Don't worry, it's monopoly money anyway.
June 26, 2009 12:59 PM   Subscribe

Overly confident in the economic health of the United States? Feeling sanguine about current spending levels? Haven't yet been scared out of your wits about your financial future? No worries! The U.S. National Debt Clock page is for you! Your one stop shop for all things financial meltdown related: Total debt, debt per citizen, budget deficits and spending year-to-date, total governmental bailouts, and much much more!
posted by Justinian (77 comments total) 4 users marked this as a favorite

 
current debt per citizen: $32,209.
posted by Justinian at 1:00 PM on June 26, 2009


:( i think we messed up guys
posted by Optimus Chyme at 1:01 PM on June 26, 2009


Why do they put people with financial problems in charge of the nation's money?

Fuck. The people running this country don't seem so much malicious as they do complete and utter retards.
posted by kldickson at 1:02 PM on June 26, 2009


Probably should've gone with a monospace typeface.
posted by Sys Rq at 1:09 PM on June 26, 2009 [6 favorites]


guys its ok we can just print more money
posted by Avenger at 1:12 PM on June 26, 2009 [1 favorite]


Fuck.
posted by empyrean at 1:15 PM on June 26, 2009


To the extent it's debt owed to ourselves it's just deferred taxation.

To the extent it's debt owed to others it's just deferred currency depreciation.
posted by @troy at 1:15 PM on June 26, 2009 [5 favorites]


The people running this country don't seem so much malicious as they do complete and utter retards.

No, they just do whatever's the most politically expedient at any given moment, knowing that our gnatlike attention span and corporate-controlled media will provide them with cover from any personal consequences from their decision. Because no-one who actually is responsible is ever held responsible. Every now and then they have a little diversionary show of token accountability, but the one in the hotseat is usually someone who'll get a lot of media attention while being in terms of scale the smallest possible potatoes and completely unconnected to the real malfeasance that's going on. Or does anyone currently believe that the most significant financial misconduct in the last few years was committed by Martha Stewart?

And by the way, on behalf of those of us using flashblock, was it really necessary to have 39 flash movies instead of one with that loaded 39 movie objects internally?
posted by George_Spiggott at 1:21 PM on June 26, 2009 [7 favorites]


We just need to raise taxes on upper income earners back to 1970's levels (or at least 80's levels) and we could pay down our debts and start running annual surpluses again in no time. Support responsible tax policy, or stop whining about deficits.
posted by saulgoodman at 1:24 PM on June 26, 2009 [10 favorites]


What was I supposed to learn from this? Is it news that the US has a large national debt? Frankly, it seems an awful lot like Republican propaganda. You know, the same Republicans who cut taxes for the wealthy when they don't need it, then make cuts to valuable social programs to use as political cover for ridiculous defense spending?

Some food for thought: How does the US debt compare to that of other countries? Is percent-of-GDP a better measure of the severity of the problem than the absolute numbers? Which presidents oversaw a rise or fall in the debt?
posted by Garak at 1:25 PM on June 26, 2009 [1 favorite]


> We just need to raise taxes on upper income earners back to 1970's levels (or at least 80's levels) and we could pay down our debts and start running annual surpluses again in no time. Support responsible tax policy, or stop whining about deficits.

The really crazy thing is that if we actually did that, the only people who would squawk louder in protest than rich people would be...poor people.
posted by Stonewall Jackson at 1:27 PM on June 26, 2009 [5 favorites]


I like this one better.
posted by chesty_a_arthur at 1:46 PM on June 26, 2009


Oh shit - we're in deep trouble. When we're in such debt, why do we keep spending?
posted by garnetgirl at 1:57 PM on June 26, 2009


Click. Eh?
posted by Mblue at 1:58 PM on June 26, 2009


Needs more Yakety Sax.
posted by ryanrs at 2:04 PM on June 26, 2009 [3 favorites]


Some food for thought: How does the US debt compare to that of other countries? Is percent-of-GDP a better measure of the severity of the problem than the absolute numbers?

I think % of GDP is probably a better measure. But the links which show the US about in line with a lot of other countries is misleading as it only goes up through last year. The US debt as a % of GDP is set to skyrocket starting this year and will soon pass 100% of GDP. In 2 years we'll go from 22nd to 6th or 7th on that list. In 5 years we'll be up there with Zimbabwe which isn't a good place to be.

Most people don't realize that as bad as those numbers look now, we're set to double the debt very rapidly. Like in 5-8 years depending on economic growth, health care reform costs, etc.
posted by Justinian at 2:05 PM on June 26, 2009


I wonder what sort of tax rate hike you'd need to have before you'd start to see not just capital but actual physical expatriation among people with high incomes.

In the 70s and 80s, remote work wasn't a real possibility for most people. If you were an executive at XYZ Corp., it was pretty much expected that you'd have your ass in a chair in an office at XYZ Corp. HQ. That doesn't seem to really be the case anymore, or at least it doesn't have to be. Email, video/teleconferencing, cheap air travel, a greater emphasis on outsourcing and familiarity with distributed workplaces ... the same sort of things that let me work from my home office would pretty easily let some guy run a company from Dublin or Moscow, if he wanted to.

I notice that Russia has a flat 13% income tax on resident income. While I don't know if it would be at the top of most US expats' lists, if you were in a very high income bracket it might start to look tempting. Spend 184 days a year there (minimum to qualify for residency), winter in Antigua or some other sunny place, get paid by an international subsidiary rather than directly by a US corporation.

Maybe there are countries that will try to do for the rich what Ireland did for corporations. It might be worth it to some countries to accept a relatively flat tax system, in the hopes of bringing in capital from abroad in the form of wealthy expat residents.

I'm not suggesting a Galt's Gulch sort of scenario, just that tax rates in the past were built on the assumption of asset and personal mobility that was true at the time; those assumptions may no longer be true. At the very least I think it's safe to say that the tradeoff calculations those taxes encouraged would have different values inserted into them if they were run today. Whether or not the effects would be significant, I don't know.
posted by Kadin2048 at 2:06 PM on June 26, 2009


Frankly, it seems an awful lot like Republican propaganda.

I don't think so. George W. Bush broke the economy. That's certainly not Republican propaganda. It's not Clinton's fault that GWB broke it. It's certainly not Obama's fault that GWB broke it. Is it "fair" that Obama wants to do all kinds of great things but that GWB broke the economy before he got into office? No. Life ain't fair.
posted by Justinian at 2:07 PM on June 26, 2009


What was I supposed to learn from this?

Speaking only for myself, that it was a pretty cool web page with lots of interesting info in one place.
posted by Justinian at 2:12 PM on June 26, 2009


I'm not suggesting a Galt's Gulch sort of scenario, just that tax rates in the past were built on the assumption of asset and personal mobility that was true at the time; those assumptions may no longer be true.

There's a simple work around for that.

Put diplomatic pressure on other countries not to accept economic expats or to require them to collect US income taxes on our behalf and penalize them if they don't comply.

If you can't appeal to people's sense of patriotic duty or even basic civic responsibility, then fuck 'em.
posted by saulgoodman at 2:19 PM on June 26, 2009 [1 favorite]


I wonder what sort of tax rate hike you'd need to have before you'd start to see not just capital but actual physical expatriation among people with high incomes.

Funny thing if you tax land ownership it doesn't matter where the taxpayer goes.

Is it "fair" that Obama wants to do all kinds of great things but that GWB broke the economy before he got into office? No. Life ain't fair.

Good argument for raising taxes back to where they were before W so we can "unbreak" the economy and move collectively forward again.
posted by @troy at 2:26 PM on June 26, 2009 [1 favorite]


I've always wanted to know: what's the difference between debt (USA sells China bonds) and simply printing more money? It seems that since both create money from nowhere and bonds need to get paid off it would be better to just print money. I know that causes inflation, but why doesn't borrowing a few trillion dollars for CHina cause inflation?
posted by GuyZero at 2:27 PM on June 26, 2009


to require them to collect US income taxes on our behalf and penalize them if they don't comply.

Finally, a use for our trillion-dollar military!
posted by @troy at 2:31 PM on June 26, 2009


I know we have a ton of really, really smart financial folks as posters here on MetaFilter. I mostly know this from the hours I spent with eyes glazed trying to decipher other meaty discussions here about all sorts of terms I don't know.

That said, can one of you lovely folks maybe explain how the per citizen debt thing affects individuals? Does that mean we need to....pay it?
posted by lazaruslong at 2:34 PM on June 26, 2009


Funny thing if you tax land ownership it doesn't matter where the taxpayer goes.

@troy: Serious question for you. I'm intrigued by this notion but how would you deal with companies like, say, Google, who occupy relatively small land areas but who's net worth is billions upon billions of dollars? Wouldn't a land-tax scheme allow landless but powerful companies and individuals to amass enormous amounts of money and undue influence?

Also, we have about $40 trillion in medical bills for our aging population coming due in the next 30-40 years or so. I'm trying to figure out how any tax on property, no matter how high, is going to pay for even a fraction of that.
posted by Avenger at 2:35 PM on June 26, 2009


I know that causes inflation, but why doesn't borrowing a few trillion dollars for China cause inflation?

Theoretically the inflation is exported to the creditor country. There was a massive rise in global GDP since the 90s since everyone got more productive and fuel prices were low until relatively recently.

I don't have a total grip on the macro situation but money supply and the physical output of the primary and secondary tiers of the economy were in some sort of gross balance. Part of the problem though is that this balance was achieved across the RMB/USD divide causing the Chinese to collect USD into their currency reserve, up to two trillion dollars or so.
posted by @troy at 2:37 PM on June 26, 2009


Is it "fair" that Obama wants to do all kinds of great things but that GWB broke the economy before he got into office? No. Life ain't fair.

Well, the problem Justinian, is that these programs aren't merely idealistic attempts to push a progressive agenda. They're necessary to head of an even more serious long-term health care crisis.

If historical trends in health care spending continue unchecked by major policy reforms, health care spending (which is already closing in on 20% of GDP) is projected to swell to unsustainable levels approaching 100% of GDP by 2082.

That's not a government spending issue. It's a deeper systemic problem and basically means that our entire economy will be consumed by health care costs. Even if for unforeseeable reasons the trend doesn't hold and health care spending doesn't reach those levels, health care is already a massive drain on our productive capacity, and there's no reason to think that trend won't continue indefinitely into the future without massive restructuring of the entire health care system.

Just throwing a few health care tax breaks at people isn't going to cut it. One way or another, we have to suck it up and tackle this problem now.


That said, can one of you lovely folks maybe explain how the per citizen debt thing affects individuals? Does that mean we need to....pay it?

I'm not particularly a financial wizard, but I know this much: no. It just means our government has outstanding debt obligations (treasury backed bonds) worth roughly that much per person. If it ever gets to the point at which the federal government defaults on those bonds, the last problem we'll have to deal with is repaying it. People just cite that statistic as a scare-tactic (or more charitably, to "put the numbers in perspective").
posted by saulgoodman at 2:39 PM on June 26, 2009


Oh no, if that doubles in 5-8 years, it'd take my household a whole six years to pay off that debt! SIX YEARS! That's as long as it takes to pay off a car! Wait, that actually doesn't really seem *that* bad. But yeah, tax rich people more, to Nixon-era tax rates. That'd also allow us to talk more about Nixon in the media, and his racist and sexist and anti-Semitic beliefs, and remind people that he was a Republican.

Sanford/Ensign for president in 2012! Rah rah rah! Hell, that deserves an extra one: RAH!
posted by jamstigator at 2:42 PM on June 26, 2009 [1 favorite]


I'm intrigued by this notion but how would you deal with companies like, say, Google, who occupy relatively small land areas but who's net worth is billions upon billions of dollars? Wouldn't a land-tax scheme allow landless but powerful companies and individuals to amass enormous amounts of money and undue influence?

Power over what? As long as it's not land or what comes from the land I say more power to them. Google, Microsoft, GSK, Apple have a lot of cash on their books and provide prime employment for many thousands of people.

At any rate, land value taxation is tightly bound to zoning, too. Everybody wants relatively clean manufacturing jobs so the local tax authority could easily eliminate LVT under productive fixed assets to $0, a practice of long-standing here in the states already.

LVT is just one mechanism to take parasitical rentiers out of the economy, Ho Chi Minh style.
posted by @troy at 2:44 PM on June 26, 2009


I know that causes inflation, but why doesn't borrowing a few trillion dollars for CHina cause inflation?

Because supposedly we'll pay back the debt by growing our GDP enough that we can pay it back with money we weren't forced to just print.

Now, apart from money taken into the economy through exports and providing services to international markets, I have no idea whatsoever where the money that makes up the difference comes from. Well, that's not totally true. I think the treasury just prints it, but there's some mumbo-jumbo that accounts for why, if there's been GDP growth, we can just increase money supply without causing inflation, but I've never quite been able to wrap my head around the precise mechanics of how that works. (I.e., how does the money get injected into the system? Who gets to decide where it goes? I think the answer to this last question is the banking system, but I'm not sure.)
posted by saulgoodman at 2:46 PM on June 26, 2009


"just" deferred taxation and "just" deferred currency depreciation, huh? That's okay as long as we can indefinitely keep deferring, but we've just seen the eventual failure of "I can survive excessive mortgage debt by selling my over-leveraged house after the price goes up". "We can survive excessive public debt by taking on more debt after the GDP goes up" doesn't sound like a much better idea, although I admit it's worked for decades. And if it ever does fail, the extra currency depreciation and extra taxation are going to hurt a lot of people. I'm trying to plan my own far-off retirement based on a weaker dollar in a weaker economy, but it's not easy and there are a lot of people who will be retiring sooner and who either won't or can't do the same.
posted by roystgnr at 2:48 PM on June 26, 2009


If historical trends in health care spending continue unchecked by major policy reforms, health care spending (which is already closing in on 20% of GDP) is projected to swell to unsustainable levels approaching 100% of GDP by 2082.

You know, there are only two real "fixes" that I can see for this problem.

1) Socialized healthcare. Doctor visits, x-rays, surgeries and so forth are rationed by the government. Everyone gets an average, early 21st-century level of care. Innovation and efficiency drop dramatically, but so do costs. There will be horror stories about "Grandma X was denied Chemo because the govt. says she's beyond her expiration date!".

2) Fully private healthcare. Doctor visits, x-rays, surgeries and so forth are not explicitly rationed, but are de-facto rationed by your ability to pay. There will be horror stories about "Grandma X was denied Chemo because she didn't have any money! The bake sale barely covered her lancets!". Innovation and efficiency will do well, but only for those who can afford it. The poor and lower-middle class will see dramatic reductions in health and lifespan.

The real kicker (to me, anyway) is that both "fixes" really amount to the same thing: medical care being rationed and given to some people at the cost of others. The only difference is that in plan 1, medical care is rationed in favor of the masses, while in plan 2 medical are is unoffically rationed in favor of the wealthy or the lucky.

What kinda scares me is that Obama and the democrats are kind of leaning towards plan 2 right now.
posted by Avenger at 2:51 PM on June 26, 2009 [4 favorites]


We have socialized health care right now. When a poor person goes in to the emergency room and can't pay, the rates on everyone who DOES pay goes up to compensate. So everyone can sorta get *some* care, at least when it's an emergency (and costs the most). Thus, what we currently have is socialized health care being done in the absolute most expensive and least effective way imaginable. What we need is *better* socialized health care.
posted by jamstigator at 2:56 PM on June 26, 2009 [1 favorite]


Well, the problem Justinian, is that these programs aren't merely idealistic attempts to push a progressive agenda. They're necessary to head of an even more serious long-term health care crisis.

You won't get an argument from me. But I have zero confidence that the congress can pass, or Obama would sign, the revenue-raising bills to pay for it. It's a lot easier to spend money than it is to raise it in taxes, unfortunately.

Here's what I would do: Uncap payroll taxes which are an incredibly regressive tax right now. Tax employer-provided health care benefits just like we tax any other non-cash payment. Raise the top couple of brackets to what they were under Bill Clinton. Lower the bar for the minimum income before you pay income tax, even if its just a symbolic 2% or whatever, until everybody not under the poverty line pays something. (This is controversial, but it is simply unsustainable for almost 50% of people to pay no federal income taxes; people should have a financial stake in the government, not just be able to vote tax increases for other people). Lastly, if this isn't enough revenue, a 1% across the board VAT.
posted by Justinian at 2:56 PM on June 26, 2009


There are a very few people who made it to where they are by skill and hard work.

The overwhelming majority of the Monied Class got rich through family and inter-family connections. Those networks are here, and the old-rich would be, quite frankly, helpless without them.

As for the others, the innovators and master businessmen... most of them got rich by leveraging charm and wit and figuring out who's coat-tails to ride. The real work of empire-building is done mostly by middle and upper-middle class professionals, and everyone who's ever, y'know, had a job, ought to know this by now.

For every self-made billionaire, there's a dozen self-made millionaires eager to take his spot when he flounces off to Antigua. They will eagerly use the infrastructure and culture that allowed the billionaire to exist for themselves, while the billionaire's power and influence will be vastly reduced.

So, if they wanna go, let 'em. If they wanna stay, pony up. Civilization ain't free.
posted by Slap*Happy at 2:59 PM on June 26, 2009 [3 favorites]


There will be horror stories about "Grandma X was denied Chemo because the govt. says she's beyond her expiration date!".

I hear those horror stories now. Only it's the insurance company dropping coverage and/or claiming preexisting condition, so what's the difference?

All health care systems ration care. That's the point of health care systems: you have to have some mechanism for determining whether or not particular medical services are called for in a particular case. The choice is between letting the market and profit motives determine how best to ration health care, or letting the medical establishment through government health care programs determine how best to ration care by setting standards of practice.

Leaving it exclusively up to individual doctors in a purely private model turns out to be the most inefficient way to provide health care, because profit motive dominates, and pretty soon a lot of doctors are giving all their rich clients multiple procedures and treatments they don't need while shutting out the economically disadvantaged (who are more likely to have health problems in the first place due to lifestyle issues).

Somewhere in the range of 80--90% of people likely wouldn't be able to afford life saving health care without going into unsustainable levels of personal debt in a purely private model. If you think the mortgage crisis hurt the economy, just imagine the harm 50% or more of the population facing bankruptcy due to unmanageable medical debts would do.
posted by saulgoodman at 3:07 PM on June 26, 2009


(This is controversial, but it is simply unsustainable for almost 50% of people to pay no federal income taxes)

The way I see it, low taxation on the poor just ends up reflected in higher rents to landlords, like that scumsuck NY absentee landlord with the investment property in Idaho; screw new VATs, tax rents. I fail to see what is so controversial or opaque about this :)
posted by @troy at 3:24 PM on June 26, 2009



Its ok, I fixed it

posted by toni_jean at 3:29 PM on June 26, 2009


What kinda scares me is that Obama and the democrats are kind of leaning towards plan 2 right now.

Obama's not leaning that way in the slightest. His health care proposal includes a public option and he just recently reiterated his support for a public option (did you miss the primetime ABC health care special somehow?). In fact, he's made numerous statements that a plan without a public option won't go far enough.

Don't lay this on Obama. I don't know how much more political muscle you can put behind getting congress to do the right thing (beyond the usual arm twisting which also only gets you so far) than getting a major television network to do an hour-long special pitching your proposal.
posted by saulgoodman at 3:29 PM on June 26, 2009


You and I might know that, @troy, but try adding half of the Americans who currently pay no federal taxes to the tax rolls and see how controversial it is. "But you pay that money in rent as it is, and rents will gradually fall in response" may be true, but it won't fit on a bumper sticker.
posted by Justinian at 3:32 PM on June 26, 2009


(This is controversial, but it is simply unsustainable for almost 50% of people to pay no federal income taxes)

Cycle the wealth at the top end back down into the economy through higher tax rates and public services, and before long, that 50% will shrink as more people move into the taxable income bracket.
posted by saulgoodman at 3:33 PM on June 26, 2009 [1 favorite]


Another vote for returning to the tax brackets of yore. My father - in the Sixties - paid a lot of taxes, but he never complained because the G.I. bill helped him, and he wanted to help the less fortunate. The military budget troubled him, as it troubles me.

So: TWO things. Soak the rich and shrink the American Empire. Is there a way to convince Americans to accept this plan before it all turns to shit?
posted by kozad at 4:44 PM on June 26, 2009


Wow. Never have I seen such an absurd use of so many Flash embeds on one page. Should have come with a label for people using non-Windows operating systems: "WARNING: this site will destroy your browser by loading forty instances of Flash at once".

Yes, I use a Mac and I'm bitter because Adobe has continually fucked Mac users over by producing slow and crashy builds of the Flash player.
posted by spitefulcrow at 4:52 PM on June 26, 2009


back down into the economy through higher tax rates and public services and before long, that 50% will shrink as more people move into the taxable income bracket.

or landlords will find more money to squeeze from their tenants and the poor stay right where they are. cf. Progress & Poverty.

I've lived in the N, C, and S California and Tokyo, and everywhere I've gone I've seen the dynamic described in that book first-hand. AFAICT, between medical goods and services and real estate, the everyday civil economy is almost half rentierism of some sort.

The solution to secure true progress is somewhat complicated but without directly taxing the rentiers I'm afraid we'll be just chasing our tails, policy-wise.
posted by @troy at 5:12 PM on June 26, 2009


There are a lot of corporations that make shittons of profit and don't pay taxes, too.

Maybe the one and only thing that needs to be done is close the damn loopholes.
posted by five fresh fish at 5:28 PM on June 26, 2009


Yes, as @troy is point out the relationships between income, income growth, taxation, and prosperity at the lower (and even middle) ends of the spectrum are complicated. As incomes rise, so do rents and such. So that money often goes directly into the hands of landlords. Now, you can raise the taxes on the landlord and get some it back or you can cut out the middleman and have even relatively low income people some income taxes and use that money to improve quality of life for everyone. It's obviously not that simple but neither is it as simple as "don't tax low and lower middle class folk, only tax upper middle and upper class folk". Taxes can get passed along just like other kinds of costs.
posted by Justinian at 5:28 PM on June 26, 2009


As incomes rise, so do rents and such.

Which is what rent control is for. (Just keep lining 'em up and I'll keep knocking 'em down... ;)

Also, who said anything about taxing the upper middle class? With just a more reasonable level of taxation on the share of wealth brought in by the top quartile, considering the sheer volume of wealth in those hands now, we could solve all these budget issues in short order.

Thanks to the last two decades of undoing progressive taxation, 80% of the annual income in America goes to only roughly 20% of the population.

So yes, under normal circumstances, you could argue that the lower 50% should at least be expected to share some of the tax burden. But when that bottom 50% of the population and the remaining 30% of the population who already pay income taxes are left divvying up a mere 20% of all the income earned every year in the US, the math doesn't exactly add up.

You have to assume that the bulk of the remaining 20% of annual income goes to the 30% who pay income taxes. So the bottom 50% of the population, frankly, aren't left with much to contribute to the tax base.
posted by saulgoodman at 7:06 PM on June 26, 2009 [1 favorite]


Sorry--my numbers are way off. I was working for memory. Hold on. BRB with the right stats.
posted by saulgoodman at 7:14 PM on June 26, 2009


The Peter G. Peterson Foundation is the best website on this topic.

And the debt per citizen is more like $184,000 per person, 483,000 per household.
posted by BigSky at 8:26 PM on June 26, 2009


Okay so, here's my redux with corrected and more carefully vetted numbers: Roughly 49.9% of the annual income in America now goes to the top quintile (the top fifth of earners). Another 23% or so of all income earned goes to the next quintile. (That's 72.9% of all annual income earned going to the top two fifths of earners.)

That leaves the bottom three quintiles to split the remaining 27% of all annual income earned. So my original numbers were off, but the upshot isn't much different.

Here's a chart of how those income distributions have changed from 1947 through 2007.

Here's a detailed breakdown of income distribution of (pretax) household annual income by quintile as provided in this Census Report based on 2006 data (PDF warning!!; see page 17):

First (Lowest) Quintile: 3.4%
Second Quintile: 8.9%
Third Quintile: 14.8%
Fourth Quintile:23.0%
Fifth (Highest) Quintile: 49.9%

(Interestingly, the top 1% of earners account for roughly half the income earned in the highest quintile, so even at upper income levels their are significant disparities.)

This graph based on U.S. Census data (assuming it's accurate), shows the breakdown in percentage terms of the households falling within each quintile:

First (Lowest) Quintile: 28%
Second Quintile: 23%
Third Quintile: 18%
Fourth Quintile: 11%
Fifth (Highest) Quintile: 17%

Putting these two sets of data together, it seems that roughly 69% of households in the U.S. fall into the three lowest quintiles. So just under 70% of the households in America control only 27% of all the income earned in a particular year. Of these households, the largest subcategory of households--fully 28% of all households in the US--take in only roughly 3.4% of the income earned in a given year. And 51% of all the households in America account for only 12.3% of annual income.

And you think it's a good idea to raise taxes on that 50%?
posted by saulgoodman at 8:46 PM on June 26, 2009 [2 favorites]


arrgh!!! "their" --> "there" (hate that mistake)
posted by saulgoodman at 8:49 PM on June 26, 2009


And the debt per citizen is more like $184,000 per person

No, that's counting future unfunded liabilities, like the $32T Medicare deficit. Fixing the healthcare system in this country is a high-order thing we have to tackle to get our collective fiscal house back in order.

The present debt held by the public just went over $7T today, or $20,000 per capita. I don't count debt held by the gov't since this $4.2T wouldn't be a problem at all if it were the only debt.
posted by @troy at 9:29 PM on June 26, 2009


Put diplomatic pressure on other countries not to accept economic expats or to require them to collect US income taxes on our behalf and penalize them if they don't comply.

So the solution is to coerce other nations to do something that's clearly contrary to their own benefit, in order to prevent anyone from escaping. Great.

Setting aside my knee-jerk objection to any economic system that requires turning the border guards around in order to prevent defectors, there are a number of practical problems with this.

One, the era in which the United States had enough leverage to compel other nations to pass up economic opportunities just because it inconveniences us, is rapidly drawing to a close. I suspect it's already over. The US can't even shut down internet gambling in Antigua. Short of pulling a North Korea — waving our nuclear weapons around until the rest of the world decides to subsidize us, lest we do something really rash — there's just no way to force one-sided, Opium War-style concessions on the rest of the world like that. To do it, we'd have to accept concessions in the other direction, which would presumably cost us as much as the other countries stood to gain from US expats. The net result is that the US would have to pay other countries (whether literally or in the form of trade or diplomatic concessions), in order to keep them from accepting our expats. It might be satisfying to keep the rich chained to their oar, but it would be costly.

Two, you would basically shut down skilled immigration with such a policy. People have traditionally moved to the US for economic opportunity, and after blind luck and geography this has probably been our biggest asset; making it impossible to leave once you're a citizen here doesn't seem like the greatest advertisement. (But on the bright side, maybe we could change the national anthem to 'Hotel California'. That'd be worth something.)

Trying to avoid the difficult questions of balancing taxation carefully against capital and human outflows by simply clamping down on the movement of people and capital isn't a recipe for success.
posted by Kadin2048 at 9:50 PM on June 26, 2009


People have traditionally moved to the US for economic opportunity, and after blind luck and geography this has probably been our biggest asset; making it impossible to leave once you're a citizen here doesn't seem like the greatest advertisement.

Hey, calm down there, buddy!

Note, I also suggested, as an alternative to discouraging expatriation, that we require other countries to enforce Us tax laws when they permit our citizens to take up residence, collecting their taxes in absentia on our behalf. There are other countries around the world that have similar agreements with the US.

And as for not doing anything to discourage immigration of skilled labor, fuck all but if it isn't it'already in decline anyway! And guess what? That trend will just continue as long as our economy is in free fall. You're probably going to find that "America, land of opportunity" is a pretty hard sell when there are no actual opportunities left. Already a lot of top IT companies are relocating their own top talent to countries like India. Expect that to continue until we get our shit together, expat hostile policies or no.

Bottom line, it's up to us to craft policies that our in our best interests as a nation. Frankly, if a bunch of assholes are willing to jump ship rather than man up and contribute whatever they can, then they're free to quit their citizenship whenever they like, and I'll be more than happy to stand on the dock, blowing kisses at them as their ship sails away.
posted by saulgoodman at 10:45 PM on June 26, 2009


damn. must be getting tired and/or drunk. never made so many typos in my life.
posted by saulgoodman at 10:46 PM on June 26, 2009


No, that's counting future unfunded liabilities

Yes, of course it's counting future unfunded liabilities. You can't just wave those liabilities away by stating a need to reform healthcare. David Walker in a video interview here, suggests some reforms. Perhaps that could work, but implementation seems unlikely. I'll believe the $32T are a non-issue when I see it.

-----

I wonder what sort of tax rate hike you'd need to have before you'd start to see not just capital but actual physical expatriation among people with high incomes.

Interesting question.

Maryland Millionaires Go Missing

"Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. ... Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls."
posted by BigSky at 11:00 PM on June 26, 2009


Does that mean we need to....pay it?
Well, not you personally, but yes, you collectively. The debt listed is held by the government, and they pay the interest on it, and in theory the principle, through money collected via taxation. In the same way you don't have to pay off your credit card, you can just pay the interest, the government can maintain its debt level but is required to pay the ongoing interest.
Clearly, if the debt was paid, the lack of an interest bill would allow more government spending, or lower taxes, so eventual repayment is desirable, but in the current landscape, unlikely. Note also the figures are per person, and as a society we have a large number of people who can't/don't contribute, like children and the elderly, so if you are a taxpayer the share you will probably ultimately have to repay is about double.
The unfunded future liabilities are a different story. They project the bill for current welfare and healthcare spending forward, accounting for demographics, so that as the proportion of elderly grows, the numbers swell greatly.
This is comparatively not as big a deal, as the government can change the rules around its obligations, for example means testing recipients so only the poorer people get full social security or prescription drug entitlements.
This is bad news if you are expecting to retire on social security in 30 years unless you expect to live a very meager lifestyle, but if you plan to be self supporting in your retirement you have less to worry about.
Of course, people are upset at the idea that after contributing to social security all their lives they get nothing back because they have too much money in other savings etc. but I suspect you will have to get used to the idea.
Where I live, social security is collected as part of general taxation, and distributed according to a means test. The aged pension is quite modest, so many people try to establish their own savings for retirement (and we have a compulsory 9% superannuation tax that you must invest until you are 60) but who then do not qualify for the state pension.
This seems a better setup. There is a safety net government pension for everyone needing it, but if you have enough of your own money you don't get it. Coupled with enforced savings, it means in a generation or so, the numbers on the government pension will remain relatively small.
Note we do face the increases in healthcare costs, however.
posted by bystander at 11:02 PM on June 26, 2009


One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls."

Good riddance. They probably hogged all the handicap parking spaces, too.
posted by saulgoodman at 11:04 PM on June 26, 2009 [1 favorite]


Good riddance. They probably hogged all the handicap parking spaces, too.

Ah yes, the typical "progressive" refusal to acknowledge the importance of incentives. But notice what happened to tax revenues. (They decreased.)

So where's the money gonna come from?

From the opinion piece:

"All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O'Malley's 'fair share.'"
posted by BigSky at 11:20 PM on June 26, 2009


I'll believe the $32T are a non-issue when I see it.

On its face it's a nonsensical number. We can't continue paying xx% of GDP on medical care. Something's gotta give, and that something is the huge profit margins that the players -- specialists, nursing homes, insurance processors, malpractice lawyers -- in this space are generating for themselves.

Or we could be libertarian about it and continue grabbing our ankles waiting for the Invisible Hand to save us.

One-third of the millionaires have disappeared from Maryland tax rolls

One third of millionaires have disappeared from all tax rolls. Haven't you been paying attention to recent events?
posted by @troy at 11:23 PM on June 26, 2009 [1 favorite]


So where's the money gonna come from?

From the wealthy. Durr. They can run but they can't hide.
posted by @troy at 11:24 PM on June 26, 2009


(Interestingly, the top 1% of earners account for roughly half the income earned in the highest quintile, so even at upper income levels their are significant disparities.)

The L Curve. Zoom in twice, then zoom out all the way. Keep a bucket nearby: you just may want to throw up.
posted by five fresh fish at 11:30 PM on June 26, 2009


Good riddance. They probably hogged all the handicap parking spaces, too.

Good riddance until your tax receipts go into the toilet. The idea is to maximize tax revenue, not feel good about yourself because you stuck it to The Man. Clearly rich people are willing to move between states to avoid paying a certain amount of taxes. The barriers to moving countries are obviously significant steeper so you can raise the top tax bracket higher before seeing much of an exodus.

The question is exactly how high you can raise it. Put it back to 90% and, hell, I'd leave the country if I ever managed to get into that bracket... which I won't. Put it back to 39.6% and I expect revenues will go way up. Put it at 45% or even 55% and I don't know what will happen. Certainly I'd rather see the top marginal rate increase gradually than punitively raise it to 60% all of a sudden. If it gets to 44% and revenues decline because growth stalls or because people start putting in the effort to hide their money you can drop it back down to 42% or whatever.

Which is what rent control is for. (Just keep lining 'em up and I'll keep knocking 'em down... ;)

Rent control helps a very few at the expense of the many, and sometimes not even that since it can lead to crappy conditions. Hell, Paul Krugman thinks rent control is a bad idea and he's the poster boy for liberal economics these days. When Milton Friedman and Paul Krugman both tell you you're out to lunch, it's time to reassess.

But, hey, this isn't theoretical: Prop 13 in California is essentially the biggest experiment in rent control ever performed and has been an absolute and terrible disaster. The state just had its bond rating lowered to one step above JUNK BOND status because of the economic catastrophe brought about in part by rent control in the form of prop 13. Yes, rent control has destroyed the, what, sixth largest economy in the world.
posted by Justinian at 11:35 PM on June 26, 2009


Prop 13 in California is essentially the biggest experiment in rent control

?

Isn't Prop-13 the opposite, ie. the biggest giveaway to commercial landowners imaginable? I agree that rent-control is teh suck as far as public policy goes, unless one is shooting for Soviet-scale market inefficiencies.
posted by @troy at 11:39 PM on June 26, 2009


Where are the wealthy going to bugger off to if the G7 decide to not support tax-dodging? They want good schools for their kids, they want to hang at the yacht club, they want high-tech healthcare. People who have hundreds of millions of dollars of wealth not going to flee to some low-rent country just because they'd otherwise have a few million dollars less free money to invest for profit; they're going to be quite willing to invest it in the infrastructure via taxation. It's called "having a civilization," and they quite prefer to have it than to not.
posted by five fresh fish at 11:41 PM on June 26, 2009


One third of millionaires have disappeared from all tax rolls. Haven't you been paying attention to recent events?

Your links have little to do with your claims. Earlier you posted a link to the Metafilter home page in reference to the $32T in unfunded MediCare liabilities. Posting a graph of S&P crashes doesn't say anything about an alleged reduction of millionaires by one third. Here is an article on the millionaire population drop. In the U.S. there was a one year decline of 18.5%. Remember, that's in contrast to Maryland's loss of one third.
posted by BigSky at 11:54 PM on June 26, 2009


@troy: it's a giveaway to everyone who owns property, be it commercial landowners or the little old lady in the house down the street. Property tax is the price you pay to live in a home you own, just as rent is the price you pay to live in a home someone else owns. So, just as property tax is equivalent to rent, prop 13 is equivalent to rent control.

Yeah, it helps commercial landowners greatly. It also helps me, the other people who own condos in my building, all the people who owns the other condos on my street, and every other family or single person who owns a house, condo, or any other piece of land in the state of California. For values of "helps" that includes "destroyed the economy", of course.
posted by Justinian at 11:55 PM on June 26, 2009


So, just as property tax is equivalent to rent, prop 13 is equivalent to rent control.

Not buying this argument that rents are equivalent to taxes. Speaking as a single-taxer Georgist of course!

It also helps me, the other people who own condos in my building, all the people who owns the other condos on my street, and every other family or single person who owns a house, condo, or any other piece of land in the state of California

Not precisely true, since California offered property tax deferral, at a user-friendly 5% APR, to seniors and the disabled -- at least until the present crisis.
posted by @troy at 12:16 AM on June 27, 2009


Ach, strike Not precisely true . . . above, that does not counter your point at all.
posted by @troy at 12:17 AM on June 27, 2009


Earlier you posted a link to the Metafilter home page in reference to the $32T in unfunded MediCare liabilities.

Sorry about the link. The $30T Medicare numbers is from ncpa, here is their latest report.

Posting a graph of S&P crashes doesn't say anything about an alleged reduction of millionaires by one third. Here is an article on the millionaire population drop. In the U.S. there was a one year decline of 18.5%. Remember, that's in contrast to Maryland's loss of one third.

Actually Maryland lost 1000 million+ income filers, going from 3000 in 2007 to 2000 for 2008. To attempt to attribute much if any of this drop to slight tweak in the top marginal rate -- the additional burden on these million+ income earners is $12K or so per million [1]-- in the face of the biggest stock crash in my lifetime is, well, what one would expect from the WSJ Op Ed page. You should hang your head in shame for even bringing this stupid argument here; if your thinking relies on the WSJ Op Ed page for support you need intervention.
posted by @troy at 12:31 AM on June 27, 2009


Not buying this argument that rents are equivalent to taxes. Speaking as a single-taxer Georgist of course!

What difference does it make to the payer if you call it rent or taxes? Either way it's the monthly/yearly cost to live in a certain location.
posted by Justinian at 1:09 AM on June 27, 2009


You are correct that the drop was in filers with $1M+ in income. And apparently the state income tax increase does not deserve the lion's share of responsibility. But taxes are the motivation; the chief culprit is the stiff estate tax with the state income tax having a supporting role: 1, 2.
posted by BigSky at 1:14 AM on June 27, 2009


What difference does it make to the payer if you call it rent or taxes?

Well by definition rents go to rentiers and taxes go to the government, with the latter in principle providing public goods and services and the former using the money for coke, ferraris, or whatever rich landlords spend their ill-gotten income on.

But taxes are the motivation; the chief culprit is the stiff estate tax with the state income tax having a supporting role

Well, people worried about the estate tax are as a rule no longer productive members of society and should be free to fly whereever they want. I'm not a big fan of the estate tax, I think confiscatory taxation of wealth in land will prove good enough in levelling the playing field :)
posted by @troy at 2:37 AM on June 27, 2009


Ah yes, the typical "progressive" refusal to acknowledge the importance of incentives.

Eh. I was drunk. Cut me some slack. Sometimes bile just needs to be released.

And no, it's not about "sticking it to the man." Don't be a prick; I'm not some childish stereotype of a Left-Winger. I'm actually not even a Left-Winger by temperament--I just think that these are such extraordinary times that we have no choice but to take drastic steps.

I'll admit, it's hard for me to be completely rational about these issues sometimes. I'm just deeply disgusted, on a personal level, by the current American upper economic class.

It's not a hostility toward upper classes in general that gets my spleen pumping, though: It's disgust toward the specific occupants of the upper class we've got now, a demographic seemingly hell bent on serving their own interests to the exclusion of any public interest, even if it means throwing more fuel on the fire even as the entire house burns down (by, for example, fleeing the country of their birth just to avoid larger tax liabilities).

I pay taxes, btw. My household falls squarely on the threshold between the third and fourth quintiles. I'd be willing, even eager to pay more in taxes if I thought it could help solve our economic problems--assuming a proportional sacrifice were made by those in the top quintile--but I think it would be bad policy, because it would have a depressing effect on overall economic activity. By sheer numbers, there are more people in my income range and below, whose spending habits would be depressed by increasing our tax liabilities. More people being more cautious about spending causes economic depression, and eventually, declines across every industry sector. Despite the current prevailing economic myth, innovation doesn't generate more economic activity: more people spending more money does.

Roughly 70% of the households in the country are worse off than mine. Obviously I think it would be bad public policy to raise taxes on this 70% of households for the same reasons I think it would be a mistake to raise taxes on my own. That leaves one source of additional tax revenue that isn't likely to further depress the economy: the upper end of the economic scale, which is occupied by the fewest households.

The fact that we need new revenues to head off economic disaster and to curb further deficit spending is really not very controversial anymore. When it's politically expedient, even right-libertarians will admit it.

The top rungs of the economic ladder--where the negative economic impacts are limited to only a relatively small percentage of households--are the only source for additional tax revenues that won't have further depressing effects on the economy as a whole precisely because they represent such a small number of households.

But asking those who are literally among the most privileged economic class in the entire world to make major short-term sacrifices now is deemed politically untenable. And the cries of outrage over the suggestion of asking these most privileged among the privileged to make personal sacrifices originate by and large from the same quarters that have relentlessly called upon the American people to accept the personal sacrifices of wartime without hesitation and to put loyalty to their nation before all other obligations or considerations for more than a decade.

I doubt any generation of the economic elite in American history has been more callow, self-interested and deficient in their regard for basic human decency and public interest than the current crop.
posted by saulgoodman at 8:50 PM on June 27, 2009 [1 favorite]


It's disgust toward the specific occupants of the upper class we've got now, a demographic seemingly hell bent on serving their own interests to the exclusion of any public interest

Indeed. The robber barons of old were scum, but they at least had the common sense to gift libraries, museums, and other public infrastructure to their nation. The current crop of greedheads are the most selfish ultra-wealthy yet.
posted by five fresh fish at 10:37 PM on June 27, 2009


Indeed. The robber barons of old were scum, but they at least had the common sense to gift libraries, museums, and other public infrastructure to their nation. The current crop of greedheads are the most selfish ultra-wealthy yet.
posted by five fresh fish at 1:37 AM on June 28 [+] [!]


This.
posted by lazaruslong at 10:49 AM on June 28, 2009


Well Gates is trying to cure malaria which would be nice. 40 Billion doesn't go as far as it used to.
posted by GuyZero at 12:40 PM on June 28, 2009


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