I ran some examples of a 1% to 2% national sales tax. It fully covers SS shortfalls along with Medicare in the early years. Over the years 2060 to 21000, it still covers SS and most of Medicare.
In the early years, there is an excess that could be directed at the deficit. This assumes no changes to benefits or beneficiaries. I hope that in the next 50 years, we might be able to make some changes to health care costs. If the birth rate declines and we do get more robotics, that would mean fewer people receiving benefits, with hopefully no severe drop in productivity.
If the Bush plan had gone through, we would have mucho mula. The S&P was 1254 in 2005. Friday, it closed at 6602. Today, we no longer have much of the surplus. infact the structural shortfall is estimated at 1.3% of GDP by ChatGPT.
I’m no economist, but I can add that, unlike the cretin in the Oval Office. Taxes are coming; a national sales tax is progressive. The rich spend more and buy more expensive items so they will pay more. Ex food, medicine, and shelter, this may be the least painful way to fix it.
The other option is to raise the taxes on SS and Medicare. I would also target the tax on those two programs and the debt. Populism is a virus, and our politicians' addiction to cutting taxes with little concern for the consequences will end. A fiscal or monetary crisis will force higher taxes.
“Taxes are coming; a national sales tax is progressive. The rich spend more and buy more expensive items so they will pay more. Ex food, medicine, and shelter, this may be the least painful way to fix it.”
Sales taxes are regressive. The Europeans have transfer mechanisms in their tax codes for lower income people hurt by the VAT. Lower income people consume at a much higher percentage of their income than wealthier people do, so they are disproportionately affected by sales taxes
We disagree. It is ok. Everybody pays taxes, living off borrowed money will destroy the economy. At some point there is no such thing as other peoples money.
I remember Krugman’s critique of Bush’s SS privatization plan was that there was a shortfall in that particular design. But I think, especially with demographic challenges that mean fewer workers per retirees, it is insane to NOT have some sort of universal stock investment for old age. It could be a small percentage of SS goes to an age-cohort fund that - 40+ years later - is distributed on average gains? There must be a way we can take advantage of exponential stock price growth to lessen the tax burden.
There were two problems, one of which could have been easily mitigated. Fear of stock market losses, yes, if you had invested a portion of the funds taken in, which in 2005 were in surplus of the 40-year-olds and younger, you would have two and a half decades of growth. You could also have done what annuities do. A guaranteed return, you can invest in a variable annuity, which still has a guaranteed return.
Democrats opposed it reflexively because it was Bush. Democrats like guaranteed government-backed money. What is hysterical is that the guarantee is still backed up by taxes and a growing economy.
I fear the people who take the decisions are the wrong people. I read about a Congressional Committee hearing of the senior executives of the American motor car industry where someone asked how many of them had come to Washington in private jets? They all had come that way. We don’t have anything that rich in the UK but we seem stuck in a quagmire when it comes to decisions affecting anything other than private profit. A Lower Thames Crossing tunnel cost more in environmental reports than a Norwegian tunnel was built of a similar length.
"[Tariffs] raise prices directly, and they make production more expensive — that’s inflationary. But tariffs can also hurt the real economy, causing shocks in the system and an increase in negative sentiment that reduces aggregate demand. Reducing aggregate demand is disinflationary."
Both effects are real, but how the affect the average of all prices depends on a) what the Fed does and b) what effect the tariff revenue has on the deficit (and what the Fed does about THAT). I think it is big misake to alk about inflation without bringing in the Fed when the Fed is supposedly targeting inflation. It makes more sense to look at events like these as inputs the Fed's decison-making.
On #5, wouldn't the right model be the way a pension fund thinks about investment...perhaps more conservative.
On #6, no surprise here.... bureaucracies are run by metrics.. you put a metric out there, the organization will react to it.
on #7, I don't think the issue is technology. Rather, it is the question of how does one react/manage another government super funding an industry..(likely in an unsustainable way). Independent of national security concerns, the right answer is to take advantage, or perhaps have a small tariff which funds an ongoing local capability.
It’s been a while since this was the debate du jour on Twitter during the NYC mayoral campaigns, but would love to see a piece on tracking programs and their impacts on public/private schools and educational outcomes.
Well at least the Africa part was positive
Noah,
I ran some examples of a 1% to 2% national sales tax. It fully covers SS shortfalls along with Medicare in the early years. Over the years 2060 to 21000, it still covers SS and most of Medicare.
In the early years, there is an excess that could be directed at the deficit. This assumes no changes to benefits or beneficiaries. I hope that in the next 50 years, we might be able to make some changes to health care costs. If the birth rate declines and we do get more robotics, that would mean fewer people receiving benefits, with hopefully no severe drop in productivity.
If the Bush plan had gone through, we would have mucho mula. The S&P was 1254 in 2005. Friday, it closed at 6602. Today, we no longer have much of the surplus. infact the structural shortfall is estimated at 1.3% of GDP by ChatGPT.
I’m no economist, but I can add that, unlike the cretin in the Oval Office. Taxes are coming; a national sales tax is progressive. The rich spend more and buy more expensive items so they will pay more. Ex food, medicine, and shelter, this may be the least painful way to fix it.
The other option is to raise the taxes on SS and Medicare. I would also target the tax on those two programs and the debt. Populism is a virus, and our politicians' addiction to cutting taxes with little concern for the consequences will end. A fiscal or monetary crisis will force higher taxes.
“Taxes are coming; a national sales tax is progressive. The rich spend more and buy more expensive items so they will pay more. Ex food, medicine, and shelter, this may be the least painful way to fix it.”
Sales taxes are regressive. The Europeans have transfer mechanisms in their tax codes for lower income people hurt by the VAT. Lower income people consume at a much higher percentage of their income than wealthier people do, so they are disproportionately affected by sales taxes
We disagree. It is ok. Everybody pays taxes, living off borrowed money will destroy the economy. At some point there is no such thing as other peoples money.
I remember Krugman’s critique of Bush’s SS privatization plan was that there was a shortfall in that particular design. But I think, especially with demographic challenges that mean fewer workers per retirees, it is insane to NOT have some sort of universal stock investment for old age. It could be a small percentage of SS goes to an age-cohort fund that - 40+ years later - is distributed on average gains? There must be a way we can take advantage of exponential stock price growth to lessen the tax burden.
There were two problems, one of which could have been easily mitigated. Fear of stock market losses, yes, if you had invested a portion of the funds taken in, which in 2005 were in surplus of the 40-year-olds and younger, you would have two and a half decades of growth. You could also have done what annuities do. A guaranteed return, you can invest in a variable annuity, which still has a guaranteed return.
Democrats opposed it reflexively because it was Bush. Democrats like guaranteed government-backed money. What is hysterical is that the guarantee is still backed up by taxes and a growing economy.
I fear the people who take the decisions are the wrong people. I read about a Congressional Committee hearing of the senior executives of the American motor car industry where someone asked how many of them had come to Washington in private jets? They all had come that way. We don’t have anything that rich in the UK but we seem stuck in a quagmire when it comes to decisions affecting anything other than private profit. A Lower Thames Crossing tunnel cost more in environmental reports than a Norwegian tunnel was built of a similar length.
"[Tariffs] raise prices directly, and they make production more expensive — that’s inflationary. But tariffs can also hurt the real economy, causing shocks in the system and an increase in negative sentiment that reduces aggregate demand. Reducing aggregate demand is disinflationary."
Both effects are real, but how the affect the average of all prices depends on a) what the Fed does and b) what effect the tariff revenue has on the deficit (and what the Fed does about THAT). I think it is big misake to alk about inflation without bringing in the Fed when the Fed is supposedly targeting inflation. It makes more sense to look at events like these as inputs the Fed's decison-making.
Good list...
On #5, wouldn't the right model be the way a pension fund thinks about investment...perhaps more conservative.
On #6, no surprise here.... bureaucracies are run by metrics.. you put a metric out there, the organization will react to it.
on #7, I don't think the issue is technology. Rather, it is the question of how does one react/manage another government super funding an industry..(likely in an unsustainable way). Independent of national security concerns, the right answer is to take advantage, or perhaps have a small tariff which funds an ongoing local capability.
How is having the US Government invest in the US economy effectively different than having a tax system that increases revenue as the economy grows?
Do individual states invest funds in the market?
It’s been a while since this was the debate du jour on Twitter during the NYC mayoral campaigns, but would love to see a piece on tracking programs and their impacts on public/private schools and educational outcomes.