Latest Debt and Deficit Projections Warrant a Full-Scale Freakout

by James A. Bacon

The latest projections from the Congressional Budget Office (CBO) indicate that, given continuation of current levels of taxation and programmatic spending, the U.S. budget deficit will be running at $2.3 trillion a year by 2033, driven in large part by a $1 trillion-a-year increase in interest payments on the national debt to $1.4 trillion a year.

As it happens, 2033 is just a couple of years away from 2035, the year that Social Security’s Old Age and Survivors Insurance trust fund is scheduled to run out of money and the payout will be limited to what the program brings in from payroll taxes, limiting the payout to 77% of what was promised.

What’s the most likely scenario in the early 2030s? Congress will borrow to sustain the full Social Security payments, adding to the deficit and accelerating growth in the national debt. This year the deficit will be about 4.3% of gross domestic product. By 2033, it will be 7.3% — and that’s before a Social Security bailout. Interest on the national debt, which cannot be cut without triggering a default, will amount to 3.6% of the entire economy.

Absolutely no one in Washington, D.C., other than a few fiscal conservatives dismissed by the political establishment as cranks, is remotely serious about taming spending. The debate is about how much we add to domestic spending programs, thus accelerating our ultimate fiscal demise. Even if we had the political will to either slash spending or raise taxes, the deficit amounts to 5.4% of the economy this year. Closing that gap would plunge the country into a recession or, if stretched over several years, prolonged stagnation. Which means the politicians will never allow it to happen.

At some point, investors will get nervous and demand a premium to offset the increased risk of either default or inflation. Interest rates will surge, and the federal fisc will enter a slow-motion death spiral.

Virginia, like other states, is required by its state constitution to balance its budget. We’ll never face the catastrophic fiscal crunch that the federal government will. But the economic outlook will be ugly. Among the 50 states we are uniquely dependent upon federal spending — especially that which is termed “discretionary” spending… spending that doesn’t go to maintain the debt or pay for mandated transfer payments. You know, optional stuff like the military and salaries for federal employees. Thus, when federal spending contracts, Virginia will be the first to feel the effects. When our economy contracts, so will revenues. Thanks to our balanced budget mandate, that will compel tax hikes or spending cuts.

So, what can we do to prevent national fiscal catastrophe from turning into a local fiscal catastrophe?

First, maintain Virginia’s AAA bond rating. The rating won’t stay AAA in a Boomergeddon meltdown scenario — I doubt it will for any state — but you’d rather get sucked into the fiscal cyclone with a AAA rating than a BBB rating. Protecting our investment grade rating at least will allow us to continue borrowing when the time comes. Chicago? Not a chance. No one will lend it a dime.

Second, go for a AAA+ (even though that’s not a real rating). Pay off our unfunded pension liabilities which, despite pension reforms and a booming stock market through last year, amount to $34 billion. By the way, limit the power of public employee unions in their collective bargaining, now legal in Virginia, to extract bigger payouts from state and local government.

Third, maintain infrastructure in tip-top condition. The easiest form of stealth deficit spending is to fall behind in maintenance and short-change financial reserves. When Boomergeddon hits, you want your infrastructure in pristine condition, so when you do start falling behind, as you inevitably will, your roads, bridges, sewage-treatment plants, and all the rest won’t decline to Third World standards.

Finally, audit independent authorities, whose finances are largely out of the public eye, to see which ones are sound and which are marginal. The Virginia Ports Authority, the Metropolitan Washington Airports Authority, and other quasi-independent enterprises support critical infrastructure that Virginia cannot do without. Like the Commonwealth as a whole, they need to shore up their finances so they can continue to operate in Great Depression-style economic conditions.

I know, I know, Boomergeddon still seems theoretical and far off. But Virginia is spending billions of dollars to restructure its energy economy to do our insignificant part to head off a feared global climate disaster 80 years from now… which is even more theoretical and more far off. Remember, climatistas, there’s not much hope of completing the transition to a zero-carbon economy by 2050 if our economy collapses in 2035.

We freak out whenever the temperature hits a new high. Heed the fiscal signs. We should be equally freaked out when deficits and debt hit new highs.


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156 responses to “Latest Debt and Deficit Projections Warrant a Full-Scale Freakout”

  1. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Your suggestions about the steps the Commonwealth needs to take are all good ones. They would be good ones in any situation, not just as a means to prepare for a major financial crisis. I notice that your list does not include tax cuts.

  2. Eric the half a troll Avatar
    Eric the half a troll

    Hmmm… not a word about those Republican tax cuts for the rich in 2017 and how they exploded the deficit…. nor the drive by Republicans to do the same to Virginia’s budget now…

    1. DJRippert Avatar

      I’m sorry but who imposed the SALT caps that Nancy Pelosi has tried furiously to reverse?

      1. Nancy Naive Avatar
        Nancy Naive

        I’ll bite. Who?

        1. DJRippert Avatar

          “Enacted through former President Donald Trump’s 2017 tax overhaul, …”

          https://www.cnbc.com/2023/02/13/what-to-know-about-10000-deduction-limit-for-state-and-local-taxes.html

          1. Nancy Naive Avatar
            Nancy Naive

            So, limit SALT and tax a tax?

          2. DJRippert Avatar

            The SALT cap hurt me. A lot. But … it was Trump who pushed the idea of limiting the deduction of state and local taxes – very much a tax on the relatively wealthy.

          3. DJRippert Avatar

            I often disagree with you but I usually understand you. What are you talking about here? Given the vast amount of money spent on entitlements it’s hard for me to see how the debt is given to the 1%ers.

            Meanwhile, “The top 1 percent earned 22.2 percent of total AGI and paid 42.3 percent of all federal income taxes.”

            https://taxfoundation.org/publications/latest-federal-income-tax-data/#:~:text=In%202020%2C%20the%20bottom%20half,of%20all%20federal%20income%20taxes.

          4. Nancy Naive Avatar
            Nancy Naive

            Good.

            I’d rather see no cap on the SALT Deduction, eliminate the Mortgage Interest Deduction in favor of an above the line Mortgage Interest Tax Credit (at 25% for all payers with a cap indexed to some % of average home prices. Cool the markets), and eliminate completely the Charitable Deduction.

            Medical Deduction and the Advanced Premium should be on the same form and produce a below the line credit. If you earn $1M or $10, your medical expenses over the 9.5% of income should generate a credit, not a phased out deduction. For practical purposes, it will phase out for high earners anyway.

            Theft losses, etc., could go on Sched 1. Or hell, call it a capital loss and put it on Sched D.

          5. Randy Huffman Avatar
            Randy Huffman

            Mortgage interest is already capped at a loan balance of $750,000 I believe, so the wealthy buying ultra expensive homes already have limited deductions.

          6. Nancy Naive Avatar
            Nancy Naive

            Still, the value of the benefit is based on the tax bracket.

            The government pays 35% of my interest if I have $250K taxable income, but only 24% if my taxable income is 100K.

          7. Randy Huffman Avatar
            Randy Huffman

            If you believe in the progressive nature of the tax rate, as I do, then that is fair. The taxpayer in the 24% rate is not losing a benefit, he or she is just paying less tax, and the person at the higher rate is still paying more tax then the person at the lower rate on the balance of their income. I don’t view this the same as the child care credits, which is based on a higher number of people in the household.

          8. Nancy Naive Avatar
            Nancy Naive

            I do believe in the progressive tax rate.

            The income deduction (standard or schedule A) is based on non-discretionary expenses and losses, e.g., Medical, SALT, mortgage interest, ideally money all of us pay. Therefore, they should be the first income dollars paid. They come from the front of the income chain and should be taxed at the lowest rate. Therefore, the credit approach I suggested.

            This is as opposed to the discretionary deductions, oh say, a Traditional IRA or HSA contribution, which are the last dollars that should be taxed.

          9. Randy Huffman Avatar
            Randy Huffman

            There is a good argument no State or Local Income tax should be deductible. Why allow a deduction for a tax? Do States allow deduction for Federal Income tax, or Payroll tax? Of course not. The allowance of $10,000 was a compromise. The whole idea was to get the tax rates down, more simplified and have it less of a reason to employ expensive accountants and attorneys to look for loopholes (which proponents of higher taxes love).

            Medical should not be “1st dollar” as there is already a huge entitlement program underwiring medical, so its already addressed.

          10. Nancy Naive Avatar
            Nancy Naive

            Think of removing the sales tax on food, drugs, and clothing.

    2. Randy Huffman Avatar
      Randy Huffman

      Tax cuts for the rich? that argument has been debunked, and the deficit was not exploded, but it did go up.

      But regardless, Democrats had the ability to reverse every cent of those cuts when Biden was elected and Democrats controlled Congress, but they didn’t. So now Democrats own these rates too, and are benefiting from them with a stronger economy.

      1. LarrytheG Avatar

        tax cuts don’t “improve the economy per se. Where one agrees or not with a federal employee getting paid and spending it – the point is the money the Federal govt gets from taxes is used to pay mostly salaries for both federal and civilian employees who spend that money into the economy no different than salaries going to non-govt employees.

        So basically, when you cut federal spending, you cut that federal employee and replace him with a civilian employee. The money the Federal employee was putting into the economy goes away and is switched over to the civilian employee.

        When that happens, you are also losing the product/service the federal employee was providing which could be anything from an IRS phone help person to a guy who is a govt contractor building a missile. You cut Fed spending and you cut these positions when you do.

        The real question is what do we want to spend tax money on and is it of value to us rather than thinking taxes t hat go to the govt go into a black hole and not back into the economy just like non-govt spending does.

        1. DJRippert Avatar

          “So basically, when you cut federal spending, you cut that federal employee and replace him with a civilian employee. The money the Federal employee was putting into the economy goes away and is switched over to the civilian employee.”

          You are now arguing on the border between socialism and communism.

          1. LarrytheG Avatar

            Nope. I’m not advocating one way or the other. I’m just pointing out that a paid govt worker puts his salary into the economy the same way a non-govt worker does. If you cut the govt work in exchange for a private sector employee, you haven’t done anything to the economy other than switch workers.

        2. Randy Huffman Avatar
          Randy Huffman

          Nuts. I learned in Econ 101 tax cuts spurs economic growth. John Kennedy knew that too when he was President. But of course, you cant cut taxes to zero and have Government services, defense, entitlements, etc. We can argue about the degrees, but you cannot argue lower taxes doesn’t benefit the economy.

          1. LarrytheG Avatar

            You have to ask yourself if you cut a federal employee by cutting spending. What does the private sector gain from that? They gain the spending formerly spent on the federal employee but the Federal employee is gone and no longer spending that salary. All you’ve done is switch the same spending from govt to private sector. How does that spur “growth”?

          2. Randy Huffman Avatar
            Randy Huffman

            Nope. You miss the point of productivity, and the whole basis of our society and Country. What is that Federal employee doing, what is their purpose in a free society? That Federal employee should have to earn their position no different then private sector employees.

            You need to get down into the basics of capitalism. Why would an entrepreneur open up a business, only to have the Government take a large portion of it, and then regulate the heck out of him/her? Without profit motive, people will not work or take risks.

            Growth occurs when in a free society, owners take risks and find ways to become more productive, offer or create a new product, fill an unmet need. You need a profit motive to accomplish that.

            There are many great Federal and Government employees, I grant you that, but they are not the engine driving our economy.

          3. LarrytheG Avatar

            You’re on the right track with “productivity” but would you , for instance, claim that a Secret Service agent or a B-52 bomber pilot were “unproductive” and fire them to send that money to the private sector to employ casino workers or pornography films? Bottom Line, do you assume that someone who processes Social Security claims is _not_ productive and should have that job abolished so the money can be spent more “productively”?

          4. Randy Huffman Avatar
            Randy Huffman

            Of course not. But there are many instances of Federal employees doing nothing. If that happens at a private company, there is an owner who is going to dive into the question of what is that employee doing for me.

            What does the Government do….in many cases grow, tax and spend, unless they are being checked (and who does the checking?). There are alot of great motivated and caring Government (and non profit) employees. But as a society, the engine of growth comes from the private sector.

            Ill leave my comments there, feel free to respond and I will be happy to read it.

          5. LarrytheG Avatar

            You might make the claim about govt, but how do you “cut” without drilling down into actual positions in agencies?

            The govt can have “productive” positions also. Like the IT upgrading up a system that
            automates and needs less employees.. or a modern naval ship that needs less crew to operate, etc.

            You cut a govt position just willy nilly – there is no guarantee that the private sector replacement
            is any more productive.

            So you have the generic claim that the govt is not “productive” and the private sector is – but you
            can make cuts on that basis and really know what you are doing or even how much more productivity you have gained. Simple things. A postal worker or a TSA guy at an airport or a border patrol agent. You think these are by definition are not productive because they are govt?

            I don’t doubt for a minute you could do an audit for a particular agency and find some positions but you can’t do that on top level cuts. Similarity, there are LOTs of private sector positions that earn profits that have ZIP to do with productivity – theyre just things people are willing to pay for – like liquor or streaming entertainment.

          6. sherlockj Avatar

            A big question is whether we get increased productivity from the government IT investments that are very expensively funded to produce it. In my experience for ten years trying to bring enterprise architectures – both process and technology improvements- to government agencies mandated to have them, the resistance of the bureaucracies was fierce and effective.

      2. DJRippert Avatar

        Wrong again. Suddenly? Jim Bacon wrote Boomergeddon in 2010, 13 years ago. You ought to buy a copy and read it before ypu embarrass yourself further.

        1. Eric the half a troll Avatar
          Eric the half a troll

          Since then, of course, we have the 2017 Republican tax cuts that continue to be funded on the national debt. And again nary a word from the so-called fiscally conservative Conservatives….

          1. Randy Huffman Avatar
            Randy Huffman

            Economic activity was increased when the tax cuts were put in place, and are benefiting now because the Democrats did not reverse those cuts when they took full power in 2020.

            Be honest, the agenda of Progressives was to only raise taxes when they were raising spending. So they are trying to have it both ways, blame Republican’s for the 2017 tax curt, then raise taxes when they are raising spending. They don’t give a dang about the deficits.

            But there is a faction of Republican’s who do, and you would call them extreme. Bunk

          2. Eric the half a troll Avatar
            Eric the half a troll

            “They don’t give a dang about the deficits.”

            They are not the ones pulling a fire alarm about the deficit though, are they? Again, the point is the very “fiscally conservative” Republicans currently in a tizzy about the deficit cheered on the tax cuts they enacted that added significantly to the deficit – and are currently arguing to extend them – thereby adding even more to the national debt and deficit.

          3. Randy Huffman Avatar
            Randy Huffman

            You are wrong and not paying attention. That does not mean I agree with alot of things associated with the more conservative element of the Republican party, but I do know they in fact care deeply about the debt and deficits.

            The problem is most politicians care about one principal thing, re-election. To do that, you gotta give the public what they want. And most of the public does not have a clue about the dire financial problems we have. In many respects I understand that, because too many live paycheck to paycheck. Sadly, way too many live Government check by Government check.

          4. DJRippert Avatar

            There is nothing sudden about Jim Bacon’s fiscal conservatism.

  3. Nancy Naive Avatar
    Nancy Naive

    25% of the debt.

    1. DJRippert Avatar

      Have you started cocktail hour a bit early tonight, Nace? Your usually cogent comments are a bit off tonight.

      Full disclosure: I have started cocktail a bit early tonight myself.

  4. DJRippert Avatar

    I give up … how was the trust fund robbed? When Reagan and O’Neill worked out the trust fund agreement it was known that it would be a stop-gap measure. And, for the record, I have not yet received the first penny of my social security payments.

    1. Not Today Avatar

      The trust fund was robbed when Boomers voted themselves free access to the ‘trust fund’ to offer tax rebates. Did you get a rebate/refund/tax benny as a result of their ‘refund’ proposals? If so…you got paid.

      1. DJRippert Avatar

        What? The trust fund was not depleted to offer tax rebates. The trust fund is in place and, as expected, being drawn down as people cash their social security checks. If you believe the trust fund was robbed, I’d appreciate some independent evidence of that.

  5. James Wyatt Whitehead Avatar
    James Wyatt Whitehead

    Debt? Deficit? Nothing to worry about. Party and spend like it is 1999.

  6. As far as I am concerned there is only one event that could possibly warrant a full-scale ‘freak out’, and that would be the resurrection of Jerry Garcia. Then again, maybe you didn’t mean that kind of freak out…

    By the way, RE: …maintain infrastructure in tip-top condition.

    That ship has sailed, my friend. This country has been falling behind in maintenance and short-changing financial reserves at local, state and the federal levels for more than 100 years.

    1. Matt Adams Avatar

      It happens when your politicians are elected to campaign and talk about wedge issues, instead of being adults and working for the country.

    2. Warmac9999 Avatar

      Welfare will do that to a country as a politician can directly buy the vote of a constituent without laundering it through messy things like infrastructure and defense.

  7. LesGabriel Avatar

    For those who can still find it, it might be time to find and dust off James’s 2010 book “Boomergeddon”. See if he was wrong in any of his projections, other than possibly underestimating American voter tolerance for runaway spending and borrowing. For those who cannot find it, or worse, never bought one, you are in luck. It is still available on Amazon. Where is Ross Perot when we need him?

    1. DJRippert Avatar

      I still have my copy.

    2. I found a VG condition copy on eBay for $7.00…

  8. …when you do start falling behind, as you inevitably will, your roads, bridges, sewage-treatment plants, and all the rest won’t decline to Third World standards.
    VDOT has already achieved that for too many roads and bridges.

    1. I agree with you, but it’s not just VDOT. It’s infrastructure at all levels. We are not going to start falling behind, we are already behind and we have been for a very long time.

      Case in point: Richmond’s combined sewers. This problem should have been addressed decades ago but they “didn’t have the money”. Now it will quite possibly cost ten times as much (or more) to fix it as it would have in the 1980s or 90s, and they still don’t have the money.

      Of course, VDOT can’t replace or renew bridges if the Commonwealth is not budgeting money for replacements and renewal.

      1. James Kiser Avatar
        James Kiser

        Not just Richmond, how about Petersburg or Jackson Miss or Flint MI any other place or even the DC Blu Plains Treatment Plant which releases a million gals a day of raw sewage into the Potomac and has for years. Now with fentanyl and pot the population is going to pieces too. But Buttigieg is busy blaming the latest train derailment on Trump and white construction workers. BTW the ATC system isn’t working so hot and how long have the feds been claiming to modernize that?

        1. I was just using Richmond as an example. As I stated in my other comment, the problem is nationwide.

        2. This problem has nothing to do with race. We have aging, failing infrastructure in every city, town, and county in this country.

          No politician wants to do the non-glamorous work associated with funding the ongoing maintenance and eventual replacement of bridges, highways, water treatment plants, etc.

          Once the photo op at the ribbon cutting ceremony on the brand new bridge is over, they put it out of their minds.

          1. how_it_works Avatar
            how_it_works

            Like I’ve noticed with those reflectors VDOT has installed on new pavement.

            A few years later, they’re all broken and missing, and they won’t get replaced again till the road is resurfaced, if even then.

            If they won’t bother to maintain them why bother to install them at all?

        3. By the way, the “lead in the drinking water” issue in Flint, Michigan did not have anything to do with race or racism, either. Nor did it have anything to do with the state legislature “ignoring” Flint.

          The entirety of the problem was caused by city official(s) trying to save a few bucks by reducing/eliminating the relatively inexpensive process of injecting orthophosphate into their treated drinking water.

          A small amount of orthophosphate injected at the treatment plant (or a downstream location) creates and maintains a thin protective coating on the inside of water lines. Without that coating, even mildly aggressive water (which most surface water is) will strip lead molecules from old lead and [some] old galvanized water service lines and plumbing. These lead molecules are released into the water which runs through the lines into and throughout buildings.

          Flint, Michigan has a lot of old buildings with old lead and/or galvanized water service lines and plumbing. The reduction/elimination of orthophosphate from the city’s water treatment process was, therefore, particularly disastrous for them. Old lead/galvanized plumbing and water service are not ideal and should be replaced by building owners as soon as practical. However, the old plumbing in Flint did not release lead into buildings’ water supplies until human ‘bean-counting’, ignorance and/or stupidity entered the equation.

          There was never any lead in the actual drinking water supply for the city, and newer buildings with copper or plastic service lines and plumbing were not affected.

          1. how_it_works Avatar
            how_it_works

            Stupid people making stupid decisions with a bad outcome that then blame someone else. Same old story.

          2. Yeah, it’s a problem I’ve been grappling with my whole life…

            😉

          3. Not Today Avatar

            No sir. It was caused by Republican state officials appointed to oversee the local government of flint cutting corners to save a few bucks and ignoring citizen complaints about the change. ‘City officials’ had nothing to do with it. https://en.m.wikipedia.org/wiki/Flint_water_crisis

        4. James Kiser Avatar
          James Kiser

          Read his speech he said “white ” construction workers took all the infrastructure jobs.

        5. James Kiser Avatar
          James Kiser

          And since Water systems etc are local controlled and operated, the fault with the failure of these systems rest on local pols. Besides as pointed out in a WSJ article black majority communities don’t pay their bills to keep these systems. It is what happens when you promise “free” stuff.

          1. LarrytheG Avatar

            Then why does Virginia appropriate funds for local wastewater and CSOs ?

            Fredericksburg just recently received a state “grant” to help with their wastewater upgrade.

            Ditto with money from the State and the Feds in building reservoirs and drinking water plants.

          2. James Kiser Avatar
            James Kiser

            I don’t believe they should, it is income redistribution.

          3. LarrytheG Avatar

            same thing for economic development and money for new schools, etc?
            Basically any money appropriated at the GA level and sent to a locality or region?

          4. James Kiser Avatar
            James Kiser

            yes it is one thing to build a road network that benefits the entire country, it is another to build schools or foster development for a particular area is stealing from other areas.

          5. LarrytheG Avatar

            ever hear of SAFER grants?

          6. James Kiser Avatar
            James Kiser

            yes I have an d they are a big rip off

          7. LarrytheG Avatar
            LarrytheG

            just one of many, many, many Federal involvement in local communities and affairs. I don’t get the “ripoff” thing. The purpose of SAFER grants is to provide up-front money to a community to do something they’re not sure is worth it for local funding. So the Feds front the money to let the locality decide if it’s worth keeping and funding it themselves longer term. Right? They do similar programs for other things… same idea… short-term up front funding to “try before you buy”.

          8. James Kiser Avatar
            James Kiser

            I was actively involved with safer grants. It was a ploy to hire more public union people. People would get hired with federal money and the at the end of the grant period you had to make them full time. Which is what happened. Same thing happened with grant money for fire and rescue after 911. The whole country basically bought NYC a new fire dept. then when others complained the feds flooded the country with grant money all that grant money caused prices for fire apparatus to triple in one year. Depts that had no buildings over 2 stories high got million dollar ladder trucks they couldn’t use and I could go on and on.It is a nightmare and a rip off the average citizen.

          9. LarrytheG Avatar
            LarrytheG

            Our county liked the SAFER grants and after the grant money ran out, they kept the workers and paid them from local money. Seemed to be not a bad thing. The county did have the choice to not continue the grant-funded new workers. Not union…. And the locality and local elected do have to apply for the grant, right just like they have to do with most govt grants. Last time I checked, the SAFER grants were bipartisan also.

    2. how_it_works Avatar
      how_it_works

      Surely the best-run DOT in the country can’t be falling behind in maintenance?

  9. DJRippert Avatar

    No hope. Did you watch the State of the Union address? When our octogenarian in chief wasn’t busy lying about McDonald’s workers signing non-competes that prevent them from working at Burger King he was promising “free stuff”. Free head start for all. Medicare for all. Free college.

    When Republicans try to get ANY spending cuts by using the debt ceiling, Biden just blathers that he won’t negotiate over paying our debt. His typically l0w-information followers eat it up.

    I used to think that, in a worst case, the US government could sell the land and energy assets it owns and cut the debt. No such hope …

    https://www.cato.org/blog/can-federal-assets-cover-national-debt

    Nikki Haley is right – you can’t have people over 75 running the country. Not Trump and not Biden. They are too old to have anything to lose.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Have the Republicans said what spending cuts they want? I must have missed it.

      1. Not Today Avatar

        Yes, yes they have. They want to cut the social supports that allow the bottom 50% of Americans (majority-minority) to survive.

        1. DJRippert Avatar

          So, Dick says he doesn’t know what cuts are proposed but apparently you do know.

          Is Dick wrong or are you?

          Maybe you are clairvoyant.

          1. DJRippert Avatar

            Wrong again. Or, at least misrepresented. Scott proposed to sunset all federal legislation at five years. After that, Congress would have to vote to either continue the legislation or not. He stated that he would vote to continue both Social Security and Medicare when the five years were up.

            Forcing Congress to reconsider the laws hey pass every five years seems like a good idea to me.

          2. DJRippert Avatar

            I got my what? You don’t know me or anything about me. As I clearly stated, I have yet to receive even a single penny from Social Security.

          3. Not Today Avatar

            If you filed federal taxes in the US between 1980 and 2010, you benefited from the windfall (which also included additional benefits for paying for your kids to go to college and saving for retirement and investing).

          4. DJRippert Avatar

            Any income earning adult born in 1992 or before filed taxes during that timeframe. That includes a lot of non-boomers. However, I still don’t know what “windfall” you are talking about.

          5. Not Today Avatar

            What part of the combined house/senate would reinstate any of those programs? I’ll wait…

          6. DJRippert Avatar

            Wrong again.

            “I’ve never advocated cutting Social Security or Medicare and never would.”

            https://www.wsaz.com/2023/02/08/senator-rick-scott-pushes-back-social-security-medicare-cuts-claim-president-biden-is-set-visit-florida/

          7. Eric the half a troll Avatar
            Eric the half a troll

            If that is true, he could simply exempt those programs from his five year review requirement proposal… but he is not doing that, right…?

          8. DJRippert Avatar

            That is a counter-proposal from some Republican leaders. Mitch McConnell I believe.

        2. Warmac9999 Avatar

          Propping up failure has gotten us to this point – and it isn’t the fault of the billionaires.

      2. DJRippert Avatar

        Not sure about the specifics but generally, waving a magic wand and cancelling $400 billion of student debt would be off the Republican table. The idiotically named Inflation Reduction Act would have been dramatically cut back. The Infrastructure Bill would have been confined to infrastructure.

        At a time when deficits and debt are, as Jim Bacon correctly points out, ruinous – it seems the Democrats can’t find enough new ways to spend money we don’t have.

        1. Dick Hall-Sizemore Avatar
          Dick Hall-Sizemore

          Oh, yes. The Democrats are always to blame. Let’s see. The CBO report says that newly enacted legislation over the last nine months would add $1.5 trillion to the national debt. Over one half of that amount is attributable to new health benefits for veterans exposed to toxic burn pits, legislation that Republicans were in strong support of. Then there is the $550 billion resulting from increased defense spending, which Republicans insisted on. The CBO says that Biden’s Inflation Reduction Act will actually reduce deficits in future years.

          On the other side of the ledger, Republicans want to extend expiring tax cuts enacted under Trump and repeal the increases on high earners enacted last year. The price tax on those measures is an increase in the national debt of $ 3 trillion.

          Finally, I just want to point out that, since 1969, the only time there have been annual budget surpluses were four years under Clinton.

          1. Randy Huffman Avatar
            Randy Huffman

            Clinton balanced the budget with a Republican Congress, and without a lot of entitlement spending going on now.

            You are absolutely correct there is a lot of blood on the hands by many Republicans. So what do we do now? Demonize anyone who wants to address this and cut spending? That is what the Democrats and liberal playbook is.

          2. Warmac9999 Avatar

            Clinton budget proposal was for deficits into the future. Gingrich forced the balanced budget deal with Clinton.

          3. Randy Huffman Avatar
            Randy Huffman

            Your right.

          4. James C. Sherlock Avatar
            James C. Sherlock

            And Newt.

          5. DJRippert Avatar

            Despite all of his personal foibles, Bill Clinton was a good president.

          6. James C. Sherlock Avatar
            James C. Sherlock

            You say that $750 billion will be spent for veterans with toxic pit burns?

            A million dollars each for 750,000 veterans has to be an internet fable. What is your reference?

        2. Not Today Avatar

          So, basically, make the have nots pay for the haves?? AGAIN?? That’s the R plan?

        3. Warmac9999 Avatar

          Take a good look at the street vagabonds – propped up by government and no incentive to work out of the situation.

        4. The overwhelming majority of the “have nots” do not pay taxes. How, then, could they be made to “pay” for anything for anyone?

          1. Not Today Avatar

            You’re confusing income taxes with payroll taxes.

  10. James Kiser Avatar
    James Kiser

    The scary part which I have been watching for years as it grew is the 118 trillion in total debt the country will have. If the creditors ever stop lending the debt will crush us.

  11. Donald Smith Avatar
    Donald Smith

    Good stuff, boss. This is the kind of stuff we all need to be talking about, and thinking about, and (most importantly of all), decide what tradeoffs we are willing to make.

    As a dude nearing 60, I (and everyone else my age) have known for the past three decades that this day was coming. We had plenty of time to prepare. More importantly, we were told, three decades ago, that we couldn’t count on having the Social Security and Medicare that our parents had.

    We older folks can’t mortgage the future of our kids. We had our shot. They deserve theirs.

  12. energyNOW_Fan Avatar
    energyNOW_Fan

    Important to focus on why Social Security needs a fix by 2034:
    Much lower USA birth rates under 2 kids per family vs. 3 kids per family Social Security design basis. This results in less workers per retiree. So we either have increase input funds or reduce payouts by 2034.

    I suggest obvious compromise would be to trim down to 90% payout vs. today. Of course Dems will not accept it, and Repubs will not accept either.

    1. DJRippert Avatar

      Not sure how you get to 90% when the funds are sufficient for only 77%. Higher taxes or means testing? Or, more debt.

      1. Not Today Avatar

        Or increase death taxes.

        1. DJRippert Avatar

          Right, higher taxes.

          1. Not Today Avatar

            There’s nothing that will stop individual stupid choices. We’re talking policy and national priorities.

          2. Not Today Avatar

            Which ones? The ones that reneged on promises of 40 acres and a mule, redlined (barred) government backed loans (read FHA and VA) in urban communities or the ones that prevented (BLACK OWNED) vs. white operated banks from making loans or the ones that confiscated lands and gave them to white people?

          3. Not Today Avatar

            How is national policy implicated in any of that?

          4. Not Today Avatar

            Not really.🤷‍♀️ I don’t think about history or policy in terms of individuals but systems and impacts on groups/cohorts of people. Forest/trees and all that.

          5. Not Today Avatar

            I’m sorry. Families are hard.

      2. energyNOW_Fan Avatar
        energyNOW_Fan

        I am saying combo of reduction plus more pay into….compromise…Dems assume we must keep payout equal or greater than today, despite less workers paying into system. We do not necessarily have to. We need to relook the basis and perhaps conclude we do not have to keep equal or greater payout, specially since that means greater taxation than original SS design.

      3. energyNOW_Fan Avatar
        energyNOW_Fan

        I am saying combo of reduction plus more pay into….compromise…Dems assume we must keep payout equal or greater than today, despite less workers paying into system. We do not necessarily have to. We need to relook the basis and perhaps conclude we do not have to keep equal or greater payout, specially since that means greater taxation than original SS design.

    2. Eric the half a troll Avatar
      Eric the half a troll

      Removing the FICA cap would do it. Of course, the rich will not accept it…

      1. how_it_works Avatar
        how_it_works

        What you need to do is make FICA apply to dividend and capital gains income. That would really fix the problem.

        1. Eric the half a troll Avatar
          Eric the half a troll

          That is one I have not considered but it would solve things…

          1. how_it_works Avatar
            how_it_works

            Most “rich” get their income from dividends and capital gains, not working a job with a salary.

          2. Eric the half a troll Avatar
            Eric the half a troll

            True but I bet they also get more than $160K in regular income as well. Start there and then move to investment income as needs be.

        2. DJRippert Avatar

          Not a bad idea.

      2. DJRippert Avatar

        I’m not sure that would do it but it would help. However, Social Security was sold as a retirement plan, not a tax. That’s why it is considered the “third rail” of American politics. Removing the FICA cap without paying more out to those who paid more in would make Social Security just another tax.

        1. Eric the half a troll Avatar
          Eric the half a troll

          Getting into the land of semantics now but is there really a tax-to-future returns ratio set in the law? If so, it is clear that demographics have changed so that it needs to re-calculated. I wonder what percentage of wage earners had income in excess of the original cap versus now. I don’t know, tbh.

          1. how_it_works Avatar
            how_it_works

            Has the cap ever been adjusted for inflation?

          2. how_it_works Avatar
            how_it_works

            Well, these days you probably need to be making at least $160K a year to live in Fairfax in a place that isn’t a complete slum. Only reason I can afford to live where I do on what I make is because I bought a couple of houses 20 years ago.

          3. DJRippert Avatar

            Not really semantics. The reason Social Security is the “third rail” of American politics is because it is a the rare program where everybody pays in and everybody takes out. It is seen as a retirement plan rather than just another tax. Change that and SS no longer remains the “third rail” of American politics.

            “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

            FDR

          4. Eric the half a troll Avatar
            Eric the half a troll

            “…because it is a the rare program where everybody pays in and everybody takes out…”

            There have been many adjustments to the contribution and benefit base since inception and not always equal. There does seem to be plenty of precedent for keeping the retirement plan structure while increasing the contribution base without increasing benefits. Further, your argument would work the other way as well. One would have to reduce contribution if one reduces benefit making the program no more healthy in the end.

        2. how_it_works Avatar
          how_it_works

          As soon as we started talking about removing the FICA cap, I thought about that–people who paid in more are going to expect more.

    3. TacoTuesdays Avatar
      TacoTuesdays

      The obvious compromise is to create a program equivalent to the federal TSP program, with the same lifecycle funds and the entire 12.4% goes into that.

      Then there’s no worry about underfunding.

      1. LarrytheG Avatar

        SS and most pensions are, in fact, annuities that will pay you no matter how long you live.

        They do this by actuarials which determine for a group of people of an age how long they will live, on average, then determine the payout so that those that live longer still get a pension while those that live shorter stop getting payouts.

        A TSP is more of a fund that may well run out if not enough is put into it.

        And that’s the problem if we have a system that does not require a certain amount going into the account and cannot be taken out until retirement.

        Otherwise, we end up with people who used up their pensions and now need entitlements to live.

        This is what Social Security does:

        1. – mandatory
        2. – can’t use any of it until you retire
        3. – pays as long as you live
        4. – stops paying when you die, even if you die before you got back all of what you put into it.

  13. James C. Sherlock Avatar
    James C. Sherlock

    This nation never will permit austerity because the progressives will deny it is necessary and accuse conservatives of wanting to push grammaw off the cliff and starve children.

    And more than half the country are net consumers of National payments. Their votes will be bought by their needs. So the progressive’s work is done.

    Great Britain got there first. Look at the disaster of a patchwork government economy they are left with. The military they have left is third world. Admirals and bands.

    The collapse of the schools in progressive hands has been the final straw. Capitalism pays for progressive programs and they don’t even know or care. They’d hope that golden goose dies.

    Under our progressive school system and our third world rates of literacy and numeracy, it will.

    Then, and soon, America will try to inflate its way out of the debt, Weimar Republic style, and for the same reason. The debt is unpayable any other way.

    1. DJRippert Avatar

      “When the people find that they can vote themselves money, that will herald the end of the republic.”

      Benjamin Franklin

      1. Not Today Avatar

        So, legislatures and those currently in power keep voting themselves preferential tax treatment? On that, we agree.

  14. I’m all in favor of living within your means, but being fiscally responsible makes you a target. There is no limit to the greed of the left. Ask them to quantify the wealthy fair share – crickets. As the liberal paradises of CA, NY, IL etc approach bankruptcy due to their irresponsible policies and the flight of their contributing population, responsible states will be asked to pickup the burden. The liberal fantasy was created by borrowing, the new goal will be to maintain it through bailouts.

    1. Nancy Naive Avatar
      Nancy Naive

      “The liberal fantasy was created by borrowing, ”

      I thought liberals taxed and spent. You know, wealth redistribution.

      Therefore, cutting revenues while still spending must be the strategy of some other party. Wonder who?

      1. Nancy Naive Avatar
        Nancy Naive

        It has been a longtime GOP strategy (that never has worked BTW), that when they are in power they cut taxes, killing revenues, and they try to get the Democrats to cut spending when the Democrats are in power.

        It’s the family dynamic of trying to make the other parent look like the bad guy, “Mommy is mean, isn’t she? Candy bar?”

      2. Liberals tax, spend and borrow. Nice strawman though.

        1. Nancy Naive Avatar
          Nancy Naive

          Whereas Republicans just spend.

          1. I’m not happy with the excessive spending and borrowing from either party. You, however, seem to have no limit to it. How much is the fair share?

          2. DJRippert Avatar

            Jesus done left Chicago … err DC.

          3. Jesus would render unto Caesar the things that are Caesar’s, and unto the Lord the things that are the Lord’s – I think.

          4. Nancy Naive Avatar
            Nancy Naive

            I always thought that was feed the hungry, clothe the poor, and tend the ill.

            You’ve a point. But, I’d like to use it awhile before giving it back.

          5. I always thought that was feed the hungry, clothe the poor, and tend the ill.

            That too. But Jesus did not suggest that Caesar do those things, he implored us as individuals to do those things.

          6. Jesus only wants 10%. The morally superior democrats will never settle for that.

          7. LarrytheG Avatar

            excellent example of mega church evangelicals… literally in Jesus name….

          8. Despite their greed, they still offer a better deal than the democrats offer. If only someone could tell us what their fair share is… if only

          9. LarrytheG Avatar

            The mega church preachers offer a better deal? how? What are folks getting for their money?

    2. As predicted, no one has even tried to tell us what the fair share is. They all claim it’s not being met, but none can tell us by how much or how it is computed. Sounds like simple greed to me – they want it and we are supposed to pony up.
      Followup question: What do the poor owe to those who are paying their bills for them? Is there a class that has no obligation to society but can make demands that must be met?

      1. DJRippert Avatar

        The fair share is everything, unless (of course) you are a member of the political elite. How does Russia work?

    3. Not Today Avatar

      ‘Liberal paradises’ subsidize poor, red states. They’re not insolvent. They’re bankrolling flyover country through federal wealth transfers. They don’t need to borrow (but could because their economies are that big) but if they took their money and ran, a huge swath of the U.S. would NEED to fight to get it back.

      1. https://uploads.disquscdn.com/images/6b2e9aadd50c25009ece4594c67fcb6b3b003b9c5d11264ef83d72ce2b18e370.png Really? HI (50) receives the least federal money (as a % of its budget), followed by VA (49) and KS (48). NY (15) and PA (16) are above the top 20 in federal subsidies. I don’t see any pattern that would justify your claim.

        Have you figured out what their fair share is yet?

          1. An article, single sourced from a far left wing think tank, is hardly definitive proof. However, it raises an interesting question.
            If what you say is true, isn’t an extension of the democrat desire to tax the rich and give to the poor? In other words, didn’t they design the fed programs to not be revenue neutral to the states, but to help those in need? And if so, why are you complaining? Isn’t the system working as the left designed it to work? You know, from each according to …

            What would clear this up is if you could answer the question of what the fair share is. Then we would know if the transfer payments are correct or not, and how close we are to an equitable system. We are really trying hard to see, but we can’t proceed until we know what the fair share is. The ball’s in your court; equity is on the line; only you have the answer.

        1. LarrytheG Avatar

          Can you provide a link? Does it say what the actual “aid” is?

  15. LarrytheG Avatar

    Late to this discussion but no way we should “fix” Social Security with general revenue money. The program needs to be self-supporting as it has always been. It’s really like most annuities in that the economics are driven by life expectancy of the annuitants. When Social Security was first created, people generally only lived about 5 years longer than when they started getting benefits.

    Now, people live for a decade or longer and the age of retirement needs to be adjusted to that reality.

    People also forget that SS is more than just payments at retirement. It’s also pays for survivors , both spouses and kids if the person paying into SS dies.

    1. DJRippert Avatar

      Right. It is self-funding. Which is why “not today’s” endless claim that tax refunds have drained the trust fund is absolute malarkey. The funds are separate and distinct.

      1. LarrytheG Avatar

        The Trust Fund has no actual funds in it anymore. Other agencies borrowed that money and have to repay it , and the money they use to repay it is general fund money. When the govt borrows money, it first borrows from internal govt accounts before it goes to outside markets by selling treasury notes.

        So, basically the money that is now paying benefits, some of it is actually coming from general fund money repayment of FICA money that was borrow prior.

  16. LarrytheG Avatar

    There are two Medicares. Part A and Part B. Part A is funded from FICA taxes – like SS is. Part B is funded from general revenues with recipients paying about 25% of the premiums to receive insurance with a 20% copay unless they sign on to Medicare Advantage.

    We continue to pay almost twice as much for health care in this country than any other developed countries and it is most acutely felt in medical care for seniors who, now days, often receive tens and hundreds of thousands of dollars of benefits for things like bypasses, knee/hip replacements, cataracts, and the like. Very lucrative services for the providers also.

    It’s not sustainable and we cannot continue to pay more and more for those services and funding them by borrowing money.

    We have to rein in costs – like other countries have and just a reminder, the other countries that pay 1/2 what we do for medical , all live longer than US citizens so it’s not about denying care and letting people die. They pay 1/2 what we do and live longer.

    1. Eric the half a troll Avatar
      Eric the half a troll

      You could just remove the FICA cap and make the rich actually pay their way…

      1. James C. Sherlock Avatar
        James C. Sherlock

        “actually pay everybody’s way”

        1. Eric the half a troll Avatar
          Eric the half a troll

          Not true. Those making less than the cap have 100% of their income subject to FICA. Your choice is to cut the benefits to the disabled and elderly or increase income to the program. Seems like the time to eliminate this subsidy for the rich is about now.

          1. how_it_works Avatar
            how_it_works

            According to the AARP:

            “FICA and SECA taxes do not fund Supplemental Security Income (SSI) benefits. Those are paid out of general tax revenues (although the program is administered by the Social Security Administration).”

            SSI is what the people who are disabled and have insufficient work credits to qualify for SSDI get.

            SSI pays a maximum of about $800 a month.

  17. James C. Sherlock Avatar
    James C. Sherlock

    Progressives, running out of the ability to tax income and transactions, want to tax wealth.

    The ability to tax is the ability to destroy, which is what they intend.

  18. Nancy Naive Avatar
    Nancy Naive

    Let’s cut Social Security and Medicare. Oh, then do like Wisconsin did with it’s State retirement, and cut all Federal retirement pay and programs.

  19. Nancy Naive Avatar
    Nancy Naive

    At the end of fiscal year 2020, the debt was $26.9 trillion. Trump added $6.7 trillion to the debt between fiscal year 2017 and fiscal year 2020, a 33.1% increase, largely due to the effects of the coronavirus pandemic and 2020 recession.

    In his FY 2021 budget, Trump’s budget included a $966 billion deficit. However, the national debt actually grew by $1.5 trillion between October 1, 2020, and October 1, 2021.

    FY 2021: $1.5 trillion

    FY 2020: $4.2 trillion

    FY 2019: $1.2 trillion

    FY 2018: $1.3 trillion

    1. LMAO! Sure. Like the democrats fought hard to balance the budget, but the evil Trump ran right over Nancy Pelosi and forced her to introduce all that spending.

      Speaking of Nancy, Nancy, do you know that the debt increased >$10Trillion while she was speaker and had control of the legislative agenda?

      Is finger pointing the same criteria you use to determine what the fair share is? If we knew how to compute the fair share we could probably move a lot closer to a balanced budget. Why won’t you tell us how you do it?

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