I keep seeing the phrase "first time ever" being used in regard to the possibility (yes I know we won't actually default) of defaulting on our debt.
I would swear I remember seeing somewhere that we have in fact defaulted in the past. But I can't find any information out about whether we actually did at some point, and if so when did it happen, and what was the fallout from it?
Can anyone enlighten me?
Here's an article from USA Today in which Sec. Geithner says it would be the first time. I'm not his biggest fan but I do trust him on this one. What I do recall from my days as a history student is that, when the first US government was convened under the Constitution, it had to decide whether to honor the debt accumulated by the old Continental Congress during the Revolution. Many advocated defaulting on the debt, saying the new USA had no obligation to pay debts assumed by an earlier government. Hamilton won the argument that the new government's credibility as a financially responsible institution required it to repay the debt, which was done. I am quite sure there has been no default since then, either. I also believe the Republicans are playing with fire on this one. Even in the best of economic times, a default would harm the economy. Now, it could throw us into a deep depression. We shall see. I don't want to find out.
PS: I am in favor of deep, across-the-board, spending cuts coupled with a tax in increase on the highests bracket only. Even that, I fear, will throw us back into recession but I don't think we have any choice.
Why a tax increase on just the highest bracket only? They the only ones that have a dog in this fight?
Not to mention that you don't increase taxes on a middle class that already bears an unfair burden. As you well know, there is no one suggesting this, even Democrats rule it out.
agree to a tax increase, would you agree to never ever again utter those time tested liberal catch phrases?
The rich can afford it
They need to pay their fair share
Shared responsibility
Shared sacrifice
It takes a village
Of course, I never used it before, either. And, by the way, I fall into the tax bracket that would be affected, just as I did when Clinton vowed to raise rates on the top bracket and I voted for him anyway. Why? Because, well, I could afford it.
and the cliche word "tax and spend". Let us start with that.
Another group that thinks they are going to reap immense benefit from tax and spending cuts. Don't even want to get started on the whole nonsense about tax cuts while it has relegated the country into the league of third world countries on infrastructure spending.
Pawlenty's Google idea is great. I found on Google that I can pay off all my debts including my mortgage in 3 to 5 years. Wonder how many banks will give me mortgage?
You are not going to get a different result by doing the same things the same way and expecting a different result (tax cuts, spending cuts, giving swops to friends and family). Does republicans have any vision for this country other than concentrating all the wealth on a few.
For all of you out there advocating higher taxes for the wealthy, how 'bout these little factoids:
1) Those in the highest 1% of the income bracket earn 20% of all income, yet pay 40% of all federal taxes. How much more of the burden should that bracket carry?
2) In the last tax year, 51% of taxpayers paid no federal taxes and/or got more money back than they paid in. How can a society function when less than half the people are paying all the bills?
3) As a member of the top 1% bracket, and a small business owner, my tax burden breaks down as follows: federal 36%, state 3%, local 1% Medicare 2.9% x 2, SS works out to about 1% x 2. Thats nearly 50% of my income, before I see anything in my bank account. When those calling for higher taxes on the "rich" pay anything like what I'm paying, then we can talk about higher taxes for me. Seriously, a 15-25% tax bracket for the middle class is hardly "unfair."
Here's a novel idea, let's have EVERYONE pay taxes. I seem to recall ponying up when I was in college earning $3.35 an hour while working nights and weekends in fast food.
If everyone pays something, then I'll pay a little more. Until then, hands off my wallet...
I would LOVE to see the tax code re-written in a simpler, fairer way. Now give me odds that can happen in this political environment. They are even longer than the odds against any tax increase passing this Congress.
1) Those in the highest 1% of the income bracket earn 20% of all income, yet pay 40% of all federal taxes. How much more of the burden should that bracket carry?
2) In the last tax year, 51% of taxpayers paid no federal taxes and/or got more money back than they paid in. How can a society function when less than half the people are paying all the bills?
3) As a member of the top 1% bracket, and a small business owner, my tax burden breaks down as follows: federal 36%, state 3%, local 1% Medicare 2.9% x 2, SS works out to about 1% x 2. Thats nearly 50% of my income, before I see anything in my bank account. When those calling for higher taxes on the "rich" pay anything like what I'm paying, then we can talk about higher taxes for me. Seriously, a 15-25% tax bracket for the middle class is hardly "unfair."
Here's a novel idea, let's have EVERYONE pay taxes. I seem to recall ponying up when I was in college earning $3.35 an hour while working nights and weekends in fast food.
If everyone pays something, then I'll pay a little more. Until then, hands off my wallet...
2. Average wage for the middle class has stagnated over the last 30 years while the cost of living has not. This is reflected in the tax code by the regular increases in the standard deduction and personal exemptions that every taxpayer receives. For 2011, the standard family of four, MFJ will have pay no tax on the first $26,400 of income and probably get a refund due to child tax credit and earned income credit. If we can get better wages to the bottom 50% they too could be paying taxes.
3. Your 36%, really 35%, is your marginal rate and depending on your filing status, I will assume MFJ, only applies to your taxable income over $379,00 for 2011. Below that is smaller progressive rates. Your FICA or SE taxes only apply to the first 110,00 of income or so, I don't have the 2011 FICA limit handy. All in all, I doubt that your total federal, state and SE income tax bite is anywhere near "50%".
And finally
4. Everyone who works and gets a paycheck pays FICA taxes of 7.5%. So everyone does. So when will you pay more?
You can afford it. Suck it up and quit whining.
-- Modified on 6/9/2011 8:33:51 PM
Everyone knows, if they actually do, like you said we are going to be fucked for a long time. The bet is they won't.
In this particular Game Theory, they are pretty much caught between fire and the frying pan. What can they do? Disgrace the country? That will go over well. Pushed themselves into a corner.
It is possible they may since their supporters understanding of the Federal Budget is less than their own check books.