Quote:
Originally Posted by
Daly
The long term goal here is to have a balanced annual budget, with Social Security and Medicare relatively untouched, with some form of tax cut on income for middle class/upper middle class. Everything else is means to an ends.
To get to something resembling a balanced budget a few things needed to happen.
On the "revenue" side (I hate that term for government collections). We collected ~5T in taxes, 3.6 Income tax and 1.4 in social/medicare. The other $1.8T was borrowed.
The new Tariffs will be interesting to see what comes in. Its been speculated that 500B to 750B will come in as a new revenue line. The only way it wouldn't is if there was a massive reduction in consumption or a migration of manufacturing back onshore which would cause a different type of economic boom.
Right wrong or indifferent Tarrifs should cut the deficit down to 1T.
Now why is it that DOGE kept saying "save a trillion.... save a trillion". That is quite literaly what they are trying to do, cut a Trillion of annual spending.
Cutting and restructuring Government is going to save Billions. Shutting off US AID and a lot of other bullshit spending will save Billions more. Cutting the government workforce back to 2022 levels will save Hundred Billion. Offer one time severance and do what we need to do.
But with all of this its still not the Trillion we need to close the gap. We aren't cutting Social Security. We arent cutting Military spending. The VA is a sacred cow of sorts and isnt "that big" to beginwith.
That leaves one more line item that can be gamed or changed. Net Interest Expense.
4 years ago we were spending ~400B to service the debit. Last year as part of the $6.8T $1.2T was debt servicing. Obviously the amount of the debit is higher but so is the interest rate because of the inflation issues and we had to raise rates. We effectively need to refinance the debt. We dont want to pay $1.2T a year. We want to pay 500B a year. The only way to do that is for the interest rate to drop. Only way that happens without inflation kicking in is to take the economy/demand down a few clicks. In the next 2 years some 10T will need to be rolled over. If we can do that at 2% vs 4% our interest expense save will be massive.
And if we need to cool the economy why not add tarrifs to beef up"revenues - or - create new investment in the USA to help defer the pain? From this perspective its genius.
+.5-.75 T in Tarrifs
- .3-.4 T in saves from government restructure
-.6T savings in Interest payments
= A Balanced Budget
If the USA gets back to having a balanced Budget in 3-4 years the S&P will triple from here.
Take the money paid into The Social Security Retirement System out of the equation. That money is not there to pay government bills. It’s completely separate. It goes to retirees.
Years ago, when SS ran a surplus, a lot of the money was stolen by politicians, placed into the general fund and spent. That is, until word got out.
SStealing the money from retirees who paid into this shitty investment of a retirement system for forty years to get it is not right.
