|
|
Post by Pakachoag Phreek on Dec 1, 2017 9:29:43 GMT -5
However, my expectation is that in 2021, the tax cuts of 2018 will be revisited, more because the revenue won't be there, and the debt will be unsustainable. Happened both under Reagan and G H W Bush. . Of course the debt is sustainable, we've been doing it for years. If every year we normally spend one trillion more than we have, what's the big deal if we start spending 1.5 trillion more than we have? Because, 1.) Interest payments on the debt are increasing (now about $500 billion a year), Because interest payments are non-discretionary, these payments tend to reduce the amount of money that is available for discretionary programs, e.g., national defense. 2.) The ability of the Federal government to self-finance some of the interest payments through surpluses in the trust fund accounts (e.g., Social Security) is declining as surpluses in the trust funds end, and the trust funds themselves in the near future reach a point that they pay out more than they take in. 3.) The U.S. savings rate is such that much of the debt is financed by other countries. About half the debt held by the public is financed by foreign governments. China and Japan hold $2.3 trillion of Federal government debt. The external debt (debt from all sources) of the United States is $18.6 trillion. China's external debt is $1.6 trillion. 4.) The Federal government runs big deficits in its operating account (which includes interest payments). The net effect is that the government incurs more debt to pay the interest on the debt it already has. Similar to taking a cash advance off a credit card to make your monthly payment. And eventually, the debt will reach a level that there are three choices: massive tax increases; risk of a cataclysmic economic collapse, or run the Weimar printing presses (which only the government has the luxury of doing). |
|
|
|
Post by Tom on Dec 1, 2017 9:38:43 GMT -5
Of course the debt is sustainable, we've been doing it for years. If every year we normally spend one trillion more than we have, what's the big deal if we start spending 1.5 trillion more than we have? Because, 1.) Interest payments on the debt are increasing (now about $500 billion a year), Because interest payments are non-discretionary, these payments tend to reduce the amount of money that is available for discretionary programs, e.g., national defense. 2.) The ability of the Federal government to self-finance some of the interest payments through surpluses in the trust fund accounts (e.g., Social Security) is declining as surpluses in the trust funds end, and the trust funds themselves in the near future reach a point that they pay out more than they take in. 3.) The U.S. savings rate is such that much of the debt is financed by other countries. About half the debt held by the public is financed by foreign governments. China and Japan hold $2.3 trillion of Federal government debt. The external debt (debt from all sources) of the United States is $18.6 trillion. China's external debt is $1.6 trillion. 4.) The Federal government runs big deficits in its operating account (which includes interest payments). The net effect is that the government incurs more debt to pay the interest on the debt it already has. Similar to taking a cash advance off a credit card to make your monthly payment. And eventually, the debt will reach a level that there are three choices: massive tax increases; risk of a cataclysmic economic collapse, or run the Weimar printing presses (which only the government has the luxury of doing). I don't disagree. Sadly, I struggle making sarcasm come through in my typing. Never mind all the stuff Fr B said in his letter, I was opposed to this plan the minute I heard it was reducing revenue without being coupled with a greater reduction in spending. In my opinion, our reliance on the credit card is out of control |
|
|
|
Post by rgs318 on Dec 1, 2017 9:53:51 GMT -5
I have never held with my party’s belief that if we owe it to ourselves, it is not really a debt at all.
Even as a life-long registered Democrat, I find that to be nonsense.
|
|
|
|
Post by alum on Dec 1, 2017 11:16:04 GMT -5
There is nothing wrong with deficit spending to promote growth. It worked coming out of the 2008 financial crisis. You can get to deficit spending two ways. The first way is for the government to simply spend more money. This has the advantage of allowing the spending to be targeted toward areas of the economy which need it and to long term capital programs which justify long term borrowing. (Post financial crisis, there should have been more spending on infrastructure and fewer grants to allow the hiring of teachers, cops, and other government workers who would not be laid off at the end of the subsidy.) The second way to get to deficit spending is by reducing taxes. The theory is that those (especially businesses big and small) whose taxes are reduced will spend the money and promote growth. The problem is that the with tax cuts, the decision as to whether or how to spend the money is out of the government's control and there is no mechanism to force the taxpayer to reinvest. If you trust the wealthiest Americans and American business to do something, and to do it right, growth might well occur. The concern here is that businesses are already sitting on piles of cash which belies an argument that there is any certainty to the assumption that they will create jobs with this tax cut. A second concern is that with unemployment already quite low that there will be no one to work at these new jobs. Ought not we just let the market work and force wages up on their own?
My problem with this bill, therefore, is that the government will incur debt which will impair future growth with not even a short term payoff, never mind a long term one.
It is time for a big overhaul of a thirty year old law, but this seems like a pretty weak job. I would have preferred a grand bargain that would have dealt with 18% of the GDP (health care) as part of it, but with the partisan divide, that was obviously not going to happen.
|
|
|
|
Post by Chu Chu on Dec 1, 2017 11:25:57 GMT -5
However, my expectation is that in 2021, the tax cuts of 2018 will be revisited, more because the revenue won't be there, and the debt will be unsustainable. Happened both under Reagan and G H W Bush. . Of course the debt is sustainable, we've been doing it for years. If every year we normally spend one trillion more than we have, what's the big deal if we start spending 1.5 trillion more than we have? Because, as this trend is allowed to continue, you eventually arrive at a time where all of the money in our GDP goes to pay the accumulated interest on the debt. This will happen faster as we increase interest rates.The time to fix this is now, when we have a sustained period of growth. |
|
|
|
Post by matunuck on Dec 1, 2017 11:28:52 GMT -5
|
|
|
|
Post by Chu Chu on Dec 2, 2017 15:55:36 GMT -5
|
|
|
|
Post by KY Crusader 75 on Dec 2, 2017 18:18:15 GMT -5
This bill will energize the economy and provide significant benefits to every American.
|
|
|
|
Post by sader1970 on Dec 2, 2017 18:28:32 GMT -5
For sure,that's the GOP story and they are sticking to it.
I hope you and they are right for the sake of the country but time will tell.
|
|
|
|
Post by hc811215 on Dec 4, 2017 9:04:00 GMT -5
The Senate bill passed Friday night contains the endowment tax but if this history major's math is correct, it would no longer apply to Holy Cross with our current endowment under $800 million. To be taxed, the endowment would need to be $500,000 per student (as opposed to $250,000 per in the house bill). With 2900 students, our endowment would need to be 1.45 billion to have its investment income taxed. Also, the senate bill does not change the tax treatment of waived tuition for grad students. We'll still have to see what happens in committee, but so far, at least on this front, things are looking a little better for Holy Cross and for its grad student recent alums and current HC students who hope to become grad students.
|
|
|
|
Post by alum on Dec 4, 2017 11:31:36 GMT -5
The Senate bill passed Friday night contains the endowment tax but if this history major's math is correct, it would no longer apply to Holy Cross with our current endowment under $800 million. To be taxed, the endowment would need to be $500,000 per student (as opposed to $250,000 per in the house bill). With 2900 students, our endowment would need to be 1.45 billion to have its investment income taxed. Also, the senate bill does not change the tax treatment of waived tuition for grad students. We'll still have to see what happens in committee, but so far, at least on this front, things are looking a little better for Holy Cross and for its grad student recent alums and current HC students who hope to become grad students. The endowment tax got wrapped up in a question about whether to exclude colleges which do not accept any federal money. At the $250,000 per student level, it applied to Hillsdale which is a darling of many on the right. By raising it to $500,000, it did not apply to Hillsdale and it stopped being a cause celebre. That appears to have been an intended consequence of the last minute amendments. There are apparently some unintended ones that will have to get addressed in committee. It will be interesting to see if Flake (immigration issues) and Collins (health care issues) change their votes if they don't get what was promised to them. I think that that the R's have made a decision that this must get done, so I imagine it will all work out and I am hopeful that although I am not crazy about this legislation, that the individual insurance markets will be steadied and that a successful DACA fix will jump start a discussion about long term immigration reform. I can always dream, right? |
|
|
|
Post by nhteamer on Dec 4, 2017 17:37:00 GMT -5
Chu, Don't really add it up but just estimate if you will. Percent of recent exposed pervs who are lefties? about 90%. Think picture of HWeinstein (perv) sitting between HRC (wife of perv ----BTW has there EVER been a bigger power differential in history than a POTUS and an intern?----) and Huma Abedin (wife of perv) at a Planned Parenthood gala. |
|
|
|
Post by Pakachoag Phreek on Dec 4, 2017 21:12:16 GMT -5
Back to the matter at hand, Both House and Senate bills are predicated on the premise that the revenue gains from increased economic activity (because of the tax cuts) will offset most of the revenue lost from the tax cut itself; i.e., the tax cut will be a big economic stimulus. This is called dynamic scoring. But this is simply this decade's iteration of the Laugher curve (excuse me, the [Arthur] Laffer curve, which has failed with respect to its promise in every previous iteration.. For a non-technical discussion of dynamic scoring. www.crfb.org/blogs/under-dynamic-scoring-house-tax-bill-still-explodes-debt#mm-3 The Committee for a Responsible Federal Budget, source of the above, is bi-partisan. www.crfb.org/board-members^^^^ Most of you won't recognize most of the names, though if GoPurp were still around, he would probably chide me regarding David Stockman being a member. But perhaps the best predictor that dynamic scoring will again fail to generate sufficient Federal revenue is to look at what has happened in Kansas. www.bloomberg.com/view/articles/2017-06-27/running-the-numbers-on-the-kansas-experiment^^^^ See the paragraph about how Bill Self restructured his contract. Also of note is that the Governor of Kansas initiated the tax cuts when the nation was still in recovery mode from the Great Recession. So, in theory, a tax cut stimulus at that point should generate more economic impact than when the economy is at or near full employment (as it is currently). In essence, the only long-term beneficiaries of the 2018 tax cut are the uber-rich and corporations. Most nearly everyone else suffers, some sooner, most later. And the country has another trillion or two or three of debt on which interest will need to be paid. I'll wait for the bill coming out of conference to again assess what the likely impact is on households that currently itemize deductions. |
|
|
|
Post by Ray on Dec 5, 2017 17:04:41 GMT -5
This bill will energize the economy and provide significant benefits to every American. Thanks, Mitch. |
|
|
|
Post by KY Crusader 75 on Dec 5, 2017 17:10:37 GMT -5
Actually it’s Dan
|
|
|
|
Post by lou on Dec 5, 2017 17:20:21 GMT -5
This bill will energize the economy and provide significant benefits to every American. POTUS keeps telling us the economy is in great shape |
|
|
|
Post by KY Crusader 75 on Dec 5, 2017 17:22:07 GMT -5
And tax reform will make it even stronger: that’s the goal
|
|
|
|
Post by Pakachoag Phreek on Dec 5, 2017 18:14:38 GMT -5
|
|
|
|
Post by Dean Wormer on Dec 5, 2017 19:47:40 GMT -5
Careful gentlemen you've stayed largely on topic and civil up to now. A few post in the last day or so are approachinf a slope you don't want to slide down.
|
|
|
|
Post by Tom on Dec 6, 2017 9:13:32 GMT -5
Careful gentlemen you've stayed largely on topic and civil up to now. A few post in the last day or so are approachinf a slope you don't want to slide down. Semi off topic. . . Rumor has it that Kimball no longer uses old fashioned trays. There's a chance they'll be needed in the next week or so. If you're going to approach a slippery slope, you should do it on a tray stolen from Kimball |
|
|
|
Post by rgs318 on Dec 6, 2017 9:19:32 GMT -5
The hill behind Wheeler was excellent for such "tomfoolery."
|
|
|
|
Post by CHC8485 on Dec 6, 2017 9:23:02 GMT -5
Correct about trays in Kimball - though there's also a rumor that a few can still be found if you know where to look in the bowels of Kimball.
But Holy Cross students don't need no sinkin' trays. I'm told I'd be surprised how well cardboard slides on snow and how a layer of duct tape improves not only the durability but also the slide-ability of the cardboard.
|
|
|
|
Post by rgs318 on Dec 6, 2017 9:32:30 GMT -5
A pair of slick soled boots pressed together (with a good sense of balance) also works...I know from experience but that was in a previous century.  |
|
|
|
Post by Pakachoag Phreek on Dec 14, 2017 16:35:45 GMT -5
The final bill (still being worked on) eliminates those provisions that would have taxed graduate students, made interest on bonds issued for college construction projects taxable, and ended deductability of interest paid on student loans. Fate of the endowment tax is up in the air.
|
|
|
|
Post by Pakachoag Phreek on Dec 20, 2017 7:47:54 GMT -5
It appears the tax on endowment income for a select number of 'wealthy' universities and colleges remains in the final bill. A point of order was raised yesterday by Senate Democrats and sustained by the Senate parliamentarian on one of the exempting criteria; schools with less than 500 tuition-paying students would have been exempted.,
Olin College in MA would be one such school. There may be religious or theological schools that also would be subject.
|
|
