Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

[Belsnickel]

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: To pay down the debt of the United States, it will hurt a lot. Not just the people of the United States but the world.

Indeed it would, but the question is whether or not we really want to.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: Bels would be better suited to tell us how to pay down our debt, but what I think should happen is...

I appreciate this, which is why I will disagree with you nicely.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: We need to cut spending big time on everything. I'm not talking about how when someone says "Spending will be cut by 50%" either since cutting spending by 50% in a politicians mind is cutting the 10% increase in half and only giving 5%. The way it works now, when they say "We are cutting such an such by 50%" they mean that the department that spent $1 billion last year was going to get a 10% increase making that departments new budget of 1.1billion and giving them 1.05 billion.

Yes and no. You are correct in describing how spending cuts are discussed. However, across the board cuts aren't necessarily beneficial. We are already spending far less in some areas than we should be as a developed nation. Also, cutting our government spending in such a way impacts our GDP. If we cut government spending, there is a strong, positive correlation to our GDP, and it is a causal relationship. So when we cut government spending, we cut our economy.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: I propose raising taxes on everyone making $100.000.00 a year and giving 25-30% less to every department of what they spent last year. If a department spent $1billion, they will now get $750,000,000.00.

Our biggest issue is on the revenue side right now, so raising tax revenues is key, here. Right now we are just not bringing in the revenues at the levels we should be. As for spending cuts, we need to be smarter with where we spend the funds, but I went into a little more detail above. Drastic cuts to government spending would result in a recession. The ways to pull out of a recession are dropping interest rates (which are already very low), cutting taxes (which are already historically low), and increasing government spending.

I subscribe to Keynesian theory, which says that right now we should be cutting spending and increasing taxes. That is what we should be doing on economic upswings so we have room to increase spending and cut taxes when we hit downturns. Politicians since Reagan have loved the deficit spending side, but when the economy is doing well they have refused to do the prudent thing in favor of what the people like.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: Cut our aid to other countries by 50% as well.

I know the reason we give aid, which is to keep those countries stable but it costs us quite a bit.

Foreign aid is 1% of our budget and has greater returns than that if done effectively. This isn't an area of the budget to focus on.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: We have to keep debt though, maybe $7.5 to $10 trillion is a good place to be for the world. The explanation is to long as to why and if you want to know look it up.

This is true and something that most people don't understand. Also, the majority of our debt is owed to ourselves. Something around 30% is what is owed to foreign governments and international organizations and individuals. The rest we just owe to ourselves.

(12-07-2018, 03:15 PM)Nebuchadnezzar Wrote: My question, are you willing to sacrifice so that future generations have a future?

I've said before that I am. But I approach this in a very technocratic way.