Rep.Kevin Brady finally admits tax cuts not paying for themselves!

You know as well as I do that without the Gingrich lead congress the debt doesn't get paid down it balloons.

 

Its going to happen one way or the other it is a historical inevitability. We have amassed 22 Trillion thus far and deficits are forecast to increase dramatically going forward.

The boomers are hitting their low spending years and high health cost years - SS is going to be stressed and in the red.

The number to watch is interest as a ratio of income. It it hits 30% the ship is taking on too much water and will sink if something doesn't change. We hit 25% due to Reagan and Bush Sr. debt buildup. At the time the interest rate was much higher. It was still over 7% when Clinton took over.

The debt is much higher today but the interest rate is lower 2.25%. This is as low as it can realistically get. The measures taken to get the rate down this low - messing with the invisible hand so to speak - are now having a significant impact on the debt market (as in inverted yield curve - the most accurate of negative indicators).

Historical average is closer to 6%. If ave interest rates were to go up just 1% that is 225 Billion. If we hit 6% that would be 1.3 Trillion/year - just in interest payments.

You mentioned the USD as the currency for international payments. This helps to keep the rate down but there are other factors that affect demand. The world is awash in US debt and at some point -how much more does one purchase.

The economy is doing well and we are running Trillion dollar deficits - what happens when the economy falters ? The "good times" do not last forever. We now have serious competition coming from numerous nations that are in the process of industrializing - competition like we have never seen before.

This is the same cycle of history playing out.

 

Then why did you make this statement?

Which one are we supposed to believe?

 

Percentage?

We don't pay enough to get qualified trades and technical teachers. Period.

 

Give it up.

 

Slick paid a price for raising taxes. It wasn't just Newt.

 

Keep up! We know there are redistribution effects from tariffs, including a shift from consumer to government. However, the net effect- via deadweight loss- is an increase in economic inefficiency.

 

The average teacher only makes 55,000 in Texas, who the hell wants to work for that after 10 years in the trade? God bless him if he can live on 1/2 that. Even educators who see the trade as a calling will quit after making that money. Leaving the ones behind that only want to get time off to educate our kids.

I don't like all of the dems proposals but the one to increase teacher salaries by 13,000 a year is a great one. Maybe then you can get a few more good ones into the system.

 

Nah slick paid a price for being an overly aggressive horn dog. The dems paid a price for being corrupt bastards. Sadly they and the neocons learned nothing from that

 

Showed the yearly data. You can't refute it so resort to a very short quarterly timeline.

 

What tax loopholes?

 

RAISE TAXES

A subset of raising taxes is economic reform, particularly in health care. There are far too many snouts in the government trough--specialists making outrageous salaries, insurers operating in uncompetitive markets, drug companies, lawyers...

Government debt and interest is a complex issue, but it is manageable.

The world is not "awash in US debt." We pay out bills and we aren't going to default.

Americans will have to compete if they want to maintain their standard-of-living. Our K-12 public education isn't good enough and way too many college and university students take garbage degrees in communications, sociology, etc. Instead of figuring ways to get better, we argue about American exceptionalism.

 

Rep.Kevin Brady finally admits tax cuts not paying for themselves!

Not without spending less. Clean up spending. Lower the debt ceiling. Do another tax cut.

 

the ones the rich use to pay zero taxes....

 

No Tariffs are an inspiration to produce goods in America

 

You don't know that it was due to a tax loophole which was in the new tax bill. They did not pay corporate taxes in 2017 either. Seems like that would make it Obama's fault because he had eight years to change it.

 

how else do you pay zero taxes with billions in profits - tax loopholes for the rich

yes, Obama tried to address the tax loopholes, but republicans refused

"Obama urges Congress to tackle tax loopholes"

https://www.cbsnews.com/news/obama-urges-congress-to-tackle-tax-loopholes/

 

Then why did the GOP for 40 years do the opposite?.....Your number one donor is the US Chamber who loves it!.....Why has every trade deal been overwhelmingly passed by republicans.....The GOP caused all this, and you slept right through it!

When it comes to credibility, you and the rest of the GOP have NONE!

 

Your claim was that Amazon did not pay taxes because of the Trump tax cut. They did not pay taxes in 2017. Simply speaking you do not know why they did not pay taxes in 2018.

Why didn't Obama do this when he had both houses of congress?

 

Really!

 

Democrats paid the price for raising taxes (and Hillarycare) when they lost control of the House in November 2004.

Oh, please. Lying pols should pay for their lies, but they don't. Case-in-point...

The lesson is consistently that lying works.

 

Apparently you forgot about Dan the furniture man Rostenkowski and the check kiting scandal of 1992. And then created a giant deflection from reality.

And it was Bush one paid the price for lying about know new taxes not Clinton whose tax hike was a miniscule three percent over what daddy bush and the Dems put back in 1990.

 

I agree with pretty much everything you have stated - except - that the debt is manageable. While I think it is possible that we could manage - I don't think this will happen. While it is manageable now - perhaps - if it continues on the current path it will not be manageable in the near future. (emphasis on near future).

And Yes - the world is awash in US debt. 22 Trillion dollars worth.

Federal Revenue is roughly 3.4 Trillion. Interest payments on the debt are roughly 500 Billion/year. This works out to 14%. This is well under the "red light/alarm bell" level of 30%.

While this seems comforting (much better than 25% during the Clinton era) - the things we needed do to get the ave interest rate down to 2.25% have consequences (Such as selling short term rather than long term, quantitative easing and so on - things that disrupt the supply demand equation.

You float a 2 yr treasury bill during 2014 for less than 0.4%. The problem is that you have to refinance that debt in two years. In 2016 the rate was higher and in 2018 that rate was as high as 2.7%. This is part of what caused our annual interest payment to increase.
Selling debt from 30 years ago that was financed at 8% - and came due in 2014 - at 0.4% went a long way in keeping our annual interest payments in check. Refinancing at shorter terms - such as 2 years - creates instability - leaves us very vulnerable to short term movements.

As per the example above having to refinance at 2.7% results in an increase of payments on that debt by 700%.

Having to refinance short term debt on to the market increases supply. The fed accumulated 4 Trillion on its books which it has to float back into the markets = increases supply. The deficit has greatly increased = increased supply.

On the Demand side - we are still the "SOLE" world reserve currency which helps (this is changing however). There is now more competition in the debt market - competition which is growing rapidly = decreased demand. Last - The world is awash in USdebt.

The economy is humming along nicely and doing very well - yet - we are increasing the deficit. What happens when the next recession hits ? Are we going to consistently run 1.5 or 2 Trillion dollar deficits ? What does that do to the supply equation. Who is going to buy all this paper - and at what interest rate. At some point the invisible hand is going to strike back - and in fact is striking back right now (inverted yield curve) .. and the Fed is out of bullets.

We could easily see (and in fact this would be normal) interest on our debt spike up. It could hit normal levels 5-6% .. or higher. With all that short term debt on the books coming due - (how we got the ave rate so low) - with the fed having to sell back into the markets - and with massive deficits - that is a whole lot of debt that will have to be refinanced at much higher rates.

This is the reason that so many of the good market prognosticators - good meaning people that have a descent track record of getting it right which is a small club - are issuing warnings.

If the average interest rate on our debt was 5% that would be 1.1 Trillion - on income of 3.4 this is an interest payment to income ration of 32% = the ship is rapidly sinking.

The point is not that this will necessarily happen - but this is a disaster waiting to happen and there are a whole lot storm clouds on the horizon and we have no rain coat.

 

You want quarterly data?



It still declined.



As you can see above, there was a steady increase in revenue as the economy grew from 2010. The tax cuts impacted the revenue, but didn't, of course, slow the growth of entitlement spending. Revenue will begin growing again, but we have a gap that will create more debt each year unless the tax cuts create more growth and more tax revenue at lower taxation levels.

Economists have studied this for years and they've established tax cuts don't pay for themselves. The most recent tax cuts will add to the national debt unless we cut entitlements. Republicans won't cut programs that 80% of voters want. Medicare, Medicaid, and Social Security are essential for most retirees.

 

All I can say is you should review the politics back then. Hillarycare and tax increases were the big killers, not Fat Dan.