I have a friend who is on disability, but dreams of the day she might be off of it again.
While the amount she is living on is tiny, once the various health insurance benefits are factored in that come along with a tiny income, we calculated that she'd have to earn $42,500 on a pre-tax basis to breakeven.
In a county where the median income is a fraction of that, that's a tall order.
[/quote]
Well,
I have been away… from the site for a while. Seems, when the chips are down, I cough up the red pill (or is it the blue one, I can never remember) and scramble to support my family. This diatribe is germane to the topic even if it isn't clear now. Please keep reading.
First, according to most of Kenneth's tables, I was/am about a 10%'er. That is until my employer of ten years decided to give me a "pink slip" as my tenth anniversary gift. I am employed in that evil medical device industry. My competitors became my friends and I quickly was employed by one of them and returned to my 10%-ish status. But, I am learning that the 10% status is very tenuous because of all of the rants about the ACA. I am in that age group that is too young to "retire." And retirement is out of the question anyway because like Adam's relative, my retirement account does not amount to much. I also have two teenagers who will be going off to college soon. (Yes, I believe in college.)
Currently, in the state that I live in, if I were to go "back" into the hospital and take a job as a nurse, I would NOT be making more than that $42,500 figure Chris was talking about above. Why? I thought nurses made good money you say. They can, just not in the south. And, hospitals are NOT hiring full time. It is far easier to "cancel" your extra shifts (when you try and make 40 hours) if the census is low than try to either shift you around the hospital or make you use your vacation time to be paid full 40 hours… But I digress.
Last summer, one acquaintance even asked me, "Why don't you go on disability and collect?" I replied that I am not disabled and how could I do that? She replied, "I don't know, but I know someone who just got their disability decision and are collecting and he doesn't seem disabled either!" And just think, on disability, getting assistance, SNAP and whatever else, my daughter would most likely get to attend UNC - Chapel Hill pretty much for FREE because of the state's College Promise program.
What is wrong with this picture?!?!
Pure and simple, our entire system is broken. But like any good machine, it will continue to work, limping along until there is a catastrophic FAILURE. - Perhaps.
The question is, how long will it limp along? Chris is still in awe that it hasn't "broken" yet. He saw the warning signs back in the early 2000's. He saw the numbers perhaps, but a lot of us, "knew there was something wrong." We are now almost half way through the "Next twenty years will be nothing like the last twenty years" prediction that Chris made. In some ways he is right. In other ways, not much has changed.
Bottom line, the rich will continue to get richer because they make the rules. And, until the system really "breaks" that will only change in that a new cast of characters will take their place. Ask the Pharaohs, the Caesars, and the kings of the western world, each new realm succeeding the last. How long did Rome last? Folks, we have a long way to go even with bumping up against the edge of energy production. Will it get a lot harder before it gets easier? Probably.
So, what's the answer? Live your life. Provide for your family as best and any way you can that has the most joy and causes you the least amount of grief. Because unless you are one of the 1%'ers you are just making ends meet.
I choose to help others. I choose not to worry if someone getting SNAP "deserves" it or not. And even the military Industrial complex and all of it's "military welfare" to the soldiers families does not bother me any more. Why? Because we are all just trying to feed our families and live out our time on this rock in relative comfort.
The "big reset" will come when it comes. Maybe sooner, maybe later - much later. It doesn't matter. If you are reading this, you are already more "prepared" than the other 99% who are not aware.
~ Peace
On one hand, Un-money is debt based money. It's 'value' is borrowed from the future. It will primarily be repaid by future labor (ours and those after us ) and our use of stored energy either fossil or nuclear. This money will also become of less value as either human labor becomes less important to the economy, or our stored energy supplies become unavailable. Either way it is based on the use of power in the future.
On the other hand, Money is commodity based. Gold and silver fit here and IMO so does bitcoin, since the mining must be done before the bitcoin can exist. Other commodities are also wealth and could be used as money. Money exists because energy has been expended to get it. It's value is determined by it's desirability in the current economy.
My take away from all this discussion on Uncle Sam's largesse out of empty pockets is to strive to live in ways that untangle our lives from the web of un-money. To do this requires accumulating 'primary wealth' as defined in "Small is Beautiful' by Schumacher. As each is able, begin to take your energy and resources out of the system of un-money. This can't be done quickly for most of us. Decompression must be gradual or it kills.
The stock markets withdrawal symptoms from the FED's backing down Quantitative Easing is an example of the shock of weaning off un-money. As we do so ourselves life for each of us will change. So before un-money becomes too worthless we need to be adequately untied from un-money.
Here are a few examples discussed on this site…Chop your own firewood. Use the sun's energy. Take your 'unemployed' time and invest it directly in your family, friends and community. Teach your children. Save your excess in forms of wealth that are not dependent on un-money. Invest in local enterprise. Become your neighbor's social security.
I'm not saying this is an easy transition. Chris pointed out the example of the friend on disability. Some won't be able to do it and survive. Still, I think that it's worth trying to untangle ourselves from the web of un-money. The community on this site is full of living examples on that journey. Hopefully the demise of un-money's value will be gradual enough for lots of others to wake up to it's deception and join in the untangling journey. But then, I'm not waiting around either.
Adam you really seemed quite outraged about this:
"And while I understand why she feels the need to take the money, I'm conflicted about my role in the affair. Because it's this very behavior of treating the government like a free money ATM (or a benevolent uncle with a bottomless wallet – use whatever analogy you like) that's ruining us."
She "needs to take the money"? You make it sound like she is touching something dirty, and that if she weren't in such a piteous condition, she should turn it down. She earned the money. Let us look at it another way. I imagine that whatever property you live on you now own free and clear, but I think it likely at one time that you had a mortgage and the you got a considerable subsidy from the United States government to support your home ownership. Money that the government really wasn't in a position to afford. Perhaps you should look at how much of a gift you got from the government during your years of home ownership, and see if you can return some of it to your aunt and then you wouldn't be in the position of abetting an old woman in getting an extra thousand or two a year from the Feds.
rcmacl -Gosh, you're really not getting me. Did you read my further clarification below?
I'm beginning to think that more words from me are not going to help you understand my position better.
Let me reiterate a few bullets here. If that doesn't help, I guess we'll just have to agree to see this issue differently:
First off, be careful with your assumptions. Both of the relative I mention in this story, and of me. For example, I rent. In fact, I'm over 40 and have never owned a house. When you make an ungrounded assumption about my background or motives, you open yourself up to the possibility of missing the mark widely. It's much better to stick to facts and data.
I'm not clear at all that you do "understand my point." Because it has nothing to do with whether my relative deserves the money, morally. It's that our SS entitlement system (like most other government funded programs) has a mathematically broken model. And this is exacerbated by an irresponsible, consequence-free "free money forever" mentality that both the operators and beneficiaries embrace.
And this line really confuses me: "this just does not excuse directing outrage towards programs that may mean the difference between whether someone gets one healthy hot meal a day or not". I see the situation completely differently. I think it's our responsibility to express outrage if a support program tens of million of people depend on is running itself into insolvency. If we don't, and the program is run into the ground, ending those hot meals for good – are we not complicit in our negligence to act?
If you want to rail at the obscene concentration of wealth happening in the U.S. as a result of our misguided and crony capitalist policies, have at it with my blessings. Chris, Ken and others have already contributed intelligently on that topic in previous comments on this thread. I'll just reiterate that even if we appropriate all the wealth of these modern-day robber barons, it won't fill the financial hole we're in. Not by a long shot. To your observation though, it might make us feel better for a few months.
I sense it's important to you to hear that I and the PP community believe those living on government assistance should be treated with kindness, compassion, and understanding of the challenges they face on a daily basis. If my assumption is accurate (and please forgive me if it's not), then speaking for myself, let me clearly state I completely believe that. But I also think that, consistent with that belief, these folks deserve programs that are based on sound math, meaningful support, effective incentives for true self-betterment, and measurable impact. Simply handing out money until the doomed system breaks does not serve their real interests, nor those of the future generations that will have to bear the costs of the aftermath.
I hope this helps.
cheers,
A
Jan,I'm pretty sure that a budget is mandated by law. This is just another example of the flagrant disregard of the law by our 'elected' representatives.
and therefore did not feel the need to respond to the the following jab from rcmaci, I will.
Perhaps you should look at how much of a gift you got from the government during your years of home ownership, and see if you can return some of it..........The government allowing me to keep some of the money that I earned doesn't qualify as a gift IMO.
If someone goes into your bank account and takes a few thousand dollars and then gives you back a few hundred, would you really consider it a gift just because he was stealing more from someone else?
SS
Actually, if we were to tax the rich AND slash the military budget, it would come very close to solving our problems. Whether that's a good idea or not, it would work.According to the latest data (from the treasury department's monthly MTS spreadsheet, smoothed with a 12 point moving average because the underlying series is so volatile) we're running a deficit of about 560 billion per year - annualized. You can see from the chart below that the deficit reduction activities actually have reduced the deficit. Wonder of wonders.
http://www.fms.treas.gov/mts/mts.xls
Given the military budget is 777 billion, less deficit of 561 billion, + "tax the rich" scheme that could conceivably be able to garner at least some money (say - taxing those hedge fund owners at ordinary income rates instead of LTGC, just for a starter - and the futures traders who also get a LTCG benefit too, for some unknown reason), I think rummaging underneath the seat cushions we could zero out the deficit in fairly short order. It would be a drastic reduction in military spending, but - let's be clear, it would work.
And if we combined this with "means testing" social security, and/or expanding SS taxes past the current income limit of - what is it, around 110k/year - why, bob's your uncle and we'd be all set. Why not gradually raise the retirement age while we're at it. Gore enough sacred cows, and what do you know, we really can fix our budget issues after all.
And in terms of dealing with the dislocation with downsizing our military - most likely it is cheaper to do it now and retrain all those guys to do something peaceful, rather than borrowing all that money to keep the system going and pay them not only current salaries but pensions as well.
Bottom line: regardless of whether or not you approve of the policy, the numbers say, it would work.
A tax on every stock exchange transaction would also work wonders. The VIX would set new records. Even if there is no logic to it, it would be a hoot to see what happens to the HFT algos.
I guess the Machine would not take too long to factor it in. It would be a neat test to see just how intelligent the machines have become. It would not surprise me if the algorithms are capable of learning.
Everywhere I cast my mind I see the sign. This is a Great Transition. Stay healthy, get enough sleep and break out the popcorn.
I see that the old guard have fallen off their perches at last and NASA and the military (especially the Navy and air force) are embracing LENR. They would be mad not to. The army still has not got over having to abandon swards.
Earthwise, thanks for the response - I am certain as well that there are laws saying budgets must be tabled. Apparently laws have become like stop signs in that many people ignore them, driving right on through them because there are no consequences.I marvel at the fact that there is no outrage over the fiscal mismanagement of Obama (and others before him), yet a previous President was called on the carpet because he couldn't keep it in his pants. Meanwhile, people care enough to get a 100,000 signature petition to the Whitehouse calling for the deportation of Justin Bieber, but there is nary a peep calling for a petition to end to deficit spending or anything else that is "material". Therein lies the problem - what has become "material" for most, the entertainment and sports worlds, is so immaterial it makes me want to barf!
But once again, I find myself very much alone in my thinking when amongst family, friends and colleagues. Most are too busy talking about the latest Superbowl commercials, or the goings on in the latest reality show, and they cannot be bothered to even think about anything that might pop their fantasy happiness. Sigh…
Jan
[quote=davefairtex]Actually, if we were to tax the rich AND slash the military budget, it would come very close to solving our problems.
[/quote]
According to Laurence Kotlikoff, the federal governments unfunded liabilities are $220 trillion. If we add state and local government unfunded liabilities into this figure we are near $300 trillion. This works out to about $1 million per US citizen.
Taxing the rich AND slashing the military budget would come no where near solving our problems.
[quote=rcmacl]I do understand your point, every single gosh darn one of us has at one time or another expected the government to step up to the plate without thinking about where the money is coming from, but this just does not excuse directing outrage towards programs that may mean the difference between whether someone gets one healthy hot meal a day or not. Leave that to the right wing pundits who no doubt think your aunt is a welfare queen.
[/quote]
Sorry Rcmacl, but your just plain wrong. This may be true in your world, but not in mine. I've never taken a single dime from any government program and the very few people I know that have, are evenly split between those who were entitled by way of lifetime contributions (Social Security) or were people ripping off the system. As a blue collar, middle class guy, all I want from my government is to be left alone. And, I think about where the money comes from all the time: every week when I see the taxes taken out of my paycheck.
The entitlement system as we know it was designed for fraud. I know that's a bold statement but I can tell you some anecdotes describing some "inside baseball" that would curl your hair; private admissions by high ranking congressman regarding the well known level of fraud. The "help the poor" mantra is just a facade.
[quote=davefairtex]According to the latest data (from the treasury department's monthly MTS spreadsheet, smoothed with a 12 point moving average because the underlying series is so volatile) we're running a deficit of about 560 billion per year - annualized. You can see from the chart below that the deficit reduction activities actually have reduced the deficit. Wonder of wonders.
[/quote]
There's a bit of monetary 'sleight of hand' going on here.
The first component is the Fed printing money out of thin air, vacuuming up all the Treasury paper and then not charging the Treasury any interest on it. That cut the deficit by some $88 billion last fiscal year.
The second component is slightly more complicated as it involves a third party, but the mechanism is the same. In this case, the Fed prints money out of thin air and buys MBS paper with it, which drives up the value of said paper, which drives down the mortgage interest rate and cost of capital for Fannie Mae and Freddie Mac, which drives up their profitability, but, more importantly, allows them to reduce their bad debt allowances enabling them to book higher profits and return more to the U.S. Treasury.
Payments to the Treasury from Fannie Mae and Freddie Mac were about $34 billion more last month than they were a year earlier, according to the report. Fannie Mae and Freddie Mac have taken $187.5 billion in U.S. aid since they were taken into conservatorship in 2008. They’ve returned $185.2 billion, which is counted as a return on the nearly 80 percent stakes the government holds, not as repayment. (Source)Taken together, Fed printing has directly reduced the federal deficit by more than $250 billion, or roughly a third. We can say that "deficit reduction activities have worked,' but it would be just a tad more direct to say that when the Fed prints up money and hands it to the government, the government's apparent cash deficit shrinks. One gigantic problem with this is that it fails to provide any lessons or restraints to the D.C. crowd, not unlike failing to allow big banks to take losses and/or go to jail. The Fed should win the all-time award for enabling behavior...they deserve it.
Unfunded liabilities are a bugaboo that assumes we will continue driving 100 mph right into the brick wall. What we can't afford, we won't pay for, end of story. If we keep on trying to balance the budget as time goes on, we'll default on stuff one small step at a time, rather than all at once in a very messy way.Seriously, means-testing social security (I.e. not giving it to the rich - or the moderately well-off), raising the retirement age, and eliminating the social security tax cap fixes the whole problem. That's seriously unpopular, of course, so it won't happen, but it would work.
Medicare is its own beast of course, but if we were to adopt the (rationed) medical care system of any one of the other major nations of the world that provide medical care to their people for 50% of what we pay, that would solve that problem. Yes some procedures and some drugs would no longer be provided, but that's just how it goes. If you want the Cadillac, you have to pay for it.
Did you know that even Thailand provides basic universal healthcare? Thailand!
Seriously. Its all fixable. It just requires goring a few sacred oxes. To mix a metaphor. And we have to stop ignoring the data and quoting figures that just don't add up. Turns out, cutting defense spending AND taxing the rich really will balance the budget.
And we're going to have to default on our crazy medical system, but that's probably a blessing for everyone other than Big Pharma and the hospital administrators making seven figure salaries. Give me death panels and rationed universal care over our overpriced system that provides worse outcomes, expensive unnecessary procedures for profit, and lower overall life expectancies any day of the week.
Just my opinion, of course. Sorry about the soapbox.
Thank you Adam, I do appreciate your additional explanations. I absolutely agree that a bankrupt system is of no use to the folks who need it. I am sorry this format does not allow room for my more nuanced views on this matter. Yes I did make the assumption that you have been a homeowner. And I certainly appreciate that you are not suggesting we should not care for those in need, and certainly I did not mean for a moment that you do not care about the circumstances of your aunt, obviously you do, or other persons in need. My rant is more how on we focus on the many problems of our failed system. I do understand that programs that benefit the poor should not be immune from this scrutiny, I just think the insolvency of this system could be better blamed on systemic and policy problems, now and in the past that primarily benefit major corporations. I just am very sensitive to suggestions that benefits to the poor are part of the problem, although in a macro sense obviously they are, it is a subject that I like to address with great care. Due to an unusual biography and unusual opportunities I have the gift to have as a close part of life people that are of the top 1% and of the lowest 5%. I have family who are working poor and family who are on benefits, and I do see that those on benefits have a better life. Frankly to address the question as when the middle class should give up for benefits, I would say based on very personal experience, that the breakover point is about is about $15,000 for an individual who has health insurance and much higher for someone who doesn't. I also want to be clear that I have found no difference in the good and caring qualities of any of the people I know regardless of their circumstances. The only exception might be that I truly find that the caring potential does go down when certain of them are spending more time listening to conservative talk radio, thus part of my sensitivity to poor bashing.
As to the matter of whether or not a tax break is gift when it lets you keep money that you earned, I am sorry I do not have time to address it in more depth. Put simply we do have a basic tax rate. When we are allowed to keep money that we otherwise would pay, we are being given a benefit that others do not receive. It comes out of the national balance sheet, just as a retirement payment to a social security recipient is a benefit that comes out of the national balance sheet. Folks tend to see this kind of benefit more clearly when they see major corporations that pay almost no taxes, but the result is precisely the same. Tax breaks are a government subsidy, they may be good they may be bad. We provide huge support in this country for people to own their own homes. Is this something we should be doing, these are interesting policy questions, but it does not change the fact that a tax break is a financial benefit given to us by the government deficit.
It doesn’t take long before the race to see who can quote the highest number for US debt starts in earnest. $80 trillion, no $120 trillion, no wait, it’s really $300 trillion. This parlor trick has been going on for far too long, whoever decided that a forecast must extend 60 – 70 years into the future- and then make hysterical claims about the enormous numbers?
And of course, it goes without saying, the only response from “reasonable” proponents of sound money is to cut social programs. I wonder who and what is sponsoring this rhetoric?
I’m pretty sure if I forecast my grocery bill over the next 70 years, I too would be broke.
But RNCarl is right, we’ve been hearing this story for way too long. Maybe it had some credibility in 2008 just after the crash, but the dire, hysterical warnings of chronic overspending and impending financial collapse simply have not happened. Yet the narrative continues unabated and unswayed by observable facts.
It seems to me regarding Social Security that most everyone agrees that if the annual cap of $106k were lifted on the taxable income threshold any and all deficits for the program would be eliminated insuring solvency for any credible future projection. And this (significant) component of the future deficit would then be retired from the tally. Yet not one word of this anywhere in this thread as a potential (and very simple) solution. (Edit- I now see davefairtex's comment)
In a similar vein, I find it a little frustrating that the same tired old claims are being thrown about, that even if we were to tax every rich person in the country, we still would not resolve the issue. So let’s not try! Great logic.
This group like data and numbers, so let’s look at some data and numbers and see if a different narrative emerges.
I like reading the IRS documents for “Statistics of Income” for US Corporations. I find that there are some eye opening facts and figures buried within these voluminous documents. Let’s consider the most recent version I have for CY 2010. Link.
Extracting some top level numbers to make my point, from pages 5-8:
- Total Assets claimed for tax purposes by US Corporations…………~$80 trillion.
- Total Income (receipts) for US Corporations in 2010…………………. $26.2 trillion
I have some more numbers, but I want to stop here because when I first found these documents a few years ago, I was rather shocked to find this number for aggregate annual revenue. This folks, is a very big number, especially when you consider US GDP is ~ $15 trillion. The total is nearly double GDP. This should stop and give pause to those that would make the case that there simply isn’t enough money in the economy. The problem is that such pundits are not looking in the right place.
Taxation and revenue in the US is divided into two generalized buckets, income of US Corporations, and income of everyone else (1040 etc.) The vast majority of US Corporations are subchapter S, or some other filing entity that pays tax not in the corporate bucket, but under the 1040 personal income bucket- as we shall see in more detail shortly. The rest of the firms in the US Corporations bucket are typically subchapter C, often (but not always) publicly traded entities.
So, let’s find out how much tax US corporations paid on the aforementioned $26.2 trillion in 2010? But first, let’s make a point about this astoundingly large gross revenue number. If we consider our current national deficit to be ~ $15 trillion, it would take about 7 months of aggregate income for all US Corporations to zero out the entire national deficit. How many American families could zero out their entire debt burden, mortgage, credit cards, auto loans, etc., in 7 months total gross income? Not many.
Back to the tax paid by US Corporations, on $26.2 trillion of total receipts. From the IRS document, page 6:
- Total Corporate Income tax paid, after credits, 2010………………………………………$223 billion
Let’s do some arithmetic! $26.2 trillion in gross income, $223 billion of tax actually paid, let’s see, that’s less than 1% tax paid against gross receipts (.0085%)
Unfortunately, we can’t really bank on this (yet) as it includes the pass through entities that pay tax through personal income tax filing (1040), as well as individual shareholders who pay tax on dividends and capital gains. The number of these pass throughs is quite significant, again quoting from the IRS document “………of the 5.8 million corporations filing tax returns for 2010, 4.1 million of these were pass through”
Oh, so the numbers really don’t count- as these entities do not pay tax at the corporate level? Wrong. Here are the details.
Of the massive 5.8 million corporate tax returns filed in 2010, only 1.7 million of these were taxable at the corporate (Federal) level. This means that only about 29% of the returns comprise the tax paid in the 1% number above, the other 71% pay tax at the personal level- and not represented in this document.
But wait, let’s look beyond the sheer numbers, let’s look at the actual income this 29% of the returns comprises- it’s astonishing- this 29% of corporate tax returns represents $20.1 trillion in receipts, or about 77% of all corporate income. So the numbers are relevant.
Based on this, we recalculate the average tax paid against total revenue- $20.1 trillion in receipts, $223 billion in tax= 1.1% Federal tax paid by US (Sub Chapter C) Corporations. Yes, I know businesses have deductions, cost of goods sold, etc., obviously this eats up the lion’s share of income, but if we look at the total profits claimed by all US Corporations is $1.4 trillion, or about 5% profit. I find this suspiciously low, this indicates, to me, the efficacy of the corporate deduction/avoidance scheme. Notably, for 2010 if you exclude the pass throughs, the pre-tax profits of US Corporations increased more than 80% from the previous year. 80%!
Another interesting data point is that of the 5.8 million tax returns, only 2,772 of these returns (.04% of the total) account for a whopping 81% of total assets, and 51% of total receipts (They also paid 69% of the total tax received by the US government for corporations) But still, this is only 1.1% of total receipts.
By contrast, individual (personal) rates for Federal income tax are on the order of up to 40% for income over $406k. I don’t know about anybody else, but I wish I had that 1.1% rate deal.
Still wondering where all the money went?
[quote=davefairtex]Seriously, means-testing social security (I.e. not giving it to the rich - or the moderately well-off), raising the retirement age, and eliminating the social security tax cap fixes the whole problem.
[/quote]
Dave,
First, thanks for the civil post. I have a lot of respect for you and the information you provide this site. And I agree with you on many of the issues you present.
Unfunded liability arguments require lots of assumptions and hand waving. Reduced medical care (and earlier death) for seniors or increased wars involving our youth could significantly alter the demographics rendering both of our argument's incorrect. We do know that working longer will keep unemployment higher than normal and reducing benefits will reduce the tax base going forward. I see a negative feedback loop here and deflation ahead WITHOUT governments cranking up the printing presses.
Let's take a peek at the other 2 E's. Energy will become increasing scarce and more difficult to bring to market. My current pick for the biggest issue the next 5 years is water. In California local farmers (my neighbors) have elected to plant 1/2 their acreage to provide adequate water for their crops.
If you increase the cost of energy and food, I see governments' receipts dropping quicker that they can shed their liabilities. Until they are forced to. The unknown is when the bug meets the windshield (JM).
Nate
You make some excellent points and thanks for wading through IRS documents. If I ever need a sleeping pill, that will do it. I have long thought that using those exponential numbers for unfunded liabilities was very misleading because, as you point out, a small change now can have colossal effects on the out year numbers.Just a couple typo type errors.
The national debt is about $15T, the deficit is measured annually and has been running around a $1T/year.
You're right about the less than 1%, but it's actually .85%.
Sorry for being a stickler.
Doug
I read and responded to Darbikrash's post before I read yours. Excellent points. One addition. Those gov't run systems that the rest of the advanced world (plus Thailand) have include negotiating prices with the providers to much lower levels than we pay.Doug
So since I happen to have the data here, I figured I'd post yet another chart, this time instead of doing the math, I thought I'd show both the receipts and the outlays from the US treasury. Again, I caution you all that these are modified by a 12-point moving average, which effectively turns them into a seasonally averaged number, but it also introduces a lag so any major changes that are occurring today won't dramatically affect the numbers for several months.(My charting package doesn't do seasonal averaging, unfortunately, so I'm stuck using moving averages which are less good because of this introduced lag)
So what changed? Receipts increased by a lot, and spending was actually reduced by a little. As in, spending is actually lower than it used to be - as opposed to simply reducing the rate of increase.
And just for fun, I included a chart of the data without the moving averages. This is why the data is pretty useless for seeing trends without applying some kind of transformation to it that massages away the seasonal variation. You can still kinda/sorta see the trends, but it is much harder.
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UItimately, we won't be able to pay for this reckless spending.
I hear you. I hear the angst. There are a lot of people who are caught in this dilemma. And the ones who are in it? They don't have a clue, like your relative.
You and I do. I'm terrified of the future.
We are 17 trillion, and hundred of trillions unfunded, in the hole.
We. Are. Not. Getting. Out. Of. This.
Simple as that.
I said to friends in 2008, in 4 years we're going to be 15 Trillion in the hole. They laughed. They laughed harder when I said 20 Trillion in 2016.
Nobody will be laughing in 2024 @ 28 Trillion. If rates don't skyrocket up to 4 or 5%…
Robots will be taking over the economy by 2020. There will be a permanently under and unemployed underclass of 10-15% and growing, if were lucky. Current thought holds 50% of the jobs will be gone in 20 years.
Let's hope I'm wrong.
We both know this ends in (hyper?) inflation.
All we can do is prepare. By something that you hope, if you have the money, will serve as a store of wealth, or growth of it.
Otherwise…
We're doomed.
•∆•
V-V