Yes, The Money Has Run Out

[Jccarlton]

Yes, the money has run out:
http://www.washingtonpost.com/wp-dyn/co ... 22_pf.html

What Mr. Achenbach neglected to mention is that most of the problem is the runaway spending of the current congress. I said that the money had run out before the election. Now it's obvious to everybody, except, well Pelosi, Reid and Obama and the rest of the idiots in Washington.

[MirariNefas]

Runaway spending has been going on a long time.

The problem is the zero sum game both parrties play, or if you think that's inevitable, the problem is the two party system period. If both parties worked together and raised taxes, the deficit would be solved. But if the party in power makes such a move, the minority party will always try to capitalize on it, eventually undoing any progress.

I'm curious about what will happen when we start to reach a tipping point. If our credit rating is reduced, the crisis will become present rather than future, and both parties will act. How quickly could they then get things under control? How long would it then take to pay down a reasonable portion of the deficit? Would spending go back to ludicrous levels as soon as the credit rating is restored, or can we expect to learn out lesson?

[choff]

It's a problem most countries face. One solution would be an international agreement to end non-disclosure in the financial industry. 30% of the Greek economy is underground by one count. By another over 50% of all world capital flows through the offshore banking system. It was fine when it was just a handful of rich people hiding money from the tax man decades ago, but now its undermining government revenues world wide. The little people can't bail out the financial industry and make up the tax difference forever. Where people, (and politicians) stand on this issue is where they sit, (and hide money from the tax man!)

[Diogenes]

Runaway spending has been going on a long time.

The problem is the zero sum game both parrties play, or if you think that's inevitable, the problem is the two party system period. If both parties worked together and raised taxes, the deficit would be solved. But if the party in power makes such a move, the minority party will always try to capitalize on it, eventually undoing any progress.

I'm curious about what will happen when we start to reach a tipping point. If our credit rating is reduced, the crisis will become present rather than future, and both parties will act. How quickly could they then get things under control? How long would it then take to pay down a reasonable portion of the deficit? Would spending go back to ludicrous levels as soon as the credit rating is restored, or can we expect to learn out lesson?

Ronald Reagan said something like "The problem is not that taxes are too low. The problem is that the government spends too much. "



As a person who regards the taking of money from me to be philosophically equivalent to forced servitude (slavery) I have ZERO interest in the government getting any more money.


As far as i'm concerned, it is our civic duty to defund the government to all extents possible. It behaves like a spoiled rotten child of wealth, and it needs to be humbled and forced to understand the nature of the work it imposes on others.

[hanelyp]

If both parties worked together and raised taxes, the deficit would be solved.

No, If taxes were raised, what's left of the economy would be harmed. I'm convinced that tax rates are already past the futility point any any rise in rates would be more than matched by a decline in the economy.

[CaptainBeowulf]

The real problem was that it was too easy for politicians to borrow money against the future for the last four or five decades to fund plans and programs that weren't sustainable in the long run. Western governments now pay out huge amounts of the tax money they collect from you in interest service payments on that debt. If we weren't paying interest, we could lower taxes or increase government services, or a bit of both...

A little bit of restraint would have gone a long way, but because of the political system people buy votes by spending now, and pushing the consequences until later... now we have to live with the consequences.

[jmc]

According to the documentaries:

"Money as Debt" and "Zeitgeist Addendum"

on this website:

http://www.sons-of-liberty.net/

In our debt based monetary system the debt can never be paid off as the total debt in U.S. dollars is necessarily always greater than the total number of U.S. dollars in circulation and if all the debt was paid off, there wouldn't be a single dollar left in circulation.

[choff]

I just saw a report on TV about Greece, it seems 80% of the population never pay their taxes. I don't know what's more crazy. People who borrow and spent money without ever intending to pay off the debt, or the people who lend them the money knowing they'll never get paid back.

[KitemanSA]

I don't know what's more crazy. People who borrow and spent money without ever intending to pay off the debt, or the people who lend them the money knowing they'll never get paid back.

I suspect the folks LENDING the money have ultirior motives, ones that the hoi polloi will wind up slaving to effect.

[MSimon]

It's a problem most countries face. One solution would be an international agreement to end non-disclosure in the financial industry. 30% of the Greek economy is underground by one count. By another over 50% of all world capital flows through the offshore banking system. It was fine when it was just a handful of rich people hiding money from the tax man decades ago, but now its undermining government revenues world wide. The little people can't bail out the financial industry and make up the tax difference forever. Where people, (and politicians) stand on this issue is where they sit, (and hide money from the tax man!)

Underground economies happen when taxes are higher than people are willing to pay.

In our Constitution smuggling was encouraged (look up "the origins of the Fourth Amendment") to place a check on the duties that could be imposed.

http://powerandcontrol.blogspot.com/200 ... dment.html

I don't want offshore banking curtailed as it is a check on the taxing ability of governments.

[choff]

The problem is with offshore banking, it's getting bigger than onshore banking, has no reserve requirements, no checks and balances, and is governed by secrecy. Onshore banks can lend to each other knowing what each bank has as collateral. But offshore banks can't tell if they're solvent or not when they borrow and lend. If their's a run on offshore banks it can't be managed. Plus, the tax dodger's are usually the wealthy, leaving the little people to make up the difference.

[choff]

Another problem with hiding taxable money in offshore banks, the offshore bankster may decide to keep your money for his very own, and then who do you complain to, the government? It's all well and good if you're a narco terrorist and you can put out a contract on him, not so for little people.

Let's say you have good reason's for bringing down governments by refusing to pay taxes. Your currency, (and hidden offshore wealth) become worthless overnight. Even if a small country like Greece defaults, the spillover could snowball into a real disaster.

[hanelyp]

If putting money offshore is risky, a proposition I'm ready to accept, people aren't going to do it unless the expected losses keeping money onshore are higher. Tax and regulation schemes imposed by the state would thus be encouraging risky behavior.

Sane governance looks at why people engage in undesirable behavior before deciding on how to deal with it.

[choff]

If putting money offshore is risky, a proposition I'm ready to accept, people aren't going to do it unless the expected losses keeping money onshore are higher. Tax and regulation schemes imposed by the state would thus be encouraging risky behavior.

Sane governance looks at why people engage in undesirable behavior before deciding on how to deal with it.

Unless they're greedy or stupid or some combination thereof, and it's a minority of people that do it, not the majority. It get's bigger than onshore because their's no tax paid by either bank or account holder, no constraint on interest rates and no reserve rate, but the risks are higher, even if the multiplier effect is larger.

It was the banks with offshore positions that needed the taxpayer bailout, not the onshore banks. But they were still scared of lending to each other because secrecy prevented them from knowing how healthy each was. |t wasn't a situation of crisis of confidence by ordinary account holders creating a run on the banks. It was a self-inflicted crisis of confidence amoung the offshore bankers themselves.

The quandry was, the US government ended up holding positions in offshore banks, giving them access to the account records of tax cheats. Never were the bankers in such a hurry to refuse the bailout or pay it off quick to get the feds out.

[choff]

I forgot to mention, that with secrecy and non-disclosure, electronic money transfers between offshore banks can easily make the logical progression from real currency to virtual to imaginary.