Tax revenues will fall as people’s income drops.Keynesian economics says we should run deficits in recessions and surpluses the rest of the time.Last year the “official” budget deficit was $779 billion. The national debt went up $1.2 trillion. The “small” $421-billion difference was more than half the official budget deficit.
By the end of 2020, it will be approaching $25 trillion. And that doesn’t include state and local debt of $3 trillion plus their $6-trillion unfunded pension liabilities.The unified deficit will easily hit $2 trillion and approach $2.5 trillion in the next recession. Within 2 to 3 years later, the total US debt will be at least $30 trillion.There are calls for a 70% tax rate on incomes over $10 million.estimated it would produce about $72 billion a year.
But what about actually doing a wealth tax? Like 1% of total net worth on the 1% wealthiest in America? Helpfully, Slemrod, of the University of Michigan, said in an email that the wealthiest 1 percent of Americans own roughly one-third of the $107 trillion in wealth in America. This group collectively holds about $20 trillion in wealth above $10 million per household.
Again, a few hundred billion a year is nothing to sneeze at. But at this rate, it would make only a small dent in the deficit.It’s entitlement spending. The CBO is projecting literally trillion-dollar deficits at the end of the next decade simply because of unfunded entitlement spending.In a recession and bear market, the $6 trillion of unfunded pension liabilities on state and local balance sheets could easily rise to $9 trillion, a number most cannot meet.
As such, the Fed’s balance sheet could grow to $10 trillion by the mid-next decade… and $20 trillion by the end of the decade. I might be wrong if politicians from either party run and win with a platform of, “I’m going to cut your Social Security and Medicare, slash the defense budget, and zero out a lot of little other pesky expenditures that you probably like.”The massive increase in debt and huge quantitative programs will change the rules of investing we have lived under for the last 50 years.
No!!!
Entitlements aren’t the problem. Greed is!
Bullshit. The problem is the right-wing has had 50 years of unmitigated success. If we keep following the policies that this article recommends then it will absolutely destroy the US.
A Balanced View of Money