| BFR said: What about student loan debt relief for existing loans? I thought you guys were all for that one, that's something like $700b +.
The US national debt is already $35t, how much is enough for you guys? You want to push it to $50t with ease. Keep it up and the USA will go bankrupt one day, and when it does, I will be moving to a long held (and currently unoccupied) family property in New Brunswick, Canada. That is my escape plan, what is yours when the USA goes under and we see Civil War #2 unfold? |
Did you not read the responses or just don’t understand them?
The overall amount of debt doesn’t mean anything, the amount of debt itself isn’t the issue, it’s the debt-to-GDP ratio that you should look at, it’s the equivalent of a country’s debt-to-income ratio.
A person trying to get a loan isn’t just going to be judged on the amount of existing debt they have, it will be weighed against their income to determine their overall financial stability.
For example, person A with $50k of debt and a salary of $70k/year is not in a better financial situation than person B who has $300k of debt and a salary of $500k/year despite having 1/6th the debt because they only gave 1/10th the income.
On top of that, it’s important to look at what the debt is being used for. Increasing debt to cut rich people’s taxes isn’t a good use of debt, whereas increasing debt to invest in things like infrastructure, housing or education is a good use of debt as these things can have positive effects on the economy in the long term.
Increasing debt to cut taxes (revenue) is the equivalent of someone intentionally taking a lower paying job despite already struggling to pay their bills, there is no upside to that and can only lead to further struggles. On the other hand, increasing debt to invest in infrastructure, housing or education is the equivalent of someone getting a loan to pay for a car, a house or go to college.
The massively increasing debt-to-GDP ratio is largely due to decades of tax cuts on the wealthy and corporations. In 1979, the top income tax rate was 70%, the top corporate tax rate was 46%, the top capital gains tax rate was 35%. They have fluctuated since then but have gone as low as income-28%, corporate-21%, capital gains-15%.
Debt-to-GDP was around 119% in 1946 just after WWII ended, high tax rates over the next few decades saw that drop to just under 32% by the time Reagan entered office in 1981. The Reagan tax cuts saw that double to 64% by 1993 when Clinton entered office. His tax increases and balanced budgets saw that go back down 54% by 2001 when Bush entered office.
Debt-to-GDP ratio is now roughly back to where it was at the end of WWII and like the article I posted earlier said, excluding bills addressing the Great Recession & Covid Pandemic, the Bush & Trump tax cuts are responsible for over 90% of that increase in debt-to-GDP.
That means the major investments under Obama & Biden like the Affordable Care Act, Infrastructure Investment & Jobs Act, Chips & Science Act and Inflation Reduction Act have only contributed a small amount to the increasing debt-to-GDP and if we kept tax rates at the level they were under Clinton then the national debt would not be an issue.
When the herd loses its way, the shepard must kill the bull that leads them astray.
