Re: how to compare living standards


"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote

The outstanding debt held by the public
is currently $4,800 billion.
The US population is currently 296 million.
So the per capita debt is about $16.2K.


If you are willing to stipulate that FICA is just another income tax, I am
willing to accept this.


That every man, woman, and child in America
owes that much to the government bondholders
is nonsense. The government rolls over its
debt and can do so indefinitely.


"Rolls over its debt ... indefinitely" means, in plain English, "pays
interest forever". Now where do you think "the government" gets the money
to pay that interest? Could it possibly be from "every man, woman, and
child in America"? Where do you think the _bondholders_ figure their
interest payments come from?


All government taxing and spending redistributes
financial wealth.


If it did not, we would not need a government, would we?


The government currently spends about
$2,500 billion a year, of which about $174 billion
is for interest payments on the debt, or about 7%
of total spending -- a relatively fraction.


Whether the word you left out is "small" or not, think about what that 7%
number means: it means that 7 cents of every dollar _you_ pay to the
government is going to debt service. If we eliminate the national debt by
"privatizing" it into 296 million individual debts your tax bill would go
down by 7%, assuming no change in government spending. If you are the
average person, your tax savings would be just exactly enough to pay the
interest on "your share" of the no-longer-national debt. Your cash flow
would not change at all. The _only_ difference, financially, would be that
you'd have a choice then which is not available to you now: to pay down
your balance (and not mine) if you _choose_ to. Why are you opposed to
personal choice here?


The largest spending by far is that of the
Dept of Health and Human Services and
the Dept of Defense.


Okay, but so what?


Tax revenue in support of government spending,
including interest on the debt,
is a function of taxable income.
Those with small incomes pay very little
toward government spending of all kinds.
Thus there is no meaningful way to "split the check."


That last sentence starts like a conclusion to a logical proof ("Thus") but
seems to have no logical connection to the rest of the paragraph. Maybe you
can explain. In the meanwhile, two points:

1) There are _plenty_ of ways to "split the check" for the debt, just as
there are plenty of ways to construct a tax code for overall government
expenditure.

2) There _is_ something different about interest on the debt, compared to
all other government expenditure: it is mandatory, and it is fungible in a
weird sort of way. We don't _have_ to spend money on the Air Force, and if
we choose to do so we are explicitly deciding to spend it on the Air Force
and _not_ the Navy. Interest on the debt is an expenditure on _everything_
we as a nation bought in the past -- including "tax relief".


And don't forget that the debt is constantly varying
as economic conditions vary.


If by "constantly varying" you mean "forever increasing", yes.


There is also an growth bias in the debt
that reflects the growth in the GDP.


Ooookay. But again, in the context of the present discussion, so what?
Whether we explicitly "split the check" or not, we can afford to carry more
debt if the GDP grows.


Tony I'm surprised you are still pushing this silly concept.


I will stop pushing _my_ silly idea the day Republicans stop pushing to
"privatize" Social Security.

-- TP


.

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