How much higher do you think that number should be?
Despite have marginal rates >70%, very few people ever paid them.
Sort-of. http://www.slate.com/blogs/moneybox/2017/08/07/the_history_o...
For a less partisan source, with a neat "pick your income" chart that illustrates the flaws in the Mises argument for sky-high incomes (try anything over ~$500k/year), https://qz.com/74271/income-tax-rates-since-1913/
$15 per hour for a teenager to sweep floors — now that’s being overpaid.
If you think you are undertaxed, there is a solution: https://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
In 2018, just over $700,000 has been donated. So clearly all of us “overpaid” people don’t really care.
I pay taxes for public transit I don’t use, public schools my kids don’t attend, healthcare I don’t consume, wars I didn’t ask for, bridges in places I’ll never go. I subsidize food for people I’ll never meet, housing, universal service fees; I pay sales taxes on everything, excise taxes created to pay for a war almost 100 years before I was born, subsidies to farmers, oil, green energy — we pay for all of this stuff. I am on with paying taxes, but dammit, I pay enough already. Over half of everything I earn goes to pay for government. I even had to pay US taxes when I didn’t even live in the US.
I understand taxes are necessary; but it’s not fair that I work 1 day for the government for every 1 day I work for myself. It doesn’t matter how much I get paid, what matters is that half of everything I do goes to taxes.
I worked very hard to get to where I am — that ought not result in being punished for it.
I consume just as much “government” as the guy standing next to me; why should I have to pay more than him?
The Fed’s debt is made up of (other) Treasury bills which it purchased during QE using “printed” money.
If this makes your head spin, then you’ve probably understood it correctly.
> The interest that the Fed collects on its investments is paid by the federal government, and then returned to the government. But this wash cycle still saves money because those interest payments would otherwise be made to the outside investors who would have purchased the bonds.
> “It’s interest that the Treasury didn’t have to pay to the Chinese,” Ben S. Bernanke, then the Fed’s chairman, told Congress back in 2011, when the annual windfalls were still new and surprising.
Besides, even after the tax cuts, the government has collected record revenues this year. We are collecting plenty in taxes — but we are spending it wrong.
Here is a list of some of the more ridiculous expenditures:
https://www.dailywire.com/news/12309/9-ridiculous-things-gov...
None of the 9 listed in the article sound particularly egregious. Almost all are grants to research institutions, which as a process has a lot of flaws, sure, but unilaterally cutting all grant funding is definitely not the solution.
The report totals at $5 billion, but the supposedly most egregious are not even in an order of magnitude near that cost.
Meanwhile, federal income is measured in trillions.
If you want to actually cut federal spending, you have to cut pensions or military spending—political suicide.
Of course, the problem with this economic philosophy is that it can be difficult to implement given political constraints. During bad years, there is a sense that the government needs to tighten its bootstraps, and during good years there is a sense that the government has the money to invest. While this is a good philosophy for household budgeting, it just turns the government into a pro-cyclic actor, which is the opposite of what we want.
[0] As long as the money makes it throughout the economy that is.
Democrats don't want to cut social programs like Medicaid and Medicare. I mean, everybody needs health care so those costs are not avoidable. Unfortunately, health care costs too much because the industry overcharges.
So what does that leave us with? Well mostly military, and the Republicans (and probably many Democrats) only want to increase it. It's over $700B a year now.
If I could wave a magic wand I would:
1) Tweak social security witholding rates to ensure continued solvency. Probably the easiest thing to do.
2) Bring health care costs (ie what providers charge) down to developed world standards.
3) Either raise taxes enough and/or lower defense spending enough to balance the deficit.
It seems simple to me. But it means some people in healthcare and the defense contractors will make less. They would fight it so that's why everything stays the same.
Which is another way of saying, it's unpalatable to politicians to focus on spending side cuts, in pretty much every regard. Even Republicans have become a party of no spending cuts, they've entirely abandoned the premise (which was a core party pitch for decades).
More realistically, problematically, there's very little spending to cut except for military (which neither party will argue for, save for a few outlier politicians). Nearly all of the above-inflation spending growth is in entitlements, debt interest and military.
The budget deficit and debt interest are high enough now, that they nearly equal (or do equal) the cost of all military spending. So if you want to balance the budget, you'd have to wipe out the US military; or cut military spending in half (shave $300b-$350b), and very considerably raise taxes on the top 1/3.
There's nobody interested in touching the third rail of entitlement cuts. Few are interested in arguing for military spending cuts. There isn't much that can be done about debt interest expenses, US debt per dollar is already historically very cheap (they'll have to go the way of Japan sooner than later, slashing that cost as low as possible with perma low rates, that creep lower with every cycle, reducing economic dynamism and growth along with it, culminating in Japanese style economic stagnation). So in short, all that is left to cut - things that enough people will agree on cutting - is relatively little edge expenses.
That's the reality of why spending isn't looked at more often for cutting.
It's actually still possible to fix this fiscal mess, there's no will for it however, few are willing to eat the shit necessary to do it.
Here's the sane, Save America From Financial Ruin, plan:
1) Slash military spending by $350 billion. Pull back from global policing. Cut almost everywhere as it pertains to the military. This will leave a vacuum for Russia and China, which they will expand into, that has to be accepted. Regional militaries will have to step up to counter that, such as Japan, South Korea, Germany, France, UK, etc. The military is primarily a human employment cost, slashing the military in half would result in two million unemploymend persons, that would have a serious cost initially to it. Over time those persons would become net tax contributors, instead of primarily a net spending cost (soldiers sitting in buildings are epic net cost centers and very poor producers of economic activity and tax contribution).
2) Raise several hundred billion dollars per year by increasing taxes on the top 1/3. Needs to be at least $300 billion, ideally more.
3) Abuse the USD global reserve standard while we have it, and while the dollar is relatively high. Use it to cheaply refinance our debt to as low of an interest cost as we reasonably can. Every $100 billion per year we can shave off of the annual debt interest cost, is a big plus.
4) Freeze entitlement spending increases for ten years. This will involve pain, nobody will be happy about it. It's better than cuts, which is even more ideal. Slightly increase worker contributions to these programs to shore them up further.
5) Freeze nearly all other government spending for ten years, no matter what. It will be painful, that's part of the process. Raise the gasoline taxes by quite a bit, that all goes into infrastructure to offset that that segment isn't going to get any inflation adjustment for ten years.
6) Hammer down costs in education and healthcare, which will free up capital for economic investment and wages. The top 1/4 income bracket receives an income / wealth transfer in the form of the outsized US spending on healthcare. Redistribute that back to the bottom 3/4, by slashing healthcare costs by a lot. This will push up wages for the bottom 3/4, and reduce wages for the top 1/4 (who are the overwhelming beneficiaries of healthcare spending). Doing this right, can both broaden healthcare access/coverage, and offset the hit the bottom 3/4 will take from various freezes on spending increases.
The first five items will get you to a balanced budget, plausibly a modest surplus. After a decade of freeze, relax spending increases to something modest, 2% max, for another decade. You'll be at a budget surplus, the economy will hopefully be larger in real terms, and your ratio of debt to GDP will rapidly begin to decline, as you both outgrow it and modestly pay down some of it. You can also continue to somewhat abuse the USD reserve to have the Fed buy and cancel out the most expensive US debt (effectively debasing some of the wealth held in USD, by slightly debasing the currency, but that wealth is overwhelmingly held by the top 1/3, so it's really a stealth tax on the wealthier block of the population).
You can't really stop a government from borrowing except by taking away the power to print money. Grab your popcorn and watch Italy a.k.a. "Greece: Part II" over the next year to see what happens when government overspending meets currency it doesn't control.
The debt ceiling isn't in the Constitution, and, as such, doesn't really demonstrate anything relevant. OTOH, all wars are characterized as defensive, and the US has usually been at war, particularly in the times of concerning deficits; aside from—if construed to require formal declaration of war for borrowing—making declarations of war more common, I can't see that the proposed restriction really would have changed much even if it existed and weren't amended out.
> You can't really stop a government from borrowing except by taking away the power to print money
Taking away the power to print money prevents monetizing debt, but it doesn't prevent borrowing (it actually eases borrowing, which is one of the reasons for having independent central banks separating monetary from fiscal policy; the degree of perceived risk of debt monetization makes borrowing more expensive, so controlling that risk facilitates borrowing.)