Fitch downgrades U.S. long-term rating to AA+ from AAA

[AWRTR]

Yes, when you soundly invest in our people, you get less need for assistance, driving down the need for many government programs. I know, this is very pie in the sky and takes a long time, which few representative can wait for when they need to show results on a talk show.

I also like the idea of Finland's education system, where private schools are essentially banned creating an education system for all instead of a separate but unequal public/private model we have here. Interestingly enough, we already kind of have that successful model in our DoD run schools. https://www.nytimes.com/2023/10/10/us/schools-pandemic-defense-department.html

Again this removes the need for massive spending by creating better educated kids.

Would you outlaw homeschooling as well?

 

[AWRTR]

The solution is always simple to me. Invest in our people. Stop investing in tax breaks for the wealthy. They don't do anything productive with tax breaks.

And by investing in our people, repeal all financial corporate tax breaks and move them to areas like R&D and education where you don't just get more money for being smart at saving money, you get more productive people and new ideas.

And finally, destroy off shore tax havens, by taxing any dollars coming back into the US at 90% after a very short window to declare them for a much lower tax rate. Or something like that.

You can do every bit of this, and I'm not opposed to any of the things you wrote, but you won't get out of this hole even then. There have to be real spending cuts along with more revenue. Our unfunded liabilities are going to bury us. Medicare, SS, and Medicaid will all eventually collapse. It may take some more time for that to happen, but when we go off that cliff panic will ensue. The taxes and cuts imposed at that point will be severe and very damaging.

 

[mdb-tpet]

You can do every bit of this, and I'm not opposed to any of the things you wrote, but you won't get out of this hole even then. There have to be real spending cuts along with more revenue. Our unfunded liabilities are going to bury us. Medicare, SS, and Medicaid will all eventually collapse. It may take some more time for that to happen, but when we go off that cliff panic will ensue. The taxes and cuts imposed at that point will be severe and very damaging.

I agree, but if all you talk about is spending cuts and taxes, you will simply rule out any meaningful change. One large political group has been brainwashed into thinking tax cuts are the only way forward (the perennially dumb Laffer curve), and the other group wants functional government programs often regardless of the overall costs. And neither group will give much when it comes to the budget leaving too little in the middle to change the budget.

The ONLY way I see forward is to entirely change the discussion toward investing in the US to eventually reduce the need for these governmental spending programs and move toward balancing the spending at the same time through investing in the US/moving/reducing the tax cuts.

 

[AWRTR]

I agree, but if all you talk about is spending cuts and taxes, you will simply rule out any meaningful change. One large political group has been brainwashed into thinking tax cuts are the only way forward (the perennially dumb Laffer curve), and the other group wants functional government programs often regardless of the overall costs. And neither group will give much when it comes to the budget leaving too little in the middle to change the budget.

The ONLY way I see forward is to entirely change the discussion toward investing in the US to eventually reduce the need for these governmental spending programs and move toward balancing the spending at the same time through investing in the US/moving/reducing the tax cuts.

I like the idea. What spending programs would you look for these investments to help reduce or eliminate?

 

[mdb-tpet]

I like the idea. What spending programs would you look for these investments to help reduce or eliminate?

Our transportation department is designing the most inefficient and expensive auto only network in the world, so start there by eliminating parking minimums and dramatically encouraging non-auto travel. Start cutting immediately, and raise the gas tax/add a per mile driven charge to cars. No city has been able to eliminate traffic through road design, on the contrary the more and wider roads you build, the worse traffic gets. Just ask LA, Houston, Atlanta etc.

Raising the minimum wage and eliminating the part time working loopholes for employers will pull millions out poverty, reducing the need for food stamps and similar poverty programs. This has been proven over and over again to help.

Stop funding private schools, and move most of that funding into public schools like Finland. We will never have a great school system when money is being pumped into private schools and out of the areas most in need of great teachers and schools.

Move, shift money from incarceration into the the public health model of crime prevention where experts go and resolve the conflicts in the neighborhood conflict zones instead of just arresting people after the fact for violence. No, I'm not talking about de-funding police, just using experts to work on the source of the crime instead of cleaning up the mess.

Keep whittling down the cost of healthcare by creating a public healthcare system with honest limits to it's funding instead of allowing the stupid high prices of for profit healthcare.

Those are some off of the top of my head.

 

[crimsonaudio]

Our transportation department is designing the most inefficient and expensive auto only network in the world, so start there by eliminating parking minimums and dramatically encouraging non-auto travel. Start cutting immediately, and raise the gas tax/add a per mile driven charge to cars. No city has been able to eliminate traffic through road design, on the contrary the more and wider roads you build, the worse traffic gets. Just ask LA, Houston, Atlanta etc.

Raising the minimum wage and eliminating the part time working loopholes for employers will pull millions out poverty, reducing the need for food stamps and similar poverty programs. This has been proven over and over again to help.

Stop funding private schools, and move most of that funding into public schools like Finland. We will never have a great school system when money is being pumped into private schools and out of the areas most in need of great teachers and schools.

Move, shift money from incarceration into the the public health model of crime prevention where experts go and resolve the conflicts in the neighborhood conflict zones instead of just arresting people after the fact for violence. No, I'm not talking about de-funding police, just using experts to work on the source of the crime instead of cleaning up the mess.

Keep whittling down the cost of healthcare by creating a public healthcare system with honest limits to it's funding instead of allowing the stupid high prices of for profit healthcare.

Those are some off of the top of my head.

FTR, almost all of these ideas fall under the idea of 'raising taxes'. Tax increases aren't just payroll / investment taxes.

In addition, 'taxing the rich' is very difficult as most of the super-wealthy don't convert their holdings to cash - the keep them in stocks. We've discussed it before but taxation on unrealized gains will almost certainly never happen (nor should they, imo), so I'm guessing that would mean overhauling the entire tax law. Just thinking aloud here.

 

[mdb-tpet]

FTR, almost all of these ideas fall under the idea of 'raising taxes'. Tax increases aren't just payroll / investment taxes.

In addition, 'taxing the rich' is very difficult as most of the super-wealthy don't convert their holdings to cash - the keep them in stocks. We've discussed it before but taxation on unrealized gains will almost certainly never happen (nor should they, imo), so I'm guessing that would mean overhauling the entire tax law. Just thinking aloud here.

It's interesting you wave away these ideas as tax increases. I do mention one gas tax increase, but only one. The rest are either revenue neutral or downward in intent over time. The gas tax really needs to be right sized for the amount of driving and cost of the roads and we could balance that tax increase with reductions in taxes from the general fund from where they are subsidizing the roads today in many states.

 

[AWRTR]

It's interesting you wave away these ideas as tax increases. I do mention one gas tax increase, but only one. The rest are either revenue neutral or downward in intent over time. The gas tax really needs to be right sized for the amount of driving and cost of the roads and we could balance that tax increase with reductions in taxes from the general fund from where they are subsidizing the roads today in many states.

A mileage tax would be one of the most regressive taxes you could pass. I understand it would be use based on usage but the people least able to pay the tax would be the most effected. How would you pay for the mass transit needed as an alternative in vast areas of the country that are rural? I live in a a heavily agricultural area of south Florida. You can’t do subways or buses in areas like these. It simply won’t work. The entire country isn’t’ New York or Houston.

 

[Go Bama]

A mileage tax would be one of the most regressive taxes you could pass. I understand it would be use based on usage but the people least able to pay the tax would be the most effected. How would you pay for the mass transit needed as an alternative in vast areas of the country that are rural? I live in a a heavily agricultural area of south Florida. You can’t do subways or buses in areas like these. It simply won’t work. The entire country isn’t’ New York or Houston.

I live in a rural area too. I would venture to guess the ultimate goal is an EV to get to the major train hubs. Trains would follow current interstate and major highways.

Just chiming in here. I haven't thought about this before today.

 

[crimsonaudio]

It's interesting you wave away these ideas as tax increases. I do mention one gas tax increase, but only one. The rest are either revenue neutral or downward in intent over time. The gas tax really needs to be right sized for the amount of driving and cost of the roads and we could balance that tax increase with reductions in taxes from the general fund from where they are subsidizing the roads today in many states.

If they are fiscally neutral than all the better (though I'd have to see it to believe it with our federal government's penchant for finding ways to spend money). FTR, I wasn't saying that these being taxes are bad, just suggesting that both taxation along with changing our spending habits are required.

IOW it wasn't meant as a criticism.

 

[AWRTR]

I live in a rural area too. I would venture to guess the ultimate goal is an EV to get to the major train hubs. Trains would follow current interstate and major highways.

Just chiming in here. I haven't thought about this before today.

That could work for travel to a major metro area or maybe interstate travel, but day-to-day commutes and the necessity to drive for normal needs like groceries and other home goods would make this untenable. It could work within a metro area like Chicago. I lived in Woodland, AL for about 5 years to say it's small is an understatement. It was 30 minutes to the nearest Wal-Mart. People drove 30 miles to work one way. I think a mileage tax would need to be very localized. Mainly in major population centers. EV's are going to be tougher in these rural areas as well. The infrastructure is going to be more difficult.

 

[crimsonaudio]

That could work for travel to a major metro area or maybe interstate travel, but day-to-day commutes and the necessity to drive for normal needs like groceries and other home goods would make this untenable. It could work within a metro area like Chicago. I lived in Woodland, AL for about 5 years to say it's small is an understatement. It was 30 minutes to the nearest Wal-Mart. People drove 30 miles to work one way. I think a mileage tax would need to be very localized. Mainly in major population centers. EV's are going to be tougher in these rural areas as well. The infrastructure is going to be more difficult.

The problem with mass transit in the US is that our entire country really developed / grew with the automobile, unlike most of Europe, so we're naturally really spread out in comparison.

I can see mass transit effectively replacing individual cars in urban and some suburban areas, but rural / semi-rural areas are unlikely to ever see that transition. At least not in any of our lifetimes.

 

[CrimsonJazz]

I live in a rural area too. I would venture to guess the ultimate goal is an EV to get to the major train hubs. Trains would follow current interstate and major highways.

Just chiming in here. I haven't thought about this before today.

That's an interesting idea. Still won't work in rural areas, but for the city dwellers I can totally see this running successfully.

 

[AWRTR]

The problem with mass transit in the US is that our entire country really developed / grew with the automobile, unlike most of Europe, so we're naturally really spread out in comparison.

I can see mass transit effectively replacing individual cars in urban and some suburban areas, but rural / semi-rural areas are unlikely to ever see that transition. At least not in any of our lifetimes.

I Absolutely agree. I think many who live in these densely populated areas and haven't ever lived outside of them may not realize the hurdles that need to be overcome. I can't see how it can be done.

 

[AWRTR]

That's an interesting idea. Still won't work in rural areas, but for the city dwellers I can totally see this running successfully.

It could work if I could go to a train station and catch a high speed train to a major metro from a rural area. A few well-placed stations could reduce miles driven in that way.

 

[TIDE-HSV]

FTR, almost all of these ideas fall under the idea of 'raising taxes'. Tax increases aren't just payroll / investment taxes.

In addition, 'taxing the rich' is very difficult as most of the super-wealthy don't convert their holdings to cash - the keep them in stocks. We've discussed it before but taxation on unrealized gains will almost certainly never happen (nor should they, imo), so I'm guessing that would mean overhauling the entire tax law. Just thinking aloud here.

It needs reforming. The problem is that, now, you can consider it as being something like a pin cushion, filled with pins. Each pin represents a special interest group. Unlike voodoo dolls, when you try to extract a pin, it hollers bloody murder. The goal should be to eliminate the special interests and reduce overall marginal rates. It's been tried innumerable times. In graduate tax law school, we used to have a grim inside joke - crawl in a burrow and pull the covers over your head for the next "reform" bill, because it meant that the tax code was about to become even more complicated...

 

[Tidewater]

The federal deficit was $1.7 trillion in FY 23, so we need $1.7 trillion in new taxes, $1.7 trillion in spending cuts or a combination of the two.
Spending cuts in the past have not realized the savings promised.
Tax increases in the past have not realized the revenues promised.
Regardless, the revenue must be increased and expenditures reduced or the country will die and then nobody is getting anything from Uncle Sam.

More likely, the Fed will simply inflate the debt away with hyperinflation. That worked out great for Germany in the 1930s.

 

[mdb-tpet]

A mileage tax would be one of the most regressive taxes you could pass. I understand it would be use based on usage but the people least able to pay the tax would be the most effected. How would you pay for the mass transit needed as an alternative in vast areas of the country that are rural? I live in a a heavily agricultural area of south Florida. You can’t do subways or buses in areas like these. It simply won’t work. The entire country isn’t’ New York or Houston.

For urban areas, which is about 82% of the population:
We didn't develop our transportation system in a short time, and we can't work our way back out quickly. For cities, one en vogue way right now to fix transportation issues is to eliminate parking minimums. When you open up the vast wasted spaces in cities that are held simply for parking, then you have tons of dead land open up for apartments and duplexes (we have to allow them to be built as well) and the like. This has the potential to increase housing stock, create less expensive housing while reduce the need for long distance commuting etc. In effect, it's all in the right direction to start fixing an intractable cost of living/homeless problem we have right now. Of course the NIMBYs will come out swinging, but there are no zero impact fixes.

For rural areas, that's tough. About 18% of the US lives in rural areas, we used to have nice trains, until the auto industry ran them out of business. Cars will still be useful out there. EVs are about the only reasonable solution.

 

[AWRTR]

For urban areas, which is about 82% of the population:
We didn't develop our transportation system in a short time, and we can't work our way back out quickly. For cities, one en vogue way right now to fix transportation issues is to eliminate parking minimums. When you open up the vast wasted spaces in cities that are held simply for parking, then you have tons of dead land open up for apartments and duplexes (we have to allow them to be built as well) and the like. This has the potential to increase housing stock, create less expensive housing while reduce the need for long distance commuting etc. In effect, it's all in the right direction to start fixing an intractable cost of living/homeless problem we have right now. Of course the NIMBYs will come out swinging, but there are no zero impact fixes.

For rural areas, that's tough. About 18% of the US lives in rural areas, we used to have nice trains, until the auto industry ran them out of business. Cars will still be useful out there. EVs are about the only reasonable solution.

Here’s a question that is interesting to me: what is defined as rural? I lived in sylacauga Al for about 3 years. It’s a small city. A large public transit system that would eliminate the majority of cars in that city and the area around it would be hard to implement and pay for.

The idea of freeing space in major cities to build more housing to drive down costs is a good idea.

 

[Bamaro]

A mileage tax would be one of the most regressive taxes you could pass. I understand it would be use based on usage but the people least able to pay the tax would be the most effected. How would you pay for the mass transit needed as an alternative in vast areas of the country that are rural? I live in a a heavily agricultural area of south Florida. You can’t do subways or buses in areas like these. It simply won’t work. The entire country isn’t’ New York or Houston.

The federal gas tax, which is basically a use tax, hasn't changed since 1993! That's 31 years! It's 18.4 cents per gallon. It needs to be raised to be able to pay for federal transportation expenses rather than those expences coming from the general fund.