💎 Get our popular bond course bundle & save $80: www.diamondnestegg.com/home#_paa2isucf 💎Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners 💎Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters 💎And join our super-supersaver membership for regular market updates & monthly live member Q&As th-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin >>>>>>>>>> WATCH NEXT >> Our Bond Courses vs TH-cam Membership | Which Is Right For You: th-cam.com/video/H5h4Eyh0hjo/w-d-xo.html >> Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: th-cam.com/video/uXPzbje1g2E/w-d-xo.html >> Bond Masters Course Sneak Peak | How To Build A Bond Ladder: th-cam.com/video/p90IDmXn19s/w-d-xo.html >>>>>>>>>> SOURCES: www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024 www.imf.org/en/Countries/CHN#data www.cbo.gov/system/files/2024-06/60039-Outlook-2024.pdf >>>>>>>>>> Here is the overview for Bond Beginners: 1. Bond Basics What A Bond Is & How A Bond Works Why Invest In Bonds New Issue vs Secondary Market Bonds Interest Rates & Bond Prices Current Yield & Yield To Maturity Always Remember This! Buying At Par, Above Par & Below Par Different Types Of Bonds Wrap-Up 2. The Risks Of Bond Investing Seven Key Bond Risks Credit Risk Interest Rate Risk Reinvestment Risk/Call Risk Inflation Risk Liquidity Risk Currency Risk & Country Risk Bond Risk Mitigation Strategies Wrap-Up 3. US Treasuries Overview What Are US Treasuries Why Invest In Treasuries Where Can You Buy Treasuries How Are Treasuries Taxed Wrap-Up 4. Treasury Bills What Are Treasury Bills (T-Bills) When Do T-Bill Auctions Happen Where Should You Buy At Auction Auto-Roll When Buying At Auction Where To Find Recent Auction Results High Rate vs Investment Rate Reopening Auctions Cash Management Bills (CMBs) Buying & Selling On Secondary Market Wrap-Up 5. Treasury Notes & Bonds What Are Treasury Notes & Bonds When Do Auctions Happen Buying Treasury Notes & Bonds Auction High Yield vs Interest Rate Floating Rate Notes (FRNs) Treasury Zeros (STRIPS) Wrap-Up 6. TIPS (Inflation-Protected) What Are TIPS When Do TIPS Auctions Happen Nominal vs Real Yields Negative Yields How Do You Adjust TIPS For Inflation Taxes On Phantom Income Secondary Market Liquidity Wrap-Up 7. I-Bonds (Inflation-Protected) What Are I-Bonds How Does I-Bond Interest Work I-Bonds vs TIPS The Annual I-Bond Limit Wrap-Up 8. Agency Bonds The Universe Of Bonds What Are Agency Bonds How Are Agency Bonds Taxed Treasuries vs Agencies Who Might Want To Consider Agencies Yield-To-Call & Yield-To-Worst Where Can You Buy Agency Bonds Wrap-Up 9. Municipal Bonds Our Bond Universe Gets More Complex What Are Municipal Bonds How Safe Are Munis How Are Munis Taxed The De Minimis Rule Social Security & Medicare Premiums Treasuries, Agencies & Munis Who Might Want To Consider Munis Wrap-Up 10. Corporate Bonds Our Bond Universe Is Complete What Are Corporate Bonds How Safe Are Corporates Corporate Bond Hierarchies Five Key Features Of Corporate Bonds How Are Corporates Taxed Treasuries vs Corporates, Etc. Who Might Want To Buy Corporates Wrap-Up >>>>>>>>>> Here is the overview for Bond Masters: 1. Stocks vs Bonds Historical Performance Are Bonds Really Less Volatile Why Invest In Bonds Accumulation vs Decumulation Allocation of Stocks vs Bonds Wrap-Up 2. Which Bonds Might Be Right For You Treasuries & Other Types of Bonds Nominal vs Real Yields Inflation vs Non-Inflation-Protected Taxable vs Tax-Advantaged Accounts Wrap-Up 3. Bond Ladders & Other Bond Strategies Normal vs Inverted Yield Curve What Is A Bond Ladder 5 Important Bond Laddering Questions Laddering When Rates Are Rising Laddering When Rates Are Falling Laddering When Rates Are Uncertain What Is A Bullet What Is A Barbell Wrap-Up 4. Holding to Maturity vs Selling Early Why Hold to Maturity When To Sell Early Before Maturity Tax Implications Of Selling Early Wrap-Up 5. Individual Bonds, Bond Funds, Etc. Why Buy Individual Bonds Why Buy Bond Funds Bond Fund Considerations Key Bond Fund Concepts CDs vs Treasuries Other High-Yield Investments Wrap-Up 6. Our B.E.S.T. Model Portfolios By Age Our B.E.S.T Model Portfolios By Age Model Portfolios In The Industry B.E.S.T Model Portfolio Difference How Much Do You Need To Retire? How I Use The Rules of 100, 110, & 120 B.E.S.T Model Portfolios (20s) B.E.S.T Model Portfolios (30s & 40s) B.E.S.T Model Portfolios (50s & 60s) B.E.S.T Model Portfolios (70s+) Wrap-Up 7. The Decumulation Phase What Is The Decumulation Phase? Bear Markets & Recessions What Can You Do In Bad/Bear Markets Decumulation Tax Considerations The 4% Rule The Bucket Strategy The Flooring Approach Jen’s Bucket Strategy With A Twist Wrap-Up >>>>>>>>>> Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY
Working in the medical field for 35 years I can tell you that if people took on more personal responsibility and took care of their health it would be a lot less expensive for Medicare and Medicaid. I'm 68 and take no medicines. Doing my part!
Thank you , Jennifer for another Terrific Video !.....Botttomline: Downsize the Gov't !....Some Agencies could be eliminated all together.....in the late 1800's to early 1900's , Gov't Spending was only 2 to 3 % of GDP....Today it's about 60 % of GDP !! Our Gov't is inefficient and wasteful !!... America will do GREAT without Gov't. Interference !!!....
Great analysis of what it takes to stop the increase in budgetary debt and how to bring it down from there. Approximately 59.9% of U.S. households paid federal income taxes in 20221 . This means that around 40.1% of households did not pay federal income taxes. Hate to put a damper on the video, but good luck negotiating anything with the 40.1%
I worked in government funded research in the physical sciences at a major university. I remember the Clinton years, every year our program manager in Washington was “tell us how you’re going to cut 10%”. It was painful, it usually meant hiring fewer grad students. But the federal budget was balanced, we got to do cutting edge research to benefit the public. It can be done.
I worked on a small ranch when I was younger. I learned that the pigs would literally eat as much as you fed them. Feed them more, they just eat more. Raising taxes is never the solution to creating a balanced budget. Ever.
I 100% agree with you, and the only thing I can say though is that the solution called starve the beast didn't work. The government learned how to deficit spend, and here we are. So it's going to have to be legislated that the Budget be balanced.
IMHO Having a large amount set aside for federal emergencies is a better way to run a country. BUT human nature for too many people is "we got this money, let's spend it".. Then when an emergency hits 'we got nothing"..
Raising taxes will reduce economic activity resulting in less tax revenue. So raising taxes is not a dollar for dollar benefit. Plus whatever government gets will be spent and more. Spending reduction is the only answer. The problem is that no politician who advocates real spending reform will get reelected. Consequently, we are in a death spiral of our own making.
Yup. The only way to raise taxes is to do it without raising taxes. What I mean is, do not make it a tax, make it a spending line item that a corporation willingly pays for a sees direct benefit from. But oh no, this would require creativity, and that is lacking, isn’t it?
"To make a long story short so we don't have to add another 15 minutes to this video" LOL! Great show today and great explanation of a really complex problem. Somehow you made it understandable and outlined the tough choices that need to be made if we are to tackle this problem. I would choose a mix that is heavy on spending cuts and light on raising taxes.
Cutting spending sounds great until people find out they'll be affected. Then their tune changes. A lot of people have no idea how much they rely on the government until it's taken away. I disagree with most in these comments. Taxes need to be raised on every level of income. Somewhere along the way, politicians convinced Americans that they could have it all, and for free. They were lying for votes and now we're 35T in debt.
So true and the solution needs to be both Tax increases and reduced govt. spending. Austerity is never fun, but the entitled brats of this country (both rich and poor) need to wake up.
The problem with continually raising taxes to fix budget deficits is the same, whether it’s local, state or federal. All you are doing to telling our leaders that they don’t have to live within our means, well just give you more money. Our leaders need to learn that the whole reason to have a budget is to decide how to live within our means. American families do this every day. We don’t just assume that we’ll get an increase in our finances. We learn to spend what we need to get by without constantly increasing our debt. If you can’t live within what you got, decrease your spending.
Shouldn’t SS & Medicare be excluded from the chart since they are taxed separately? My vote is for 10% spending reduction How do the presidential candidates stand on the issues?
I hope more people are paying attention to this issue. The solution gets more painful each year but is not pursued until the pain of the illness is greater. What will be the pivot point? How will this pyramid scheme end?
Thanks for mentioning that the last time we had a balanced budget was during the Clinton administration. If we simply returned to those tax rates, we would increase revenue by about $850 billion and cut the deficit by half! Yes, those tax rates are higher than they are now, but they didn't put a crimp in the economy since we had strong economic growth during the late 90's.
First a question: is it true that a business pays payroll taxes and I pay income taxes on dollars earned? And that same business pays taxes on their profits, taxes on their dividends they issue, and then I pay taxes on those same dividends as income? Anyway, how about a slight increase to Medicare taxes and eliminate the cap on FICA? Since the top 50% is already paying 97% continuing to pay FICA all year wouldn’t be that big a hit. I just know I wouldn’t run my house this way. What a mess. Simplify the tax code and everyone pays their fair share.
Hi Rob & Cindy. The answer is yes, companies typically pay payroll taxes, SS, FICA, etc as well as taxes on profits (and a lot more other costs). BUT what a specific company pays in taxes will also depend on how that particular is structured (e.g., as an LLC, S-Corp, C-Corp, etc).
What debt is held by other than the public? Social Security trust fund? US Treasury? Foreign governments? Surely these holders of US debt count against GDP as well. Most of the expenditure categories you list do not seem like economically "productive" spends.
We al know we need to cut the defense budget. Contractors like boeing and lockheed martin have undergone unpresented levels of corruption through their monopolization in securing defense contracts and buying out smaller contractors. Who else are you going to when needing to buy an F-35 Lighting II, they set the price and an exuberant one at $82.5 Million. The helmet alone costs 400 THOUSAND DOLLARS, sure it has many features, but this is outrageous, enough said.
My fear is you say cut the military budget and all those veterans hospitals shutter up and those poor men who served are kicked on the street. And Lockheed still finds a way to get their millions. 😢
Tax businesses additionally, say 1% or 0.05 on revenue for 5 years. To be clear, that is a tax before deductions. For companies with headquarters abroad, tax the same for revenue generated in the USA. Also increase the s.s. full retirement age as well as a other things mentioned in this video. I think our wildly successful business should pay a little more and frankly the wildly successful individuals. If you tax revenue they can't just defer taxes or find a loophole. For the ultra wealthy individuals increase the estate tax, increase the top rate, and get rid of deductions.
CLOSE the Department of Agriculture, Commerce, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, Transportation, and Veteran Affairs. That would be a good start.
Great Presentation, but what you could have mentioned is there is a potentially a 4th option or mixture thereof is that we spend presently spend about a $ 1 Trillion dollars in interest expense every 90 days in which ends up being about $4 Trillion a year on annual interest expense at the present interest rate, so perhaps another part of the equation could be is for every 100 basis point or every .25 basis point reduction how much would that reduce our interest expense annually. As a result, it's my estimation we go back to zero % in order to take off $4 Trillion plus the compounding effect in which is why I have loaded up on long term Treasury Bonds TLT as I believe we are in the precipice of a raging Bond Bull market.
I would raise some taxes and go for a government run health system. The insurance companies have taken over the medical system to the point it has become a money making machine instead of a health care system. The feds should also stop bailing out big banks, insurance companies and other business. Finally we should stop funding other countries wars.
is the u.s. debt sustainable though ? how much u.s. debts will contribute to its future growth and development? China might have higher debt but I thought most of its debt is growth-driven that will create future return instead of maintenance purposes such as most u.s. debts are used. .
The top tax rate in the 1950's was 91%. Somehow this has dropped so that the top now avoids taxes as do corporations. Perhaps the GOP could fully fund the IRS so rich non-payers like Trump actually paid their fair ahare.
To make a fair comparison, you need to really look at the numbers, China's debt problem is not the central government (=our Federal), their central government debt is only 20-25% of gdp, the problem is their provincial government debt (=our State and local government), they are running a record trade surplus this year and an estimated 5% growth in gdp (even 4.8% is still respectable), we're at 3%....so China economy is going to collapse?
No one wants to receive less than what they're accustomed to--loss aversion at its core. Politicians are rated by how much funding they bring back to their constituents or how much they lower taxes. People want what's good for them now...not the generations after. We are nearing a precipice. We are likely declining as a world power and our time as the reserve currency is ending. It seems that all prior world powers had a slow rise and a fast fall. Their fall coincided with high debt levels during a time of expensive wars. Once a country can't afford its current debt along with new war debt, the end is upon it.
@cindyfoster it just means higher earners pay most of the taxes more than "their fair share", they're just aren't enough Millionaires & billionaires to pay the tab unless these Dem (& some rhino) politicians want to help out
"The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes..." Top 50 percent means what? Taxpayers whose AGI is greater than the average? AGI above the median? Total income (including CGs) greater than average or above median? Net assets greater than average or above the median?
Good question. Also does the top 50% of taxpayers make 97% of the income? I would think that retirees who no longer generate much income would fall in that bottom 50%, yet many woukd have been I. That top 50% when they were working.
What do you mean by 41% “across the board? All taxpayers at their current tax rates? That would be a tricky number to come up with. Especially with social security and Medicare taxes lumped in with varying income tax rates.
@@cindyfoster1127 the top 50% includes A LOT of retired people Millions of them That would include my mom 92 and me and my wife’s parents and her aunt and uncle and a bunch of friends … and 25 guys I went to college wife I can come up with 500 of top of my head
America is a spend happy country. My Government has to show me that it can be wise with what it takes from us. Cut before even thinking about raising TAXES.
Depends what the spending is on. The interstate highway system has been a huge boost to the economy by letting a factory sell its goods in a store thousands of miles away.
by absentee or other priorities, did the younger generation vote against the fiscal spending ($ for first home buyers, pay off student loans, inflation reduction act, $ for immigrants, increasing foreign wars, etc). But, yea, I get your point. Alot of the policies did benefit more those that had investment money than the middle class or younger generation.
Um ..look at the historical debt chart. It didn't start skyrocketing until Obama in 2010 and his insane "stimulus" packages. It's not an older gen vs younger gen issue, my friend. It's a philosophy issue.
@@darwinjina Didn't intend to make it a generational battle, was just trying to point out the reality of what has happened with this debt situation. The cost debt will inevitably end up being shouldered by the people left to service it. Just the reality of it. Having said that, as a person that paid off their student loans, do I like that physicians and lawyers are receiving hundreds of thousands in "loan forgiveness" (which is just debt that is also going to be assumed by younger generations)? No, I don't.
@@ScottScott-b4h :eyeroll:. Always someone that has to step in and make it political. The debt relative to GDP has been going up under both republicans and democrats as have the deficits.
Make the capital gains tax rate the same as ordinary income. No income cap on FICA. Eliminate the countless deductions people receive (including mortgage interest? absofuckinlutely). A lot of tax lawyers and accountants will lose their jobs by simplifying the tax code in this way, but I count that as a win. In terms of spending...the U.S. military is stupidly and unnecessarily powerful, so even a significant budget cut would not inspire Mexico and Canada to invade.
Solution? Increase corp tax 14%. Balance personal, corp tax at approximately 34% each. Increase payroll (FICA) inline with inflation rate. I would not cut expenditures as they are underfunded as is.
I would not want to ruin a good man like Ron by asking him to take on this mess the way it sits. I'd first "clear the pathway" by removing the bile and waste of entrenched lifer politicians, Then activist politicians that he'd be faced dealing with at first. Lobbyists would be relegated to selling paintings on the street and any other Activists would be repurposed and assigned to the National shoreline buoy registry. Then I'd give Ron the Go-ahead.
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SOURCES:
www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024
www.imf.org/en/Countries/CHN#data
www.cbo.gov/system/files/2024-06/60039-Outlook-2024.pdf
>>>>>>>>>>
Here is the overview for Bond Beginners:
1. Bond Basics
What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up
2. The Risks Of Bond Investing
Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up
3. US Treasuries Overview
What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up
4. Treasury Bills
What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up
5. Treasury Notes & Bonds
What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up
6. TIPS (Inflation-Protected)
What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up
7. I-Bonds (Inflation-Protected)
What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up
8. Agency Bonds
The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up
9. Municipal Bonds
Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up
10. Corporate Bonds
Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up
>>>>>>>>>>
Here is the overview for Bond Masters:
1. Stocks vs Bonds
Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up
2. Which Bonds Might Be Right For You
Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up
3. Bond Ladders & Other Bond Strategies
Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up
4. Holding to Maturity vs Selling Early
Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up
5. Individual Bonds, Bond Funds, Etc.
Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up
6. Our B.E.S.T. Model Portfolios By Age
Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up
7. The Decumulation Phase
What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up
>>>>>>>>>>
Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that:
1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances
2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY
Working in the medical field for 35 years I can tell you that if people took on more personal responsibility and took care of their health it would be a lot less expensive for Medicare and Medicaid.
I'm 68 and take no medicines.
Doing my part!
Thank you , Jennifer for another Terrific Video !.....Botttomline: Downsize the Gov't !....Some Agencies could be eliminated all together.....in the late 1800's to early 1900's , Gov't Spending was only 2 to 3 % of GDP....Today it's about 60 % of GDP !! Our Gov't is inefficient and wasteful !!... America will do GREAT without Gov't. Interference !!!....
The fact that the Pentagon gets close to $900 billion a year and has yet to pass an audit is simply ridiculous.
Great analysis of what it takes to stop the increase in budgetary debt and how to bring it down from there. Approximately 59.9% of U.S. households paid federal income taxes in 20221
. This means that around 40.1% of households did not pay federal income taxes. Hate to put a damper on the video, but good luck negotiating anything with the 40.1%
I worked in government funded research in the physical sciences at a major university. I remember the Clinton years, every year our program manager in Washington was “tell us how you’re going to cut 10%”. It was painful, it usually meant hiring fewer grad students. But the federal budget was balanced, we got to do cutting edge research to benefit the public. It can be done.
Thanks - glad to have your perspective
@@rwg312 what we need to do is to have an “automatic cut off” on a GDP to spending ratio so it’s a mindless budget.
I worked on a small ranch when I was younger. I learned that the pigs would literally eat as much as you fed them. Feed them more, they just eat more. Raising taxes is never the solution to creating a balanced budget. Ever.
Agreed - but not everyone thinks like we do
I 100% agree with you, and the only thing I can say though is that the solution called starve the beast didn't work. The government learned how to deficit spend, and here we are. So it's going to have to be legislated that the Budget be balanced.
IMHO Having a large amount set aside for federal emergencies is a better way to run a country. BUT human nature for too many people is "we got this money, let's spend it".. Then when an emergency hits 'we got nothing"..
Raising taxes will reduce economic activity resulting in less tax revenue. So raising taxes is not a dollar for dollar benefit. Plus whatever government gets will be spent and more. Spending reduction is the only answer. The problem is that no politician who advocates real spending reform will get reelected. Consequently, we are in a death spiral of our own making.
You said it way better than I did!!!!
Yup. The only way to raise taxes is to do it without raising taxes. What I mean is, do not make it a tax, make it a spending line item that a corporation willingly pays for a sees direct benefit from. But oh no, this would require creativity, and that is lacking, isn’t it?
"To make a long story short so we don't have to add another 15 minutes to this video" LOL!
Great show today and great explanation of a really complex problem. Somehow you made it understandable and outlined the tough choices that need to be made if we are to tackle this problem.
I would choose a mix that is heavy on spending cuts and light on raising taxes.
Great video. Thanks
Jen for President! 🎉
Cutting spending sounds great until people find out they'll be affected. Then their tune changes. A lot of people have no idea how much they rely on the government until it's taken away. I disagree with most in these comments. Taxes need to be raised on every level of income. Somewhere along the way, politicians convinced Americans that they could have it all, and for free. They were lying for votes and now we're 35T in debt.
So true and the solution needs to be both Tax increases and reduced govt. spending. Austerity is never fun, but the entitled brats of this country (both rich and poor) need to wake up.
Cut it all and start from scratch. Justify every penny. Get back to basics.
The problem with continually raising taxes to fix budget deficits is the same, whether it’s local, state or federal. All you are doing to telling our leaders that they don’t have to live within our means, well just give you more money. Our leaders need to learn that the whole reason to have a budget is to decide how to live within our means. American families do this every day. We don’t just assume that we’ll get an increase in our finances. We learn to spend what we need to get by without constantly increasing our debt. If you can’t live within what you got, decrease your spending.
A combination of both. Trim spending slowly and raise taxes slowly. Fiscal “responsibility”.
Shouldn’t SS & Medicare be excluded from the chart since they are taxed separately?
My vote is for 10% spending reduction
How do the presidential candidates stand on the issues?
I hope more people are paying attention to this issue. The solution gets more painful each year but is not pursued until the pain of the illness is greater. What will be the pivot point? How will this pyramid scheme end?
Thanks for mentioning that the last time we had a balanced budget was during the Clinton administration. If we simply returned to those tax rates, we would increase revenue by about $850 billion and cut the deficit by half! Yes, those tax rates are higher than they are now, but they didn't put a crimp in the economy since we had strong economic growth during the late 90's.
First a question: is it true that a business pays payroll taxes and I pay income taxes on dollars earned? And that same business pays taxes on their profits, taxes on their dividends they issue, and then I pay taxes on those same dividends as income?
Anyway, how about a slight increase to Medicare taxes and eliminate the cap on FICA? Since the top 50% is already paying 97% continuing to pay FICA all year wouldn’t be that big a hit.
I just know I wouldn’t run my house this way.
What a mess. Simplify the tax code and everyone pays their fair share.
Hi Rob & Cindy. The answer is yes, companies typically pay payroll taxes, SS, FICA, etc as well as taxes on profits (and a lot more other costs). BUT what a specific company pays in taxes will also depend on how that particular is structured (e.g., as an LLC, S-Corp, C-Corp, etc).
What debt is held by other than the public? Social Security trust fund? US Treasury? Foreign governments? Surely these holders of US debt count against GDP as well.
Most of the expenditure categories you list do not seem like economically "productive" spends.
It is not politically popular to talk about fixing the problem. That is why it will never happen.
We al know we need to cut the defense budget. Contractors like boeing and lockheed martin have undergone unpresented levels of corruption through their monopolization in securing defense contracts and buying out smaller contractors. Who else are you going to when needing to buy an F-35 Lighting II, they set the price and an exuberant one at $82.5 Million. The helmet alone costs 400 THOUSAND DOLLARS, sure it has many features, but this is outrageous, enough said.
My fear is you say cut the military budget and all those veterans hospitals shutter up and those poor men who served are kicked on the street. And Lockheed still finds a way to get their millions. 😢
Tax businesses additionally, say 1% or 0.05 on revenue for 5 years. To be clear, that is a tax before deductions. For companies with headquarters abroad, tax the same for revenue generated in the USA. Also increase the s.s. full retirement age as well as a other things mentioned in this video. I think our wildly successful business should pay a little more and frankly the wildly successful individuals. If you tax revenue they can't just defer taxes or find a loophole. For the ultra wealthy individuals increase the estate tax, increase the top rate, and get rid of deductions.
CLOSE the Department of Agriculture, Commerce, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, Transportation, and Veteran Affairs. That would be a good start.
Until US gets its fiscal house in order, no long-term bonds for me. Staying under 5 years max, until we get some clarity.
Nice research, Jen.
If the US defaults on those long term bonds, whether or not you own them, you are going to have bigger issues.
Exactly tax and spend politics has to end !
No tax increase!
Great Presentation, but what you could have mentioned is there is a potentially a 4th option or mixture thereof is that we spend presently spend about a $ 1 Trillion dollars in interest expense every 90 days in which ends up being about $4 Trillion a year on annual interest expense at the present interest rate, so perhaps another part of the equation could be is for every 100 basis point or every .25 basis point reduction how much would that reduce our interest expense annually. As a result, it's my estimation we go back to zero % in order to take off $4 Trillion plus the compounding effect in which is why I have loaded up on long term Treasury Bonds TLT as I believe we are in the precipice of a raging Bond Bull market.
I’m already paying 24% back to the irs on that interest earned.
I would raise some taxes and go for a government run health system. The insurance companies have taken over the medical system to the point it has become a money making machine instead of a health care system. The feds should also stop bailing out big banks, insurance companies and other business. Finally we should stop funding other countries wars.
Totally is correct.
is the u.s. debt sustainable though ? how much u.s. debts will contribute to its future growth and development? China might have higher debt but I thought most of its debt is growth-driven that will create future return instead of maintenance purposes such as most u.s. debts are used. .
The top tax rate in the 1950's was 91%. Somehow this has dropped so that the top now avoids taxes as do corporations. Perhaps the GOP could fully fund the IRS so rich non-payers like Trump actually paid their fair ahare.
GDP is not income.
Cut spending
Agreed. Where?
To make a fair comparison, you need to really look at the numbers, China's debt problem is not the central government (=our Federal), their central government debt is only 20-25% of gdp, the problem is their provincial government debt (=our State and local government), they are running a record trade surplus this year and an estimated 5% growth in gdp (even 4.8% is still respectable), we're at 3%....so China economy is going to collapse?
What about the late 1990s PAYGO?
No one wants to receive less than what they're accustomed to--loss aversion at its core. Politicians are rated by how much funding they bring back to their constituents or how much they lower taxes. People want what's good for them now...not the generations after. We are nearing a precipice. We are likely declining as a world power and our time as the reserve currency is ending. It seems that all prior world powers had a slow rise and a fast fall. Their fall coincided with high debt levels during a time of expensive wars. Once a country can't afford its current debt along with new war debt, the end is upon it.
More tax from big companies and rich ppl
Tell every country we give foreign aid to that they are on their own for a year.
@cindyfoster it just means higher earners pay most of the taxes more than "their fair share", they're just aren't enough Millionaires & billionaires to pay the tab unless these Dem (& some rhino) politicians want to help out
"The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes..."
Top 50 percent means what? Taxpayers whose AGI is greater than the average? AGI above the median? Total income (including CGs) greater than average or above median? Net assets greater than average or above the median?
YEP " TAXING THE RICH " DOES NOTHING FOR THE ECOMOMY THEY NEED TO TAX THEMSELVES
Good question. Also does the top 50% of taxpayers make 97% of the income? I would think that retirees who no longer generate much income would fall in that bottom 50%, yet many woukd have been I. That top 50% when they were working.
What do you mean by 41% “across the board? All taxpayers at their current tax rates? That would be a tricky number to come up with. Especially with social security and Medicare taxes lumped in with varying income tax rates.
@@cindyfoster1127 the top 50% includes A LOT of retired people
Millions of them
That would include my mom 92 and me and my wife’s parents and her aunt and uncle and a bunch of friends … and 25 guys I went to college wife
I can come up with 500 of top of my head
5 Presidents (both parties) proved lowering taxes increased revenues.
America is a spend happy country. My Government has to show me that it can be wise with what it takes from us. Cut before even thinking about raising TAXES.
𝐕𝐎𝐓𝐄 𝐉𝐄𝐍𝐍𝐈𝐅𝐄𝐑 !
I'd start by halting all payments to foreign countries. Especially Ukraine and Israel.
Ok. That's 95 billion saved. Out of. a 1,990 billion deficit. What next?
@@TehSuperHeroYou have to start somewhere .
I refuse to pay for any down payments of other people's homes & no more paying for their B.S. education
The economy does not grow because of government spending. Government spending is a zero sum game.
Depends what the spending is on. The interstate highway system has been a huge boost to the economy by letting a factory sell its goods in a store thousands of miles away.
How about a tax on stock transactions, end the Social Security tax cap. There's a little tax the rich.
Would the removal of the SS cap also increase the top monthly check size? I am sure a lot of people would like that.
Get the younger generation, who are struggling as is, to pay the debts of the older generation..... The perverse incentives of the current system....
by absentee or other priorities, did the younger generation vote against the fiscal spending ($ for first home buyers, pay off student loans, inflation reduction act, $ for immigrants, increasing foreign wars, etc). But, yea, I get your point. Alot of the policies did benefit more those that had investment money than the middle class or younger generation.
Um ..look at the historical debt chart. It didn't start skyrocketing until Obama in 2010 and his insane "stimulus" packages. It's not an older gen vs younger gen issue, my friend. It's a philosophy issue.
@@darwinjina Didn't intend to make it a generational battle, was just trying to point out the reality of what has happened with this debt situation. The cost debt will inevitably end up being shouldered by the people left to service it. Just the reality of it. Having said that, as a person that paid off their student loans, do I like that physicians and lawyers are receiving hundreds of thousands in "loan forgiveness" (which is just debt that is also going to be assumed by younger generations)? No, I don't.
@@ScottScott-b4h :eyeroll:. Always someone that has to step in and make it political. The debt relative to GDP has been going up under both republicans and democrats as have the deficits.
@randoroo2540 agreed
Make the capital gains tax rate the same as ordinary income. No income cap on FICA. Eliminate the countless deductions people receive (including mortgage interest? absofuckinlutely). A lot of tax lawyers and accountants will lose their jobs by simplifying the tax code in this way, but I count that as a win. In terms of spending...the U.S. military is stupidly and unnecessarily powerful, so even a significant budget cut would not inspire Mexico and Canada to invade.
Does not cover inflation and compensating risk taking and research. Non-starter.
Solution? Increase corp tax 14%. Balance personal, corp tax at approximately 34% each. Increase payroll (FICA) inline with inflation rate. I would not cut expenditures as they are underfunded as is.
Raise taxes on the billionaires....
That won't help even if they did that it wouldn't make a dent in anything
All 550 of them? Income or capital gains?
@@Grumpollion All of their profits should be taxed regardless of where it comes from.
We need to raise taxes on the super rich billionaires. They are not paying anywhere near their fair share.
Total bs and economic illiteracy
Elect Ron Paul President.
I would not want to ruin a good man like Ron by asking him to take on this mess the way it sits. I'd first "clear the pathway" by removing the bile and waste of entrenched lifer politicians, Then activist politicians that he'd be faced dealing with at first. Lobbyists would be relegated to selling paintings on the street and any other Activists would be repurposed and assigned to the National shoreline buoy registry. Then I'd give Ron the Go-ahead.