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Originally Posted by Evil_inKarlate
Ah, but traditionally, the poor were kept poor but not Too poor, such that rebellion was suppressed and their subsidized livelihoods helped stave off disease etc so they maintained a decent-sized cheap labor pool. In the modern US, the poor aren't content with 'not Too poor' and continually demand more, including health coverage and other benefits so that disease etc are no longer effectively keeping their numbers in check. Unless a better solution is found than simply throwing money at them, we're going to end up with the aforementioned 'thousands of beggars storming the house' regardless of any self-serving generosity.
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Maybe the flaw is in the necessary requirement of 'cheap labor' ?
People have an annoying habit of not going along with being the cannon fodder that they are assigned to be by other people. Can't say I blame them.
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Originally Posted by Evil_inKarlate
That was not my intended implication, and I agree, while debt rollover is an annoyingly poor use of money, it is no cause for alarm.
What Is cause for concern is that in the next decade or so we are faced with one or more of 1) the aforementioned unlikely default, 2) significant cuts to government programs without offsetting tax cuts, 3) significant increases in taxes, or 4) significantly rising public debt, in increasing order of probability IMO. None of these are good for social stability or economic health.
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Agreed. #3 and #4 are the most likely given past US political behavior.
As most reputable studies show, the sooner that any given required tax increase is passed (or any required benefit reduction is phased in) the better. The longer one puts off either choice, the larger the impact that choice will have, once it is made.
I understand that an increase of 16% of the present Social Security payroll taxes would solve the problem entirely, if the tax is passed sooner rather than later (I don't have a source off-hand for this - I'm citing from memory, I could be mistaken on the precise figure).
Given that the USA has the lowest level of taxes of any western nation, there is no substantive danger that such a tax increase would make the USA comparatively uncompetitive with the USA's major trading partners as the USA would remain the lowest tax jurisdiction even with such an increase.
It is also to be noted that many other western nations are extremely competitive trading partners with the USA despite paying significantly higher tax rates. Indeed, the USA keeps losing trade ground to these higher tax jurisdictions. Canada for example has increased its market penetration of almost every class of exported product to the USA over the last 20 years (and has higher taxes every step of the way).