Tax/War question

[zeitgeist]

Maybe someone can answer this for me because everyone avoids it like an STD

Why is it that everyone who supports the war in Iraq/Afghanistan dont want to pay higher taxes? I mean where is all extra this money supposed to come from? It just shows me how all these patriotic people want "victory" but yet dont want to sacrifice anything of themselves.

[maladroit]

i don't think anyone WANTS to pay higher taxes, but some people who make a lot of money realize that there is going to be a lot of suffering if the gap between tax revenue and spending isn't closed

iraq and afghanistan don't cost that much in relation to other government spending...iraq is by far the largest war expenditure and it has cost less than $570 billion since march 2003...that is the exact about the the budget deficit in a *single* year in 2004, and this year's deficit will be about twice that amount...the US national debt is over $10.6 trillion now, and it will probably crack $11 trillion before george bush retires in luxury...the current fiscal year cost of interest on that debt will be about half a trillion dollars...george bush and congress have been blowing cash like a trillionaire with cancer in a whorehouse...would you 'want' to pay more tax to finance that tab? go ahead and pay extra tax on your own...the rest of the country seems content to pass that tab on to future generations...their grandkids are going to be very angry at the sacrifices they will have to make for the current excesses...americans have been borrowing money from their grandchildren to finance an artificially high standard of living

[Mississippi Steve]

I don't make anything near what could be considered "a lot of money", in fact, last year my *NET* income was $26,000 and out of that I have to pay over $10,000 in taxes. Where is the money going to come from?? I don't know

[thcbongman]

I don't make anything near what could be considered "a lot of money", in fact, last year my *NET* income was $26,000 and out of that I have to pay over $10,000 in taxes. Where is the money going to come from?? I don't know

I had to pay 37% of my income in state and federal taxes last year for about twice your income, essentially paying under $20000 worth of taxes. Thank god my taxes will be reduced under Obama and so will yours. If I'm getting a tax break, yours will be bigger.

[maladroit]

the canuck government has been running budget surpluses for over a decade (including this year), and they are using tax dollars to finance hunt-and-kill missions in afghanistan...i am paying too much tax for the wrong reasons

[GoldenBoy812]

the rest of the country seems content to pass that tab on to future generations...their grandkids are going to be very angry at the sacrifices they will have to make for the current excesses...americans have been borrowing money from their grandchildren to finance an artificially high standard of living

This is a common misconception. Around 75% of all US debt is held internally. That means that 75% of treasury yields go to America and its citizens in one form or another. Hardly the zero sum game you make it out to be:jointsmile:

[Markass]

We shouldn't be policing the world in the first place...:thumbsup:

[GoldenBoy812]

We shouldn't be policing the world in the first place...:thumbsup:

This is true. Imagine if the money spent in and on Iraq were to be spent improving the American security infrastructure. The US lost out on trillions upon trillions of dollars in growth because of that very bad decision...

[maladroit]

even if all the $10.6 trillion debt is held internally, it still has to be paid back by future generations...that isn't a zero sum game per generation

[Stoner Shadow Wolf]

even if all the $10.6 trillion debt is held internally, it still has to be paid back by future generations...that isn't a zero sum game per generation



im confused... what is this "zero sum game" and such?


isnt it obvious that future generations are the ones who have to pay for everything the old farts do before they die?

[GoldenBoy812]

even if all the $10.6 trillion debt is held internally, it still has to be paid back by future generations...that isn't a zero sum game per generation

LOL, poor choice of hypothetical assumption, but it does prove my point.

Q:If it was to be 100% held by Americans, who would receive the future payments of the debt???

A: Future generations:thumbsup:

Understand now???

[GoldenBoy812]

im confused... what is this "zero sum game" and such?

A zero sum game is a form of competition between 2 or more parties where your success comes at the expense of the other parties failure.



isnt it obvious that future generations are the ones who have to pay for everything the old farts do before they die?

Yes, but.... Who do future generations pay?

[overgrowthegovt]

Yeah, I hate the idea that my tax dollars go towards death and destruction in Aghanistan. If you object to a war, you shouldn't have to pay for it. If everybody who supported a war had to pay extra, no one would support it (such is the nature of greed), so the West wouldn't have to commit atrocities in the Middle East anymore.

[maladroit]

"If it was to be 100% held by Americans, who would receive the future payments of the debt??? A: Future generations Understand now???"

- i understand people living on borrowed money won't be paying it back



"Who do future generations pay? "

- thanks to the trade and budget deficits, increasingly it will be chinese, japanese, british, and arabs too...the more they are owed, the more control they have over us monetary policy

[GoldenBoy812]

i understand people living on borrowed money won't be paying it back

What exactly are you saying? Social Security holds roughly 21%, federal agencies hold another 24%, 9% is held by the federal reserve, and another 14% is held by the private sector leaving 25% to be held by foreigners. Who e


thanks to the trade and budget deficits, increasingly it will be chinese, japanese, british, and arabs too...the more they are owed, the more control they have over us monetary policy

As one of the main opponents to deficit financing, i would have at least expected you to point out its most dangerous aspect. US debt is for the most part, simple redistribution of income from taxpayers to bondholders, in which the taxpayer and the bondholder are the same person. This means that interest payments have virtually no direct opportunity cost.

Yet when government debt grows, it takes from the potential pool of private investment that could be used to upgrade factories, train new skills, etc... This simple example of "crowding out" is by far the most dangerous aspect of higher debt. This will eventually lead to lower productivity.

The second most alarming aspect of debt service is the fact that we must repay external debt with the exports of real goods and services...

It is silly to worry about foreign nations controlling our debt service policies when the two examples above are much more troublesome...

[grow1964]

This war would have been over a long time ago if it was a pay as you go type of deal. Instead nothing has been paid on this and the federal debt has just increased from about 5 trillion when Bush came into office to over 10 trillion today.
This is just the tip of the iceberg too, wait until you see the bills for SS and medicare in the next 20 years. Those unfunded liabilities are around 60-70 trillion which makes the federal debt look small. LOL.
There is only 2 possibilities to get out of this. Print money (Hyperinflation) or default on the debt and liabilities. We could borrow it too I suppose but since wall street already bent over the rest of the world with their 500 trillion in derivitives I don't see the rest of the world lining up anytime soon to continue to finance Americas over indulgent lifestyles.

Its going to get ugly in the near future. Make sure you have some gold, silver or farmland or a combination of the above. Farmland would be best since you can always grow your own food, next would be silver then gold. Of them all Silver has the most potential for appreciation.

[Mississippi Steve]

im confused... what is this "zero sum game" and such?


isnt it obvious that future generations are the ones who have to pay for everything the old farts do before they die?

Speaking as an "old fart", I have been paying for it since before you were born. When I am no longer able to work, and have to retire, you and your children and your childrens children will pick up where us old farts left off.

[JakeMartinez]

I thought most of the US debt was held by the federal reserve for our money supply.

Moreover, money that goes to the fed is theirs to keep so I don't see how taxpayers get paid more than a pittance out of the debt.

[GoldenBoy812]

I thought most of the US debt was held by the federal reserve for our money supply.

Moreover, money that goes to the fed is theirs to keep so I don't see how taxpayers get paid more than a pittance out of the debt.

No, the Fed has in theory, an unlimited supply of money at their disposal. It is their purchasing of securities (US debt) that allows them to add to the reserves of member banks. Of course, this does allow them to potentially purchase guaranteed assets (USTC) if reserve deposits get re-appropriated on to the balance sheet.

It has to say something about the overall strength of the dollar relative to other currencies, because when things started to get tough, the entire world began purchasing dollars which has made my trip to Rotterdam much cheaper! Look at how the dollar has killed other currencies these past two months.

[grow1964]

Google the money masters to see how the money system really works. The creature from jekyle island is also a goo book by I think its edward griffin. Explains how the bankers took control of the US economy.

If you noticed in the last month or two there has been lots of talk on tv about how safe your money is. There's a reason for that. If everyone ran to take their money out of the banks there wouldn't be enough to go around. The actual money supply is only about 1% of what is really in deposits and investments. The rest is just digits.

For those that dont know, banks basically take in deposits and then lend out money based on those deposits. So if someone deposits 100 dollars the bank can lend out 1000 so they just created 900 dollars out of thin air. The money does not exist. Its just digits that are created and the banks count on the fact that everyone will never run to the banks at the same time to take out their cash.

The next thing to understand is that the credit bubble was created by greenspan and went from the stock market to the housing market. The problem wih credit expansion is that in order to maintain the bubble more and more credit must be created to keep it propped up. This is the reason so many assets are devaluating as we speak, from the stock market to the housing market. The bubble works great if you are the first one in. If your the last one in then you are stuck. Its like a pyramid scheme only legalized by the government.

Why cant they keep this bubble going? Simple really, people in the US are maxed out. They cant borrow anymore because the incomes for the average person have not gone up much and they can only service so much debt. Congress and the bankers all know this but they dont talk about it much if at all. If you notice in this latest bailout to the bankers the banks get all the money and they still refuse to lend it out. Thats because they know whats coming. They just want to get their money back and stick the taxpayer with the worthless assets (Houses). I shouldnt call them worthless, they have some value bu that value is much lower then where they are priced right now. The only thing they are really doing is delaying the inevitable. Think about it. In 2000 a house was selling for 120-140k. that same house is 300k today. well maybe its backed off to 250k. The real value of that house at 3% inflation would be around 150-160k. Real wages only went up at an average of 3% a year over the same period so how could the stock market and housing go up more? Look at the realvalue of the stock market, in 1990 it was around 2000 on the dow. The dow took 90 years to get to 2000. then in 17 year it went from 2000 to 14,000. Was there really that much of an explosion in the economy? If you were making 30k in 1990 are you making 210k today?

I could write for hours on the subject but will stop here for now. Well one last point. The US is owned by the bankers, insurance companies, drug companies, and the military industrial complex. When you understand this you understand why all of those industries give so much to reelect congresscritters. You also understand why war is so profitable for them and why there is very little investigation into the profiteering. You can then see why mandatory insurance laws are passed even though the supreme court has ruled against that. You can also see why Bush expanded medicare benefits to the elderly and why we suddenly have so many 'new conditions' that warrant the new drugs coming out. These companies all know if they can get congress to mandate it they can rob the citizenry blind and do so legally. Everything the government gets involved with become more expensive than the private sector running it. Get rid of medicare and medicaid and see how fast prices come down in the health industry. This is why the insurance companies and health industries are pushing so hard to make these things mandatory. Like in ma we have mandatory healthcare now. This is illegal according to the supreme court and is the reason why if you dont carry insurance there is only a 180 dollar fine. If the fine was to severe people would take this to court but because it is only 180.00 they wont fight it. Too expensive to fight it when you have to hire an attorney and pay thousands. In 10 years people will forget about the supreme court decisions and take it for granted that healthcare is a right. Another generation and noone will remember when there was no healthcare. This is also how they get away with taxing people directly from their paychecks. Also illegal but after 3 generations people have forgotten what income really means and are just used to paying taxes. Your grandparents or great grandarents didnt have taxes taken from their pay. They also knew that income was not that same as pay from working. Fortunately the Supreme court has also decided on many occasions what income is. (Congress nor the IRS can make that decision, only the supreme court can)

Ok i am definitely rambling here. I'm really done for now LOL..

[grow1964]

No, the Fed has in theory, an unlimited supply of money at their disposal. It is their purchasing of securities (US debt) that allows them to add to the reserves of member banks. Of course, this does allow them to potentially purchase guaranteed assets (USTC) if reserve deposits get re-appropriated on to the balance sheet.

It has to say something about the overall strength of the dollar relative to other currencies, because when things started to get tough, the entire world began purchasing dollars which has made my trip to Rotterdam much cheaper! Look at how the dollar has killed other currencies these past two months.

Yes but only because the rest of the worlds economies are in sad shape as well. Enjoy the strength while it lasts. The printing presses will be fired up soon. Its the only way.

[dragonrider]

last year my *NET* income was $26,000 and out of that I have to pay over $10,000 in taxes.

I think you need to get a better tax advisor.

[Mississippi Steve]

I think you need to get a better tax advisor.

Taxes as a sole propriator is a BOHICA event. FWIW, that was *AFTER* all the exemptions, deductions, and profit/loss statements.

[dragonrider]

Taxes as a sole propriator is a BOHICA event. FWIW, that was *AFTER* all the exemptions, deductions, and profit/loss statements.

Ha ha! I thought BOHICA must be some kind of tax statute acronym I had not heard of, like AMT or something. Googled it, and I guess it is not an official acronym...

Do you get business tax advice? And I'm not just talking about someone to do your paperwork --- I mean someone who can advise you on how to avoid taxes and run your business in a tax efficient way.

[apocolips31]

Maybe someone can answer this for me because everyone avoids it like an STD

Why is it that everyone who supports the war in Iraq/Afghanistan dont want to pay higher taxes? I mean where is all extra this money supposed to come from? It just shows me how all these patriotic people want "victory" but yet dont want to sacrifice anything of themselves. Don't tell me you're going to be ignorant enough to use the word "EVERYONE"...:wtf: You shouldn't be so stereotypical. As for the question I don't think anyone wants to pay higher taxes but, we all have to pay some tax. If only people who wanted to pay for the military paid for it we wouldn't do so well. Truth is most people if they could have their way they wouldn't pay taxes at all if that burden could be put on someone else.

[Mississippi Steve]

Ha ha! I thought BOHICA must be some kind of tax statute acronym I had not heard of, like AMT or something. Googled it, and I guess it is not an official acronym...

Do you get business tax advice? And I'm not just talking about someone to do your paperwork --- I mean someone who can advise you on how to avoid taxes and run your business in a tax efficient way.

Yes, I do have an accountant, and this year he has incorporated my business. Not that its going to do that much good, business is so slow, that so far this year, It has cost more to keep my doors open than I have brought in, and now the IRS is wanting another $6800 for my 2007 taxes, over and above what I have already paid in for quarterly estimated.

[JakeMartinez]

No, the Fed has in theory, an unlimited supply of money at their disposal. It is their purchasing of securities (US debt) that allows them to add to the reserves of member banks. Of course, this does allow them to potentially purchase guaranteed assets (USTC) if reserve deposits get re-appropriated on to the balance sheet.

It has to say something about the overall strength of the dollar relative to other currencies, because when things started to get tough, the entire world began purchasing dollars which has made my trip to Rotterdam much cheaper! Look at how the dollar has killed other currencies these past two months.

Of course it has an unlimited supply of currency. However, we all know the only thing that gives our money value is how much of it is in circulation.

I wasn't talking about that practice. I'm talking about the interest we owe for every dollar in circulation (physical or electronic) to the Fed.

You know, the way every dollar is one dollar plus a prescribed percentage of interest.