4 ms·

It is interesting ( and a little scary ), because we are very much on a path that could easily unravel existing status quo ( and yes, overall as a beneficiary o

It is interesting ( and a little scary ), because we are very much on a path that could easily unravel existing status quo ( and yes, overall as a beneficiary of it, I would it to mostly stay as it is ). Why I say it is interesting? The article is from WSJ, which has rather specific target audience in mind ( not me ). The fact that it is recognized as a real problem suggests that it may no longer be a can that can be easily kicked down the road ( and FED is unlikely to make adjustments to help that situation either ). Note that it will likely serve as a call for austerity with social security and medicare taking the brunt of it ( the chart will serve as a clear indicator that it is the real culprit ) along with a message to anyone who suggests otherwise: 'we have a war coming up yo; you don't want to cut defense spending'. It is all rather depressing, because it is predictable and was avoidable. Now, and I harped on this for a while, we have only a set of really difficult decisions ahead ( raising taxes AND cutting services ). No one will like this.

ta1243 3y ago
> Now, and I harped on this for a while, we have only a set of really difficult decisions ahead ( raising taxes AND cutting services ). No one will like this. The value of America's largest 500 companies (or whatever the S&P is) has increased by $6T in the last 12 months, $16T in the last 5 years. This is talking about $1T of payments over the next 10 years, or $100b a year -- well under 5% of the gains that America's companies have increased in value solely because of an American Hegemony led world leading to such stability.
- A4ET8a8uTh0 3y ago
  But this 'value' does not address the underlying issue unless you are suggesting that it is just a question of carving out that value for the purpose of debt payment. Am I misreading something?
- wongarsu 3y ago
  So you are saying America should raise taxes on the S&P500 (or their shareholders) so the government can pay for providing this insane value?
- acdha 3y ago
  That paper value only helps if you can realize it by taxing it. Our debt is so high because there is a significant political faction dedicated to cutting taxes by incurring debt for future generations to deal with. It’s easy to forget but the budget was balanced at the turn of the century, and successive rounds of tax cuts for the wealthiest people – the WSJ demographic and holders of most of those stocks – added trillions in debt. Those low tax rates are also factored into assumptions of those companies’ long term value so stock prices will decline if we do start taxing more.
- fallingknife 3y ago
  And those 500 companies combined make significantly less than $1T of profit per year, so the example you used to try to minimize the magnitude of the problem actually does the opposite.
  - ta1243 3y ago
    Their value increased $6T in 12 months. If their shareholders want to keep that insane value, then they can pay their way. Or the US could collapse and the world enter a 100 year China led world. Those shareholders can lose say 90% of their value, costing them $35T. Upto them really, it's not like anyone else has a say
deleted 3y ago
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seatac76 3y ago
Before we get to cutting benefits, there’s other stuff we can do. American economic system is very fat in the middle lot of middlemen involved. On big ticket government spending items we can do a lot of things to improve efficiency. - Healthcare: price transparency and elimination of PBMs would reduce cost significantly. - Defense: Undoing some of the consolidation, yes obviously will take time, but this fixed cost plus shenanigans that inflate defense spending is insane. There are other places too, lot of things can be done before talking about austerity.

ta1243 3y ago

> Now, and I harped on this for a while, we have only a set of really difficult decisions ahead ( raising taxes AND cutting services ). No one will like this. The value of America's largest 500 companies (or whatever the S&P is) has increased by $6T in the last 12 months, $16T in the last 5 years. This is talking about $1T of payments over the next 10 years, or $100b a year -- well under 5% of the gains that America's companies have increased in value solely because of an American Hegemony led world leading to such stability.

A4ET8a8uTh0 3y ago
But this 'value' does not address the underlying issue unless you are suggesting that it is just a question of carving out that value for the purpose of debt payment. Am I misreading something?
wongarsu 3y ago
So you are saying America should raise taxes on the S&P500 (or their shareholders) so the government can pay for providing this insane value?
acdha 3y ago
That paper value only helps if you can realize it by taxing it. Our debt is so high because there is a significant political faction dedicated to cutting taxes by incurring debt for future generations to deal with. It’s easy to forget but the budget was balanced at the turn of the century, and successive rounds of tax cuts for the wealthiest people – the WSJ demographic and holders of most of those stocks – added trillions in debt. Those low tax rates are also factored into assumptions of those companies’ long term value so stock prices will decline if we do start taxing more.
fallingknife 3y ago
And those 500 companies combined make significantly less than $1T of profit per year, so the example you used to try to minimize the magnitude of the problem actually does the opposite.
- ta1243 3y ago
  Their value increased $6T in 12 months. If their shareholders want to keep that insane value, then they can pay their way. Or the US could collapse and the world enter a 100 year China led world. Those shareholders can lose say 90% of their value, costing them $35T. Upto them really, it's not like anyone else has a say

deleted 3y ago

[deleted]

seatac76 3y ago

Before we get to cutting benefits, there’s other stuff we can do. American economic system is very fat in the middle lot of middlemen involved. On big ticket government spending items we can do a lot of things to improve efficiency. - Healthcare: price transparency and elimination of PBMs would reduce cost significantly. - Defense: Undoing some of the consolidation, yes obviously will take time, but this fixed cost plus shenanigans that inflate defense spending is insane. There are other places too, lot of things can be done before talking about austerity.