Hey @attheedgeofscience , i thought i would post my questions and thoughts about the budget deficit in another thread, if you get a chance I would really appreciate any thoughts you have on my own thoughts. I remember you use to have your name on the profile so i looked you up and you're educational background was very impreesive. So again any thoughts you might have id appreciate, if not no worries.
Im sure that played a part of it but also the shrinking tax revenues from the shrinking economy, social security, medical costs like medicare and medicaid, food stamps ,unemployment and military spending.
Agreed, the Federal reserve has kept the interest rates very artificially low, and plan to slowly bring it back up which will increase the deficit even further.
Just curious as to why you think this is the case? Do you not think that lowering spending and trying to grow the GDP would work. I know the GDP in the USA is growing, it more then it was previous to the recession and that employment is up, although i suspect that the people aren't necessarily finding the high paying jobs that were out there before the financial crisis occurred.
EDIT I think this kind of helps to answer the previous question.
Yes i remember this as well, i'm not entirely sure how it the progressive tax plan turned out but i know recently although im sure many wont believe this so ill post a link, but the effective rate as been extremely low under Obama.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/11/your-taxes-are-really-low-in-one-chart/
as can be seen from the chart below, there has been a roughly 40%-point increase in the debt-to-GDP ratio over just four years. That expenditure is essentially what the government of the USA has spent in order to quell the (unpopular) unemployment rate (in national economics you pay "something" to get "something else", loosely speaking).
Im sure that played a part of it but also the shrinking tax revenues from the shrinking economy, social security, medical costs like medicare and medicaid, food stamps ,unemployment and military spending.
having high debt is also (very) inefficient to the functioning of the economy due to the added interest rate that must be paid (as a "penalty" on top of the loan installments)
Agreed, the Federal reserve has kept the interest rates very artificially low, and plan to slowly bring it back up which will increase the deficit even further.
Ultimately, the USA government will have no choice but to raise taxes (citizen and/or corporation) in order to address its debt.
Just curious as to why you think this is the case? Do you not think that lowering spending and trying to grow the GDP would work. I know the GDP in the USA is growing, it more then it was previous to the recession and that employment is up, although i suspect that the people aren't necessarily finding the high paying jobs that were out there before the financial crisis occurred.
EDIT I think this kind of helps to answer the previous question.
On slight side-note: in any economy, there are smart ways of addressing economic problems. An example of that could be the number of tinnitus sufferers not contributing to the GDP due to their inability to work (about 2 million in the USA suffer from severe debilitating tinnitus and may well be part of that statistic). Suppose that proportion of the population was suddenly to join the workforce (provided there is enough "demand"), then "supply" would be able to boost the GDP in a new equilibrium on the S-D Curve (more GDP = more taxes without raising the tax rate = good news for the average citizen!). The same applies to other patient groups, for instance. Debilitating and impacting sicknesses is therefore an important factor to address for non-rare diseases and any government should have a self-interest in looking into it (i.e. attempt to cure the underlying problem).
President Obama has - in my opinion - addressed the problem intelligently by raising taxes for the richest part of the population (taxes are already very low in the US and hence the increase is really non-impactful, financially speaking - i.e. compare it with income tax rates of some 60% within the EU for maximum earners). However, the proposal was not exactly popular with the Republicans if I remember correctly. From a European, and hence an unbiased point-of-view, the failure to accept the proposal shows the plain simple stupidity of those in power who represent the American population (= people need to understand that problems have to be addressed and cannot swept under the carpet).
Yes i remember this as well, i'm not entirely sure how it the progressive tax plan turned out but i know recently although im sure many wont believe this so ill post a link, but the effective rate as been extremely low under Obama.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/11/your-taxes-are-really-low-in-one-chart/