Re:Will America's debt doom us?
by mdorazio on Monday September 23, 2019 @11:40AM
(#21049928)
Worth noting is that Clinton was president during the dot com bubble, which enabled that surplus... until the economy came crashing down a short while later. Also worth noting is that some of the policy changes of the Clinton white house + Greenspan federal reserve enabled the housing crash as well. I personally feel like we got a surplus only by taking out a mortgage on the next ~15 years of America.
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The 2000 crash was mostly a stock market drop. The actual economy never constricted, just approached 0 growth. http://visualizingeconomics.com/blog/2011/03/08/long-term-re...
If anything it was how weak the 2000 correction was that lead to the housing bubble.
Rather, President George W. Bush used the existence of the surplus as a reason to enact two tax cuts. Those tax cuts, their extension (mostly) by Obama, the Trump tax cuts, the wars in Iraq and Afghanistan, and sizable increases in the defense budget are the major contributors to the budget deficit and hence the accumulation of debt since 2001.
You left out the fact that nearly 2/3 of Americans are net tax recipients. Everything that the government does at all levels is paid for by either debt or the highest 40% of earners.
Seems reasonable - after all, those people have more money.
Why is this supposed to be surprising or relevant?
It's a surprise to plenty of people who think that their $70,000/yr income makes them a net tax payer when it actually doesn't. And it's relevant because people will reduce their marginal income, or relocate to more favorable tax jurisdictions, when the tax burden of that income is excessive.
It's also relevant because, at a certain point, the productive portion of the population will fall below that necessary to make payment on the debt at which point the shit hits the fan in a big way.
70k is in the top ~16% so by your description they are net contributors to the tax base. https://graphics.wsj.com/what-percent/
The cutoff for top 40% is around 40k/year.
PS: Numbers are 5 years old but should be a good ballpark.
According to google te median 2019 household income is $63k. And according to the CBO the median income of the middle quintile of households filing tax returns was $72k. That seems to disagree with your wsj link.
Households can contain multiple people filing separately. Did you mean only 40% of households or 40% of taxpayers?
Anyway, people getting Social Security should really mess with this calculation as someone could be making 150k, but up to 45k of that is from the government.
Re:Will America's debt doom us?
by AnimalMuppet on Monday September 23, 2019 @12:38PM
(#21050579)
Did that change from Clinton to Bush? If not, then it wasn't how we got from a surplus under Clinton to the deficit.
I was responding to a commenter who enumerated their list of perceived fiscal failings of the government, from Bush to Obama to Trump.
The Clinton years also coincided with a great increase in consumer debt (mostly credit card). When people have more money to spend, they spend it - and the economy grows. There's a cost that comes later, naturally.
Re:Will America's debt doom us?
by DiogenesKynikos on Monday September 23, 2019 @12:07PM
(#21050192)
A massive tax cut and a few wars also had to do with the deficit during the Bush Jr. years.