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U.S. Debt Clock like you have never seen. This has trading ramifications!
Not completely. Everyone associates the "Bush Tax cuts" (even though they were a bipartisan effort) as the big detractor...but in reality, revenues were climbing above the historical norm. There's no need to collect more than 18-20% revenue and given the slowdown in the economy, it only made sense to cut taxes.
Furthermore, we've entered this new era where Americans feel like a tax cut is some sort of gift (as if the money belonged to the government and giving it back is a blessing).
The reality is we operated in this country for over a century with no individual income tax (back when the Federal government still operated within it's Constitutional limits). Americans can longer imagine a world where there's not 35% taxes.
We don't have a revenue problem, revenues are still where they've always been, we have a spending problem. I can't emphasize this enough.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
Can you help answer these questions from other members on NexusFi?
I hear you and understand where you are coming from.
My point is we were doing better in 2000, and when started spending more than we took into the government and instead of fixing the problem, the nation kicked the can down the road for 12 years and here we are. ( I should mention that the Europeans seem to be making an Olympic sport of kicking the can down the road )
If the economy is bad and you run deficits to help the economy, then you need to run surpluses when times are good to make up for it. Long term deficits are not good for the economy.
It seems we are all Keynesian when financial crises hit like in 2008, but when times are good, we seem to start saying 'Deficits don't matter' instead of paying the deficits down.
( Whether you say it is a revenue problem or a spending problem depends on whom you ask and I don't want to touch that question. )
There are two main problems with Keynsian philosophy. 1) Capital formation is the key driver of economic growth. The ability of people with disposable and extreneous property to risk that property in order to creat new businesses, industries (and as a result...jobs).
But lets assume for a minute that Keynes was correct, lets assume that individual consumption and spending is what drives economic growth.....
The next logical step (the one that politicians take) is that therefore it's "Best" to spend our way out of recessions, to inject money into the hands of individuals who will then go out and spend that money, creating demand for products and services (and eventually finding it's way into the hands of capitalists).
This is how you get idiots like Nancy Pelosi saying "we have to pass the unemployment bill in order to create jobs."
The PROBLEM, the main problem with Keynsian philosophy (beyond the fact that it's simply either wrong or misguided on consumer spending vs. capital venture) is that politicians and governments aren't in the habit of spending in bad times and then SAVING in good times.
Keynes advocated for smoothing out the economic cycle by spending your way through troughs and then scaling back and saving your way during peaks (in order to prevent overheating and boom/bust cycle).
The problem is that politicians spend. They spend when times are tough (quoting Keynes bunk notions) and then when times are good, every pension, every government worker, ever service and benefit says "we can afford a little more." This is how NJ and virtually every other state ended up on the brink of bankruptcy....during the boom, they expanded retirements and entitlements for state workers, to the point of ridiculousness.
NOW, it's nearly IMPOSSIBLE to scale those commitments back. (wages and benfits for municipal and union workers is EVER a ratchet, it only goes one way, not the other).
So even if you accept the notion that Keynes was correct (which I don't) the pragmatic and practical reality is that it can NEVER work with politicians....politicians spend, it's what helps them to get re-elected....they spend during bad times (by borrowing and placing the burden on future generations and voters who cannot yet represent themselves) and they REALLY spend during good times.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
First i would just say that I think Keynes was far more complex in his thinking than what is given in the mainstream view of his general theory of employment, money,and interest... His real philosophy on economic designs were in his discourses on what he called the animal spirts... the unquantifiable and the unmodelable.. A lot of things are designed to work but don't, the process of the common law for one. Sadly, the rule of law has been replaced by the rule of lawyers. And politics, that's a simple concept, you elect the person to represent you who will act accordingly, pretty simple.. We voted in politicians to balance our books when we put the conservatives in power, they made painful and deep cuts, and we re-elected them because they did what they said they would do, not vice versa... a bit simpler here though... but anyways, every situation is unique, the only constant the animal spirits, when they run wild again and we are on the brink of collapse I'm sure whatever it is people call Keynesian will be sounding pretty good...
Show me this fictitious politician who's EVER made "paintful and deep" cuts at the Federal level...I'm interested to see such a unicorn.
If a politician advocates returning to 2008 spending levels (which in a completely tragic twist of fate, makes them conservative apparently) then idiots come out of the woodwork screaming "Draconian!" "Barbaric!" etc. I was here in 2008. People weren't living in caves, fighting off bears with torches...but to return to those spending levels is unthinkable.
Americans have been brainwashed into believing that the Federal Government HAS to be the size it is or at least in close proximity. They cannot envision a world where the Federal government is limited to ONLY it's mandates under the Constitution.
Virtually EVERY function that the Federal Government serves today, outside of defense and foreign issues, can and should be solved at the state level. The benefits of such a system are incredible and numerous. But alas, people respond to national propaganda and fearmongering and manipulation by the media and they throw the Constitution in the trash.
Nevermind the fact that if Romneycare is SOOOOO successful in Mass....that the citizens from every other state can voluntarily choose to feature such a system in their state....we have to employ a one size fits all debacle at the national level.
Everything from education, to financial regulations, to FDA issues can be solved at the state level...as well as entitlements and welfare.
THAT would give the citizenry and operable choice of governance. You could pick your poison. It would also create a laboratory of policy experiments where states could see how other states impliment their policies and either replicate or reject them. It puts the operable crook (aka the politician) closer to home (rather than in a couple of buildings thousands of miles away).
We were never meant to be a Democracy. We were never meant to be singular nation. We were meant to be a union. A representative Republic...with a confederation of member states, all serving under the same flag (for foreign and border relations) and the Federal government was never intended to be anything but a referee on social issues.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
Going to bad when we have to implement Greek like austerity measures to stop our massive spending problem. Headed for a massive train wreck if spending brakes not applied quickly.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
, Keynes does not work in real life ( IMHO ) because of politicians. 
