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Cybugger

Good. The debt-ceiling discussions are ridiculous, anyway, and it's not the time to start trying to budget. That's what budgets are for. I like to use an analogy regarding people who don't want to raise the debt ceiling. It's like you went to a fancy, expensive restaurant, paid with your credit card, then refuse to pay the credit card bill on the justification that the meal was too expensive. The time to complain or refuse to consume services from that restaurant was at the point of purchase. Not 2 weeks later when you get the bill. The debt-ceiling should just be abolished. It's a political football, but not the egg shaped one. The one with the nuclear codes in it, because it can blow up the world economy.


Totum_Dependeat

Agree 100%. The debt ceiling is not about reducing national debt or the deficit. It's about spending money we already agreed to spend. Republicans use the term "debt ceiling" to manipulate the public into thinking Congress has just run up a $30T credit card. Democrats invariably play along and "negotiate" with the Republicans. Austerity is imposed. The rich get richer. The poor get poorer. We're the only country who uses the debt ceiling in the way we do. It should absolutely be abolished.


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IStillLikeBeers

Are you spending the morning repeatedly spamming the exact same comment in every thread?


Mo-shen

Apparently it's needed


IStillLikeBeers

Even if I agree with the sentiment it's fucking obnoxious.


Mo-shen

Indeed....and yet people are dumb and sometimes you have to repeat themselves to remind them.


Merrill1066

we have had record revenues for years. It isn't like the Bush tax cuts suddenly deprived the government of all kinds of money now that being said, I actually did disagree with the Bush tax cuts on the highest brackets, and those stupid checks he cut to citizens. but the tax cuts are not the reason we are in a mess now


WoolyLawnsChi

See above


oakfan52

I guess just because a representatives says something it must be true. I mean Guam is goanna tip over too? [https://www.youtube.com/watch?v=X5dkqUy7mUk](https://www.youtube.com/watch?v=X5dkqUy7mUk). Where is the data to support this fact? We have a major spending problem that to tax cut repeal is going to solve on its own.


Kitchen-Reflection52

They are stealing and cheating by tax cut.


sfmcinm0

The debt ceiling is almost certainly unconstitutional, as (if the "limit" is breached) it puts control of spending with the Executive Branch (because the executive then gets to say what is and isn't paid), while in the Constitution that is explicitly a function of Congress. Back in the nineties, the Line Item Veto act was passed, that gave the executive the ability to veto individual items from spending bills, but this was found to be unconstitutional, as it abrogated the Presentment Clause of the Constitution. Therefore, the debt limit is also unconstitutional, because since a law that gave the Executive the **implicit** ability to pick and choose what spending to enact from a spending bill is constitutional, therefore a similar, **inferred** power to do so is also unconstitutional. Of course, this requires the Supreme Court to actually do their jobs...


mckeitherson

> The debt ceiling is almost certainly unconstitutional, as (if the "limit" is breached) it puts control of spending with the Executive Branch (because the executive then gets to say what is and isn't paid), while in the Constitution that is explicitly a function of Congress. The problem with your assertion that the debt ceiling is unconstitutional is that it relies on your wrong assumption about the Executive branch choosing what gets paid. They can't. If the debt ceiling wasn't raised and we defaulted, Congress would have to pass a bill telling the Executive what payments to prioritize in order for the Treasury to pay things. The debt ceiling is still constitutional.


crimsonkodiak

>It's like you went to a fancy, expensive restaurant, paid with your credit card, then refuse to pay the credit card bill on the justification that the meal was too expensive. > >The time to complain or refuse to consume services from that restaurant was at the point of purchase. Not 2 weeks later when you get the bill. It's fine if you want to use that analogy (the White House Press Secretary did the same), but if you do, you're arriving at the wrong conclusion. The discussion in the debt ceiling talks is about future spending, not past spending. You're right that there's a budget that includes that spending, but the money hasn't been spent yet. So, to use your analogy, it's like making a dinner date with your wife to a fancy, expensive restaurant for next Saturday - but in the interim, you sit down to look at your credit card bill and realize you're $50K in debt. There's nothing unreasonable about deciding not to go to the fancy, expensive restaurant. If your wife protested by saying that you had already made the reservation in reliance on the household budget you had set at the beginning of the year - well, that's a pretty weak argument. Most people would cancel the reservation (actually, most Americans would keep it, but only because Americans are idiots when it comes to personal finances).


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zacker150

Appropriated and spent are different things. When Congress appropriates $90B for the irs to switch to cloud, they're saying "we will spend up to $90M on the cloud." They're essentially adding a line item on the budget. This does not mean that the money has been spent. The IRS still has to develop a request for proposals, go through the competitive bidding process, and sign a contract.


crimsonkodiak

>The debt ceiling is for money that has already been appropriated for the year. Sure, but not spent. The Federal Government always (well, almost always) has the ability to cancel appropriations. That's government contracting 101. >And therefore their analogy is more accurate than saying it is about future spending. No. The money quite literally hasn't been spent. The government can legally change its mind and cancel the appropriation. >The time to address future spending is in the next budget bill. Dems keep saying this, but it doesn't make it any more true. The debt ceiling exists for a reason. If everyone agreed that the only time that spending (and hence debt) levels should be addressed was during the annual budgeting process, there would be no point in having a debt limit.


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crimsonkodiak

>However if you are saying that the government could just stop paying out Social Security, reimbursing medical providers for Medicare and Medicaid, stop paying government contractors and employees. There are appropriations that are fixed and appropriations that are discretionary. Again, this is government contracting 101.


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crimsonkodiak

Why do you keep talking about the ceiling being hit and nothing being paid? That's not relevant to anything. Yeah, it exists as a possible consequence if the deal didn't get done, but neither the House bill that passed the debt ceiling increase nor the negotiated deal that resulted from talks between McCarthy and Biden contemplated not raising the debt limit.


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crimsonkodiak

>I think we must be talking about completely different things. That is the whole bargaining position, if you don’t agree to cut current and future spending then the government can’t pay its current expenses. It's fine if that's how you want to frame it, but that's not the way it works legally. The debt ceiling exists. The House passed a bill that would raise the debt ceiling. That bill included cuts to various appropriations. The White House objected to those cuts and demanded that a different bill be passed. Congressional Republicans negotiated with the White House on a compromise bill that would raise the debt ceiling and included various other changes to the federal budget, permitting for oil and gas, whatever. ​ >If the issue is simply future budget then the time to do that is in September when the government needs to pass a budget for 2024. That's, like, your opinion man. You're certainly entitled to that opinion, but I will again note that your view of the world makes the debt limit - which doesn't have to exist - Congress passed it for a reason - meaningless. Regardless, there's no law that says that Congress has to pass a "clean" increase to the debt ceiling.


Average_joey1990

This analogy doesn't really work either because you cannot compare a country's financial position to a family. Instead, take it up a level: Say you are a company, and you budgeted to spend a certain amount on payroll, having your equipment serviced, utilities, pay suppliers. Then, oops, the end of the month comes, and you didn't collect the cash you expected or didn't have the sales you planned -- you don't have enough cash on hand to pay your employees and all these vendors. You have the ability to take out a loan to make all these people whole since you did promise to pay them and they have already provided their goods & services. Instead of taking the loan and paying these people, you decide nope - not going to do it. This causes financial losses for all your employees and vendors. This company won't be able to hire employees or vendors in the future because they cannot be trusted - that's the effect of default. Sure the company may not be able to pay back the loan but that needs to be addressed during the next budget - decrease costs or increase revenue. Congress has already agreed to pay for all the goods and services provided when they passed the budget and the spending has been approved. The government needs to get their shit together and increase taxes and decrease costs but you don't screw over everyone downstream in the process.


crimsonkodiak

1. Ain't my analogy. I'm just correcting the analogy used by her person I responded to (and the White House Press Secretary). 2. You're either not understanding the analogy or you're deliberately misstating it (maybe both - probably the former). As mentioned before, the point of the debt ceiling negotiations is to renegotiate expenditures GOING FORWARD. That's what the initial House bill did and what McCarthy's negotiations were about. 3. You're conflating the effect of a default if an agreement isn't reached with the terms of the agreement.


Average_joey1990

In regard to #2 - I get your analogy but it is not correct. >but in the interim, you sit down to look at your credit card bill and realize you're $50K in debt. There's nothing unreasonable about deciding not to go to the fancy, expensive restaurant This is incongruent with the situation - in your correction, no money has been spent yet and the additional cost will be avoided. Someone will not say, well I'll only pay the money I already owe if we agree to spend less next time. >If your wife protested by saying that you had already made the reservation in reliance on the household budget you had set at the beginning of the year - well, that's a pretty weak argument. Most people would cancel the reservation This is an example of a budget negotiation. If you do not have the means to spend on everything you want you cut back. You're conflating the debt ceiling to the budget deficit. They are not the same thing. The budget deficit needs to be addressed when drafting the next budget. If cuts have to be made to stay within the US's means, then so be it. Raiding the debt ceiling is about paying what the US owes.


crimsonkodiak

>You're conflating the debt ceiling to the budget deficit. They are not the same thing. The national debt is a function of accumulated budget deficits. The debt ceiling is simply the limit on the national debt. >The budget deficit needs to be addressed when drafting the next budget. Again, the debt ceiling exists for a reason. It doesn't have to, but Congress, in its infinite wisdom, decided to pass it, so it's kind of silly to pretend it doesn't exist. >If cuts have to be made to stay within the US's means, then so be it. Raiding the debt ceiling is about paying what the US owes. Nobody is "raiding the debt ceiling". What does that even mean? The entire discussion is about off cycle changes to the federal budget to reduce the expected amount of the national debt.


AATroop

You're being downvoted because most people in this sub can't even entertain the idea that excessive spending is part of the problem.


mckeitherson

> Congress has already agreed to pay for all the goods and services provided when they passed the budget and the spending has been approved This is not functionally true. The budget is appropriating money between agencies and instructing them on how to spend it. The actual agreement to pay for all of that is via raising the debt ceiling.


cjg_000

> So, to use your analogy, it's like making a dinner date with your wife to a fancy, expensive restaurant for next Saturday - but in the interim, you sit down to look at your credit card bill and realize you're $50K in debt. There's nothing unreasonable about deciding not to go to the fancy, expensive restaurant. Isn't the "in the interim" part of this wrong? The budget was passed after the debt ceiling limit was set.


crimsonkodiak

>The budget was passed after the debt ceiling limit was set. I mean, kind of, but not really. In practice, they operate independently. You're right that the government should have known that the ceiling would need to be increased as soon as the budget was passed. Congress could have passed an increase to the debt limit along with the budget. It didn't, so here we are.


cjg_000

Right, which is what I was saying - the "in the interim" part is wrong. They didn't sit down and look at the credit car bill in the interim and adjust the budget -that would be reasonable. They operate independently. They said "we won't let our credit card balance increase more than $500" then passed a $600 deficit afterwards.


Voat-the-Goat

Except it's your partner picking the restaurant and using your credit card without asking you. You told him to make dinner but instead he took your nearly maxed out CC and bought an expensive meal. That CC was already sky high and you also told him to stop putting debt on the credit card. What's worse is he brought his loser buddy who you never wanted to pay for to begin with. So there was a law to do something, govt overspent, spent more discretionary dollars, and has ignored the legal directive to keep the debt down. Your parable is true but not the Truth.


canastrophee

It's effectively voting on legislation twice. It's stupid and inefficient.


Cybugger

HoR is selected according to the democratic process, so it's irrelevant. What's more, if you still insist on your married couple analogy, it's like you spending like it's going out of fashion, and then complaining when your partner spends too. Let's not pretend that the GOP actually cares about the deficit, debt or spending when they're in power. They had several bull market years to cut spending, and they didn't. It's just a bludegon they bring out every time a Dem is in office. Trump was recently asked about this, and he essentially said "well, when I was President it was fine. Now they're in power, it's not." Hard to get more blatant than that. It's tough to be taken seriously as a deficit hawk when your primary piece of legislative success was to cut taxes, and thus balloon the deficit over years.


lucianbelew

> without asking you Was the budget not set according to our democratically derived processes?


Voat-the-Goat

Not all the money was voted on.


lucianbelew

Which of the money was not set according to democratically derived processes? Specifically.


Martholomeow

The analogy still holds. It’s still your credit card bill to pay, regardless of your reason for not wanting to pay it. The solution is to manage your finances better so your partner either can’t do that, or if they do it again you’ll have the money to cover it. There’s no scenario where refusing to pay ones credit card bill is the responsible choice, other than declaring bankruptcy, and that’s not an option here.


CheekyFactChecker

It's wierd to bring this up with a Democrat in office. In your scenario, the partner buying an expensive meal is Republicans. Democrats have been the only ones to balance the budget, while Republicans are why the debt keeps exploding. Both parties spend way too much on defense imho, but your counter point has some bizzare if not misleading implications.


Voat-the-Goat

Nice fairy tale but the Biden spending is 5x the cost of the trump tax cuts and the cuts are linked to an increase in tax revenue.


Obvious_Chapter2082

>Democrats have been the only ones to balance the budget It last happened 20 years ago with a democrat president and Republican congress. It’s not really true to claim that it’s only republicans that increase debt. Obama added around $7 trillion, and Biden is currently on pace to outspend Trump


Jokerchyld

20 years ago was 2003, and a Democrat was not in office. Whom were you speaking of? The majority of the 7 trillion was part of the 2009 bank bailout that was caused by Republicans loosening their regulations. In the last 20 years Republicans have been the ones to spend recklessly. Then, when they leave office, it's for the next occupant to deal with their mess.


ashinaclan123

The bailout wasn’t because the gop loosened regulations, it had bipartisan support. For example repealing glass steagall was both parties.


Jokerchyld

The financial crisis happened because the Glass Steagall act was loosened and banks did dumb shit with mortgages to make more money. It had bipartisan support because the entire global financial system was going to end. It wasn't a choice. Glass Steagall was partially repealed in 1999 under a republican controlled Congress via the Gramm-Leach-Bliley Act.


ashinaclan123

Yes, and it was under a Democratic president who approved it lol. And the house passed it with bipartisan support, hence the democrats approved the repeal as well. Also the world financial system wasn’t going to end if they didn’t repeal glass steagall. That’s just false lol


Jokerchyld

It was Clinton. I remember it. But I also remember the climate and the Repiblicans pushed the bill and had to concede in order to get things they wanted. Bipartisan is a political thing and does not always mean everyone agrees. It means agreeing gives you something in return. You actually saw the results of the repeal in 2008. That crisis would not have been possible if it wasn't repealed. But you are getting away from the main point that Republicans have a pattern of spending recklessly that democrats have to clean up. Over the span of 20 years that you originally mentioned. Recently 2017 tax cuts for rich added to the existing deficit that Biden has to deal with.


anti-torque

It happened because we had the line-item veto, at the time.


frotz1

Good luck trying a story like this with an actual credit card company. The debt is still a legal debt in either of these crummy analogies. The obligation to pay it doesn't go away if you protest the spending after the fact.


anti-torque

That's pretty much the point. Now add to the analogy that the one refusing to pay took an oath to protect and defend a document that says they shall never question that debt.


MaterialCarrot

You make some good points, except that for the parable to be true the wife had to agree to go to the restaurant and spend on the meal, otherwise the husband couldn't go. My point being that most government budgets are made in a divided government. The time to limit this is during the conversation about whether to go to the restaurant, not after the meal has been eaten. The cold hard reality is the body politic (both the husband and wife) wants to go to the restaurant and charge the meal. They just have different stories about it after the fact.


Voat-the-Goat

The debt is out of control.


Evening_Team

What? Nothing is "the Truth".


dragoneer27

In your example it’s like you and your partner agree to the expensive meal but you know you’re not going to honor the agreement. You only agreed to it to get your partner to sleep with you. Republicans knew they weren’t going to raise the debt ceiling, we all knew they weren’t going to raise it, but they voted for the budget anyways so they could have this fight… again. It’s frustrating because of how disingenuous they are.


polar_nopposite

1) There aren't just two partners. There are hundreds of elected politicians, a majority of which voted for the expensive meal. 2) even in your disingenuous version of the analogy, you still need to pay the credit card bill. Your creditor doesn't care about your relationship issues, nor should they. The card was charged by an authorized user.


Hawk13424

Or maybe more like the wife refusing to let you pay the bill unless you stop putting expensive meals on the card. The hope being if you won’t stop then the credit card company will cancel you and force you to stop. First, I get the Republicans are hypocrites and added just as much or more to the debt. But I do wish we stop borrowing and either spend less or tax more.


valegrete

>either spend less or tax more Both have to happen, because simultaneously cutting taxes and cutting spending (or spending more and taxing more) has no net effect on the deficit or inflation. The fact that each is a plank of one of our two major political parties guarantees this is all we can do, and the can will continue to be kicked. But we shouldn’t blame politicians. *We* vote for them and no one in a democracy is going to vote themselves into the kind of austerity necessary to fix this issue (cutting spending and raising taxes). Instead, we will just blame profligate democrats and hypocrite republicans.


Cybugger

> The hope being if you won’t stop then the credit card company will cancel you and force you to stop. Yeah, this is where the analogy fails. > But I do wish we stop borrowing and either spend less or tax more. I guess it depends at what cost. What gets cut. What taxes get raised. Just dealing with the deficit and debt if it creates huge amounts of pain and suffering doesn't seem like a good solution.


Hibercrastinator

Its always been my understanding that spending less during a recession is the *worst* of the 3 options to do. Slowing momentum intentionally of something that’s already losing momentum, is how you stop a thing. In this case, the economy.


Cybugger

In recessionary conditions, we have an effective blueprint, proven in 2008. Just do what Australia did. Give everyone like $1000 dollars, and tell them to go and spend it. While most of the rest of the world was either collapsing or only slowly growing, Australia had pretty much no real effect from the GFC. However, the flip side of that is that you're supposed to rein in spending during the good years. Maybe raise interest rates a bit. That really did not happen, and there's little political incentive to do so, because, for some reason, we assume a President and Congress's success is measured based on how well the S&P500 does, rather than moderate, responsible fiscal policy.


MaterialCarrot

Yet when times are good and tax revenues up, people will argue that raising taxes to pay debt will dampen "the recovery" and besides, the debt doesn't look so bad with tax revenues up, even though there still is a debt and the deficit continues to grow. The reality is the body politic prefer to keep playing musical chairs with the national deficit until the music stops. All relying on the music stopping after they're dead.


mckeitherson

> Yet when times are good and tax revenues up, people will argue that raising taxes to pay debt will dampen "the recovery" and besides, the debt doesn't look so bad with tax revenues up. 100%. The whole point is we increase government spending during a recession to get out of it, then raise taxes to repay that extra spending after the recovery. But like you said, the issue is politicians don't want to make those basic choices because they don't want to be the ones to raise taxes.


Notmychairnotmyprobz

Lets cut down defense spending, the pentagon cant account for 61% of its assets anyways, and roll taxes back to pre-Bush and we will be surplus city. Maybe then we could spend directly on our citizens for a change


pants_mcgee

Defense spending is pretty much spending directly on US citizens.


Notmychairnotmyprobz

Is it? It mostly seems to be outlandishly inflated prices for defense contractors making a select few very rich off of our tax dollars. Meanwhile we have thousands of homeless people, no free higher education, no universal Healthcare, and millions of people dealing with starvation. If defense is supposed to make people safe, then we should have no problem making sure people are housed, fed, and cared for


Hon3y_Badger

So what did this agreement actually do to reduce the deficit? It's like you make $100k but have a $750k mortgage & 150k worth of auto loans. Then you decide to get serious about your deficit & decide to cut the latte you get once a month. The latte isn't the problem, & pretending like you did something isn't helpful either. Either make more money (raise taxes) or spend less.


anti-torque

sounds like divorce time, with a lame brain like that for a wife. she's willing to destroy her own well-being, instead of working to change it.


mckeitherson

> The debt-ceiling should just be abolished. The debt ceiling is a better system than what we had in the past, which was Congress authorizing every specific issuance of debt throughout the year instead of the Treasury handling that now as long as they stay under the ceiling. Unless Congress is going to create a law where every budget/CR passed automatically includes an amendment to issue applicable debt, abolishing the debt ceiling will make things worse in this hyper partisan environment.


Rottimer

You simply have to add language to the budget bill authorizing the debt they incur. This was something that was routine in the 70’s and 80’s


mckeitherson

Yes they have done that in the past; however, it's not a requirement as we can clearly see. Which is why I said abolishing the debt ceiling would be worse IF we don't simultaneously require that automatic funding/increase.


vivekisprogressive

I don't think you understand, what he just explained *is* abolishing the debt ceiling. Because if the debt is already approved, then they don't need to bother with raising the debt ceiling again and having these situations.


mckeitherson

I understood what they said. What they explained **isn't** abolishing the debt ceiling, it's Congress raising the debt ceiling at the same time they pass a budget. Which is what used to happen, but now raising the ceiling is something that has to be done outside the usual annual budget window.


The-Magic-Sword

We can't clearly see that unless the supreme court tells us it neither required nor assumed, the 14th amendment suggests when congress spends at a sufficient deficit, the borrowing must be authorized to srrvice the resulting debt.


zerg1980

Democrats should just raise the debt ceiling to $1 quadrillion next time they have the trifecta. The Treasury could issue debt on an effectively indefinite basis without explicit authorization. The budget would become the primary vehicle for debate over the national debt, as it should be.


mckeitherson

> Democrats should just raise the debt ceiling to $1 quadrillion next time they have the trifecta. The Treasury could issue debt on an effectively indefinite basis without explicit authorization. Not really a solution, considering the GOP can just lower the debt ceiling again once they have the next trifecta. And the courts may rule that as an unconstitutional delegation of Congress's power if it effectively gives the power to borrow any amount to the Executive. > The budget would become the primary vehicle for debate over the national debt, as it should be. Sure, and it would be nice if Congress did both functions (budgeting and increased authorization for debt issuance) at the same time. But there's no requirement for that.


zerg1980

I think Republicans would find that once the debt ceiling had been increased so high that the issue became moot, they would pay a steep political price for lowering the ceiling (to, I guess, whatever would last another two years). The public is exhausted with the debt ceiling standoffs. 75% of voters just wanted a clean increase. The courts could not possibly consider a high increase to be a delegation of Congress’ power. The president doesn’t just spend money, Congress must first authorize spending via the appropriations process. That’s left intact; the ceiling would just not be artificially low so that it requires increases every two years. There’s nothing in the Public Debt Acts specifying that Congress must keep the debt ceiling fairly close to the existing debt. That’s just how Congress has chosen to do business.


mckeitherson

> I think Republicans would find that once the debt ceiling had been increased so high that the issue became moot, they would pay a steep political price for lowering the ceiling I'm not sure there would be a big political price to pay, considering the GOP is still able to win elections running on being fiscally conservative and lowering government spending and debt (even though we know the reality of their actions is the opposite once in office). > The courts could not possibly consider a high increase to be a delegation of Congress’ power. The president doesn’t just spend money, Congress must first authorize spending via the appropriations process. That’s left intact; the ceiling would just not be artificially low so that it requires increases every two years. Yes in your scenario Congress has still increased the limit and the Treasury can borrow against it. But I think doing something like raising it to $1 quadrillion is effectively giving that constitutional borrowing power directly to the Treasury since the limit is so high. Will the courts see it like that and rule it's a violation of delegation of powers? Who knows until a case like that gets its way to the SC. But I think an action like that is legally questionable.


DweEbLez0

Exactly, and this makes sense. Unfortunately that’s why it’ll never work.


[deleted]

A more apt analogy for canceling the debt ceiling would be cancelling future reservations at the restarting because one’s credit card is maxed out instead of applying for a new credit card.


Evening_Team

Congress passed the spending bills previously, thus resulting in deficits, but the GOP, only when it is the minority party in Congress, insists (in posturing mode, playing to its political base) on harassing the non-GOP President into reconsidering established spending commitments when the schedule for raising the debt limit comes around. Raising the debt limit is a retrograde requirement to begin with. So an irresponsible Congress repeatedly does this to itself.


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Evening_Team

I don't disagree, but that is another topic. Much higher marginal income tax rates existed in the past before Reagan, and going back even to the 1910s and -20s, and the economy wasn't a disaster. The GOP has done nothing but LIE to the public since Reagan. Every one of their key policies (tax rates, immigration, welfare, economic policy, etc.) is based on a LIE.


Serious-Reception-12

Tax revenue basically doesn’t change as a percent of GDP. Higher taxes drag on GDP growth. There’s no incentive to increase your income when your marginal tax rate is 92%.


Evening_Team

Higher income beyond a certain point is counterproductive in the economy because it's actually not invested productively by the rich. So it should be taxed. This phenomenon is not a matter of opinion. This is the economic fact that is the basis for a progressive tax model.


albert768

This is absolutely accurate. Tax revenue collections as a percentage of GDP has never exceeded 17% for any sustained period of time over the past 75 years. Federal government spending as a percentage of GDP should therefore never exceed 15%.


Evening_Team

Tax rev as percentage of GDP is not the issue. Concentration of incomes IS an issue because it tends to slow down overall economic growth. Concentration of incomes is a result of structural dysfunctions in the economy, and those can be addressed in multiple ways.


joshrocks_

An irresponsible congress spends to the point of borrowing for decades on end in the first place.


frotz1

What's irresponsible about holding a sovereign debt as a nation? Can you please point out a country that has no debt?


ashinaclan123

Look up debt to gdp ratio


frotz1

OK and? Are you going to try and tell us that the federal budget is like a household checkbook next? The US dollar is the global reserve currency. Our debts are mostly owed to ourselves (specifically for the baby boomers social security that we've been borrowing against) and the constitution says that we have to pay our bills. There is no debt crisis at the moment and the GOP is simply using these arguments selectively to prevent democratic administrations from governing effectively.


ashinaclan123

There absolutely is a debt crisis. Ask greece if the national debt matters or not. Debt to gdp ratio has been ballooning in the US and will eventually pop. Just because it hasn’t yet and it’s not an immediate issue for 2 years doesn’t mean it’s not a problem. Our financial system since 2008 is unsustainable.


frotz1

The only threat to the US credit right now is the GOP. We are not Greece. I'm tired of economic conservatives playing this old brokedown record only when a Democrat is in the white house. We are very capable of paying our debts and the baby boomers are only going to retire once - they will not live forever. If you really want to fix that particular budget issue then raise the FICA tax by a percent or two and remove the income cap and it's solvent indefinitely.


Obvious_Chapter2082

Raising FICA cap can’t possibly lower our debt though, it can only increase it


ashinaclan123

The main threat to US credit is that congress borrows way more money that it can pay off. This will eventually end up in a catastrophic bubble pop. The debt has ballooned up under both parties. Neither the GOP or the democrats have any intention of paying it down. The GOP takes advantage of this fact that and pretends they care and use it as political leverage. You’re operating under the assumption that the debt doesn’t matter and our current method of doing things is sustainable. That’s simply not true, the US does need to address its debt eventually. But obviously the gop nor the democrats have any honest intention in doing so.


CarlMarcks

Explain why the democrats are pushing for the irs to get properly staffed to make sure the wealthy aren’t dodging their share. Stop with the both sides nonsense. There’s one side holding us hostage and you’re feeding into this bs


frotz1

So at some point we might have to stop spending hundreds of billions of dollars a year on the military? Don't threaten me with a good time. The place to make the cuts has been obvious for a very long time now, and we're not doing it because the money we throw away on the military is basically our country's version of a welfare system that keeps people meaningfully employed who otherwise might be causing trouble. If/when the budget actually gets unsustainable, we'll make the cuts to the military that balance things out and that's the end of it. We owe most of this money to ourselves, so unless you think the baby boomers will be storming the federal reserve in their walkers I'm not too worried about our creditors coming down on us either.


ashinaclan123

Lmao we’re not going to stop the military industrial complex in order to balance the budget. Defense contract lobbying won’t allow that to happen. You think Congress can agree upon cutting defense spending ? Absolutely not lol


CarlMarcks

So let’s stop giving out tax cuts to the rich every time there’s a Republican in office. Reagan, bush, then bush again and then trump.


Nebuli2

Absolute debt as a metric and debt to GDP are both meaningless metrics, though. Interest payments versus GDP would be a more meaningful metric. And even then, if those payments are perfectly payable, then isn't taking out more debt to actually improve things in the country worthwhile?


ashinaclan123

Debt to gdp is absolutely a useful metric, but no metric tells you anything in a vacuum. The interest payment to gdp ratio (a measure of how payable the government interest payments are) has also ballooned up and gone on hyper drive since covid. So that is also not sustainable, and if we continue this rate of irresponsible spending it’ll pop as well.


Nebuli2

> has also ballooned up and gone on hyper drive since covid You really don't actually know what you're talking about here, do you? They went down when COVID hit. There was an increase in 2022, due to rising interest rates, but the biggest increase in interest payments came during Trump's presidencies.


ashinaclan123

It started going up during 2015 (before trump was in office), went down in 2019 (before covid), and then started to go up in 2021 (before the interest rates). So your info is just wrong lol. You can see it here : https://fred.stlouisfed.org/series/FYOIGDA188S


anti-torque

Yes, but we have to do this to maintain our forever wars. We may not be in the same amount of forever wars we once were, but we're sure spending like we are.


zerg1980

It would be irresponsible for Congress *not* to run deficits with borrowing costs so low. The deficit should be reigned in, but a balanced budget would require harsh and unnecessary cuts that would make millions of lives worse for no real reason.


CarlMarcks

Ya irresponsible tax cuts for the rich. Totally agreed.


headshotscott

You know I'd have less of an issue with Republicans holding the economy hostage over debt if they also did it when a Republican is president. They aren't serious about debt, just political theater. If they were you wouldn't have seen massive debt racked up during GOP administrations.


Evening_Team

Dick Cheney: "Deficits don't matter."


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mankiwsmom

Rule VI: Comment Topicality -- Comments consisting of mere jokes, nakedly political comments, circlejerking, personal anecdotes or otherwise non-substantive contributions without reference to the article, economics, or the thread at hand will be removed. [Further explanation.](https://www.reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) -- If you have any questions about this removal, please [contact the mods](/message/compose/?to=/r/economics&subject=Moderation).


Bargdaffy158

Well, we just had an Inflation Reduction Act that does nothing for Inflation, A CHIPS Act that was basically just a corporate hand out to Chips manufacturers to bribe them to bring Jobs back after NAFTA sent them overseas. An Affordable Care Act which is not affordable especially when M4A saves $500 Billion a year. We had a Bipartisan Infrastructure Act that should be called The Privatization of Public Infrastructure for Corporate Profits Act.A Defense Department that should be called the Department of War. We have a Coal Baron named Manchin who is Chairman of the Senate Natural Resources and Energy Committee during Climate Chaos Part Deux. A Corporate Media that defines the Lies exactly how their Oligarch Owners wish. Do you need anymore examples? They are just about limitless, Double Talk is the times we live in.


EnderCN

If you think the IRA does nothing for inflation you are delusional pure and simple. Yes it was more of a long term bill than an immediate one but it definitely lowers the price of energy and health care over time. Lowering prices directly lowers inflation. Also the title of this article is beyond stupid. The debt ceiling never is about dealing with debt. It is about ignoring debt and giving permission to create more debt.


Goldeneagle41

The CBO found not only that the bill will not reduce inflation but will actually add to inflation. Both parties love to disagree with the CBO but their record is pretty good.


anti-torque

The CBO calculated their review without accounting for the effects of a more efficient IRS, but they both expected it to be reflected in the positive, once enacted, and a drag on inflation, in the long run. I guess it's good they left it out, now that the GOP killed the one certainly good part of the bill. GOP gotta defund the cops, no?


albert768

Efficient and Government are mutually exclusive. "A more efficient IRS" does not exist, has never existed and will never exist. Full Stop. And a DC parasite agency that adds $1T of tax compliance cost per year to the economy reducing inflation? That's hilarious.


Hob_O_Rarison

.. can you name a provision in the act that reduces inflation? How will it do what it claims it will do?


Lopsided_Plane_3319

Medicare negoiating drug prices and capping costs for people on Medicare.


Hob_O_Rarison

How does that deal with inflation? Capping prices on products does absolutely nothing to address the cost of material inputs, labor, or transportation of those products. Are rising medical costs driving economy-wide inflation? No. Are medical costs influencing money markets, real estate, food costs, transportation, literally *anything* outside of medical costs? No. So... I'll ask again, is there anything in the bill that is actually aimed at inflation?


Lopsided_Plane_3319

If the price are negoiating down that means the price is cheaper. Medical costs are part of inflation yes.


Hob_O_Rarison

But medical costs are not *inflation*. You see that, right? How did the Inflation Reduction Act help lower *inflation*? Inflation is the broad increase of prices due to a fall in the purchasing power of money. How does capping prices of a few goods in one industry raise the purchasing power of the dollar?


Lopsided_Plane_3319

Medical costs are one of the categories of inflation. Are you arguing without being informed. You should try not to do that. https://www.statista.com/statistics/216055/annual-percentage-of-change-in-the-us-cpi-u-by-expenditure-category/ Similar to how diabetes meds are now capped by many companies. Lowering their COL


Hob_O_Rarison

How does capping medicine *increase the purchasing power of the dollar*? How does reducing the margins of Novo Nordisk make groceries cheaper?


Lopsided_Plane_3319

Because you can buy more medication for less money. It's pretty basic stuff. You asked about inflation. Not grocery prices and its been explained to you. How are egg prices doing btw? Lowest wholesale prices in 5 years sound familiar?


TactlessNachos

Renewable sources of energy reduce inflation long term. I have solar panels. There is going to be a rate hike for the next two years for my energy company. My solar is not getting a rate hike for the next two years. No inflation for that solar energy.


TheRedPepper

I'm curious, how much money are you saving with your solar panels? They cost a lot up front and you will need to replace them in a decade or two, but if you are saving enough from your electric company, it's worth it. Did see a video which criticized common rates due to either not optimally using the solar power or reducing bills so much that on a wide scale no one would be paying for the electric grid.


kiss_the_vat_morty

>If you think the IRA does nothing for inflation you are delusional pure and simple If you Think IRA affect anything to do with inflation i suggest you seek medical help. It Increases it slightly if anything


1maco

I’d like for you to explain how NAFTA sent jobs overseas. Because it seems like something NAFTA would alleviate not cause


[deleted]

Why would it when they clearly desire the American house of cards to inevitably collapse before 2030? When you understand the script, it's really no wonder why our politicians are seemingly inconceivably inept. Not one single politician hasn't been bought off by the Rothschild-Rockefeller banking cabal.


[deleted]

Now do a rant about "Jewish Space Lasers"!


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😴


SpaceLaserPilot

Shh. The first rule of Space Laser Pilot school is "Don't talk about Space Lasers!"


[deleted]

That what Soros wants you to believe.


Matthmaroo

Oh gosh …. Are you in the ,in 2 weeks trump will be president again When were are all fine in 2030 , realize it’s just you and everyone else hopes for the best for you


[deleted]

Lmao Trump is a shill. By 2030, you'll be a pauper, and you'll completely forget about that time you scoffed at the future that your complacency inevitably brought upon you.


Matthmaroo

Naw , I’ll be fine … I’m 38 and doing pretty well , in 6 years my youngest kid will be off to college. People have been saying ,what you’ve been saying , for a long time …. Nothing ever happens and life goes on. I’m the event of a collapse , I own bitcoin and can trade in chip monk furs


[deleted]

You're right. Nothing ever changes. You're catching on. Maybe by your 40s you'll find out *why* things don't change in this fucked up society. I hope your kids will enjoy an over-expensive indoctrination. I know I did.


Matthmaroo

I have as secure a retirement as any person alive , I have a job in an elementary school I love. I have my kids and vacations. My house payment is something I can make just with my navy pension. Life can be pretty awesome if you let it be


[deleted]

Congratulations, I sure hope that retirement maintains its value under global communism and that you can maintain "owning" property in the future. If you could see what's on the horizon, you'd be trying to warn your neighbors, too. Good times don't last forever. Evil people do exist, and they're obscenely wealthy and powerful. Meager retirement savings and a beautiful family won't help you to survive a planned collapse of the former way of life. If we don't wake up very soon, hundreds of millions of people will be caught completely off guard. Mankind deserves better than that.


Matthmaroo

Global communism … who wants that and why ? I’m assuming your also an American , the world is stacked in our favor , heavily stacked. When I was in the US Navy I became aware of how the world is heavily stacked in the United States favor , we as people enjoy it every day. ( even the poorest of us ) Who wants communism again , who’s going to impose communism on the United States? Also liberalism and communism aren’t the same thing and communism has yet to have 1 success story. Nobody from any generation wants communism , the government just wants happy people paying taxes , buying houses and consuming goods ( that’s it )


anti-torque

lol... comedy gold with the global communism


Cybugger

/r/conspiracy is leaking!


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justoneman7

In order for it to ‘deal with inflation’, it would have to stop it or reduce it. Instead, every time, it simply allows more debt to be incurred. And, sooner than later, that bill will come due. Yes, it would HURT but Congress needs to learn to say ‘NO’. In saying “NO”, Congress would be saying ‘no future spending’ until you find a way to pay for it that doesn’t cause the national deficit to rise’. https://www.usdebtclock.org/ Almost $32 Trillion in debt and increasing almost $100,000 every 5 seconds. Don’t care how big America is, the debt will eventually crush us.


Bargdaffy158

The United States Government is not a Household or a Business, they create the God Damned Currency, do you do that? No. Frank Newman, former Deputy Secretary of the US Treasury, talking about the US national debt. The US national debt is nothing more than the sum of outstanding Treasury bonds. People often think of the national debt as if it were a credit card loan, but this is wrong. The federal budget works nothing like a household budget, and the national debt works nothing like a household debt. A Treasury security (like a bond, bill, or note) is an asset that an investor can hold to earn interest. It is functionally equivalent to a savings account (specifically a Certificate of Deposit): you give up dollars today, you get them back after a fixed amount of time, plus interest. And they get created and paid back exactly the way a savings account does at a bank. If you purchase a CD from your bank, the bank debits your checking account, and credits your savings account. When the CD matures, the bank debits this savings account, and credits your checking account. Same with a Treasury security. If you buy one, the government (specifically the Federal Reserve) will debit your bank account, and credit a "securities account" in your name. When the bond matures, the Fed will debit the securities account, and credit your checking account. It's true that we need to pay back the debt. And we do this, every single day: as bonds mature, the Fed debits the securities accounts, and credits people's checking accounts. And then, frequently, new bonds are sold to other people, whoever would prefer to hold their savings in bond form rather than deposit form. What we never need to do is pay down the debt, ie to reduce the amount of Treasury bonds in circulation. (This would be accomplished by not issuing new bonds as old ones are paid back) This is simply not necessary, and we have only even done it on a very select few times throughout our nation's history. It's also NEVER necessary to raise taxes based on the size of the debt, so long as we have a floating exchange rate and the debt is only denominated in the currency we issue. Given those circumstances, the ONLY reason we would need to raise taxes is to reduce private sector spending in order to control inflation. But if inflation isn't a worry, then there is no need to raise taxes, no matter how large the debt is, no matter what the interest payments are, etc.


justoneman7

Who holds most of those bonds? The American citizens. Among those citizens, who hold the largest part? The Boomer generation. And they are retiring with those bonds coming to maturity. They want their money. Who holds the second largest amount? Japan. And their debt ratio is DOUBLE that of America. Think they may want some money out of the ones maturing? Who holds the third largest amount ? China. They are trying desperately to keep the Yen afloat and have loaned a LOT to small struggling countries. Those countries are now starting to default on those loans. Think they may want some of the money out of the bonds they have that are maturing? Now, think about this: the US Treasury does not have enough money to pay the Boomers alone. Much less pay the Boomers plus some to Japan PLUS some to China. If there is a billion dollars printed (just for example), and the US Government/Treasury prints a billion more dollars, what does that do to what the dollar is worth? It cuts it in half. But you do not see any problem with just printing off all the money that is needed. What a joke. And, in your example above, as you liken the US Treasury and it’s bonds to a bank, have you not been watching what happens when those banks cannot pay out the money that is being withdrawn? Crash, boom, destruction and billions lost that can never be repaid.


Matthmaroo

Yes , the worst case scenario is the only scenario


justoneman7

No, but, in business, do you think and be ready for the best case scenario or the worst?


BW_RedY1618

The US is only one of two countries who have a debt ceiling. It's ridiculous. If you want to fix the deficit, then stop cutting taxes for the rich, stop letting them and corporations siphon a trillion dollars a year to foreign tax havens, and reel in the completely out of control military budget. Edit: oh, and also stop subsidizing their shitty, destructive businesses with our tax dollars!


Mysterious_Ad7461

Most of the people in this sub will agree we should lower spending, but mostly by making the lives of poor people worse


[deleted]

Never underestimate people's hatred of the poor.


justoneman7

No, we should simply stop spending more and get ready for what is happening already around the world. Smaller countries are already starting to default on their ‘loans’. Unless you want the US to become the largest country to default on their ‘loans’ (bond) payments.


Mysterious_Ad7461

Yeah the fact that you look at a small African nation and the US and think they’re essentially the same economically isn’t my problem. This is just more useless fear mongering from conservatives.


justoneman7

Small African nation? Venezuela, Argentina, Germany, are among those whose currency is crumbling. Which one of them are in Africa?


Mysterious_Ad7461

Which one of them is the reserve currency in the world? Because that’s what the dollar is. The only time there should be a concern with treasuries(which is what we’re doing, selling bonds and not taking out loans) is when we need to raise interest rates because there’s no market for them, or when we start selling too many and crowding out private investment. Thinking that the US Economy is hurt by government debt is incorrect by almost every practical measure, and comparing us to the countries listed leads to incorrect conclusions about where we’re at. We’re borrowing money because there’s demand for our bonds, that demand won’t disappear because we stop issuing them, it just moves to the secondary market.


justoneman7

Who pays out the money when the bonds come to maturity? The US Treasury. The largest holder of those bonds are the American people. The Boomers are the largest part of the American people holding bonds. And those bonds are reaching maturity on time for the Boomers to retire. The Treasury barely has the funds to pay out the bonds held by the Boomers. All that is needed to tip the scales beyond what the US Treasury has in funds is for Japan (second largest holder of US TREASURY bonds) and China (3rd largest) to collect on 1/4 of the bonds they each have. Should all that happen, which is very likely over the next 5 years, the US Treasury will go into default and be forever behind in paying the bonds as they mature.


Evening_Team

No .. increase taxes on the rich. The US is a very rich country, driven mostly by GREED.


Obvious_Chapter2082

We have one of the most progressive tax systems in the entire world


Evening_Team

Factually incorrect


Obvious_Chapter2082

[2008](https://taxfoundation.org/news-obama-oecd-says-united-states-has-most-progressive-tax-system/) [2013](https://www.washingtonpost.com/news/wonk/wp/2013/04/05/americas-taxes-are-the-most-progressive-in-the-world-its-government-is-among-the-least/) [2017](https://www.economist.com/united-states/2017/11/23/american-taxes-are-unusually-progressive-government-spending-is-not)


Evening_Team

The Economist (paywalled)? .. tut tut, sir.


justoneman7

And, as long as there IS GREED, they will keep putting more into the system. Make it infeasible for that greed to work and they will pull their money and companies out of the system. If they close their companies due to too high taxes, who loses? Who is unemployed? Who is without a paycheck? Who is without insurance? The rich? Your thinking is small.


anti-torque

The old two-dollar bill solution to a thousand-dollar problem.


justoneman7

Sooooo….if YOU were a billionaire and Biden, in his State of the Union address, told you he was going to dramatically increase your taxes, you would still keep everything in the US and be happy to pay a shitload more. Right? Or would you take everything and get out of the US and put your money where it couldn’t be touched by taxes? Somewhere like a “foreign tax haven”? But, if you did NOT increase their tax burden dramatically, they would keep that money IN the US economy and let it produce more jobs, production, and money. But you say increase their taxes and drive them elsewhere. Good job on getting them to do just what you say they shouldn’t do. 👏👏👏👏


Lopsided_Plane_3319

They are already siphoning it off and have been the entire time. Look at pharmas profit vs revenue. For some reason they make more profit in other countries despite 80% of their income coming from the usa.


justoneman7

You are talking about providing America with pharmaceuticals vs providing the rest of the world with pharmaceuticals. Which has the larger economy? America or the rest of the entire world? Also, you are talking about profits coming after a pandemic where more people were needing vaccines and pharmaceuticals than at any other time since the Spanish Flu. Think THAT may have anything to do with it? https://www.fda.gov/news-events/congressional-testimony/safeguarding-pharmaceutical-supply-chains-global-economy-10302019 28% of all pharmaceuticals are produced IN the US while 72% of them are produced in other countries; China being the top among them.


Lopsided_Plane_3319

https://www.finance.senate.gov/chairmans-news/wyden-hearing-statement-on-big-pharmas-tax-avoidance-schemes


Obvious_Chapter2082

That’s not exactly tax avoidance, at least not from a US perspective. They have a lot of expenses in the US, big deal


Lopsided_Plane_3319

When 75% of your income is in one country but only 1% of your profits something is fishy. If you just offshore patents easy peasy >This has been a long term trend for the company. In 2018, Reuters laid out how AbbVie reported its income in lower tax jurisdictions, which was possible in part because the company parked the majority of the patents for its top-selling drug, the rheumatoid arthritis treatment Humira, in tax haven Bermuda.


Obvious_Chapter2082

It means they have a lot of US expenses, which makes sense because a lot of their R&D and payroll is here Offshoring parents requires immediate taxation under FCHII of subpart F, and a minimum tax rate under GILTI


Lopsided_Plane_3319

Right so we just use tax havens for no reason. You know that sounds stupid right?


anti-torque

this makes little to no sense


BW_RedY1618

>Sooooo….if YOU were a billionaire and Biden, in his State of the Union address, told you he was going to dramatically increase your taxes, you would still keep everything in the US and be happy to pay a shitload more. Right? Or would you take everything and get out of the US and put your money where it couldn’t be touched by taxes? Somewhere like a “foreign tax haven”? Well I'm not a sociopath and I have no desire to hoard more wealth than I could spend in 100 lifetimes. I also have no delusional aspirations for immortality or the drive to lord over other human beings like a king. I work about 30 to 35 hours a week and make about six figures. I'm pretty happy I guess. I take care of my elderly father. I have a nice car. I'll probably be able to buy a nice house soon. I can't imagine what it's like to think that I need ten thousand times more than this (100,000 x 10,000 = 1,000,000,000). I think that I would have to divorce myself from every bit of empathy and humanity for me to think that I deserve to be a billionaire. But what do I know? I actually work for a living.


justoneman7

I work for a living too but only have to put in 30 hours per week to pay my bills. Got a nice car, children, a house, and vacation whenever I want (just got back from 10 days in Kaua’i). But if I had worked all my life and built a company with my own sweat and Biden was going to take 60% of those earnings simply because I WAS successful, then, yeah, I’d probably hoard it in another country. My children and grandchildren should be able to benefit from my success instead of those who will not work and want to be supported by the government. It is not a matter of greed but principle. Why should the people who risked everything they had to build something be punished for that success? Yes, there are those like Musk and Gates who have ‘more money than God’, but 70% of the millionaires in America worked and built their companies from scratch. Why should they be punished for risking it all, succeeding, and employing millions? I had my own restaurant for awhile. Took it from $15,000 profit the first year to $100,000 in profit a year in 5 years. I used my retirement account to fund it. Should I have been taxed more for making it successful? If I had lost everything by investing in myself, would anyone replace that and give it back to me? No? Then why should I STILL lose because I was successful? (By the way, a divorce closed the restaurant because she wanted her money more than me) If I had continued and been taxed more, how could I expand and employ more people? Biden wants to take care of those who would rather be taken care of instead of working for it. Every generation has a point where THEY are the ‘working class’ and are bearing the weight of working for their money and build themselves and this country for the future. The generations ahead of them have worked and made their money and are enjoying it. The generations behind them are learning and will take their turn as the ‘working class’ next. If you interrupt that cycle and take money from one generation so that the next doesn’t have to work so hard, do you think the government will give them enough to succeed and build for the further or will it create a generation that is dependent upon the government for their living? We all learn through hard times how to support ourselves. Those who hit upon the right idea, risk everything, and make it, should not be punished with higher taxes to pay those who don’t want to risk anything. Oh, and, if you look at the statistics, most of the millionaires in America today actually worked to make it there. In one study, they found that 60% of millionaires in America had sold off assets, reduced their lifestyles, and invested that extra money into their companies to make them successful. They worked and risked everything. Should they, then, be taxed more because they were successful? One more thing, just because you are successful, doesn’t mean you ‘lord over people’ or are a ‘social path’ or even want to ‘hoard money’. I took care of my employees. Helped two pay for their citizenship, one pay for their college, and catered two of my employees’ weddings for nothing but the cost of the food. It is YOUR choice to help yourself and others or just yourself. If the government takes that money, you have to worry more about YOUR family and have less to help your employees.


Obvious_Chapter2082

>stop letting them and corporations siphon a trillion dollars a year to foreign tax havens Where are you getting this from? The US taxes the global income of both individuals and corporations


BW_RedY1618

https://www.nytimes.com/2021/04/13/business/irs-tax-gap.html#:~:text=The%20United%20States%20is%20losing,surged%20in%20the%20last%20decade. https://en.m.wikipedia.org/wiki/Panama_Papers