Government Debt to GDP

VaughanJB

VaughanJB

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Why don't government lower taxes? What's the justification for raising taxes? Why aren't they spending money on infrastructure? Why aren't they spending on everything?!?!

Debt. Taking a look at countries debt to GDP, it's a truly horrifying picture.

Japan? 237%
US? 124%
France? 113%
UK? 96%
Germany? 62%
Kuwait? 3%
Afghanistan? 8%

In short - our countries are broke! They're teetering on the edge. Borrowing costs for more money are high. We had austerity, and we're truly no better off. Our governments have no head room for major change. And who owns this debt? Investors, other countries, and trust funds.

We expect radical ideas and implementation from governments, but the truth is, there's no money to do it. And it's not immigrants that are causing this. It's not welfare. It's a systemic issue that has gone on for a few generations. Asylum seekers account for 0.3% of the national spend. Spending on corporate welfare dwarfs that spent on Asylum Seekers by more than 17 times. 1% of GDP is spent on foreign aid, and it's going down.

We're broke!
 

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We could reduce spending or we could increase revenue but it’s pretty clear that we do not have the will to do either.

“I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country.” - Andrew Jackson
 
Aunt Bea said:
We could reduce spending or we could increase revenue but it’s pretty clear that we do not have the will to do either.

“I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country.” - Andrew Jackson
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Maybe it's not so much lack of will but more about once begun politicians are not good with ending programs that get them elected. Like wanting to end extending the COVID-19 subsidies was the sticking point for the recent long shutdown of the government.

No wonder the deficit keeps climbing.

Costs almost half a trillion dollars. The Congressional Budget Office recently estimated that permanently extending the COVID-19 subsidies would increase the deficit by $350 billion over ten years, plus another roughly $60 billion in additional interest costs to finance the spending. Total spending, a better measure of the size of government, would increase by more than $488 billion. Sarah Wagoner at the Economic Policy Innovation Center notes that this extra cost is more than Congress spends on many federal agencies, such as the National Aeronautics and Space Administration (NASA) or the Environmental Protection Agency (EPA).

It's no mystery to me where this kick the can down the road is headed. It ain't going to be pretty with AI in it's infancy taking jobs. How will taxes to support paying the debt be generated if AI does jobs?
 
We're spending over a trillion dollars a year now on the military with much of that going to military contractors who are getting filthy rich off government contracts. But we can't spend $35 billion a year to help people pay for health insurance. That just shows how f*cked up the priorities are in this country.
 
VaughanJB said:
Why don't government lower taxes? What's the justification for raising taxes? Why aren't they spending money on infrastructure? Why aren't they spending on everything?!?!

Debt. Taking a look at countries debt to GDP, it's a truly horrifying picture.

Japan? 237%
US? 124%
France? 113%
UK? 96%
Germany? 62%
Kuwait? 3%
Afghanistan? 8%

In short - our countries are broke! They're teetering on the edge. Borrowing costs for more money are high. We had austerity, and we're truly no better off. Our governments have no head room for major change. And who owns this debt? Investors, other countries, and trust funds.

We expect radical ideas and implementation from governments, but the truth is, there's no money to do it. And it's not immigrants that are causing this. It's not welfare. It's a systemic issue that has gone on for a few generations. Asylum seekers account for 0.3% of the national spend. Spending on corporate welfare dwarfs that spent on Asylum Seekers by more than 17 times. 1% of GDP is spent on foreign aid, and it's going down.

We're broke!
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Does that figure include states as well as the national government?

Australia's national debt is 31.7%, not including debts of each state.
Australia holds approx $80.7 billion in US Treasury Securities.
 
Knight said:
Maybe it's not so much lack of will but more about once begun politicians are not good with ending programs that get them elected. Like wanting to end extending the COVID-19 subsidies was the sticking point for the recent long shutdown of the government.

No wonder the deficit keeps climbing.

Costs almost half a trillion dollars. The Congressional Budget Office recently estimated that permanently extending the COVID-19 subsidies would increase the deficit by $350 billion over ten years, plus another roughly $60 billion in additional interest costs to finance the spending. Total spending, a better measure of the size of government, would increase by more than $488 billion. Sarah Wagoner at the Economic Policy Innovation Center notes that this extra cost is more than Congress spends on many federal agencies, such as the National Aeronautics and Space Administration (NASA) or the Environmental Protection Agency (EPA).

It's no mystery to me where this kick the can down the road is headed. It ain't going to be pretty with AI in it's infancy taking jobs. How will taxes to support paying the debt be generated if AI does jobs?
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I understand your point but it’s equally interesting that there was little trouble in extending the income tax reductions that were scheduled to expire this year.

The affordable care act and the New York State insurance exchange were extremely helpful to me in obtaining health insurance during my early retirement. In New York State, it simply isn’t an option for an individual to purchase a health care policy through an insurance agency/broker.

People lived and died before the affordable care act subsidies and people will continue to live and die without them but I do believe that we should address healthcare once and for all with some form of nationalized healthcare like Medicare for all. It seems to me that the money currently being spent by taxpayers, employers, and employees, etc… would be sufficient to pay for basic healthcare for all.

Basic being the key word, we have to be willing to accept the fact that not everyone will have a successful outcome in every situation and that all of us will eventually die.

I think that all most Americans want is a fair deal that isn’t skewed in favor of one group at the expense of another.
 
We haven't learned the valuable advice that when you find yourself in a hole, you should stop digging.
We have been in a catch 22 cycle for decades with little hope of escape.
In order to seriously reduce the national debt, one has to either raise taxes or cut programs.
In order to do that, you have to get elected, but the majority of voters don't like either, so we keep doing what we're doing and expecting different results. The word insanity comes to mind.
 
Aunt Bea said:
I understand your point but it’s equally interesting that there was little trouble in extending the income tax reductions that were scheduled to expire this year.

----snip-----

I think that all most Americans want is a fair deal that isn’t skewed in favor of one group at the expense of another.
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Right to the heart of the matter. Thank you.
 
Aunt Bea said:
... I do believe that we should address healthcare once and for all with some form of nationalized healthcare ...l

... I think that all most Americans want is a fair deal that isn’t skewed in favor of one group at the expense of another.
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But aren't your two points (highlighted above) mutually exclusive?
 
bobcat said:
We haven't learned the valuable advice that when you find yourself in a hole, you should stop digging.
We have been in a catch 22 cycle for decades with little hope of escape.
In order to seriously reduce the national debt, one has to either raise taxes or cut programs.
In order to do that, you have to get elected, but the majority of voters don't like either, so we keep doing what we're doing and expecting different results. The word insanity comes to mind.
Click to expand...

There are two problems with this, as I see it.

1) We've been through austerity. Services were cut. Public spending was cut. Yet the net result was a big fat zero.

2) If the UK reduced it's debt to 60%, you can bet the next government will push it up to 70% to buy votes.

The vicious circle continues.

One of the issues is that a lot of that debt is held by investors, pension funds, and speculators.

Here's a shocker - US national debt has increased by 40% in just five years. UK debt has grown by 55% in the same time frame. That money went on Covid, and various things. But the fact remains, the spending on Covid has benefited the stock market and investors. Given this, are normal working people any better off? I think not.

National Debt is part of the engine that feeds investment brokers, hedge funds, and pension funds. But at some point, one imagines, the house of cards must fall.
 
Warrigal said:
Does that figure include states as well as the national government?
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No. These are national figures. In the US, the most indebted (by number) is California. However, the most indebted per head leaves Connecticut at the top. In Australia, Victoria has the largest debt, but by capita it's New Territories.
 
Here's another thought.

in 2024, repayment of interest on the US national debt was greater than that spent on Medicare.
 
VaughanJB said:
There are two problems with this, as I see it.

1) We've been through austerity. Services were cut. Public spending was cut. Yet the net result was a big fat zero.

2) If the UK reduced it's debt to 60%, you can bet the next government will push it up to 70% to buy votes.

The vicious circle continues.

One of the issues is that a lot of that debt is held by investors, pension funds, and speculators.

Here's a shocker - US national debt has increased by 40% in just five years. UK debt has grown by 55% in the same time frame. That money went on Covid, and various things. But the fact remains, the spending on Covid has benefited the stock market and investors. Given this, are normal working people any better off? I think not.

National Debt is part of the engine that feeds investment brokers, hedge funds, and pension funds. But at some point, one imagines, the house of cards must fall.
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As the old saying goes ...... it's complicated. Even if we made an attempt to balance the budget by spending only what is taken in for a given year, it would require extensive cuts in spending, which will likely send the economy into a tailspin, which now means there is less money coming in, so the balancing attempt will backfire by reducing government revenue.

Unfortunately, so much of our economy is reliant on government spending (Military, healthcare, all federal bodies and agencies, social programs, etc...), and even as bloated as it is, we are stuck in the boat with it. Every time there's a disaster, FEMA sends out billions of dollars in relief. Yes, it's a noble thing to do, but these noble things come at a cost. If you set fire to your house to keep your neighbor warm, it's probably not the wisest of decisions.
 
Could it be that taking time to evaluate subsidies & not automatically renewing them is what people want right up until evaluation is possible?

I can't complain about any reduction in some government agencies or the jobs that have been eliminated. I haven't been negatively impacted.

It's usual for what took place to happen with government to shut down over subsidies. Maybe it's time to look at why automatic renewal needs review.

Covering the full premium costs of many marketplace plans led to significant enrollment fraud. A recent Paragon report estimates that the program has more than 6.4 million improper enrollees, costing taxpayers $27 billion in 2025. There are also 11.7 million enrollees (more than one-third of the marketplace) who have not filed any claims for their heavily subsidized insurance benefits. This means “tens of billions in federal subsidies are flowing to insurers and brokers for phantom enrollees.” Even when enrollees do not make a single claim, insurers keep the subsidies. The threefold increase in these “zero-claim” enrollees since the COVID-19 subsidy expansion corroborates estimates of widespread fraud and reporting on insurance brokers gaming the system.

Fraud in billions is one thing. Making insurance companies filthy rich due to how the ACA subsidies are structured IMO warrants serious looking into.
 
My opinion only…We forget that what basically happened to the USSR was they went broke. If a large debt holder of the US (think China, who we insulted repeatedly over Covid) dumped our debt at a deep discount…it would hurt them but really hurt us. Fiscal responsibility is seen as a problem for some…but really is a problem for all. We have enemies (granted we created most of them) and we are vulnerable.
 
bobcat said:
We haven't learned the valuable advice that when you find yourself in a hole, you should stop digging.
We have been in a catch 22 cycle for decades with little hope of escape.
In order to seriously reduce the national debt, one has to either raise taxes or cut programs.
In order to do that, you have to get elected, but the majority of voters don't like either, so we keep doing what we're doing and expecting different results. The word insanity comes to mind.
Click to expand...
One can raise taxes, raise revenue, lower spending, legally steal assets from citizenry or other nations, war, all kinds of creative ways to make money, ask Hitler's friends, they'll say so too.
 
The last time we had a balanced budget was back in fiscal year 2001. Actually, it was a surplus. So what happened?
  • Massive tax cuts for the rich. Everyone had their taxes cut to some extent, but the biggest beneficiaries by far have been the rich.
  • Increased spending on the military. The Pentagon budget increased some 60-70% after 9/11. It was about $300 billion annually during the '90s and is currently over a trillion dollars.
So basically, revenue decreased and spending increased.

We also had the Great Recession of the late 2000s where we had decreased revenue due to high unemployment and increased payouts for unemployment benefits. And then we had the pandemic where revenues again decreased and stimulus checks were sent out to everyone, which greatly increased the budget.

The cycle seems to keep repeating itself: tax cuts for the rich and increased military and entitlement spending.
 
The total wealth in the US is about $168 Trillion. The richest 10% own about 2/3 of that which comes to about $112 Trillion. Our current national debt is a little over $38 Trillion. So I say let's have a wealth tax and pay off the debt on their backs. They can afford it and still have plenty left. Now I'll just sit back and wait for the inevitable howls of opposition from the usual suspects. :)
 
Knight said:
Covering the full premium costs of many marketplace plans led to significant enrollment fraud. A recent Paragon report estimates that the program has more than 6.4 million improper enrollees, costing taxpayers $27 billion in 2025. There are also 11.7 million enrollees (more than one-third of the marketplace) who have not filed any claims for their heavily subsidized insurance benefits. This means “tens of billions in federal subsidies are flowing to insurers and brokers for phantom enrollees.” Even when enrollees do not make a single claim, insurers keep the subsidies. The threefold increase in these “zero-claim” enrollees since the COVID-19 subsidy expansion corroborates estimates of widespread fraud and reporting on insurance brokers gaming the system.

Fraud in billions is one thing. Making insurance companies filthy rich due to how the ACA subsidies are structured IMO warrants serious looking into.
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Response to Paragon report shoots holes in Paragon's methodology and conclusions
 
Trade said:
The total wealth in the US is about $168 Trillion. The richest 10% own about 2/3 of that which comes to about $112 Trillion. Our current national debt is a little over $38 Trillion. So I say let's have a wealth tax and pay off the debt on their backs. They can afford it and still have plenty left. Now I'll just sit back and wait for the inevitable howls of opposition from the usual suspects. :)
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They're happy with their Propertarian and bootstraps outlook, aka jealousy.....it'll never change, nor would some ever admit that medicare and SS are entitlement just the same as SNAP, WIC, medicaid or "welfare." And if they opened their eyes they would realize all these programs are at risk because some people could give a rats azz about pretty much anyone but themselves.
 
Trade said:
The total wealth in the US is about $168 Trillion. The richest 10% own about 2/3 of that which comes to about $112 Trillion. Our current national debt is a little over $38 Trillion. So I say let's have a wealth tax and pay off the debt on their backs. They can afford it and still have plenty left. Now I'll just sit back and wait for the inevitable howls of opposition from the usual suspects. :)
Click to expand...
I keep a damn low profile, except for stupid stuff. They're the wolves, I'm the sheep. I know my turf but I been clipped enough. They'll do just fine without input from me.
 

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