3 hours ago, DrPhilly said:

As far as taxes, the current system relies on future tax payers.

Can someone explain this? When people say "Our grandchildren are going to be paying for this!" what does that mean, exactly? Are we currently paying for the Vietnam War? Obviously, there's a ripple effect, but that's kind of an indirect relationship.

1 hour ago, EaglesRocker97 said:

Can someone explain this? When people say "Our grandchildren are going to be paying for this!" what does that mean, exactly? Are we currently paying for the Vietnam War? Obviously, there's a ripple effect, but that's kind of an indirect relationship.

Mostly pertains to the deficit/debt I would imagine.

You probably know much of this, but deficit spending basically means the treasury has to sell a bunch of treasury notes/bonds to cover the budget gap. For that you need buyers, and we're fortunate that there is no shortage of institutions and other governments willing to buy up huge amounts from our treasury. This allows us to keep the government functioning; the only other alternative is to print money which can spur high inflation if not done carefully. I'm not an expert, but I believe both do happen to some degree.

Those notes/bonds are paid back at a higher amount than initially paid of course, so that shows up as debt service payments in future budgets. I don't know what the current service payment is, but as of a few years ago it made up something like 6-8% of the total outlays. In the 90s, this number was much higher, as high as 15%. What's changed is the rates; interest rates being kept this low for this long means it's pretty cheap to borrow.

So on some level it makes sense to capitalize on that and borrow money cheap. But it also handcuffs the fed; if it increases interest rates, our debt service payments will start to rise. 

The other side of this is what it does to the markets. When you can no longer get the yield you want (or need) from buying up bonds, investors start to search for those yields elsewhere. At one point it made a lot of sense for someone who is at retirement age to put a good portion of their retirement funds in government bonds. That's no longer sensible, as the yields are just not there. So all this money is now looking for higher yields in riskier ventures - which is probably a good portion of why the stock market looks hotter than it might seem sensible given fundamentals: there's just more funds getting into the market. 

I touched on the latter there in the GME/WSB thread, but I still find it incredible how disconnected the market is from fundamentals at this point. But the boomers want their yields, so I take it that - along with a government willing to dump cash on the market - is a lot of what's pushing up the stock market. 

Circling back after my tangent, so yeah the "kids" will be paying off the treasury notes that are closing our deficits, just as we're paying service to notes sold years and decades ago each year from deficits incurred by our parents.

Now, a bit of this is fine and healthy. Too much? Well, we don't know. 

Our capricious spending and massive debt has compromised our own national security. China holds so much of our debt, and our economy relies on China continuing to buy our debt. This compromises any real ability we have to hold them accountable for the dastardly things they do, such as the genocide going on there right now. This is the fault of both parties as both spend like drunken sailors when they are in power. It's going to continue to be a problem. 

That's a pretty good clear explanation. A question about this part, though:

  

30 minutes ago, JohnSnowsHair said:

Those notes/bonds are paid back at a higher amount than initially paid of course, so that shows up as debt service payments in future budgets. I don't know what the current service payment is, but as of a few years ago it made up something like 6-8% of the total outlays. In the 90s, this number was much higher, as high as 15%. What's changed is the rates; interest rates being kept this low for this long means it's pretty cheap to borrow.

So on some level it makes sense to capitalize on that and borrow money cheap. But it also handcuffs the fed; if it increases interest rates, our debt service payments will start to rise.

The rate is fixed, though, right?  If I purchased treasuries in the 90s when the rate was like 9% but cashed them in 30 years later, I'm getting that 9% ROI. But if I buy bonds today with the rate around 2%, it's only getting paid back at that rate in the future. So, it's incredibly cheap to borrow money right now, meaning that "kids" 30 years from now will be able to service that debt at a historically cheap rate, correct? So, while the general concept is true, wouldn't it be less of a concern today than in previous eras?

 

11 minutes ago, Gannan said:

Our capricious spending and massive debt has compromised our own national security. China holds so much of our debt, and our economy relies on China continuing to buy our debt. This compromises any real ability we have to hold them accountable for the dastardly things they do, such as the genocide going on there right now. This is the fault of both parties as both spend like drunken sailors when they are in power. It's going to continue to be a problem. 

That I certainly understand. This allows China to manipulate the value of U.S. currency correct? More or less, it's a hostage situation.

4 minutes ago, Gannan said:

Our capricious spending and massive debt has compromised our own national security. China holds so much of our debt, and our economy relies on China continuing to buy our debt. This compromises any real ability we have to hold them accountable for the dastardly things they do, such as the genocide going on there right now. This is the fault of both parties as both spend like drunken sailors when they are in power. It's going to continue to be a problem. 

Well, it's kind of a two way street with China. It's worth noting that their holding of our notes is down about 20% from its highs a few years ago and continuing to drop. I'm not certain whether they've completely stopped buying, or just significantly reduced. But Japan is now the #1 holder of our debt.

Holding the debt isn't a big deal though. I don't think they can "call in the debt" as I understand it, the bond has a maturation date. Removing themselves from the market for more though does have an impact on the treasury's ability to meet its obligations. 

3 minutes ago, EaglesRocker97 said:

That's a pretty good clear explanation. A question about this part, though:

  

The rate is fixed, though, right?  If I purchased treasuries in the 90s when the rate was like 9% but cashed them in 30 years later, I'm getting that 9% ROI. But if I buy bonds today with the rate around 2%, it's only getting paid back at that rate. So, it's incredibly cheap to borrow money right now, meaning that "kids" 30 years from now will be able to service that debt at a historically cheap rate, correct? So, while the general concept is true, wouldn't it be less of a concern today than in previous eras.

savings bonds stop increasing in value at their maturity date. I would assume (?) the same is true of notes/etc., but I'm not an expert.

this suggests they stop at maturity date: https://www.treasurydirect.gov/indiv/research/securities/res_securities_stoppedearninginterest.htm

On 2/3/2021 at 1:06 PM, VanHammersly said:

But I'm talking about unaccompanied minors.  They aren't with their parents.

maybe the word "unaccompanied" should be in a larger font.  

2 hours ago, JohnSnowsHair said:

Well, it's kind of a two way street with China. It's worth noting that their holding of our notes is down about 20% from its highs a few years ago and continuing to drop. I'm not certain whether they've completely stopped buying, or just significantly reduced. But Japan is now the #1 holder of our debt.

Holding the debt isn't a big deal though. I don't think they can "call in the debt" as I understand it, the bond has a maturation date. Removing themselves from the market for more though does have an impact on the treasury's ability to meet its obligations. 

They could stop buying  it, which would have been devastating years ago. During the 2008 financial meltdown Putin was trying to encourage them to do so. 

Sooooooooo am I getting my stim check or not?

I am just under the cut off as Head of Household last time and are the numbers changing? 

44 minutes ago, DaEagles4Life said:

Sooooooooo am I getting my stim check or not?

I am just under the cut off as Head of Household last time and are the numbers changing? 

That’s what I’m wondering about. If they cut out the head of household provision I’m out of luck for my free money.
Feels like it would be dumb politically to cave on lowering the income. Not sure what it would do for him aside from possibly grabbing one or two GOP senators. He’ll still get blasted by the GOP for the bill not being more bipartisan regardless and he’ll piss off some of his middle class voters.

Trying to keep this thread up to date with policy. Here are additional exeutive actions and recent foreign policy announcements.

  

Quote

February 4	National Security	No	Establishes an interagency working group to propose improvements for recruiting, retaining and supporting national security professions
February 4	National Security	No	Outlines the structure of the National Security Council, incorporates more regular participation from Cabinet officials focused on domestic policy that influences national security
February 2	Immigration	Yes	Revokes Trump’s order justifying separating families at the border and creates a task force that recommends steps to Biden to reunite separated families
February 2	Immigration	Yes	Aims to address economic and political causes of migration, works with organizations to provide protection to asylum seekers and ensures Central American asylum seekers have legal access to the United States. Rescinds Trump administration policies and guidelines and also initiates a review of policies "that have effectively closed the U.S. border to asylum seekers”
February 2	Immigration	Yes	Rescinds Trump’s memo requiring immigrants to repay the government if they receive public benefits. Elevates the role of the executive branch in promoting immigrant integration and inclusion, including reestablishing a Task Force on New Americans. Requires agencies to review immigration regulations and policies

 

Quote

America First Couldn't Last

Joe Biden visited the State Department on Thursday, and while there he delivered his first address on foreign policy. The President will rely on America's diplomatic corps and traditional alliances, will take strong steps against nations that misbehave, and will seek to reassert the United States' leading role in world affairs. In short, the "America First" foreign policy of the Trump years is kaput.

Biden outlined several steps he plans to take in the near future, to wit:

• Sanctions on Myanmar, where the military has just executed a coup against Aung San Suu Kyi
• No more American support for the ongoing war in Yemen being waged (primarily) by the Saudis
• Reestablishing the program by which the U.S. admits refugees
• Turning the screws, in some fashion, on Vladimir Putin
• Working to protect the rights of LGBTQ people around the world

What Biden didn't say was almost as important as what he did say. He did not mention Trump's name, as you might imagine. And when the President listed the nations he's been chatting with, there were some rather notable absences: "Over the past two weeks, I've spoken with the leaders of many of our closest friends—Canada, Mexico, the U.K., Germany, France, NATO, Japan, South Korea and Australia—to begin reforming the habits of cooperation and rebuilding the muscles of democratic alliances that have atrophied over the past few years of neglect and, I would argue, abuse." None of the nations currently being run by strongmen—Turkey, India, North Korea—on that list. No Israel, either.

There was also one other bit of news on the foreign affairs front, and it also involves Trump. The White House announced that if The Donald requests intelligence briefings, the decision about whether to accommodate him would be left to the intelligence establishment. This is usually how it's done anyhow, though there is sometimes presidential input. In any event, this allows Biden to avoid the appearance of being partisan and petty, while still achieving his ends. He knows that Trump cares little for intelligence, and is highly unlikely to request any information. If he does ask for anything, the pros will almost certainly turn him down. (Z)

 

 

Here's that Godless liberal, commie scum, pretending to go to church as usual.

Remember PATRIOT AMERICANS, Trump was appointed by Jesus.

1 minute ago, Toastrel said:

 

Here's that Godless liberal, commie scum, pretending to go to church as usual.

Remember PATRIOT AMERICANS, Trump was appointed by Jesus.

It is so weird that Trump supporters think Trump is religious.   Trump cynically pretended to be religious -- and laughs at religious people behind their backs.   But oddly, that didn't matter to evangelicals.  

Biden ended Trump's war in Yemen that has killed countless innocent civilians. Biden should be awarded the Nobel Peace Prize. 

On 2/5/2021 at 1:05 PM, Jsvand12 said:

That’s what I’m wondering about. If they cut out the head of household provision I’m out of luck for my free money.
Feels like it would be dumb politically to cave on lowering the income. Not sure what it would do for him aside from possibly grabbing one or two GOP senators. He’ll still get blasted by the GOP for the bill not being more bipartisan regardless and he’ll piss off some of his middle class voters.

🤣🤣🤣

Seems excessive.

Quote

WASHINGTON -- The House Ways and Means Committee on Monday is expected to lay out a proposal to send $3,600 per child to millions of American families, as House Democrats work to assemble the $1.9 trillion COVID-19 relief package proposed by President Biden.

The 22-page proposal, first obtained by the Washington Post and confirmed by ABC News, would send $3,600 per child under 6 years old to American families, and $3,000 per child between the ages of 6 and 17. The benefit would decrease for Americans making more than $75,000 annually, or couples earning more than $150,000 a year.

The program would be administered by the Internal Revenue Service. The payments, which would start going out in July, would follow through on the Biden administration's call to expand the Child Tax Credit.

 

15 minutes ago, EaglesRocker97 said:

Seems excessive.

 

The benefit would decrease for Americans making more than $75,000 annually, or couples earning more than $150,000 a year. 

This seems a bit backwards for single parents. 

44 minutes ago, EaglesRocker97 said:

Seems excessive.

 

Finally my 2 kids start to pay off!!!!!! In your face @vikas83 !

29 minutes ago, DaEagles4Life said:

The benefit would decrease for Americans making more than $75,000 annually, or couples earning more than $150,000 a year. 

This seems a bit backwards for single parents. 

13 minutes ago, Gannan said:

Finally my 2 kids start to pay off!!!!!! In your face @vikas83 !

Gonna go out on a limb and say the kids cost more than you might get from the government. Just a hunch.

2 minutes ago, vikas83 said:

Gonna go out on a limb and say the kids cost more than you might get from the government. Just a hunch.

Not mine!  They live on one pack of Ramen a day!  Take that!

A lot of assumptions/projections being made here, but the study itself is an interesting read wherever you stand. 

And no I'm not saying I agree/disagree with a minimum wage hike. Just saw it on twitter and thought it was a decent study. 

Only the govt could spin adding 500k to poverty is actually lifting up 900k lol

7 minutes ago, ToastJenkins said:

Only the govt could spin adding 500k to poverty is actually lifting up 900k lol

The WSJ article is broad strokes and kinda meh. The study itself is pretty interesting though. Long but interesting. 

I guess i would care more if the cbo were at all accurate about mich of anything

even when they gamed the assumptions they had to admit huge jobs losses