I’d love to hear some other proposals about how to pay our debts, I think interest payments for governments are set to surpass GDP or something. Seems like we need to find a way to tax back some of the money the super wealthy are lending to the government.

That doesn't make you any less of a creditor; the money in a bank account is a liability for the bank from an accounting standpoint. The bank is indebted to you for the exact amount in your bank account. How much of your money do you think should be taxed to repay debts of the poor?

You might want to consider switching to to a High Yield Savings Account so that you do.

One of the reason it isn't very popular is that the traditional way of injecting money in the economy is by adjusting interest rates which makes it relatively neutral for capital (because they can get more interest) at the cost of the working class. As Piketty points out in his book though [1], the times where inflation was very high because of large scale government programs (like in the post WWII reconstruction era) were booming times for the middle class. The current covid recovery had unemployment rates at all times lows, well up to the point where governments decided tackling inflation was worth killing jobs.

Of course, reducing unemployment to improve returns was never popular so it's being sold to everyone by pushing a scary inflation narrative. Personally, I'd rather pay more for my boxes of cereals than being laid off.

[1]

https://en.m.wikipedia.org/wiki/Capital_in_the_Twenty-First_...

There's no such thing. You're describing an aspect of capitalism (the part where capitalists benefit).

"Socialism" does not mean "benefitting from wealth redistribution". By that logic, someone like Genghis Khan could be considered the ultimate 'socialist' because he pillaged more than anyone and redistributed all that wealth to himself.

Taxing even as much as 5% of that per year would be $200, peanuts compared with tax on earned income from doing useful work

Now you want to give them another handout, the first time interest rates get to almost normal levels?

There needs to be some way of taxing the ultra rich effectively to be able start balancing the books. Every time this is discussed people start talking about high earners and never about the types of people lending the government hundreds of millions of dollars.

For example the average tax rate paid by the top 400 wealthiest people in the US was just 8.2% (2010-2018) and that is on additional income not the billions they already have. Let's not get started with Trusts handed down generationally to avoid inheritance tax completely.

I have no idea what the best solution is but the road to serfdom we are all on is unsustainable.

Keeping productivity and personal choice at the forefront means people have to keep getting value. I can switch away from Netflix at any time. I can't switch away from my local council or choose to stop paying them. And so my local council is allowed to have a terrible track record and keep on existing.

I also don't know the detailed answer, but I think more choice where people individually decide where to spend their money is a big part of building useful things that don't result in crippling expense on an economy.

I completely agree with your second sentence.

We need to balance the books by not having unsustainable vote-buying policies that cost outsize amounts of money.

> For example the average tax rate paid by the top 400 wealthiest people in the US was just 8.2%

Citation needed. What does "average" mean? What is the denominator on the fraction that generated the percentage?

Thinking if only we could take other people's money forever to pay for things is pointless.

If it's expensive to do things, for whatever reason, then inflation goes up for everyone. If it's pointless to start things, because the government will dip in whenever it likes, then the endless progress-train will stop.

100. That's what "per cent" means, percentages are a way of comparing ratios without needing to worry about scaling both numbers. The % sign is shorthand for /100

100. That's what "per cent" means, percentages are a way of comparing ratios without needing to worry about scaling both numbers. The % sign is shorthand for /100 .

As for the citation im not the op but it was the 400 richest families and it was the white house itself https://www.whitehouse.gov/cea/written-materials/2021/09/23/...

The numerator is theoretically their tax bill.

The denominator is not 100. It should be their income - but that's complicated to count.

> For the denominator, we use changes in the reported wealth of the Forbes 400 to estimate the income of the 400 wealthiest families.

Balanced budgets with perpetual motion machine money is unsustainable. It is simply mathematically impossible.

>then the endless progress-train will stop.

There is no such thing.

Companies will pile up inventories until they realize that they should stop producing and fire their workers and instead just hold this perpetual motion machine money instead of running a productive business. Yields from speculation trump yields from production, see cryptocurrencies.

Then as more and more businesses quit, prices will rise and you get to see inflation. The speculative bubble will collapse and the cycle repeats, just like with cryptocurrencies, except you will lose your job and your income will fall.

In short, the interest rate will get stuck at some above market clearing rate.

If we assume the presence of Oeconomia Augustana banks next to the regular banks and that people will quickly switch to this type of banking, then the absence or presence of central banks or whatever policies they make will be utterly irrelevant because under OA banking, the interest rate is actually market oriented.

Interest rates in the early 1980s in the US went as high as 14% and the economy didn't shut down. Businesses kept right on doing business, despite the high interest rates.

That doesn't seem to be what your theory would predict and yet it happened in real life. https://en.m.wikipedia.org/wiki/Federal_funds_rate

In fact, in the face of real physical laws like the constant thermodynamic increases in entropy, it would be foolish to expect to even get a zero nominal yield. Life is the gradient between our endowed energy reserves and the heat death of the universe. Something that violates this is akin to a perpetual motion machine.

You either get inflation, negative interest. Any pretense of permanent zero yield will require political redistribution of income from one part of the economy to another.

Are you sure you want to tax people who've worked all their lives, saving up money, who are now living off the interest payments?

The amount of wealth being sucked from the labour of younger generations is beyond any ridicule. Extremely high taxes on labour - that goes to the old, extremely high real estate prices - to the old, extremely high rents - to the old. Yet it is not enough and they take on huge debts to the government - to be paid by the young. Top that with the forced pension fund contributions of young workers who are to expect to never receive any pension when they turn old.

I know this is a high earner tech forum, and these things don't become most readers, but for people working in other sectors the perspective is different.

Every culture has also had older people stepping down at some point to let fresh blood take the charge and carry the burden. In Western societies we don't see that so much anymore. Instead it seems the old prefer to see things rot than to let younger people take over. With land, farms, houses, businesses, etc.

If younger people got an honest chance all would benefit, including the old. Instead young people are mostly seen as people to exploit or ignore.

It is not difficult to look up history. The current old people who hold power in small and in large, when you look up their history, they all got help to start their ventures. Very few of them are self made, so why the act?

>We've just made the system so efficient

It's only efficient at robbing the young.

One half of this social contract, the young-giving-to-old, was formalized (and forced) while the other half, old-building-for-young, was utterly abandoned. There's a great meme about this: "no take, only throw!"[0]

Eating all the seed corn[1] will eventually lead to famine.

[0] https://knowyourmeme.com/memes/no-take-only-throw

[1] https://en.wiktionary.org/wiki/eat_one%27s_seed_corn#English

Yeah, and I say that as someone on the wrong side of forty.

The relative growth in wealth from pensioners to working groups in most Western nations is completely unsustainable, and will end very badly eventually. Trying to flatten the curve now is preferable to the alternatives.

And people who over-borrowed will get free money but people who didn't (and saved instead, and put up with 0.5% rates) will be punished?

The system in the US is essentially corrupt and engineered to support the status quo. It is far from a free market supported by savvy players making decisions based on actual risk/reward principles.