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You sound like you’re agreeing with the statement. What is your syntactic point here? That the taxpayer has nothing to do with the decision making is irrelevant

by moate 3y ago

You sound like you’re agreeing with the statement. What is your syntactic point here? That the taxpayer has nothing to do with the decision making is irrelevant the point you responded to. They still pay for it.

_heimdall 3y ago
Technically we haven't paid for new spending in tax dollars since Clinton was in the White House, its hard to say taxes pay for something when its paid for with debt. That said, my point was that the tax payer isn't really paying for it when the tax payer has no say in what is being paid for. If the taxes are collected either under false pretense, or no pretense at all, for what the money will be spent on then the citizen is only responsible for paying the tax bill. The money is the government's at that point, and responsibility for how it is spent at that point stops at their desks. If the tax payer were truly the one paying for this, we would at minimum have a voice in the program. At best, the government would propose the plan and leave it up to the tax payers to fund it in almost a kick starter type of approach. A simple vote would make more sense IMO, but if we are to pay for it with tax dollars and the government refuses to run a surplus, tax payers (should) have to kick in more money to pay for it.
- gen220 3y ago
  Acknowledging the complexity inherent in how the U.S. gov't finances initiatives. However, eventually, the buck stops at the taxpayer. Yes, the federal gov't issues bonds to finance their activities (i.e. deficit spending), but the creditworthiness of the U.S. is intrinsically supported by the federal government's capacity to collect taxes from its citizens. Eventually, "we the people" foots the bill. It might be amortized over decades and deferred more years still, but it's still a debit to "we the people" of $8.5B in the ledger.
  - _heimdall 3y ago
    I'm honestly not sure if that is the case anymore. With a purely fiat system we really can't afford to pay off the debt, doing so would remove money from the money supply and could lead to an economic contraction. I'm no sure what would happen economically if we paid off federal debt in any meaningful amount. I'd be really curious if you have any insights into what that would look like.
    - gen220 3y ago
      I do think we can pay off the debt. It would require an increase in taxation that would cause an S&P 500 contraction. When it comes down to it, it'll be a political choice between cutting Social Security benefits (absolutely no way this happens) and a highly progressive tax on the country's wealthy. I don't think the first one is going to happen, and our two party system is so totally dominated by the country's wealthy population that we'll never even see a vote on the second during peacetime. One route is to "grow" our way out of debt, and those hopes are pinned on some blend of nuclear fusion and "AI, AI, smth smth, AI". Failing that strategy, I think that spiraling U.S. debt is one of the features that greases the slide towards WW III. :/ Last time around, we needed WW II to rebalance power between asset owners and renters in this country – it literally required a global, existential struggle to get wealthy people to pay taxes. I'm afraid we're on the same track today.
      - rhelz 3y ago
        > I do think we can pay off the debt. It would require an increase > in taxation that would cause an S&P 500 contraction. I was very worried about the huge deficits from the Reagan era. But when Clinton was elected, and he raised taxes, I thought we were done for. Surely, raising taxes would cause the economy to contract more, which would lead to even less government revenue, a higher deficit, ever more impossible to service, etc etc.... Well. Imagine my surprise a few years later when the deficits turned into surpluses. What I had forgotten to take into account is that raising taxes causes the interest rates to go down--if the government isn't borrowing billions and trillions of dollars, i.e., if the demand for debt goes down, the price of debt (i.e. the interest rate) also goes down. So an upper middle-class guy may have gotten his taxes raised by a few thousand dollars--but he just refinanced his mortgage from 10% to 5% and saved a thousand dollars a month. (Yes, interest rates for mortgages were that high, and higher. My Dad bought a house at $14% interest rate in the 80's). I remember reading an article in the Wall Street Journal by a guy who was scared to death of the surpluses--in a few decades, he said, we'll no longer have any 30-year government bonds. How will Fannie May and Freddie Mac be able to subsidize 30-year mortgages? How are we going to use Black-Scholes to calculate the correct value of derivatives if we don't have a measure of the zero-risk interest rate?? Alas, the supreme court threw away Gore, and installed Bush as president, where he solved those "problems" in very short order.

by moate 3y ago

_heimdall 3y ago

Technically we haven't paid for new spending in tax dollars since Clinton was in the White House, its hard to say taxes pay for something when its paid for with debt. That said, my point was that the tax payer isn't really paying for it when the tax payer has no say in what is being paid for. If the taxes are collected either under false pretense, or no pretense at all, for what the money will be spent on then the citizen is only responsible for paying the tax bill. The money is the government's at that point, and responsibility for how it is spent at that point stops at their desks. If the tax payer were truly the one paying for this, we would at minimum have a voice in the program. At best, the government would propose the plan and leave it up to the tax payers to fund it in almost a kick starter type of approach. A simple vote would make more sense IMO, but if we are to pay for it with tax dollars and the government refuses to run a surplus, tax payers (should) have to kick in more money to pay for it.

gen220 3y ago
Acknowledging the complexity inherent in how the U.S. gov't finances initiatives. However, eventually, the buck stops at the taxpayer. Yes, the federal gov't issues bonds to finance their activities (i.e. deficit spending), but the creditworthiness of the U.S. is intrinsically supported by the federal government's capacity to collect taxes from its citizens. Eventually, "we the people" foots the bill. It might be amortized over decades and deferred more years still, but it's still a debit to "we the people" of $8.5B in the ledger.
- _heimdall 3y ago
  I'm honestly not sure if that is the case anymore. With a purely fiat system we really can't afford to pay off the debt, doing so would remove money from the money supply and could lead to an economic contraction. I'm no sure what would happen economically if we paid off federal debt in any meaningful amount. I'd be really curious if you have any insights into what that would look like.
  - gen220 3y ago
    I do think we can pay off the debt. It would require an increase in taxation that would cause an S&P 500 contraction. When it comes down to it, it'll be a political choice between cutting Social Security benefits (absolutely no way this happens) and a highly progressive tax on the country's wealthy. I don't think the first one is going to happen, and our two party system is so totally dominated by the country's wealthy population that we'll never even see a vote on the second during peacetime. One route is to "grow" our way out of debt, and those hopes are pinned on some blend of nuclear fusion and "AI, AI, smth smth, AI". Failing that strategy, I think that spiraling U.S. debt is one of the features that greases the slide towards WW III. :/ Last time around, we needed WW II to rebalance power between asset owners and renters in this country – it literally required a global, existential struggle to get wealthy people to pay taxes. I'm afraid we're on the same track today.
    - rhelz 3y ago
      > I do think we can pay off the debt. It would require an increase > in taxation that would cause an S&P 500 contraction. I was very worried about the huge deficits from the Reagan era. But when Clinton was elected, and he raised taxes, I thought we were done for. Surely, raising taxes would cause the economy to contract more, which would lead to even less government revenue, a higher deficit, ever more impossible to service, etc etc.... Well. Imagine my surprise a few years later when the deficits turned into surpluses. What I had forgotten to take into account is that raising taxes causes the interest rates to go down--if the government isn't borrowing billions and trillions of dollars, i.e., if the demand for debt goes down, the price of debt (i.e. the interest rate) also goes down. So an upper middle-class guy may have gotten his taxes raised by a few thousand dollars--but he just refinanced his mortgage from 10% to 5% and saved a thousand dollars a month. (Yes, interest rates for mortgages were that high, and higher. My Dad bought a house at $14% interest rate in the 80's). I remember reading an article in the Wall Street Journal by a guy who was scared to death of the surpluses--in a few decades, he said, we'll no longer have any 30-year government bonds. How will Fannie May and Freddie Mac be able to subsidize 30-year mortgages? How are we going to use Black-Scholes to calculate the correct value of derivatives if we don't have a measure of the zero-risk interest rate?? Alas, the supreme court threw away Gore, and installed Bush as president, where he solved those "problems" in very short order.