.
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.
BS...there are other ways...the following was sent to me today by my brother...but the message is clear on what we need to do:
These three, short sentences tell you a lot about the direction of our current government and cultural environment:
1.) We are advised NOT to judge ALL Muslims by the actions of a few lunatics, but we are encouraged to judge ALL gun owners by the actions of a few lunatics.
Funny how that works. And here’s another one worth considering.
2.) Seems we constantly hear about how Social Security is going to run out of money.
How come we never hear about welfare or food stamps running out of money? What’s interesting is the first group “worked for” their money, but the second didn’t.
Think about it..... Last but not least:
3.) Why are we cutting benefits for our veterans, no pay raises for our military and cutting our army to a level lower than before WWII, but we are not stopping payments to illegal aliens such as monthly payments for each child, money for housing, food stamps, free education including college and also the right to vote?
Are we missing something?
If not, pass this along.
Bankruptcy is what I figure is going to be the way out. Maybe some kind of settlement but tha tis bankruptcy after a manner.
Don’t see any other way.