The US can easily afford its obligations. The problem is that the tax base has shifted into alternative forms of income such as dividends and cap gains which are taxed at lower rates.
It’s a policy choice that these returns are not taxed at comparable rates to income. The trend of nation-wide capital returns vs income is telling.
Instead of looking at where the tax revenues can come from, which I don't necessarily disagree consider what proportion of the nations economic activity is government spending.
I consider govt spending/GDP a much better indicator of economic health. In fact, tertiary_sector/GDP is better still.
The US government has too much presence in the economy and can't even provide health care and free tuition.
The issue here is that no one can agree on which portion of government spending is wasteful. It’s almost taken as a tautology that the government is wasteful. After 50 years of cost cutting and wage freezes, I tend to find it fanciful that individuals paid 1/4 of their private sector compensation to work on core civil infrastructure, national research priorities, and policy are somehow a bad deal for the American taxpayer at large. If anything, I’d imagine that the government could incentivize greater productivity by normalizing the pay scales. At a minimum, maintaining a public capability can often neutralize monopolistic pricing practices.
Have you considered who the narrative of wasteful spending benefits? Even our narratives of tax increases never discuss tax increases on what is now the bulk of personal monetary gain.
"The issue here is that no one can agree on which portion of government spending is wasteful."
Human nature, I guess
"It’s almost taken as a tautology that the government is wasteful. After 50 years of cost cutting and wage freezes,"
These cuts are not reflected in government spending vs GDP is mostly flat for the last 40 years
Note that in the 1970s the US was paying for moonshots and Vietnam (both filthy expensive)
"I tend to find it fanciful that individuals paid 1/4 of their private sector compensation to work on core civil infrastructure, national research priorities, and policy are somehow a bad deal for the American taxpayer at large. "
Ya, that's not a thing. I worked in government, I still work on government projects and no one outside the NSA is getting paid a 1/4 of their private sector compensation. Maybe a 20% hit which they chose to accept since, in my experience, most start as contractors and move to become feds for the job sec + benefits.
Frankly, Id say half of the government employees I worked with are unemployable. And they most of them had at least a STEM masters.
"If anything, I’d imagine that the government could incentivize greater productivity by normalizing the pay scales. At a minimum, maintaining a public capability can often neutralize monopolistic pricing practices."
I don't necessarily disagree.
"Have you considered who the narrative of wasteful spending benefits? Even our narratives of tax increases never discuss tax increases on what is now the bulk of personal monetary gain."
Ive considered it a lot in fact. One of the main beneficiaries appears to be the DC area which was the only region of the country not to have a recession in 2008 and has been outpacing most of the country in growth for thirty years.
The main beneficiaries, thus, are the laptop-class (and their billionaire masters) which is a new way of saying mandarins.
it's a straw man argument to say that the average civil servant is the beneficiary of the trillion dollar deficits. No one is making that argument. Very wealthy people, politicians, and corporations are the beneficiary of the government largess.
> After 50 years of cost cutting and wage freezes
It's hard to say the federal government has been cost cutting for 50 years when the budgets have been growing at exponential rates.
> Very wealthy people, politicians, and corporations are the beneficiary of the government largess.
Is the proposal to cut large contracts or replace them with civil service? How do you reclaim these expenditures? My anecdotal observation is that many of these contracts are fundamentally difficult to do correctly. For example, Aircraft Carrier manufacturing has both a monopoly, and a monopsomy. There is only one seller and one buyer. That seller is increasingly having execution challenges due to the overall decline in US ship building but the only real solution would be to either re-shore commercial ship building in the United States, nationalize the seller and see if the government can run it better, or stop buying aircraft carriers.
Unfortunately, a 100% cut to all government defense and discretionary expenditures would only save 1.8 Trillion or roughly ~23% of the Federal budget. Obviously, this would yield problems. The only means available to truly cut the Federal budget at the rate of trillions per year would be a change of entitlement benefits.
It would be expected that the government budget grows as our population ages with current benefit programs. The same programs that the beneficiaries "paid into" for decades.
It’s a policy choice that these returns are not taxed at comparable rates to income. The trend of nation-wide capital returns vs income is telling.