Don't miss this article about government debt

Money quote: "[When our leaders] have full knowledge of an impending disaster … they have proof of its inevitability in ANY scenario … and they so declare in their official reports … but STILL don’t lift a finger to change course … then they have only one remaining claim: INSANITY!"

The government itself has produced three reports that show that we can no longer prevent financial disaster on a national level. The best we can now do is choose which disaster we want.

By continuing to deny reality - sticking their heads in the sand - our Congress is ensuring that the inevitable reckoning will be the worst of all possible scenarios.

The problem with Socialism is that eventually you run out of other people's money - Margaret Thatcher

In the campaign during the ABC debate Charlie Gibson asked Obama an excellent question. He recited the statistics that prove that raising tax rates on the wealthy actually reduce the amount of money the govt collects due to causing changes in behavior of those taxed at the higher rates. I forget the specific question but he was referencing Obamas pledge to raise taxes on those making over $250K.

Obama's answer was unbelievable but very telling. He said; "It's about fairness ..." In other words, he doesn't care how much less money the govt collects, those rich bastards shouldn't be rich when others are poor.

That is pure wealth re-distribution/socialism and that's what Obama is all about. Except for himself and his cronies of course.

That is pure wealth re-distribution/socialism and that's what Obama is all about. Except for himself and his cronies of course.

That's how it worked in the USSR.

*sigh*

I was hoping, what with the title, of a much happier story... maybe one about more artisan cheeses or better wine being produced.

That's how it worked in the USSR.

You mean the country whose government collapsed a few years ago? And was almost immediately replaced by a thugocracy?

You mean the country that was a net importer of food despite having some of the most fertile plains in Europe (the "Ukrainain breadbasket")?

You mean the country that was a net importer of energy and fuel oils despite having some of the world's largest natural gas and oil deposits?

You mean the country whose leader lost an impromptu economics debate to Richard Nixon?

Oy vey.

Must be why I am so pissed. I have no credit debt besides my 6.0 locked in mortgage. Cars are paid for as is everything else. We don't "take advantage" of the program here to provide health insurance to children under 18, mostly cause we actually want them to see the doctor. We homeschool our kids even though we pay property tax and sales tax(state and county). Our state doesn't have an income tax so this is how they pay for schools and all those other goodies. So we will never see a benefit from those taxes. And then there is the FICA tax more than 50K, almost half the cost of my house, that we will never see.

You know I have wondered What would have been so bad about letting me keep the FICA money to pay off my house early. That way I could save or invest the 1100 a month for my own retirement and the government wouldn't have to worry about me.. You know let me pay my own way through..

> I was hoping, what with the title,
> of a much happier story... maybe
> one about more artisan cheeses or
> better wine being produced.

24-hour auto races country roads! Straights that go for three miles! (That works out to seventeen kiloe-meters!)

Unfortunately, truth in advertising only applies to commercial entities, not politicians who are above the law as we all know. It is truly cynical for our so called leaders to continually spend more than is received in the normal course of things, it is nothing less than theft from future generations, which is why as contemplative adults we must give the boot to those who are the most egregious offenders of the public trust.

I'm so glad you wrote about this. I've long tried to convince friends how lopsided the tax base is, but there persists this idea that "rich people don't pay taxes".

The biggest freeloaders of all are our rural residents. The most coddled, knock-kneed weakling economies are rural ones and their residents, suported by subsidized roads, postal service, phones, air service, farm subsidies, the bogus ethanol program, power and water systems--all generally subsidized by urban residents.
On phones alone, annually, we subsidize rural phone systems to the tune of $8 billion.
Yeah, but we cry about clunkers. A one-time $3 billion, sunsetted program.
Like trained monkeys aping the mannerisms of their betters, you guys bash the federal government---but never ever mention our bloated military establishment.
BTW, most people in lower income tax brackets are paying a lot in taxes, in sales taxes and Social Security.
If you cherry pick the type of tax paid--ie personal income tax--you will get a certain result. Poor people hardly pay anything in capital gains taxes either.
Like ignoring rural subsidies, and the welfare class we have created in our hinterlands.

"There were the proletariat, making bread out of sawdust, and then there were the Party people, whose idea of a bad day was a delay in the delivery of the week's champagne and caviar."

It's not so different here. If you work for the government, you get to retire with a pension. If the pension fund comes up short, so what? The taxpayers will pick up the tab, even if it means they don't get a retirement for themselves.

In terms of "where does all the money go," let's stop targeting ghetto-dwelling welfare queens. The REAL welfare queens live a lot better - they work for the government.

"Like ignoring rural subsidies, and the welfare class we have created in our hinterlands."

Chump change. The real welfare class is made up of government bureaucrats. If you pay $1 in taxes, don't worry about the five cents that ends up in the pocket of some broke-assed poor person. Pay attention to the 95 cents that went to administer the redistribution program itself.

This story is a wonderful example of lying with statistics. It pretends that income tax is the only source of revenue. Payroll and excise (e.g. gas) tax account for approximately 40% of federal revenue and they are overwhelmingly paid for by low and middle income people. It also ignore the fact that state taxes tend to be regressive.

If we ignore the taxes that poor people pay, it appears that the rich pay all taxes. Duh.

The federal income tax is the only significant progressive tax in the country. Property, sales and payroll taxes are regressive (poor people pay a higher precentage of their income). Government fees are regressive. State income taxes are fairly flat.

I do not know if the rich are paying to much but the statistics here are bogus.

At every election, I am disgusted by the "choice" I get to make between the canditates. And my question is, what real power do we the people have in the political process? Seriously, this isn't hand-wringing, woe is me talk. I really want to know.

Don't assume that the only people who benefit from big/expensive government are those who are too low-income to pay taxes. There are also a lot of *affluent* people who benefit so strongly from expansion of government that the benefits greatly outweigh any extra taxes they have to pay. For example...

College administrators. K-12 school administrators. Trial lawyers. Lobbyists and lawyers with a regulatory practice. Politically-connected business executives and owners, especially those who specialize in winning government contracts. "Nonprofit" executives, many of whom already do quite well for themselves financially. And so on.

It is sad to see Amy Alkon join the brigade of sychophant bloggers--economic losers who make peanuts, but dutifully rant about the inequities of the income tax.
Amy, do you think the rick folks have enough influence, that they can survive without your help?
I am glad you are so concerned for thei welfare, however. Your heart is in the right place!

Like ignoring rural subsidies, and the welfare class we have created in our hinterlands. - butt-ever (i-hole)

Chump change. - Pirate Jo

PJ, butt-ever is just i-hole trying to revive his tired argument argument about rural subsidies that got effectively slapped down in a prior thread.

http://www.advicegoddess.com/archives/2009/10/06/dumbshits_for_l.html#comments

Don't you know me better than that by now?

Of course I do. I didn't think you were seriously suggesting a move to Soviet-style economics.

"Payroll and excise (e.g. gas) tax account for approximately 40% of federal revenue and they are overwhelmingly paid for by low and middle income people. It also ignore the fact that state taxes tend to be regressive."

How is it fair that rich people also pay all those taxes PLUS higher income taxes? You're dismissing the basic inequity of having it all loaded on the top end.

The wealthy pay much more in property taxes, since they generally own more property. It doesn't matter what the individual payments represent as a percentage of income. They likely pay more sales tax too since they buy more things, then they also have to worry about being taxed again when they die with the estate tax - on earnings they've already paid taxes on.

No society and form of government can withstand bloodsucking it's most productive members forever. We are headed for a financial collapse because almost half our citizens are dependant on the top 20% to support them.

We may be screwed anyhow... please someone tell me this is a paranoid rant:

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

"Short of devaluing the dollar and taking a large bite out of the middle class through inflation and taxation, there is no way to ever pay down that bill."

Spread the word. That is exactly what is going to happen. Inflation and taxes are going to take value from everyone with a job and bank account.

The rich will pay in dollars. The middle class will pay through inflation. All earners will pay through unemployment and decreased wages.

We Must Spend or We Are Going to DIE!
Excerpt:
===============
From: Ruling Class
To : Public
Re : We must tax and spend now, or we are all going to DIE!

We don't want to tax and spend (cough), but we must react to the crisis that we have identified. We are going to borrow, spend, and (reluctantly) tax to support our actions. The alternative is DEATH. No one wants that.

So what if you are poor in the future? At least you will be alive, and we will be in power to continue wise and supportive government to help you out of your poverty. Your children will pay most of the taxes, and we are training our children in the public spirit that will allow them to rule wisely.
===============

Don't panic yet, Nicole. Note that that story was written by Robert Fisk, in whose honor the term "fisking" was coined:

http://en.wikipedia.org/wiki/Fisking

On the other hand, even the National Enquirer gets the story right sometimes...

Today is a federal holiday in Canada. I turned down time-and-half on top of my stat pay to stay home. Here's why:

My (combined federal and provincial) marginal tax rate is 32% on labour, 16% on capital gains, and 4% on dividends from Canadian corporations. Oh, and my sales tax rate is only 5%.

The system encourages ignorance of income tax, as it is jacked before you get your hands on it, and spending, as the sales tax rate is so low. Further, the system rewards those who invest over those who save. No rational person in this system would ever work if not for necessity, and that's exactly why I work. As soon as I'm able to earn without working, I'll do exactly that.

The system itself is insulting, as it relies on the irrationality of the people. Every taxpayer must be infected with affluenza for the system's perpetuation. Work, pay income tax, acquire dependents, acquire debt, and repeat until you're one missed paycheque from living on the street.

Conan-
You are an economic illiterate, though your grammar may be impeccable.
Check out USDA budget. One-half is rural subs. Add to that the $8 bil a year on phone subs. Post Office? Roads, water systems, power---it adds up to more than $100 bil. a year, easy. I am working on a paper on this.
It's odd isn't it--the party that affects(not effects) a right-wing, free-enterprise stance--the R-Party--is absolutely dripping in federal fat, waste and subsidies.
We habe created a perma-class of knock-kneed weaklings--rural Americans.
Even the Defense budget is oddly skewed to Southern and rural state and counties. Another sop, in other words. Yes, our national defense requires we spend everything in Sam Nunn's house.

Conan the Barbarian become Governor, but Conan the Grammarian--well, let's just say the former Conan got all the brains.

i-hole, I've posted it before and I'll post it again. This time I'll type slowly since apparently you can't read fast.

Many of the subsidies to rural areas are wasteful and should be eliminated. We don't need to pay farmers not to grow crops.

However, a large chunk of the federal funds spent on rural states is due to the federalization of large tracts of land in those states (e.g., 85% of Nevada and 70% of Alaska are owned outright by the federal government). If the federal government wants to reduce federal expenditures in Alaska, all it has to do is sell its land there.

--------------------

This libertarian utopia you've recently decided you want would have everyone living in cities with rural areas cut off from electricity, phones, roads, and mail service. How (and what) do you think your city dwelling sophisticates are going to eat?

I'll give you a hint - each other as soon as the grocery stores are emptied.

--------------------

I am working on a paper on this.

Good luck with that. Come back and see us when you get out of college (or high school?) and your argument is based on real world insights rather than a professor's rhetoric.

You remind me of a professor I had in grad school. His only non-academic job was a six-month internship between his bachelor's degree and his doctorate. He couldn't understand why his students (all with at least three years of experience outside of academia) constantly argued with his pet theories.

--------------------

Post Office?

Personally, I'm in favor of doing away with the Post Office. But the Democrats like it because it's unionized and unions tend to vote Democrat.

Roads, water systems, power

You mean the things that enable crops to be grown and transported throughout rural America.

The things that allow people to live in cities thousands of miles from their food sources?

....the R-Party--is absolutely dripping in federal fat, waste and subsidies.

As I've reminded you on many occasions before, both parties are awash in pork. Republicans have no political power today and the pork is just as fat as ever.

Your personal animosity toward the Republicans is turning you into a parrot who simply repeats the same phrase over and over hoping someone will toss him a cracker.

Each party is bribing a different segment of society with its own money (well, the Democrats are also using the income of productive people to bribe the non-productive).

While a possible solution may be a third (or even a fourth) party, it would not take long before any new party begins using taxpayer money to buy votes.

Limits on spending might help curb the avarice of our government, but there always seem to be ways around them.

Even the Defense budget is oddly skewed to Southern and rural state and counties.

Most heavily urbanized areas have indicated a reluctance to house large military bases.

Tank maneuvers in the suburbs tends to play havoc with rush hour traffic.

Fighter jet drills over New York City tend to cause panic (and interfere with the flight patterns of passenger-jet-downing geese)

Military bases take up enormous amounts of land. The federalization of that land means the nearby municipality is unable to collect taxes on those lands. Hence, many cities have indicated a reluctance to sacrifice tax revenue for defense installations.

New York, Chicago, Philadelphia, and San Francisco have all eagerly traded military bases for land that can be developed and taxed (and then densely populated by people being fed by rural farmers who live hundreds or thousands of miles away).

Yes, our national defense requires we spend everything in Sam Nunn's house.

You are aware that Sam Nunn retired 12 years ago...and was a Democrat?

This is another reason military bases tend to be located away from densely populated areas:

http://www.cnn.com/2008/US/12/08/military.jet.crash/index.html

Conan-

Your arguments for rural subsidies--cheaper food--are not reasonable. Your sentiments about federal lands--often leased to ranchers are far below marklet rates--are senseless.

I could argue that food stamps and urban welfare are great. Maybe food stamps mean that some people will work for less, and that means wages are kept in check, and that means cheaper goods. I still do not like the food stamp program.

I would rather pay less in taxes, and let the free market determine how goods are made and transported.

It might mean more rail transport. It might mean more American trucks look like the trucks they use in the outback of Australia--three trailers, big bumpers, big wheels, to handle broad dirt roads. No rural sissy-types need apply to drive those babies.

A free market would certainly mean far less rural development, all to the good. The perma-welfare rural economy we have created is a drag on our international competitiveness.
If we do have an expensive future in terms of oil, these rural areas will die a slow death, the agony prolonged by more and more subsidies from urban residents. But, eventually, $6-$8 gasoline will kill 'em. If you own a house in rural America, your main asset is may soon be worthless. Call it Detroit without the auto factories.

Lastly, if we justify some subsidies, where do we draw the line? Where you say so? Or me? Or that guy behind that tree? Or "democratically" (meaning all subsidies are good, you get yours, and I get mine, while the whole pie shrinks).

There is always a high-minded or community-based reason for subsidies. So, ergo, all subsidies are good--by your limited reasoning.

Military bases: Sure, they should be in rural areas--but why always the South? And why did military spending gravitate to Georgia in the Sam Nunn days? It has stayed there and became part of the welfare system. No, Nunn is not Senator anymore, but his legacy grows every year.

Besides, if you're gonna spend 10¢ for a word like 'sycophant', you oughta spell it rite.

I don't actually understand why 'Ever is here. Everyone upsets him, everything's beneath him, even the United States is beneath him... (Or is it the other guy who doesn't live here, Iholi? Does it matter? 18 Social Security digits, but one outlook between 'em.)

I am working on a paper on this.

For your sake, I sure hope you present and support your positions in your paper better than you do on this blog.

So, ergo, all subsidies are good--by your limited reasoning.

i-hole, your understanding of economics is limited to libertarian science fiction with its utopian vision of no government societies. They work very well in L. Neil Smith and Ayn Rand fiction. But in real life, they too often degenerate into a modern-day Somalia.

I've already told you I'm opposed to subsidies (urban and rural).

But you also have to understand that if you want to collect a few million people into a city, you're going to need to secure access to a food supply for that city. That means them city folk gotta pay a little something for the roads and rails, electricity, phones, and other trappings of modern life for the rural regions feeding them.

An interstate highway system will also enable them to move goods from factories and harbors to all parts of the country, giving them access to more markets than those Outback trucks could ever achieve.

You can make those payments at the supermarket checkout (but then you're subsidizing other users of the roadways). Or you can use collective money for a road and rail network that makes getting goods to market cheaper and faster for all.

These are benefits that are not counted in your formula of how many tax dollars urbanites pay and how many they get back.

Your sentiments about federal lands--often leased to ranchers are far below marklet rates--are senseless.

First, your sentiment shows a lack of understanding about how ranching and land leases work. Ranchers just as often make improvements to those lands at their own expense.

This site will explain a little of it to you: http://yeomanlawyer-yeoman.blogspot.com/2009/08/land-use-patterns-in-western-ranching.html

Second, you continue to erroneously equate the federal government's money spent on its own land to subsidies and call that money welfare for rural dwellers. The federal government owns the land and pays for its maintenance.

It might mean more rail transport.

No it won't. Under your scenario, more rail won't work. You'd need to subsidize rural rail routes and you're opposed to any rural subsidies.

A free market would certainly mean far less rural development, all to the good.

It would mean less urban development. You can't put a few million people into a city and if the only way you have to feed them is a few Outback truck runs every week.

That last part should have read:

A free market would certainly mean far less rural development, all to the good.

It would mean less urban development. You can't put a few million people into a city and keep them from killing each other over food (and other goods) if the only way you have of supplying them is a few Outback truck runs every week.

"This story is a wonderful example of lying with statistics. It pretends that income tax is the only source of revenue. Payroll and excise (e.g. gas) tax account for approximately 40% of federal revenue and they are overwhelmingly paid for by low and middle income people. It also ignore the fact that state taxes tend to be regressive.

If we ignore the taxes that poor people pay, it appears that the rich pay all taxes. Duh."

It is true that payroll taxes and taxes on consumption are not as progressive as income taxes. But payroll taxes and consumption taxes represent a smaller share of government revenue, and income tax represents a larger share of government revenue, in the United States than in most other developed countries. So the general point still holds. For example, in many European countries the VAT is about 20%, payroll taxes are around 40% and taxes on alcohol, fuel and tobacco are much higher than in the US. Ironically, these countries are often held up as kinder and more civilized places than the bad ol' US of A.

The OECD recently confirmed that the United States has a more progressive tax system than most developed countries.

Moreover, programs like Social Security still subsidize the poor, but just not as much. That is, the wealthy pay in slightly more than they get while the poor usually receive slightly more than they put in. So other government programs and taxes still redistribute resources, but just not as much.