Post by ferris1248 on Jul 10, 2024 8:30:04 GMT -5
"America’s most unaddressed gigantic problem is the $35 trillion national debt. It’s rapidly growing to unsustainable levels and Americans are eventually going to face some unhappy choices."
"Neither of this year’s presidential candidates — incumbent Democrat Joe Biden and Republican challenger Donald Trump — is leveling with voters about the sacrifices that loom. Biden wants to raise taxes on businesses and the wealthy without touching benefits in the budget-busting retiree programs, Social Security and Medicare. Trump pretends that some new tariffs on imports and more supply-side tax cuts will magically solve the problem."
"Virtually no politician tells the truth about how to fix the debt because the real answer is that there’s something for everybody to hate. Tax hikes, spending cuts, and benefit reductions are all inevitable, and that message upsets so many voters that telling the truth and getting elected mutually exclude each other."
"Yet there are solutions. In a new analysis for the Manhattan Institute, budget expert Brian Riedl outlines a range of actions Congress can take to stabilize federal borrowing and forestall a debt crisis that would cause soaring interest rates, runaway inflation, or both. The United States doesn’t need to pay off its entire national debt. It just needs to peg it at around 100% of GDP and keep it there. And the actions Riedl outlines are not the draconian ones that will be necessary if Washington dawdles, as usual, and waits until the last moment to address the problem."
"There are a few truisms of debt math. One is that taxes on the wealthy are going to have to go higher, because that’s where the money is. The share of national wealth controlled by the top 1% of earners has risen from 14% in 1990 to 16.8% at the beginning of 2024, while the share for the bottom 50% has dropped by a bit. Higher taxes on the wealthiest Americans would restore some balance lost during the last 30 years."
"Part of the reason the federal budget outlook is so gloomy is that the total cost of Medicare and Social Security is exploding as baby boomers flood into the programs, and there aren’t enough incoming workers to pay all the benefits owed on the current schedule. The ratio of workers to retirement beneficiaries has dropped from 5.1 in 1960 to around 2.9, and it’s headed to 2.5 by 2030. Fewer workers are financing benefits for more retirees, and both programs are due to run short of money in the early 2030s."
"One way to keep benefits whole might be to simply raise the payroll taxes that finance Social Security and Medicare, or raise the ceiling on the Social Security tax, which only applies to the first $168,600 of income. But at some point, that distorts the whole point of these two programs, which were meant to keep seniors out of poverty — not pad the lifestyles of the elderly at the expense of younger Americans still trying to build families and careers."
"His set of solutions involves reasonable sacrifices for those who are able to give, as the chart above illustrates. Riedl would keep Social Security and Medicare benefits fully intact for the bottom 40% of enrollees, by income. But he’d enact modest benefit cuts for the top 60%, while gradually raising the Social Security retirement age from 67 to 69."
"There would also be select tax hikes on businesses and the wealthy, to include raising the top individual income tax rate, raising inheritance taxes that involve capital gains, and paring back some business tax breaks. Defense spending and other so-called discretionary outlays that Congress has to approve every year would have to be capped or reduced."
"At least two changes would directly affect ordinary workers. One would be a 1-point increase in the tax that funds Medicare, with workers and employers each paying half. Another would be taxing part of employer-provided health benefits as income, which would be a de facto tax hike."
"Most working taxpayers can find something in this outline of proposals that would make them worse off. In a way, that’s the point: The nation’s massive debt load can’t be fixed while exempting any large constituency."
"Up until now, every partisan plan to wrestle the national debt has been a non-starter because it's politically popular with one large faction but politically toxic to another. When the politicians start producing plans that nobody likes, they might finally be getting somewhere."
finance.yahoo.com/news/heres-who-will-pay-to-fix-the-nations-mushrooming-debt-170139454.html
"Neither of this year’s presidential candidates — incumbent Democrat Joe Biden and Republican challenger Donald Trump — is leveling with voters about the sacrifices that loom. Biden wants to raise taxes on businesses and the wealthy without touching benefits in the budget-busting retiree programs, Social Security and Medicare. Trump pretends that some new tariffs on imports and more supply-side tax cuts will magically solve the problem."
"Virtually no politician tells the truth about how to fix the debt because the real answer is that there’s something for everybody to hate. Tax hikes, spending cuts, and benefit reductions are all inevitable, and that message upsets so many voters that telling the truth and getting elected mutually exclude each other."
"Yet there are solutions. In a new analysis for the Manhattan Institute, budget expert Brian Riedl outlines a range of actions Congress can take to stabilize federal borrowing and forestall a debt crisis that would cause soaring interest rates, runaway inflation, or both. The United States doesn’t need to pay off its entire national debt. It just needs to peg it at around 100% of GDP and keep it there. And the actions Riedl outlines are not the draconian ones that will be necessary if Washington dawdles, as usual, and waits until the last moment to address the problem."
"There are a few truisms of debt math. One is that taxes on the wealthy are going to have to go higher, because that’s where the money is. The share of national wealth controlled by the top 1% of earners has risen from 14% in 1990 to 16.8% at the beginning of 2024, while the share for the bottom 50% has dropped by a bit. Higher taxes on the wealthiest Americans would restore some balance lost during the last 30 years."
"Part of the reason the federal budget outlook is so gloomy is that the total cost of Medicare and Social Security is exploding as baby boomers flood into the programs, and there aren’t enough incoming workers to pay all the benefits owed on the current schedule. The ratio of workers to retirement beneficiaries has dropped from 5.1 in 1960 to around 2.9, and it’s headed to 2.5 by 2030. Fewer workers are financing benefits for more retirees, and both programs are due to run short of money in the early 2030s."
"One way to keep benefits whole might be to simply raise the payroll taxes that finance Social Security and Medicare, or raise the ceiling on the Social Security tax, which only applies to the first $168,600 of income. But at some point, that distorts the whole point of these two programs, which were meant to keep seniors out of poverty — not pad the lifestyles of the elderly at the expense of younger Americans still trying to build families and careers."
"His set of solutions involves reasonable sacrifices for those who are able to give, as the chart above illustrates. Riedl would keep Social Security and Medicare benefits fully intact for the bottom 40% of enrollees, by income. But he’d enact modest benefit cuts for the top 60%, while gradually raising the Social Security retirement age from 67 to 69."
"There would also be select tax hikes on businesses and the wealthy, to include raising the top individual income tax rate, raising inheritance taxes that involve capital gains, and paring back some business tax breaks. Defense spending and other so-called discretionary outlays that Congress has to approve every year would have to be capped or reduced."
"At least two changes would directly affect ordinary workers. One would be a 1-point increase in the tax that funds Medicare, with workers and employers each paying half. Another would be taxing part of employer-provided health benefits as income, which would be a de facto tax hike."
"Most working taxpayers can find something in this outline of proposals that would make them worse off. In a way, that’s the point: The nation’s massive debt load can’t be fixed while exempting any large constituency."
"Up until now, every partisan plan to wrestle the national debt has been a non-starter because it's politically popular with one large faction but politically toxic to another. When the politicians start producing plans that nobody likes, they might finally be getting somewhere."
finance.yahoo.com/news/heres-who-will-pay-to-fix-the-nations-mushrooming-debt-170139454.html
