33 votes

Mathematically impossible... 16 tril in GDP, 9 tril in local, state and federal spending with 150 million workers.

This should wake anyone who is in doubt that we are totally screwed.

Almost 9 trillion in total local, state and federal spending
Almost 16 trillion in total GDP
Somewhere around 150 million working adults

Total government spending including deficit spending accounts for 56% of GDP, and pure deficit spending alone is almost 25% of GDP.

Doing the math, assuming the above numbers, it comes out to about $59,900 in PURE taxes for every working person in America just to pay for the total local, state and federal spending. This is ~5,000 dollars more then America's median income in PURE TAXES.

$59,900 with a 260 day work year (5 days a week). This comes out to around $230 per working day per worker just to pay for the spending, not including paying off the debt principle or personal living expenses and debt.

So my question... how the hell are we going to pay for this with a declining work force and higher liability loads?

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Third one eyed man

in a room full on blind people. Thank you!

Do me a favor.

Give me evidence that the Constitution was financed by Bankers.

Study Robert Morris

Mentor to Alexander Hamilton and self-appointed president of the First National Bank of the United States. This government’s first central bank.

I would start at von mises dot org

In fairiness, prior to about

In fairiness, prior to about 1945, states didn't really do a great job of reporting taxation and income...there was no real procedure for it. We can estimate that in 1900, total taxation levels were between 16 and 24%. It is a very wide range, but that is what is needed.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

To be fair ....To be fair .........

To be fair the reason the government has a triple AAA credit rating ( had a AAA rating)is not because they pay their bills…..because they have the most effective diabolical, threatening, aggressive, intimidating, menacing, hostile, bullying, frightening agency in the world as collectors and NOW THAY ARE IN CHARGE OF COLLECTING YOU HEALTH INSURANCE PREMIUMS.

The Boston tea party happened because the King wanted to raise the tax to 2% on tea….men we are a bunch of wimps

To be fair….the mob only charges 10%.....I would rather have them in charge……at least they admit to being thugs…..well at least to each other….this charade of the USG is more than I can take.

sorry man nothing personal....but the words "to be fair" and the tax system are words the never go together with this government.....i know you were making a point on a pervious post....i just lost it for a second

Actually, the government does

Actually, the government does pay its bills. Although they might not with the government shut-down.

The Boston tea party happened because

1) Taxation without representation. Not the case here.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

You're right

Sorry….I should have said that the way government achieves an AAA rating is for their performance is the art of tax collecting…..and could you really say a government is paying its bills if it is 17 trillion in debt.

When someone’s living high on the hog on credit cards and then finally defaults on the debt do we really say they were paying their bill…..not really just moving it down the balance sheet from current liability to long term liability.

Taxation without representation. Not the case here.....Really.....when was the last time you felt you were represented.....me....never....well one person RP, but he was never my congressman......I hate that phrase because it was much deeper then that.

The thing is, the way I see

The thing is, the way I see it, is that if you look at the spending, here has what has happened, since the 1790s to today:

1) Spending has gone from being sometimes 10:1 state to federal, to around 1:1, if that. Resultingly, a lot of programs originate at the federal level. However, for many things, while the federal government collects and distributes the money, it is the state governments that dole it out. For example, in education, medicaid, etc.

2) In general, spending levels have been very consistent. There are two twists to this: In times of war (including our "wars" with Afghanistan and Iraq) spending has ballooned. Secondly, Social Security and Medicare are straight-up additions to the tax burden. So basically, if you normalized war spending and removed SS and Medicare (both on the spending and taxation side), overall government spending and revenue levels are remarkably consistent from decade to decade.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

"So my question... how the

"So my question... how the hell are we going to pay for this with a declining work force and higher liability loads?"

We're not going to. Based on the action and inaction of our government it is quite clear that there is no intention whatsoever of paying our liabilities long-term.

What is clear is that the government is trying to delay the inevitable crash as long as possible.

And it won't be any ordinary crash if they delay it too far into the future. It will be the most damaging and painful economic crash ever. There will be millions and millions of broken promises.

We know what the Rodney King riots looked like back in the 90's. Now just think what they would look like if various government benefit checks stop being received. That might explain things like this.

...

It'll Be Ok

dont worry too much, if everyone's in debt then the government can just print the $60,000 and give it to all the workers to pay the debt, problem solved! im gonna buy a pony with mine. then a single loaf of bread.

i should win a Nobel in economics for that idea.

meow

Cyril's picture

LOL. Careful with what you wish :

LOL. Careful with what you wish :

you may actually GET the Nobel Prize with that idea these days!

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Gov't run "health care" = euthenasia

That's how.

Flush that mess

With the deluge of a giant toilet swirl, the feces of unpayable debt must be flushed from the monetary system.

Sorry for the putrid analogy, but decaying debt—like death—rots and stinks.

Increase minimum wage, duh...

That's the solution.

totally

if the minimum wave was 70$ an hour there would be no poor people YAY!

meow

Yippee!

Then we can pay $60 for a Big Mac meal at McDonald's hehe. :)

Cyril's picture

Serious about paying it off?

(Just a friendly correction; mostly rhetorical)

To be able to pay that sort of debt, you can make it $700 for the m.w., and better make sure you have 0% unemployment, with newborns and people on hospital beds included in the payroll subject to income tax (and others).

Oh, and that'd be with 16 work hours a day, 7 days a week, all year long.

For the next 50 years or so.

Then... people... might... be able to afford some time off.

Maybe!

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

The missing link is the pay scale

The missing link here is the pay scale that those numbers are derived from. Let me explain...

Let's hypothetically say that the people figured out money and how they've been gamed by it. In doing so, they stopped all 'commercial' debt based activities. They stopped getting bank loans for things. No more credit cards. They lent to each other at minimal FLAT interest charges. And lastly, they supported only businesses that maintained sole ownership, wage priorities and community involvement.

Let's play that out...

Their prosperity would rise at a rate of about 10 times the REAL inflation rate. In other words, their wages would rise about 100% per year (i.e. 40k > 80k > 120k > 160k) In doing so, this newfound income would cause a little initial inflation (locally) but would in turn result in buying quality and modularity for quantity and disposability. When that finally reduced commercialism based consumption, the real winfall would be realized.

So at this point the wages are 4-5 times current and the prices (due to genuine competition taking over) are lower than current. As this grows nationally, the government is presented with two problems and one solution. First is that their tax base is much higher so the OPs problem is somewhat resolved but the two problems are now that the people no longer need as much social welfare (in most all its forms) and the ponzi scheme that funds the government is no longer supported.

This is a very generalized overview but hopefully, it can get the debate started.

??

?? What? No disrespect, but having wages rise at 100% per year while little inflation is completely unrealistic. Ben Bernanke doesn't pretend that is possibly. Obama doesn't. Ron Paul doesn't. Lew Rockwell, Dave Ramsey, Tom Woods, Mark Levin, Rush Limbaugh, Simon Cowell, Piers Morgan, or whatever type of commentator one might thinks really knows what is going on....none of them, not 1 would suggest that this is possible.

What reason would there be for a 100% annual rise in wages if we stopped taking debt? I agree that there would be some mighty changes. I think it would be long term benefit, but short term pain. But even that long term benefit would be far short of a doubling of average American's salary's purchasing power per year.

You care to explain why you think such unparalleled growth would be likely or even just possible.

It's really pretty simple

but you can't just view it on the macro level.

If just you "smber2c" were offered that pay schedule, inflation in your area wouldn't change, right? But your finances and future sure would. If most of the professionals (the productive ones) in your community doubled their pay, your state's inflation wouldn't change much beyond some restaurants and entertainment venues, right? This is the way it could trend from the bottom up. The relevant part here is that once you got your bills, essentials, savings and play money earned, you would probably retire. This frees up your job for the next guy. In doing so, your individual situation actually 'supported' multiple jobs because your spouse wouldn't have had to work and your kids would have at least gotten a break on borrowing for a house our other big ticket items. So you directly supported 2-5 people and so will the next guy in your job. If you had progressed through this and retired in 8 years, so might the next guy. Here's where it gets interesting... If each person follows this time frame, that traditional 40 year "job" now supported 5 eight-year careers that each supported 4 people. In other words, 10-32 people were supported by one genuine, prosperous job.

That's the job benefit side. The inflation side is that while this is taking place for some people, the majority of people are still struggling and pressuring inflation down. Also, since you still had to work for that money (i.e. you weren't simply handed it), you now value it much more than other winfalls like winning the lottery. This means you'll be more discerning in purchases. You will not buy that cheap Ikea pressboard furniture because you realize that quality will last. In tech, this translates to modularity. People like you will be targetted as customers by companies who offer permanent upgradability to things like phones, cars and appliances. In short, you'll jump off the rent train. No longer will those things fill out your monthly budget once you own them outright.

As those early adopters get this alternative rolling, the late-comers can also benefit from it. This is where competition should have led us over the last century but the banks stopped it via other factors. They introduced debt into every link of the chain. They introduced (pushed) over-hyped commercialism into every market. They effectively tied our social status to our financial wealth. In doing so, they guaranteed the majority would compromise 'a little more' for a possible benefit. Add up all those compromises over a century and here we are.

I'm not advocating anything new here. I'm just righting the cumulative wrongs of the last 100 years (+/-). It's been estimated in numerous places and studies that aggregate bank debt (and its derivatives) robs a cumulative 40-60% of total profit directly from every transaction. All I'm doing is exposing what would happen if we ended that on a realistic (slower) time frame because you and I know that the mega-corporations aren't going to just start doubling their wages overnight. If you, however, started a truly no-debt company that your community really got behind, I'm sure doubling a few wages would be cheaper than a marketing campaign. ...especially since you dumped 60% costs and wages would only increase from 11% to 44% (on average). And that still leaves you 27% for a price drop to compete.

Regarding what Ron, Lew, Tom and Mark have to say on the subject, please show me where any of them ever considered the physical effect of ending all the financial games. I'd guess if they did, it would be somewhat similar.

Looking forward to your feedback.

I'm glad your happy to chat

I'm glad your happy to chat on this, but I'm not sure I even really get your 1st step in this. You mention stopping all commercial debt based activity. Well 1st I don't think Ron, Lew or Woods are going to approve of prohibiting a commercial industry because some people don't like it. And as a saver, I'm going to lend/invest my money in where I get the highest rates, not in a "minimal flat interest charge" so I guess I'm then compelled to my new wealth in foreign corporations under this plan.

Just to clarify your 1st step, are you calling for the government entering the financial markets and prohibiting a wide variety of their lending? I understand people thinking that way, though I'm not in agreement on it. (if you're just calling for people not to use debt...we'll that's already happening with many families. We own our 2 cars, home [well sorta, we owe mom/dad 1/4 of the house] and we have no credit cards)

But even with a gov't prohibition in place (a controlled, community oriented lending program) I don't see why "prosperity would rise at a rate of about 10 times the REAL inflation rate. In other words, their wages would rise at about 100% per year (i.e. 40k > 70k > 120k > 160k)." Why? Getting higher wages occurs when a business produce more. If lending disappears sure they don't have to pay interest, but do you suggest that debt is eating 50% of the average businesses production annually? I know that in our family business there was a load taken to open it and the payment on that is fairly minimal compared to total income/expenses. And there are surely tons of profitable corporations without debt that don't see 100% growth annually.

If wages did start to double annually, there would be a unprecedented shedding of jobs to other nations that makes the last 50 years look isolationist. Why pay radiologists here 3 million when you could pay for Australian consults for 300K? Why buy American made anything when Asian produced goods would cost less and less year after year?

As to my being offered 40k yr 1, 70k yr 2, 120k yr 3, and 160k year 4. That in itself wouldn't cause inflation, but where are those funds coming from and how many people are getting them? If I'm in the medical profession, to pay be double, we're needing to make double, which means either seeing twice the patients, charging twice the prices, or some combination. Essentially, to have this panacea for any significant number of people would necessitate inflation or drastic reduction in quality to allow for greater profits.

As for 8 year working career being sufficient time to produce the wealth necessary to provide for an individual and their spouse to live 80 years at a modern standard of living. I don't see how eliminating commercial debt makes us even close to that much more productive. If I'm a contractor building homes, do I build enough through 8 years of debt free building to purchase my own home, much less to support 160 years (husband/wife) of food, clothing, transport, healthcare, travel, etc...? (Note: I'm using couple lifetime b/c while they don't pay for their 1st 20ish years of life, they pay for their kids first 20ish year of life so its equivalent in a 2 child family)

I think what you're missing is the difference between

I think what you're missing is the difference between public corporations and other highly indebted companies and those businesses that you mentioned.

Building homes is a productive business. Small family businesses usually are too. Those and even your radiologist example is pretty much a direct service business. What I'm referring to are major corporations and other businesses that have debt they'll never pay off.

Look at the operating budget for these companies and find the productive parts. At computer manufacturers, their labor is around 6% of retail price. Their materials (buying the parts) are 17%. Where is the rest? It is in sales and marketing (commercialism) and investment expenses.

Look at other manufacturers that have gone public. They have similar numbers. From the ones I've looked into, most have materials at 5-10% with labor around 11%.

That's a product being built and hitting their dock for 15% of retail cost. Why can't we keep it that low? It's because the stock market wants its cut and the banks they deal with want a cut and the government wants its cut (not necessarily taxes but often in cost of business regs, etc.). To pay for all these expenses, the company MUST MUST MUST ALWAYS increase next years sales over this year's. It's the perpetual growth paradigm.

In doing so, they must borrow more or dilute shares more or find another way to raise cash to grow. They must constantly cut quality and quantity and wages while increasing price. Does this sound familiar? Of course. It's the way every single product on the free market goes eventually. Why? What's the common denominator?

It's that debt load that constantly increases. When it's all said and done (counting direct and indirect costs), it's over 50% of the cost. If you didn't get that high, it's because you didn't include increased expenses when dealing with other regulated materials (think OSHA, ISO9000, credit bureaus, insurance mandates and the like) or games like lobbying to maintain a monopoly.

If you remove those costs, you can easily divert 3/4ths of it to wages and simply cut the price by the rest. Isn't this the HOW of how a small competitor is supposed to take down Goliath in the free market? Hadn't this been effectively SHUT DOWN by the banks manipulating the market into only publicly traded, debt based companies which they can control?

But you're going to say you can't cut sales or marketing or even some others, right? I disagree here. Most sales is 'push' and only necessary to increase sales higher then the customers want to pull those products from you. Think of a car salesman vs. a website. One is a huge expense while the other is virtually free (after simple maintenance and updating). Think of a well respected business in a small community where everyone knows what is made and everyone supports that company.

If you made good, cheaper (reference the 1/4 price drop above) step-ladders and only sold in a 50 mile radius, people in that area would only buy yours. You wouldn't have to advertise or market or probably even distribute. You would only have materials and labor and owners for expenses. The higher the tech, the more pronounced this effect is. This lends to more automation in a lower tech companies which cuts their costs.

I don't see why a company that doubles its wages would effect a flood of jobs to go overseas. Can you explain that? Are you simply making a direct link of wages and price without considering the price drop mentioned above?

Regarding the 8 year retirement, your mileage may vary. The average income is $40k and the average household income is $55k. Of that, most of those people get less than $5k/year to do anything creative with. I'm talking about paying off a loan early, putting money away, or any other financially sound action. In fact, in a 40 year career most of that $1.6 million earned will go to 3 places. Taxes, interest (and other bank expenses) and insurance. This leaves $400k TOTAL to actually buy your lifestyle things like a home, cars, education, goods, food, entertainment, vacation, clothes and energy. The rest is wasted on 'the system'. What if instead, you could earn $500k in 8 years before those expenses even hit you? What if you had cash on hand so a simple bond could cover all insurance expenses in one shot? What if you had enough to lend to family and friends, for personal and business costs so they could get started. Hell, what if you just eliminated 32 years worth of commuting expense? Are you starting to see the savings accumulate?

This got too long, ball's back in your court.

Cyril's picture

Well... welcome to the club.

Well... welcome to the club.

Yes, the most basic arithmetic has spoken eventually and you found yourself bumping into the only bizarre, unexpected wall left standing, blocking your view :

how the hell are we going to pay for this with a declining work force and higher liability loads?

We won't. Nobody will. Or not in the usual sense of a quiet, orderly "payment" (since it's impossible) you know - debtor vs. creditor, anyway.

BAM! The bizarre wall just fell.

Instead, the system will have to fail loudly, abruptly... to be replaced by what? That is question.

You may have missed that one, but since they arrived at the same arithmetic conclusion, they also speculated on might happen in lieu et place of the impossible payment :

http://www.dailypaul.com/296462/stefan-molyneux-and-g-edward...

I warmly recommend watching it when you get a chance.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Hey, call me a conspiracy

Hey, call me a conspiracy theorist but if those in charge had their way, it would be the people of Mexico, Canada, and the U.S. paying for it all.

Cyril's picture

I can't imagine them to succeed this time around

I can't imagine these sick control freaks and bastards will have their way, this time.

As for the worst case scenario :

Yes, I expect great civil unrest to be likely, at one point or the other.

Yes, I expect many acts of brutality and complete injustice against the people, from the DHS, or the police, and possibly a part of the military.

Yes, many of us will get hurt and will have to sacrifice themselves some time.

But "they" won't succeed at the complete Orwellian enslavement eventually - for the more or less long run.

Too much of truth - about what their horrendous plans are really up to, and whom they serve - has spread already, and not only in the US. Far from it.

Still, we MUST continue speaking it out loud, far and wide, including, even, during the chaos most people will be forced into.

Peace.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

I have a darker imagination

i can imagine them winning again and again and again. i think the liberty movement will forestall the inevitable, but it wont be until a brutal and painful collapse that enough people will come around. and even then if the us does implode i doubt people in power are going to allow more liberty theyll only use it as an opportunity to seize every scrap of power they can... i imagine another revolution 20 or more years down the road.

meow

With

severe survival presure.

The creation, production and fair exchange of values is the business of evolving consciousness, love and life.--Craig Johnson