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I am not an economist and even they often don’t agree, but shouldn’t we be concerned about the Country’s deficit and debt?
Nobody I know likes taxes, but does debt and growing interest payments present a greater risk? Federal interest payments are over one trillion dollars a year – that is a million, million by the way.
I sometimes think, can we get to the point where nobody, not even another country wants to invest in the US? I suppose that is far fetched, but a scary thought. What if the demand increases for a higher return on Treasure bonds?
Social Security is now redeeming the trusts treasury bonds to pay benefits, is that cash coming from more debt somewhere?
At what point, if there is a point, will debt and interest payments reach a limit?
I know the analogy is not totally accurate, but I think about a family in deep credit card debt using cash advances to make the next payment on another card or perhaps rationalizing charging a family vacation to get away from it all.
Given the circumstances, I am flabbergasted that there is even talk of tax cuts. We have yet to have a serious discussion about fixing Social Security (or Medicare) and it’s over ten years since the trustees warned of the need for action. Some people are planning retirement assuming there won’t be Social Security. That’s not fair.
What does the combination of all this mean to average investors, to Americans planning retirement or in retirement depending on investments, to the HD community?
Is inflation back on the radar? Will higher interest rates be good or bad for retirees. Should higher taxes be part of retirement planning? Will working people pay more into Social Security or see benefits changed?
Needless to say I don’t have any answers and absent a crystal ball, I’m not sure anyone has. Nevertheless, none this is going away.
How do we plan for more Inflation, higher interest rates, higher taxes or more do it yourself required in lieu of government safety nets – like subsides for health insurance that often support early retirement?
Do Americans think about this stuff? Do they see the huge numbers as a risk, as impacting their lives? I don’t think so.
I’ve yet to read or hear any explanation of how the US can get out from under our debt. Even now we’re running several trillion dollar deficits each year, adding to the debt.
I don’t see anyway it ends other than through hyperinflation, then ultimately default and a new currency. Very unfortunate.
Great post and great comments.
You don’t have to go too far back in history to find politicians that were actually economic pragmatists. Jerry Ford and Jimmy Carter were fiscal conservatives, believing that government services truly needed by the country should be paid for. George HW Bush saw the need for revenue and raised some taxes, losing his job as a result. Bill Clinton, with the help of republican legislators balanced the budget and had us on a path to zero debt. Then came a terrible decade requiring deficit spending to get us out of trouble. I am not placing blame on the president, but when those tax cuts were made permanent all hopes of being debt free vanished. Does anyone think that the Tax Cuts and Jobs Act won’t be extended or made permanent?
Now “chicken in every pot” politics has gone crazy with politicians of both stripes promising us the world with absolutely no plan pay for it. The recent extension of SS benefits never should have been signed into law without a way to pay for it.
And yes, those immigrants are a net plus. Not only do they pay billions in taxes, they’re also going to be necessary in rebuilding CA after the fires.
Solid points made by all. What should our priorities be, we can’t be all things to everyone. I think the debt should be an urgent priority yet prioritizing the pain that comes with addressing said debt remains the most confounding problem. The consultants and experts will give you a ton of gimmicks, yet no amount of gimmicks will help without increasing taxes. I think the common man’s view is “why tax me when they are just going to waste it anyway?, a view I don’t disagree with either.” we might all feel better if the tax increases showed some positive impacts. Seems to me their is no free lunch after all ,and the case for Roth retirement plans as a hedge against future tax increases continue to be salient thinking.
We’ve gotten to the point that politicians, regardless of affiliation, have no incentive to exhibit fiscal responsibility. They just shift monies on the margin. “Cut