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Discussion in 'Politics, Religion, Social Issues' started by thewap, May 6, 2016.
Nonsense. The US owes interest on loans for money it can print. That would lead to inflation, obviously, but there are ways of managing this in an emergency. Step number one is taxing the rich. Step number two is cutting back on corporate welfare (incentives etc. that go directly to stockholders' pockets rather than creating jobs or value).
Great, now this dip **** wants to destroy the full faith and credit of the US.
You agree that he should run the economy the way he runs his companies. Bankruptcy works for companies because they have assets they can sell. Govt do not have assets to sell they have to raise interest rates to achieve the same results. The action would also piss off all the countries holding US debt and they would have to pay higher and higher interest rates to get future credit.
There are few issues that better highlight the difference between Donald Trump as a businessperson, and his fitness to serve as President than his ideas about Government Debt.
Starting with the US Constitution. The Fourteenth Amendment, Section Four, which states:
That is exactly what Trump is proposing to do: Question the validity of US Government debt by asking creditors to accept less than 100 cents on the dollar. Come economic depression; recession. During the Civil War and the Whiskey Rebellion. Nobody has ever suggested the United States fail to honor its financial obligations. That's why the US Dollar is accepted as a worldwide reserve currency. Thats why the US Government can borrow at historically low interest rates. It could be argued that the entire financial stability of the planet depends on the fundamental understanding that the United States (like the Lannisters...) always pays its debts.
Even the slightest hint that the US will fail to pay its debts has been known to cause financial chaos. Like happened during some of the recent "Shut down the Government" shenanigans of the Tea Party. They caused spikes in interest rates that will end up costing the taxpayer billions.
And, who exactly does Donald Trump think is going to end up paying for his "discount" of Government debt? Answer: Probably tens of millions of United States citizens, retirees and prudent investors. People who own mutual funds; IRAs; and rely on pensions.
Trump: Make America Great Again. Starting by suggesting we welch on our debts like a sleazy casino operator and failed airline owner.
Brilliant! I assume you mean "tax them a lot more".
Of course, then the rich will leave the US, and the whole country will be in the same boat with New Jersey:
One billionaire moves south — and New Jersey's budget falls apart
Billionaire David Tepper is moving from New Jersey to Florida this year — and so is his tax contribution to New Jersey, which is so large the move threatens his former home's state budget.
New Jersey's struggling state budget projections rely on income taxes for 40 percent of revenue, Bloomberg reported. To support this, the state levies the third-highest tax burden in the country, with a marginal income tax rate of almost 9 percent for top earners and an array of estate and inheritance taxes.
The Sunshine State, on the other hand, has one of the country's lowest tax burdens: it taxes neither personal income nor investments, and its corporate tax is 5.5 percent, all of which tempted Tepper to move south.
New Jersey's current predicament highlights both the stark income difference between America's rich and poor and the subtle side effects of trying to solve it through taxation.
I'm all for cutting corporate welfare. Where do you want to start?
It's shelved under Speculative Fiction. There's a duplicate under Humor and Hyperbole.
vrDrew, what do you think of the idea of negative central bank interest rates?
I've read of many economic analysts who claim that if a nation's debt is 60% or more, that nation is in deep doo-doo. We're surviving because of the petro-dollar and world reserve currency status. Nowhere is written that those two items will last forever and ever--and the Saudis and China seem to be doing a rapid nibble on them.
Regardless, our government has screwed up so badly, these recent 40+ years, that we now have to borrow money to pay the interest on the money we've already borrowed. That doesn't strike me as fiscal wisdom.
And vulchR, with the politics of envy, wants to tax the rich. How? Tax their bonds? Their shares of stock? A higher tax on their real estate holdings? New taxes on their personal property? Clue: Congress will never run short of members who will not punish themselves nor the sources of funds which enable re-election.
Outside of a very few special circumstances they don't generally work too well. They quite literally act as a deterrent to saving. And saving has to be done by somebody.
The talk about the US debt has been overwrought. The US Federal budget was in surplus less than twenty years ago; and all we need to do is grow the economy sufficiently that the debt becomes manageable.
That's not going to happen overnight. It will probably take a decade or two. During which time we have to avoid letting the current deficit grow too quickly. But its more important for everyone - businesses, bankers, consumers, employees, and retirees - that economic growth proceed at a healthy clip.
'We have to default to save the economy.' Yea, that's the ticket.
...Also, too, Peter Schiff is evidently a blithering idiot.
Too bad 80% of everything that comes out his mouth is a lie.
Cutting back on entitlements at all levels is what the country needs.
The democrats have fallaciously defined corporate welfare as the issue - while driving policy that supports every big corporate backer in the process.
Want to bring 280B into the country in corporate investments? Quit double-taxing corporate profits earned overseas and incentivize at home investment that creates jobs. This is a conservative extinct fir first year spending of repatriated earnings. It could be much higher if properly managed.
Wait, can't do that because it's "corporate welfare." Nonsense. It's good investment support and WILL bring capital spending, growth and jobs home.
What's your plan? Just tax corporations more and hope the government can spend the loot wisely? The piggy bank runs dry pretty quickly that way.
Government does not create anything.
Why is that so hard for liberals and socialists to grasp?
That's all well and good, but the US is in the unfortunate situation that if you taxed people at 100% you still wouldn't pay off the interest on the debt at this point.
The problem isn't your entitlements. Plenty of countries in Europe and elsewhere give their citizens things like free healthcare, free education, etc.
One of the problems is your government spending trillions of dollars on being world police, being stuck in the cold war defensive spending mentality, when the cold war ended in the 90s.
Stack the cost of health care, education, drug rehabilitation, etc. against the military budget and it isn't even close.
They don't double tax corporate profits made overseas. They tax the relative difference. If a corporation were to pay 30% on their profits in Belgium, when they repatriate their cash, they have to pay 5% taxes to match the US rate.
--- Post Merged, May 6, 2016 ---
Actually, if the US were to stop everything for about 4 years, shut down all entitlements and programs, lay off all government employees, shutter Washington, we'd be able to pay the debt down to 0 and then some.
...though it'd probably destroy the economy in the process.
--- Post Merged, May 6, 2016 ---
This is just utter nonsense. Interest for the last full fiscal year (2015) was $402.4 billion. GDP (national income) of the US in 2015 was $17.9 trillion (source IMF).
That's the basic idea. Fluctuation in exchange rates can make it a little more annoying, and as they are compelled to seek refunds in the case of over-payment to foreign governments. thewitt knows all of this. I don't know why he always phrases it in a misleading manner.
That sort of thing is based on a flawed analysis.
Devaluating the debt ?
Ask Greece, Cyprus or Argentina how that worked for them.
There is NO reason for double taxation, rationalize it any way you want. The US government has no business imposing income tax on a company when that income is earned abroad. None.
I've never said double the tax, only double taxation. Taxes are not owed in the US for sales made in China.
The cost to repatriate funds earned abroad are also higher than simple income tax, and approach confiscatory levels.
Agree with this or not, it's a FACT that companies like Apple will invest their earnings overseas rather than back in the US to avoid this excessive taxation.
You want to see that capital invested in the US? Get rid of the tax and incentivize investment at home. It's dead simple, but the politics of corporate hate espoused by the Democrats will not allow it - so that money gets invested abroad.
Global companies like Apple have full control on where income is realized. If Apple makes 500$ on an iMac sold in the EU they could just write an invoice over 500$ to Apple-EU for providing OSX, making them appear on the Cupertino balance.
Letting them repatriate earnings that have been taxed extremly low in Ireland for free will be just more incentive to create a situation where even more earings happen in Ireland.
-> deadly race to the bottom
Do you have a source for this?
Here's a link from 09 talking about tax amnesty.
This was a measure enacted by the administration of former U.S. President George W. Bush in 2004 that gave a tax amnesty to multinationals who had been keeping money, tax-free, offshore: it allowed them to bring back that money, and pay a tax rate of 5.25%, instead of the normal 35% corporate tax rate.
Am I missing something on this?
I was referring to foreign tax credit, which Renzatic implicitly referenced. A liability of close to 35% means that they hit the top marginal rate without repatriating foreign income.
You might also take note why that tax holiday was largely regarded as a failure. That companies that lobbied for this claimed to be cash strapped and therefore unable to put money into domestic investments. This wasn't actually the case. Having more money in the economy doesn't necessarily result in increased private investment. If there isn't anything interesting, much of it ends up in treasury bonds.
Also recall that 35% assumes they are paying top marginal rates and that they had little to no tax liability on that income outside the US.
jerwin, I don't see where 60% is particularly "flawed", given that all parties of the article are in agreement for around 90%. But the US cash-flow debt is at or above GDP, now. And if you consider GAAP for unfunded liabilities, we're six or more times over GDP, depending on the source.
throAU, the US defense budget has been higher; for now it's around 20% of the budget. (Not that I'm at all pleased with either the amount or with the way it's spent.)