6 ms·

U.S. Deficit, Pegged at $1.7T, Effectively Doubled in 2023

56 points by dilawar 3y ago

flexie 3y ago
It's a unique form of American subsidies: You don't have to directly pay your businesses to get a competitive edge. You just don't require companies and individuals to pay any way near enough tax to keep basic government functions like education and healthcare going. Then you solve it by printing more money. When a less powerful country does that, it bears most or all of the cost itself. When the US does it, much of the inflationary cost is borne by all other countries that use the dollar as a reserve currency. Other countries don't have a reserve currency like the dollar.
- mrjin 3y ago
  I'm wondering how much longer it can play such game. If current trend does not changes, its revenue will soon unable to cover the interests.
  - 6nf 3y ago
    Inflation fixes that
    - ejb999 3y ago
      not if interest rates go up at the same rate, or higher than inflation
      - 6nf 3y ago
        I mean historically
  - smitty1e 3y ago
    Revenue hasn't covered costs in decades. If the BRICS overthrow the U.S. dollar, there will be a come-to-Beevis moment in the U.S.
    - kmlx 3y ago
      > If the BRICS overthrow the U.S. dollar imo there is zero chance of BRICS ever amounting to anything more than a photo-op every couple of years.
    - ChatGTP 3y ago
      Will there? I think what's behind all this reckless spending is the fact that the US armed forces are the biggest and most powerful in the world. While they have the most guns and are prepared to use them, it's not going to be easy to change this world order. Like, who's going to stand over the 7ft 300lb thug? The US wont just sit around while their position is eroded,at least in my opinion. We're also relatively good allies and I think this goes a long way too. If China had a 10x more powerful military and Navy than the USA, had experience in combat and was willing to use it. It wouldn't take long for the Yuan to win.
      - RandomLensman 3y ago
        You need a currency that buys stuff and that other people want to have - military might alone isn't sufficient at all. The ruble was never a great currency, no matter how mighty the USSR was, for example.
      - bobthepanda 3y ago
        China does not want the yuan to “win.” The Chinese state views control over capital flows as more important than the prestige of reserve currency. They can, and have, clamped down significantly on foreign outflows when they deem it necessary.
    - throw0101c 3y ago
      > If the BRICS overthrow the U.S. dollar, there will be a come-to-Beevis moment in the U.S. Yeah: > Pretty straightforward really. You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money * https://twitter.com/davidfrum/status/1665053372402081792 https://twitter.com/davidfrum/status/1665053372402081792 How anyone lump China and India, not exactly the best of friends, together is beyond me.
- chii 3y ago
  > Then you solve it by printing more money. the money isn't printed. It's debt, which is different. The debt is expected to be repaid, with interest. If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the expectation is that each printed dollar is worth less. By borrowing instead of printing, you don't have this permanent increase in money supply. Of course, there are other ways to increase the money supply, which is to control how much debt actually makes it into the system - but this can be regulated as required by the economy. > Other countries don't have a reserve currency like the dollar. the dollar being reserve is not really "forced" upon other countries - it's a choice they made to use USD as their reserve. They do it because other parties trust it. They could use the japanese Yen, or even the chinese yuan. And yet, majority of entities choose to use the USD. They do it because it's a relatively stable currency. They do it because other people accept it, and they do it because there's some trust that the US won't print money like Venezuela or Zimbabwe.
  - georgeplusplus 3y ago
    >>>If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the expectation is that each printed dollar is worth less. When banks make a loan they are literally creating new money into existence. Perhaps you meant Bank Reserves which is the underlying system banks and the fed use and the dollars which is bank customers like you and me use.
    - notahacker 3y ago
      Nothing you've said disagrees with the OP. The new "money" is literally credit, which literally is someone else's debt obligation which disappears when repaid.
      - epups 3y ago
        I think it does, actually. Every time I see a comment about "money printing", it makes me think of the author holding the opinion that the government literally created money, as in wealth, out of thin air.
- glimshe 3y ago
  Your statement applies to the entirety of the developed world, not only the United States. Please don't tell me that countries like Japan, Germany and France don't get the same sort of subsidy. No matter where you live, it's the poor that bear the cost of deficit spending, which is a worldwide problem. In poor countries, as you pointed out, deficit spending is a more acute problem, usually felt through currency collapse that mainly hurts the largely poor population.
  - Zufriedenheit 3y ago
    Germany actually has the second highest tax rates of the developed world. [1] Also it is written in our constitution that the budget has to be balanced except in extreme cases like pandemic, natural disaster or war. Our problem is that companies are leaving because of high tax and energy costs. [1] https://de.statista.com/statistik/daten/studie/185987/umfrage/steuer-und-sozialabgaben-nach-laendern/ https://de.statista.com/statistik/daten/studie/185987/umfrag...
    - bobthepanda 3y ago
      Also at this point the drag on infrastructure investment is starting to hurt the German economy.
    - glimshe 3y ago
      The stability you describe is relatively recent, the country has catapulted itself to development through deficit spending, and today still has a debt-to-GDP of ~66%. This isn't bad but still is a big subsidy partially financed by poorer countries. Germany, in particular, has been extensively accused by less developed EU partners of unfairly benefitting from the single currency.
- deleted 3y ago
  [deleted]
- olalonde 3y ago
  Indeed, money printing is a hidden tax on all currency holders. That's partly why Bitcoin is appealing to many people.
  - knorker 3y ago
    Printing more bitcoin is a tax on everyone and their electricity costs, their environment, and the existence of free tier compute.
    - olalonde 3y ago
      Bitcoin mining in itself doesn't damage the environment. It's the electricity generation that sometime does, but that's not a problem unique to Bitcoin. Bitcoin works perfectly fine with clean energy.
      - knorker 3y ago
        Whataboutism will not convince anyone. The rest is advanced mental gymnastics. It's hard to convince someone when their greed depends on them not understanding it.
        olalonde 3y ago
        I am not trying to convince anyone, just stating facts.
- tomohawk 3y ago
  You could raise taxes to 100% and not pay for everything the US is obligated to at this point. It's totally insane. The 2 ways out are to somehow grow the pie bigger to get more revenue while stopping the constant increase in obligations, or to inflate the money and pay off the debt with worthless paper. It's also the backdrop of the infighting over the Speaker of the House. It's the Speaker who has control over the budget, not the President. If you look, for example, at the R votes against Jordan, it is mostly those on the appropriations and defense committees who want to keep the spending going at any cost.
- laboratorymice 3y ago
  Fully agree, and it's probably intentional. It's not entirely fair, but I suppose most countries would do the same given the chance. Clearly it's not how you want to get ahead as a country, since all it takes is for the world collectively to decide it no longer wants to bear that cost, and then you can only keep it through force. Inflation becoming a well-understood phenomenon with the general population also threatens it. If China plays its cards right, the US is going to start having a bad time still this decade. The US should be aggressively trying to reach a more balanced economy. The distribution of not just wealth, but of the ability to generate wealth, leaves the US on very shaky ground.
  - maroonblazer 3y ago
    Despite its many problems, the U.S. still enjoys the largest consumption of any country. People are banging down the door/wall to move here; we don't see people clamoring to emigrate to China. China's demographics spell doom for the foreseeable future. Not only would China need to play its cards right, it'd need to win the lottery to overtake the U.S.
mkl 3y ago
https://archive.ph/gTMoh https://archive.ph/gTMoh
- oldbbsnickname 3y ago
  archive.{ph,is,today} domain records are missing right now, again. https://downforeveryoneorjustme.com/archive.ph https://downforeveryoneorjustme.com/archive.ph As a hack, fill /etc/hosts from parts of `dig archive.today ANY @carl.archive.is` 178.17.174.208 archive.ph archive.is archive.today archive.li 23.184.48.154 archive.ph archive.is archive.today archive.li 179.43.151.41 archive.ph archive.is archive.today archive.li 5.188.6.118 archive.ph archive.is archive.today archive.li 94.140.114.194 archive.ph archive.is archive.today archive.li
smitty1e 3y ago
“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. Gradually and then suddenly.” – Ernest Hemingway, The Sun Also Rises
georgeplusplus 3y ago
I wish I had the determination to round up all the comments on hacker news that said debt didn’t matter for the US or inflation wasn’t caused by debt. The people that have been warning about this scenario for a decade are finally getting proven right. The us banking system is unraveling before us and I’m getting the pop corn out. Hopefully the people learn from the failed systems that caused this debt bubble like San Francisco and don’t spread their ideas farther than those borders so something is salvageable from this mess we created.
- p-e-w 3y ago
  > The us banking system is unraveling before us and I’m getting the pop corn out. People said the exact same thing in 2009, and two years later everything was back to the way it had been before.
- ngetchell 3y ago
  Honest question. If inflation was caused by debt, why is inflation going down while the debt increases faster?
  - plonk 3y ago
    Because interest rates are increasing? Both the cost of debt and the cost of the dollar increase.
    - ngetchell 3y ago
      I suspect rising interest rates and stable gas prices are what is causing lower inflation. The parent stated a link between more debt and more inflation and was hoping for an explanation that would explain the link.
      - plonk 3y ago
        Government spending both increases the government's debt and causes inflation. Maybe that's the link they are looking for. Plus, I don't know much about monetary policy, but wouldn't the Fed feel obliged to start quantitative easing if the government's debt put it in difficulty?
pearjuice 3y ago
As long as the US is a military super power there is no problem whatsoever. See https://en.wikipedia.org/wiki/List_of_countries_by_military_ https://en.wikipedia.org/wiki/List_of_countries_by_military_... Not trying to be a low-effort reply but any Economy 101 textbook will theorize this kind of debt/interest/inflation mix is impossible. Practically, the world is too dependent on the USD in one way or another. If they try to break loose, they might get confronted with those military expenditures which is a good enough incentive to keep using USD as a global reserve currency.
p-e-w 3y ago
Experts and laypeople (and the press) will go on and on and on about national deficits, but what exactly is it that they are afraid of? It seems to me that the past decades have convincingly demonstrated that countries really can keep running up debts basically forever, and nothing particularly problematic ever actually happens, except in a few cases where the economy overall is in an extremely bad shape for a variety of unrelated reasons. Can someone with more knowledge enlighten me what all the fuss is about?
- Grimburger 3y ago
  > nothing particularly problematic ever actually happens, except in a few cases where the economy overall is in an extremely bad shape for a variety of unrelated reasons. Quite sure you answered your own question here. Survivorship bias isn't a valid argument. Lebanon, Greece, Pakistan, Turkey all come to mind in the last decade, all with unsustainable amounts of debt. The modern monetary system is a faith based system which hands leeway to governments to create and destroy supply at will. When people lose faith it all collapses very quickly, the failure modes are never slow. The relatively small Silicon Valley Bank is a great example of this and the systemic collapse in confidence of banking.
  - p-e-w 3y ago
    Sovereign defaults are very rare events outside of banana republics. It's not survivorship bias so much as it simply doesn't normally happen, despite the vast majority of advanced economies having been neck-deep in debt for a long, long time.
    - Grimburger 3y ago
      An average citizens quality of life has dramatically decreased nonetheless, default or not. > The currency has been devalued by 90% – still not enough to reflect its slide in full. Inflation is in triple digits. Public services have collapsed; without hiring a private generator, households can expect only an hour or so of power a day. Shortages of drinking water have contributed to disease outbreaks, including the first cholera cases for decades. Parents are sending their children to orphanages because they cannot feed them. A growing number of citizens have resorted to armed robbery as the only way to extract their own deposits (now vastly reduced in real terms) from banks when they desperately need to pay for basic services such as healthcare. The collapse of Lebanon, formerly known as the "Switzerland of the Middle East", has been described by Western media as one of the most devastating and worst financial recessions since at least the 19th century. https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis
0xDEF 3y ago
From at outside perspective it's interesting how little the US taxes people in the top 5% income bracket. Here in Denmark the progressive tax on this segment makes up the biggest source of tax collection.
- naveen99 3y ago
  You might be surprised how much Denmark taxes the bottom 50%, and how little the us taxes the bottom 50%.
  - hotpotamus 3y ago
    That's actually rather impressive then that if they have significant taxes on the bottom 50% that they still get the majority of their revenue from the top 5%.
  - sgerenser 3y ago
    Indeed. Everyone in the US calling for higher taxes on “the rich” is shocked when they see how much their taxes would go up too if we had EU-average tax rates.
starbird3000 3y ago
All this talk about debt and nothing about the main reason why: taxes are too low. By that I mean if you compare like with like, for example healthcare costs which are paid by taxes elsewhere, then in the US we're paying more for less. It's the same on nearly every basic service. Paying these items through taxes would reduce our overall bill and we'll have better services. Also social security doesn't need to be cut, as much as the GOP would love to do so, you just need to remove the cap on the tax at $160K and suddenly it's solvent for the next 50 years. There are very simple fixes to this, and most of them involve taxing the rich back at the rate they were taxed under Reagan and Clinton.

56 points by dilawar 3y ago

It's a unique form of American subsidies: You don't have to directly pay your businesses to get a competitive edge. You just don't require companies and individuals to pay any way near enough tax to keep basic government functions like education and healthcare going. Then you solve it by printing more money. When a less powerful country does that, it bears most or all of the cost itself. When the US does it, much of the inflationary cost is borne by all other countries that use the dollar as a reserve currency. Other countries don't have a reserve currency like the dollar.

mrjin 3y ago
I'm wondering how much longer it can play such game. If current trend does not changes, its revenue will soon unable to cover the interests.
- 6nf 3y ago
  Inflation fixes that
  - ejb999 3y ago
    not if interest rates go up at the same rate, or higher than inflation
    - 6nf 3y ago
      I mean historically
- smitty1e 3y ago
  Revenue hasn't covered costs in decades. If the BRICS overthrow the U.S. dollar, there will be a come-to-Beevis moment in the U.S.
  - kmlx 3y ago
    > If the BRICS overthrow the U.S. dollar imo there is zero chance of BRICS ever amounting to anything more than a photo-op every couple of years.
  - ChatGTP 3y ago
    Will there? I think what's behind all this reckless spending is the fact that the US armed forces are the biggest and most powerful in the world. While they have the most guns and are prepared to use them, it's not going to be easy to change this world order. Like, who's going to stand over the 7ft 300lb thug? The US wont just sit around while their position is eroded,at least in my opinion. We're also relatively good allies and I think this goes a long way too. If China had a 10x more powerful military and Navy than the USA, had experience in combat and was willing to use it. It wouldn't take long for the Yuan to win.
    - RandomLensman 3y ago
      You need a currency that buys stuff and that other people want to have - military might alone isn't sufficient at all. The ruble was never a great currency, no matter how mighty the USSR was, for example.
    - bobthepanda 3y ago
      China does not want the yuan to “win.” The Chinese state views control over capital flows as more important than the prestige of reserve currency. They can, and have, clamped down significantly on foreign outflows when they deem it necessary.
  - throw0101c 3y ago
    > If the BRICS overthrow the U.S. dollar, there will be a come-to-Beevis moment in the U.S. Yeah: > Pretty straightforward really. You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money * https://twitter.com/davidfrum/status/1665053372402081792 https://twitter.com/davidfrum/status/1665053372402081792 How anyone lump China and India, not exactly the best of friends, together is beyond me.
chii 3y ago
> Then you solve it by printing more money. the money isn't printed. It's debt, which is different. The debt is expected to be repaid, with interest. If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the expectation is that each printed dollar is worth less. By borrowing instead of printing, you don't have this permanent increase in money supply. Of course, there are other ways to increase the money supply, which is to control how much debt actually makes it into the system - but this can be regulated as required by the economy. > Other countries don't have a reserve currency like the dollar. the dollar being reserve is not really "forced" upon other countries - it's a choice they made to use USD as their reserve. They do it because other parties trust it. They could use the japanese Yen, or even the chinese yuan. And yet, majority of entities choose to use the USD. They do it because it's a relatively stable currency. They do it because other people accept it, and they do it because there's some trust that the US won't print money like Venezuela or Zimbabwe.
- georgeplusplus 3y ago
  >>>If you actually printed money, which does not have interest to be repaid, then the amount of circulating money would've increased permanently. Therefore, the expectation is that each printed dollar is worth less. When banks make a loan they are literally creating new money into existence. Perhaps you meant Bank Reserves which is the underlying system banks and the fed use and the dollars which is bank customers like you and me use.
  - notahacker 3y ago
    Nothing you've said disagrees with the OP. The new "money" is literally credit, which literally is someone else's debt obligation which disappears when repaid.
    - epups 3y ago
      I think it does, actually. Every time I see a comment about "money printing", it makes me think of the author holding the opinion that the government literally created money, as in wealth, out of thin air.
glimshe 3y ago
Your statement applies to the entirety of the developed world, not only the United States. Please don't tell me that countries like Japan, Germany and France don't get the same sort of subsidy. No matter where you live, it's the poor that bear the cost of deficit spending, which is a worldwide problem. In poor countries, as you pointed out, deficit spending is a more acute problem, usually felt through currency collapse that mainly hurts the largely poor population.
- Zufriedenheit 3y ago
  Germany actually has the second highest tax rates of the developed world. [1] Also it is written in our constitution that the budget has to be balanced except in extreme cases like pandemic, natural disaster or war. Our problem is that companies are leaving because of high tax and energy costs. [1] https://de.statista.com/statistik/daten/studie/185987/umfrage/steuer-und-sozialabgaben-nach-laendern/ https://de.statista.com/statistik/daten/studie/185987/umfrag...
  - bobthepanda 3y ago
    Also at this point the drag on infrastructure investment is starting to hurt the German economy.
  - glimshe 3y ago
    The stability you describe is relatively recent, the country has catapulted itself to development through deficit spending, and today still has a debt-to-GDP of ~66%. This isn't bad but still is a big subsidy partially financed by poorer countries. Germany, in particular, has been extensively accused by less developed EU partners of unfairly benefitting from the single currency.
deleted 3y ago
[deleted]
olalonde 3y ago
Indeed, money printing is a hidden tax on all currency holders. That's partly why Bitcoin is appealing to many people.
- knorker 3y ago
  Printing more bitcoin is a tax on everyone and their electricity costs, their environment, and the existence of free tier compute.
  - olalonde 3y ago
    Bitcoin mining in itself doesn't damage the environment. It's the electricity generation that sometime does, but that's not a problem unique to Bitcoin. Bitcoin works perfectly fine with clean energy.
    - knorker 3y ago
      Whataboutism will not convince anyone. The rest is advanced mental gymnastics. It's hard to convince someone when their greed depends on them not understanding it.
      - olalonde 3y ago
        I am not trying to convince anyone, just stating facts.
tomohawk 3y ago
You could raise taxes to 100% and not pay for everything the US is obligated to at this point. It's totally insane. The 2 ways out are to somehow grow the pie bigger to get more revenue while stopping the constant increase in obligations, or to inflate the money and pay off the debt with worthless paper. It's also the backdrop of the infighting over the Speaker of the House. It's the Speaker who has control over the budget, not the President. If you look, for example, at the R votes against Jordan, it is mostly those on the appropriations and defense committees who want to keep the spending going at any cost.
laboratorymice 3y ago
Fully agree, and it's probably intentional. It's not entirely fair, but I suppose most countries would do the same given the chance. Clearly it's not how you want to get ahead as a country, since all it takes is for the world collectively to decide it no longer wants to bear that cost, and then you can only keep it through force. Inflation becoming a well-understood phenomenon with the general population also threatens it. If China plays its cards right, the US is going to start having a bad time still this decade. The US should be aggressively trying to reach a more balanced economy. The distribution of not just wealth, but of the ability to generate wealth, leaves the US on very shaky ground.
- maroonblazer 3y ago
  Despite its many problems, the U.S. still enjoys the largest consumption of any country. People are banging down the door/wall to move here; we don't see people clamoring to emigrate to China. China's demographics spell doom for the foreseeable future. Not only would China need to play its cards right, it'd need to win the lottery to overtake the U.S.

mkl 3y ago

https://archive.ph/gTMoh https://archive.ph/gTMoh

oldbbsnickname 3y ago
archive.{ph,is,today} domain records are missing right now, again. https://downforeveryoneorjustme.com/archive.ph https://downforeveryoneorjustme.com/archive.ph As a hack, fill /etc/hosts from parts of `dig archive.today ANY @carl.archive.is` 178.17.174.208 archive.ph archive.is archive.today archive.li 23.184.48.154 archive.ph archive.is archive.today archive.li 179.43.151.41 archive.ph archive.is archive.today archive.li 5.188.6.118 archive.ph archive.is archive.today archive.li 94.140.114.194 archive.ph archive.is archive.today archive.li

smitty1e 3y ago

“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. Gradually and then suddenly.” – Ernest Hemingway, The Sun Also Rises

georgeplusplus 3y ago

I wish I had the determination to round up all the comments on hacker news that said debt didn’t matter for the US or inflation wasn’t caused by debt. The people that have been warning about this scenario for a decade are finally getting proven right. The us banking system is unraveling before us and I’m getting the pop corn out. Hopefully the people learn from the failed systems that caused this debt bubble like San Francisco and don’t spread their ideas farther than those borders so something is salvageable from this mess we created.

p-e-w 3y ago
> The us banking system is unraveling before us and I’m getting the pop corn out. People said the exact same thing in 2009, and two years later everything was back to the way it had been before.
ngetchell 3y ago
Honest question. If inflation was caused by debt, why is inflation going down while the debt increases faster?
- plonk 3y ago
  Because interest rates are increasing? Both the cost of debt and the cost of the dollar increase.
  - ngetchell 3y ago
    I suspect rising interest rates and stable gas prices are what is causing lower inflation. The parent stated a link between more debt and more inflation and was hoping for an explanation that would explain the link.
    - plonk 3y ago
      Government spending both increases the government's debt and causes inflation. Maybe that's the link they are looking for. Plus, I don't know much about monetary policy, but wouldn't the Fed feel obliged to start quantitative easing if the government's debt put it in difficulty?

pearjuice 3y ago

As long as the US is a military super power there is no problem whatsoever. See https://en.wikipedia.org/wiki/List_of_countries_by_military_ https://en.wikipedia.org/wiki/List_of_countries_by_military_... Not trying to be a low-effort reply but any Economy 101 textbook will theorize this kind of debt/interest/inflation mix is impossible. Practically, the world is too dependent on the USD in one way or another. If they try to break loose, they might get confronted with those military expenditures which is a good enough incentive to keep using USD as a global reserve currency.

p-e-w 3y ago

Experts and laypeople (and the press) will go on and on and on about national deficits, but what exactly is it that they are afraid of? It seems to me that the past decades have convincingly demonstrated that countries really can keep running up debts basically forever, and nothing particularly problematic ever actually happens, except in a few cases where the economy overall is in an extremely bad shape for a variety of unrelated reasons. Can someone with more knowledge enlighten me what all the fuss is about?

Grimburger 3y ago
> nothing particularly problematic ever actually happens, except in a few cases where the economy overall is in an extremely bad shape for a variety of unrelated reasons. Quite sure you answered your own question here. Survivorship bias isn't a valid argument. Lebanon, Greece, Pakistan, Turkey all come to mind in the last decade, all with unsustainable amounts of debt. The modern monetary system is a faith based system which hands leeway to governments to create and destroy supply at will. When people lose faith it all collapses very quickly, the failure modes are never slow. The relatively small Silicon Valley Bank is a great example of this and the systemic collapse in confidence of banking.
- p-e-w 3y ago
  Sovereign defaults are very rare events outside of banana republics. It's not survivorship bias so much as it simply doesn't normally happen, despite the vast majority of advanced economies having been neck-deep in debt for a long, long time.
  - Grimburger 3y ago
    An average citizens quality of life has dramatically decreased nonetheless, default or not. > The currency has been devalued by 90% – still not enough to reflect its slide in full. Inflation is in triple digits. Public services have collapsed; without hiring a private generator, households can expect only an hour or so of power a day. Shortages of drinking water have contributed to disease outbreaks, including the first cholera cases for decades. Parents are sending their children to orphanages because they cannot feed them. A growing number of citizens have resorted to armed robbery as the only way to extract their own deposits (now vastly reduced in real terms) from banks when they desperately need to pay for basic services such as healthcare. The collapse of Lebanon, formerly known as the "Switzerland of the Middle East", has been described by Western media as one of the most devastating and worst financial recessions since at least the 19th century. https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis https://en.wikipedia.org/wiki/Lebanese_liquidity_crisis

0xDEF 3y ago

From at outside perspective it's interesting how little the US taxes people in the top 5% income bracket. Here in Denmark the progressive tax on this segment makes up the biggest source of tax collection.

naveen99 3y ago
You might be surprised how much Denmark taxes the bottom 50%, and how little the us taxes the bottom 50%.
- hotpotamus 3y ago
  That's actually rather impressive then that if they have significant taxes on the bottom 50% that they still get the majority of their revenue from the top 5%.
- sgerenser 3y ago
  Indeed. Everyone in the US calling for higher taxes on “the rich” is shocked when they see how much their taxes would go up too if we had EU-average tax rates.

starbird3000 3y ago

All this talk about debt and nothing about the main reason why: taxes are too low. By that I mean if you compare like with like, for example healthcare costs which are paid by taxes elsewhere, then in the US we're paying more for less. It's the same on nearly every basic service. Paying these items through taxes would reduce our overall bill and we'll have better services. Also social security doesn't need to be cut, as much as the GOP would love to do so, you just need to remove the cap on the tax at $160K and suddenly it's solvent for the next 50 years. There are very simple fixes to this, and most of them involve taxing the rich back at the rate they were taxed under Reagan and Clinton.