The 1% Solution to the National Debt


by WhoWee
Tags: debt, national, solution
dipole
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#91
Mar4-12, 03:24 PM
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You assume it's somehow the people's fault for the U.S. being in debt. We are taxed already, that is paying your fair share. The government can't do whatever it wants, and then try to make other people pay for it's mistakes.
Office_Shredder
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#92
Mar4-12, 03:42 PM
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Quote Quote by dipole View Post
You assume it's somehow the people's fault for the U.S. being in debt. We are taxed already, that is paying your fair share. The government can't do whatever it wants, and then try to make other people pay for it's mistakes.
If other people aren't going to pay for the government's mistakes, who is?
WhoWee
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#93
Mar5-12, 01:15 AM
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Quote Quote by dipole View Post
You assume it's somehow the people's fault for the U.S. being in debt. We are taxed already, that is paying your fair share. The government can't do whatever it wants, and then try to make other people pay for it's mistakes.
What assumptions and which people are you referring to - please clarify?
chiro
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#94
Mar5-12, 02:46 AM
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Quote Quote by JDoolin View Post
I'm not making any huge sacrifices, or changing my life for it, but, here's an example. If I happen across a one-sided argument, on Physics-Forums, I can jump in and put in my two cents. True, it's not going to change the world by itself, but I can lead by example. If two people see me doing it, maybe they'll jump in as well.

There are a lot of people that are doing a lot more than I am, of course. Look at the Occupy Wall Street movement. There are more and more people taking that chance of being ostracized, imprisoned; maybe they're not getting killed, but they're getting pepper-sprayed, and arrested.

They may not know exactly what needs to be changed, but they are willing to take the hard option and short-term pain. But I think that there's another point to be made here. The people in the Occupy Wall Street movement want to be a part of their government. They want to be part of the decision-making process.

But most of the people I talk to aren't in the Occupy Wall Street movement. They are people who listen to Christian radio stations, and try not to watch the news, because "it's usually bad news anyway," or "it's so boring" and they "don't know which side to believe." That's the scariest thing... We really don't know what to believe. It's this sense that "If I were compelled to act... what if I were on the wrong side?"

No, I think if people knew what to do, they would stand up and do it. The problem is that without transparency and accountability, nobody has any idea what to do. We know we're being lied to, but we don't know who is lying.
That is the best thing you can do: lead by example.

This is the one thing that a lot of people don't realize: you're goal is not to save the rest of the world or fix the whole system.

What tends to happen is that if people do lead by example as you pointed out then other people will take notice if they are so inclined. But by leading by example if you so choose to do something that is not easy, then you will no doubt have to bear that burden when you get to it but if you are true to your word and your actions, then undoubtedly people will notice.

I have heard a few different ideas of how to 'fix' the system from a variety of different people who have quite a variety of different focii and backgrounds.

One suggestion I heard for politics is the idea that a contract be introduced for not only political candidates but even for any kind of representative in government. The idea is that if you provide a promise or anything of the sort then you are entering into a legal contract that has certain obligations that are contractual in nature. This would mean that if this were to be the case then they would have a legal responsibility to the people and in the case that this responsibility were neglected then they would be responsible for such actions.

In connection with your answer, this is a way to offer accountability to the public. It is just a suggestion and like all suggestions or initial ideas it needs to be fleshed out and discussed before it would be made into something more viable but IMO it is a good idea none-the-less.

Also a lot of people don't realize that they don't have to do it all at once.

Things like choosing where to spend money have a huge impact.

We all buy cheap goods and there is plenty of incentives for us who don't have access to a printing press to do so. But the thing is, if you told people that they should buy the more expensive locally made brand that has no subsidies of any sort to support local businesses then I would be very interested to see how many people say "thanks for the information" as opposed to actually doing it.

The other thing is that thinking is hard: not many people want to do it if they can avoid it. It takes a lot of effort, it takes courage especially if its not popular and you are opening yourself up to all that comes with it including ridicule amongst other things. Also like you have mentioned, the effects of thinking can get you killed.

This ties in with my comments on personal responsibility: the underlying matter of it all is basically personal responsibility and it includes not only the effect of what you do, but also in acknowledging that you are personally responsible for the thinking that leads to those decisions.

Chances are that people will convince themselves that other people are right if a lot of them are right, if someone with authority says they are right, or if nobody else says they are right.

Like I said, thinking is hard and what's harder is having the courage to take action that is aligned with the result of thinking for yourself.

But you already have the right idea: you are taking responsibility for yourself and leading by example. This is the highest honor for any individual because not only will you hold your head up high, but you will send a message to everyone around you and you will give them courage in the form of a real tangible example.

This is what causes real change and I applaud you for it.
JDoolin
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#95
Mar6-12, 09:44 AM
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Quote Quote by dipole View Post
You assume it's somehow the people's fault for the U.S. being in debt. We are taxed already, that is paying your fair share. The government can't do whatever it wants, and then try to make other people pay for it's mistakes.
Do you mean, "can't" or "shouldn't?"

Quote Quote by WhoWee View Post
What assumptions and which people are you referring to - please clarify?
Is it the "people's fault" for the U.S. being in debt? Is it the "people's duty" to pay for the government's mistakes?

I think the people's main duties in regards to the government's mistakes are (1) to make sure that these mistakes don't happen again, and (2) to make sure that the people who caused the problem don't get rewarded, and (3) trying to put in place a government that tries to prevent mistakes, rather than let them happen.

From Griftopia by Matt Taibbi:

Quote Quote by Matt-Taibi
In a sense, this whole mess was a kind of giant welfare program the financial service industry simply willed into being for itself. It invented a mountain of money in the form of a few trillion dollars' worth of bogus mortgages and rolled it forward for a few years, until reality intervened--and suddenly it was announced that We the Taxpaer had to buy it from them, at what they called face value, for the good of the country.

In the meantime, and this is the second thing that's so amazing, almost everyone who touched that mountain turned out to be a crook of some kind. The mortgage brokers systematically falsified information on loan applications in order to secure bigger loans and hawked explosive option-ARM mortgages to people who either didn't understand them or, worse, did understand them and simply never intended to pay. The loan originators cranked out massive volumes of loans with plainly doctored applications, not giving a **** about whether or not the borrowers could pay, in a desperate search for short-term rebates and fees.

The securitizers used harebrained math to turn crap mortgages into AAA-rated investments; the ratings agencies signed off on that harebrained math and handed out those AAA ratings in order to keep the fees coming in and the bonuses for their executives high. But even the ratings agencies were blindsided by scammers who advertised and sold, openly, help in rigging FICO scores to make broke and busted borrowers look like good credit risks. The corrupt ratings agencies were undone by ratings corrupters!

Meanwhile, investment banks tried to stick pensioners and insurance companies with their toxic investments, or else they held on to their toxic investments and tried to rip off idiots by sticking them with the liability of default. But they were undone by the fact that some of those "idiots" never intended to pay off, just like the thousands of homeowners who bought too-big houses with option-ARM mnortgages and never intended to pay. And at the tail end of all this frantic lying, cheating, and scamming on all sides, during which no good jobs were created and nothing except a few now-empty houses (good for nothing but depressing future home prices) got built, the final result is that we all ended up picking up the tab, subsidizing all this crime and dishonesty and pessimism as a matter of national policy.

We paid for THIS instead of a generation of health insurance, or an alternative energy grid, or a brand-new system of roads and highways. With the $13-plus trillion we are estimated to ultimately spend on the bailouts, we could not only have bought and paid off every single subprime mortgage in the country (that would only have cose 1.4 trillion), we could have paid off every remaining mortgage of any kind in this country--and still have had enough money left over to buy a new house for every American who does not already have one.
CaptFirePanda
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#96
Mar6-12, 10:01 AM
P: 27
The government got duped along the way as well. As much as there might be a common belief that politicians are all shysters, it obviously isn't true. I'm sure a few government pockets were fleeced along the way, but this was a case of a very large and well orchestrated ponzi scheme.

To expect some of these very same people to buy into this rather collective idea of erasing the debt is pretty optimistic, to say the least.
Pattonias
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#97
Mar6-12, 10:16 AM
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The reason that any government is corrupt is due to a tendency toward selfishness of its people over what would work for the greater good in the long run. Any time you take a hand-out, whether you know or not where it comes from, you are contributing to the problem as a whole. I don't think everyone feeling guilty or picking a small number of people to "blame" is going to help the problem. What we have to wrap our minds around is the fact that we will all have to pay for this, and we will all be upset about it.

I think it is irresponsible and plain stupid of our smartest and handsomest politicians to try throw blame when they can't even balance the budget right now.
WhoWee
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#98
Mar6-12, 10:19 AM
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Quote Quote by Pattonias View Post
The reason that any government is corrupt is due to a tendency toward selfishness of its people over what would work for the greater good in the long run. Any time you take a hand-out, whether you know or not where it comes from, you are contributing to the problem as a whole. I don't think everyone feeling guilty or picking a small number of people to "blame" is going to help the problem. What we have to wrap our minds around is the fact that we will all have to pay for this, and we will all be upset about it.
This thread is intended to discuss solutions to a problem - not to place blame for the problem.
Pattonias
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#99
Mar6-12, 10:24 AM
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Quote Quote by WhoWee View Post
This thread is intended to discuss solutions to a problem - not to place blame for the problem.
Isn't it though, picking the "1%" to pay off the debt is in essence placing blame on them. If we are looking for a true solution then why do we keep trying to find anyone but the entire population to pay off the debt?
WhoWee
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#100
Mar6-12, 10:46 AM
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Quote Quote by Pattonias View Post
Isn't it though, picking the "1%" to pay off the debt is in essence placing blame on them. If we are looking for a true solution then why do we keep trying to find anyone but the entire population to pay off the debt?
IMO - if the solution is to focus tax increases on the 1% and continue with out of control spending - not even pass a budget for nearly 3 years now - I would agree. However, this thread discusses a solution that would reward the people willing to participate in a definitive solution to retire the National Debt with a permanent tax holiday - and would require a balanced budget moving forward. As noted, it might be possible to instll a flat tax in accordance.
JDoolin
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#101
Mar6-12, 11:03 AM
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Quote Quote by WhoWee View Post
This thread is intended to discuss solutions to a problem - not to place blame for the problem.
Can you solve a "problem" without understanding what that problem is? I think its important to understand how the problem came about, which involves at least understanding HOW the problem came about.

There are going to be crooks on both sides of the issue; some crooks who want the national debt paid off immediately, because they stand to gain more by an immediate pay-out. Some crooks who want the debt to be paid out over a long period of time, because they stand to gain more if they are paid lots and lots of interest payments. But I think there are more of the former than the latter.

Think of it this way. If I had enough money to invest in a company, I would invest in it, because I believed they were going to make a profit. Not a short-term profit, but a long term profit. If I'm a good-guy, that's the way I think. It's a win-win sort of scenario, where I make money when they make money.

On the other hand, if I'm a bad-guy, I invest money in a company so that it will trick other people into investing in the company. I'm trying to create a "bubble" so that other people will think the company is worth something, then I can sell high, and leave the other people with a bunch of crappy investment.

Now, when I hear that the government has a debt, I think of the lenders as investors. Some of those investors are investing in good-faith, and they don't want their money back immediately, because they think, in the long-haul, the country will turn a profit, and they'll get back interest. Others of those investors are investing in bad-faith, believing the U.S. economy is a bubble that is about to pop, so they want to get back their money right away.

The long-term investors see the government debt as a good thing; not a "problem". The short-term investors see the government debt as money missing from their pockets, which is a "problem."
Vanadium 50
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#102
Mar6-12, 11:05 AM
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Quote Quote by Pattonias View Post
I guess we have concluded that since the OP's question is flawed in that the top 1% doesn't have that much money, then that plan can't work.
There are 300M people in the US, so 1% is 3M, not 30K. So it's $5M, not $500M. However, there are only about 3 million millionaires in the US, so the numbers still don't work out.

There is a pernicious meme going around that it is possible to have a high level of social spending and it can be accomplished entirely by taxing "other people". The numbers simply do not work out.
WhoWee
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#103
Mar6-12, 11:16 AM
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Quote Quote by Vanadium 50 View Post
There are 300M people in the US, so 1% is 3M, not 30K. So it's $5M, not $500M. However, there are only about 3 million millionaires in the US, so the numbers still don't work out.

There is a pernicious meme going around that it is possible to have a high level of social spending and it can be accomplished entirely by taxing "other people". The numbers simply do not work out.
Again - the "1%" didn't mean 1% of the population - the thread is focused on people with an ability (assets) to participate and has been expanded to include corporations.
Pattonias
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#104
Mar6-12, 12:37 PM
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Quote Quote by JDoolin View Post
The long-term investors see the government debt as a good thing; not a "problem". The short-term investors see the government debt as money missing from their pockets, which is a "problem."
This would be the problem if the debt was under some sort of control. Right now both the good guys and bad guys are getting worried. When we have to raise our debt limit in order to pay the interest on our current debt, the good guys should be worried. In your household that would be getting a new credit card to -not pay off- but pay the interest or minimum payment on your other credit cards. The problem that we will be facing in my lifetime is that the good guys will stop investing money in the United States and everyone will lose.

I can't agree with any plan that would require a select few to take on a debt they had no part in creating. To include companies and wealthy individuals it would be ridiculous to look to them to "fix" the debt problem. There is no scheme or quick fix. The government needs to balance the budget and spend the next 100 years paying off the debt.

A little debt is a good thing for a growing economy, a large debt is a terrible thing for a shrinking one.
JDoolin
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#105
Mar7-12, 09:24 AM
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Quote Quote by JDoolin View Post
Now, when I hear that the government has a debt, I think of the lenders as investors. Some of those investors are investing in good-faith, and they don't want their money back immediately, because they think, in the long-haul, the country will turn a profit, and they'll get back interest. Others of those investors are investing in bad-faith, believing the U.S. economy is a bubble that is about to pop, so they want to get back their money right away.
I found kind of an odd counter-example to this: Commodities; There's something kind of fishy about making long-term investments in commodities. People that invest in commodities for the long haul, rather than buy from the farmer and sell to the grocery stores to provide liquidity. It drives the prices of food up and causes people to starve.
ThinkToday
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#106
Mar7-12, 03:05 PM
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Quote Quote by JDoolin View Post
I found kind of an odd counter-example to this: Commodities; There's something kind of fishy about making long-term investments in commodities. People that invest in commodities for the long haul, rather than buy from the farmer and sell to the grocery stores to provide liquidity. It drives the prices of food up and causes people to starve.
Nothing unusual about it. As someone that grows corn, if the price early summer is $2.50/b and I think I can grow 40,000b. I may contract 20,000 at $2.50. If crops look bad, I can still probably grow 1/2 the normal yield and not have to buy more expensive corn to meet the contract. However, if everyone looks to have a bumper crop that year, the price may drop to $1.85/b. In that senerio, I have half my crop sold at $2.50 and I'll suck it up at $1.85 for the rest. Or, I could store it into the winter (~$0.25/b) hoping for a rebound in prices. Farmers do this all the time. Commodities afford growers the option to avoid or minimize "take it or leave it prices" from buyers.
ThinkToday
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#107
Mar7-12, 03:16 PM
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Quote Quote by Pattonias View Post
This would be the problem if the debt was under some sort of control. Right now both the good guys and bad guys are getting worried. When we have to raise our debt limit in order to pay the interest on our current debt, the good guys should be worried. In your household that would be getting a new credit card to -not pay off- but pay the interest or minimum payment on your other credit cards. The problem that we will be facing in my lifetime is that the good guys will stop investing money in the United States and everyone will lose.

I can't agree with any plan that would require a select few to take on a debt they had no part in creating. To include companies and wealthy individuals it would be ridiculous to look to them to "fix" the debt problem. There is no scheme or quick fix. The government needs to balance the budget and spend the next 100 years paying off the debt.

A little debt is a good thing for a growing economy, a large debt is a terrible thing for a shrinking one.
As has been said "A rising tide floats all boats". People need to work, so we need jobs. If we want jobs, we need companies to want to open up business here. We need to drop corporate taxes low compared to all other countries, sort of like the state of DE does to get companies to set up shop there. I'd also have tax advantages for all dollars spent creating a US job. Honestly, IMO, companies pass taxes on to "us" anyway, so skip taxing them for ONLY the money spent here making jobs here. Lastly, you can't float a boat with big holes in it. Government has got to get out of the "we'll fix everyone's life for them" thinking spending as if there are no limits. Do their Article I Section 8 duties, and drop the rest to the States. The State's voters will let the State governments know the priorities in their area and how much spending/taxes they'll tolerate to get it.


They use to say "all politics are local" and they should be, but that's less true as the Feds step in and "local" control is gone.
Jimmy Snyder
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#108
Mar7-12, 04:00 PM
P: 2,163
Forbes has issued their annual list of billionaires. There are 1226 of them and their total net worth is $4.6 Trillion. Here's a story about it.

Forbes list of billionaires

Not all is well though. You see, the net worth of the top 1%, that is to say the top 12, is 450 billion. So 10% of all the billionaire's wealth is concentrated in the hands of the top 1%. Robert Agostinelli, spokesman for the Occupy Seattle movement has called for the government to step in and even things out.


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