It's only funny money, nothing to worry about. If we ignore it does it really matter how much debt we have or that the economy is being propped up by the FED. We should all demand to stop paying taxes since they can just create as much money as they need out of nothing. Interesting times.....
It is the very thing that is the most important aspect in this crisis. Who pays?
Quantitative easing, stimulus, bail outs, financial support, housing emergency support, vaccine and what not funding to expedite solutions. Nearly all of these are funded by the tax payer. Who for the most part hasn't yet figured that he will be paying for it for the many years to come, with little chance that the tax rates will be readjusted back to its normal level, which was already commensurate. Give me more support please, since I think money just comes from the sky.
There is going to be a point where even the last idiot will stop paying, since he won't be able to pay anyway.
When I dig into how our governments, at least in the west, are handing the economical chaos we are in now, and their ability to ignore and conceal reality, I figure there is nothing that can prevent an imminent total downfall of our current system that relies on heavy fundings of countless institutions.
It may happen gently if the authorities apply common sense. But that's not what we have elected up there. And individuals seem to be very biased, triggering their self survival pathways to get the best of a situation, at the expenses of god knows how many.
I foresee a questioning of our tax rates very soon. People won't understand why they are paying so much on one side, and realise they can't pay on the other.
They're not "funded by the tax payer." That is exactly what doesn't happen. Money is a not a limited physical resource, and "tax payers" do not generate it.
Money is a set of political choices defined by governments. It's also a draconian form of social credit which enforces individual and corporate competition over political power and access to resources.
The only limitations are literal physical resources, including a stable climate - exactly the things that this Money System fails to conserve or manage intelligently.
The rest is just rhetoric and persuasion with some numbers thrown in.
The point of economic rhetoric isn't to grow "the economy" for everyone, it's to manage faith in the future for both winners and losers, and most of all to maintain and expand differentials between the different castes and levels in the economy.
If the government wanted to narrow those instead of expanding them it could do it tomorrow. It wouldn't even need to raise taxes - although it might sometimes be useful to do so to make a rhetorical point about relative power.
At the very least I think individual should be taxed like corporations, on profit instead of revenue. This would also mean a lot more money circulating and way more jobs since people could decide between spending and reducing profits or paying more taxes.
Modern Monetary Theory:
- The state creates money and spends it into existence
- The state taxes back money to control inflation, achieve social outcomes and incentivise certain behaviour.
The problem is the population like 1, and dislike 2. But inflation comes later and humans are bad at thinking rationally about future consequences (see: climate change).
So it’s almost inevitable you get uncontrolled spending with printing. Aka ‘brr’.
The other problem is that printing by itself is actually quite socialist. If everybody got equal and the dollar devalues equally across all asset classes goods/services, you end up reducing savings and reducing debts. One could argue this is Good.
The problem is the printing just pours straight into the fat cats of Wall St and you end up with gross inequality.
Milton Friedman has several lectures around this. While excessive taxation and inflation are both bad for various reasons, inflation disproportionately hurts the poor.
People who own homes, businesses, stocks, cars, gold, silver, bitcoin, farm land etc. dont have to worry about inflation as much. Those who have only cash in hand are the losers. Poor people who typically have only few thousand dollars in cash deposit savings see their money being wipes out by inflation. You dont have to worry if you have sp500.
Couldn’t the government counter this effect with tax breaks or UBI? Like how a carbon tax along with tax offsets alleviates the burden on the poor due to an increase in price of consumer items.
The carbon tax, like vat, is a tax targeting the poor entirely. Tax offsets? Yea right..
The middle class pays nearly the entire tax income ball. Funding UBI or anything else will have to come from there. The tax offset will always be in the benefit of the upper brackets, because they can't fund such a pool of money to be redistributed anyway. Tax corporates? Oh no, that would stifle innovation and reinvestment. So, tax the middle class. But that won't work. They already spend 2/3 of their earned wealth in various taxes. Nobody is going to work to fund a UBI they can get anyway.
I love the idea of UBI, but doing the math and figuring out how people think about whether producing value for others vs doing nothing should show that it just can't work.I would happily be won't and take the UBI cheque and do something productive while not really having to care about the adoption of whatever I'm producing
> The middle class pays nearly the entire tax income ball.
Only because we choose to gift the capitalist class with preferential tax treatment. If we treated all income as income, the tax burden would shift from the middle class and higher-income working class to the capitalist class, where it rather self-evidently belongs
The Canadian carbon tax returns 90% of its revenue as a rebate. It works great -- my family gets $500 a year, more than what we pay.
As far as the middle class paying for most of UBI, that's exactly what's supposed to happen. If you're an average taxpayer and UBI is $1000/month then your taxes should increase $1000/month.
The poor aren't affected so much by monetary inflation as by old-school wage-price inflation. If wage inflation > price inflation, they're winning. Considerable effort has been invested (mostly by Friedmanites) to suppress the mechanisms of wage inflation. Conversely, if wage inflation < price inflation, that's a serious and immediate cashflow problem which will eat up their savings far faster than mere inflation will.
> typically have only few thousand dollars in cash deposit savings see their money being wipes out by inflation
10% inflation on $1k savings vs 10% inflation on a $20k salary: you do the maths?
There are lots of research economists at the fed with many different views. The St. Louis fed in particular produces many excellent reports.
But… the fed is a business. They will operate to expand their domain to the maximum extent possible, regardless of internal opinion. Same with government.
It seems that you are implying that "Modern Monetary Theory" has been adopted, if that's the case, you are totally missing the point.
MMT it's a description (a theory that can be validated) of how the system works, not a recipe. Finally, after unavoidable evidence, people are starting to accept that this is how modern money really works (and have been working for quite a while).
Now, we can have a conversation about what to do with it (I suspect that's a conversation many don't want to have), instead of talking about "public debt" and "borrowing from our grandchildren".
By the way, most MMT economist recommend very different policies of what has been done, what is vindicated here is the "the state creates money and spends it into existence" only limited by inflation part. That doesn't mean that they recommend Quantitative Easing for instance.
The trouble with MMT isn't necessarily so much that it's wrong, it's that it seems to have been latched onto by populist rabble-rousers who tell people that the government could just print enough money to give people all the nice, expansive government programs they'd want without the part where they tax ordinary people to pay for them, and the only reason they haven't already is because politicians are in the pockets of wealthy fat cats.
I think what you mean is that the super-wealthy are the primary benefactors of the system which everybody else (mostly the moderately wealthy) is forced to pay for.
But you’ll never get ‘fairness’ by force. Whoever wields power will use it to their own benefit.
If MMT is not wrong (and it's not), it means that the government can spend all that it choose in its own currency with the only limit of inflation. This means, that the size of public deficit is important because it can be inflationary, but the size of the public debt, it's only an accumulate of past deficits and it's kind of irrelevant.
If this is the case, it seems to me, that when, politicians say that there is not enough money, or the public debt is too high, they are basically lying to the population. That's the kind of lying that we don't hear when is time to spend in a war, or cut taxes for the rich, for instance.
We agree that many politicians are in the pockets of wealthy fat cats.
Public debt is simply shifting inflation in time, with the costs that additional inflation will be created, due to the additional spending on interest.
In short it is simply reducing inflation today in order to have that inflation in the future, and that shift in time will require additional taxes to pay for it.
There is not mechanism by what issuing public debt will reduce inflationary risks, in fact the opposite could be true.
There is a suspicion in MMT that issuing bonds and high interest rates could be actually inflationary because the interest payment of that bonds. They don't think that there is a clear proof of it, though. Note that this is the opposite of what mainstream economics believe.
Now, from the MMT perspective, issuing bonds is not necessary in order to fund spending. From the MMT perspective, bond issue is a "choice". It's not exactly a choice because there is a legal mandate, but from the practical point of view bonds are not necessary to facilitate spending. So, you could just expend without creating new bonds, and keep the public debt number as accounting device (that it's what basically is).
Even if a government "choose" to issue bonds, the interest is decided by the government through the Central Bank. The Central Bank have the capacity to keep the interest at any point they decide (as you can see in the Euro-Area at the moment). And, of course, if the bonds are owned by the Central Banks (as is the case of a lot of the USA, Euro or Yen debt at the moment), the interest will go to the government who can decide if to run a deficit or a surplus depending of the fiscal space available at the moment.
>>"and that shift in time will require additional taxes to pay for it. "
Because governments are the issues of the currency, they don't need to tax in order to spend. Increasing taxes could be necessary if you want to spend and the fiscal space is not there in the economy, but that's highly dependent of the circumstances of the economy at that point in time, not a given.
So, no, it's not reducing inflation today in order to have inflation in the future and, not, it will not require additional taxes to pay for it.
> There is a suspicion in MMT that issuing bonds and high interest rates could be actually inflationary because the interest payment of that bonds.
A long-term increasing interest rate (especially at a low absolute level) ought to push inflation from income-producing assets to other things, because rising interest rates would undermine the reason for buying the claim on future income. I think that's backed by theory and empirical evidence from the 70s, and simply amplifies how tenuous the macro financial situation has become. Even more alarming, the Fed thinks the lever to reduce inflation is interest rate increases ... which as noted at some point in the rate-raising process should shift asset inflation into consumer inflation, which would beget more raises.
MMT is wrong in the sense that it's unimplementable. If you need to curb spending or raise taxes to slow inflation in the latter half of a cycle a politician can run on a platform of not doing that thing, get elected on that mandate and then it all falls apart.
If it ran on autopilot then it might work, but in a democracy it won't run on autopilot.
MMT is not unimplementable because it's already how it works. In its major part it's a description not a policy. So, with MMT already working all these past years, inflation have been below the desire target. The poster child of MMT, in terms of monetization of debt, is Japan, and Japan has been incapable to create inflation despite wanted it desperately for many years.
>>"If it ran on autopilot then it might work, but in a democracy it won't run on autopilot."
If you listen to the MMT economist, you will see that they are big proponents of automatic stabilizers. The infamous "job guarantee program" is basically an automatic stabilizer of inflation and unemployment.
The fundamental problem is that we don't want to tell baby boomers that they will have to work until 70 in order to keep the system afloat, or that if they are rich (including the value of their house) that they should pay for their own retirement and healthcare in old age and not receive any handouts.
Instead we will allow them to retire at 60/65, pay pensions independent of their personal wealth, and run the system into the ground.
(Government spending on the healthcare and welfare - which is overwhelmingly baby boomers with expensive chronic health conditions, and their pensions - is about 50% of Government spending).
> The fundamental problem is that we don't want to tell baby boomers that they will have to work until 70 in order to keep the system afloat, or that if they are rich (including the value of their house) that they should pay for their own retirement and healthcare in old age and not receive any handouts.
We could also tax the rich to fund the pensions and healthcare of the masses. The amount of wealth the mega-rich have gained over the last year alone is absurd.
That doesn't really solve the end purpose, which is that Baby Boomers need to lessen their consumption of national resources (real estate) and global resources (food, energy), so that these limited resources can be utilized by the next generations.
It should be mandatory (either formally or through the pension/taxation system) for example to downsize your home and portfolio before you receive any subsidies or welfare.
For most citizens, the benefit of spending goes negative after a certain point. But each additional dollar does benefit somebody, and everybody is fighting for it to be them. The strategy of reduced spending is a global optimum, but not a Nash equilibrium.
FED creates most money just by allowing commercial banks to loan the same money multiple times. How many times is controlled by rates.
Good thing about producing money this way is that it has a fixed lifetime. When credit is paid back money becomes borrowed one time less and thus disappears from the economy.
So the way to control inflation is to just adjust rates so that more credits are being paid back than issued. This scales down money in the economy.
Taxes have barely anything to do with it.
The only fault of this system is that when people default on their loans en mass, the additional money stays in the economy and can't be removed which results in inflation.
And how much of that money is flowing into buying up residential housing now because every other asset is so inflated? Basically every index is at all time highs. The stock market more or less recovered last summer and they keep buying? WTF is the plan.
The obvious thing that is needed is strong labor unions. The open question is why so much of this money is flowing into asset price inflation instead of either consumer inflation or higher wages, or some combination of the two. Even a 50/50 split of consumer inflation and higher wages, which might at first seem to have no benefit, would in fact have the benefit of deflating the relative debt burden that the public is carrying. There is also the very great question of why monetary stimulus was more effective at raising wages in the early and mid 20th Century. Strong labor unions must be part of the answer. The power of the unions forced more of that money to the workers, and less of it to those already holding assets. It is, of course, well known that in every Western country the percent of national income going to capital decreased in the mid 20th Century, whereas the percent of national income going to labor increased in the mid 20th Century.
An alternative, which would not require strong labor unions, would be massive final consumer spending on the part of the government: this is the spending where the government is the final consumer, which is currently only 33% of the Federal budget. A massive program of rebuilding infrastructure would help force the money into the real economy, and this would have some of the same effects as strong labor unions.
One of the key pillars of "Reaganomics" was attacking the cycle of wage-price inflation by breaking the ability of unions and workers in general to coerce higher prices from the market. The commonly-circulated graph that shows compensation splitting off from productivity in the 1970s isn't an accident, it's an intended policy outcome.
The key distinction isn't so much between "workers" and "capitalists" as between "voters for whom cashflow is critical" and "voters for whom asset income and fixed income is critical" (i.e. pensioners! A huge fraction of the voters!) Within the "cashflow" category you also have the question of whether you've paid off enough mortgage to regard house price inflation as good rather than bad, or whether you're staring up at the wall of deposit required to enter the housing market.
That's true, but keep in mind, the peak year for unionization in the USA was 1949, the Communist hysteria of 1947-1954 forced the labor unions to purge their militants, and afterwards the unions were in slow decline. And the divergence of wages versus productivity occurs in the 1970s. In other words, Reagan did not start anything, but rather, he was the final nail in the coffin of trends that had started much earlier.
Depending on what you consider decisive you can use 1949, 1958, or 1973 as the decisive turning point. The double recession of 1958-1960 was certainly decisive if we're looking at labor's political power. It was after that, for the first time in 70 years, that the USA began to develop a trade deficit. Please look at first chart on this page:
Realistically, EITC expansion or similar would be the tool if you wanna go that route as it’s more easily modeled than nationwide collective bargaining and is generally considered more efficient than a jobs program.
Please think about the amounts of money that we are talking about. Would you seriously consider disbursing $4 trillion dollars through EITC expansion? It is absolutely not designed to handle that kind of money.The EITC cost $90 billion in 2019. Biden's recent budget more than doubled it, but still, it's at a different order of magnitude than what we are discussing:
So given how the economy is going, what are the chances that the only resolution will be some sort of conflict in the next couple decades? Or will there be a gradual acceptance of UBI?
What sort of conflict, started by whom, and for what purposes?
For intra-US conflict, I guess you're looking at the question of armed militia groups storming a government that maybe this time aren't complete bozos infiltrated by the FBI?
As more and more people are squeezed economically, all existing tensions will be exacerbated. The biggy is when enough people start to struggle to consume enough calories that s** really starts to hit the fan. I would expect every geo-political problem, every cultural problem, every domestic problem to get worse.
Whatever is going to happen is going to happen soon. Such is the nature of exponential growth. Everything seems to happen all of a sudden at the end, despite the rate of growth potentially remaining constant. Then some period of radical adjustment, as all exponential growth of any system in the real world is unsustainable and must end.
First consider: Inflation occurs when supply of dollars exceeds demand for dollars.
Demand comes mostly from investment. Taxes try to exert a direct effect on supply and demand, but they also exert a massively negative effect on private activity. I think, at this point, the negative effect is far greater. They’re complicated and expensive, and ineffective at collecting from the benefactors of the spending activity. Even 100% taxes would be catastrophically inflationary because there would be no private investment demand to absorb new money creation. So we have to consider the possibility that forcible tax collection is just ineffective, inefficient, and obsolete.
Also consider that there is now global competition, maybe even supranational, for choice of economic systems to participate in. Efficiency and value of governance will be paramount.
To be pedantic, I think it's that inflation occurs when supply of dollars increases relative to the demand for dollars? I'm not sure what, if anything, it means for demand to exceed supply.
Well, yes, it depends on how you define demand for a transactional medium, which is not easy. You could see it as having something to do with the sum of all immediate capital obligations, like loan payments or salaries, plus consumption at a given price level, and international exchanges.
But my point is that those market factors easily dominate balance of supply and demand, such that the only thing that matters is the efficiency of the economy. So even if taxes could balance the budget, the reduction in investment would kill more demand than supply. Therefore, if correct, the only thing that matters is efficient spending.
61 comments
[ 2.1 ms ] story [ 120 ms ] threadQuantitative easing, stimulus, bail outs, financial support, housing emergency support, vaccine and what not funding to expedite solutions. Nearly all of these are funded by the tax payer. Who for the most part hasn't yet figured that he will be paying for it for the many years to come, with little chance that the tax rates will be readjusted back to its normal level, which was already commensurate. Give me more support please, since I think money just comes from the sky.
There is going to be a point where even the last idiot will stop paying, since he won't be able to pay anyway.
When I dig into how our governments, at least in the west, are handing the economical chaos we are in now, and their ability to ignore and conceal reality, I figure there is nothing that can prevent an imminent total downfall of our current system that relies on heavy fundings of countless institutions.
It may happen gently if the authorities apply common sense. But that's not what we have elected up there. And individuals seem to be very biased, triggering their self survival pathways to get the best of a situation, at the expenses of god knows how many.
I foresee a questioning of our tax rates very soon. People won't understand why they are paying so much on one side, and realise they can't pay on the other.
Money is a set of political choices defined by governments. It's also a draconian form of social credit which enforces individual and corporate competition over political power and access to resources.
The only limitations are literal physical resources, including a stable climate - exactly the things that this Money System fails to conserve or manage intelligently.
The rest is just rhetoric and persuasion with some numbers thrown in.
The point of economic rhetoric isn't to grow "the economy" for everyone, it's to manage faith in the future for both winners and losers, and most of all to maintain and expand differentials between the different castes and levels in the economy.
If the government wanted to narrow those instead of expanding them it could do it tomorrow. It wouldn't even need to raise taxes - although it might sometimes be useful to do so to make a rhetorical point about relative power.
The problem is the population like 1, and dislike 2. But inflation comes later and humans are bad at thinking rationally about future consequences (see: climate change).
So it’s almost inevitable you get uncontrolled spending with printing. Aka ‘brr’.
The other problem is that printing by itself is actually quite socialist. If everybody got equal and the dollar devalues equally across all asset classes goods/services, you end up reducing savings and reducing debts. One could argue this is Good.
The problem is the printing just pours straight into the fat cats of Wall St and you end up with gross inequality.
Milton Friedman has several lectures around this. While excessive taxation and inflation are both bad for various reasons, inflation disproportionately hurts the poor.
People who own homes, businesses, stocks, cars, gold, silver, bitcoin, farm land etc. dont have to worry about inflation as much. Those who have only cash in hand are the losers. Poor people who typically have only few thousand dollars in cash deposit savings see their money being wipes out by inflation. You dont have to worry if you have sp500.
The middle class pays nearly the entire tax income ball. Funding UBI or anything else will have to come from there. The tax offset will always be in the benefit of the upper brackets, because they can't fund such a pool of money to be redistributed anyway. Tax corporates? Oh no, that would stifle innovation and reinvestment. So, tax the middle class. But that won't work. They already spend 2/3 of their earned wealth in various taxes. Nobody is going to work to fund a UBI they can get anyway.
I love the idea of UBI, but doing the math and figuring out how people think about whether producing value for others vs doing nothing should show that it just can't work.I would happily be won't and take the UBI cheque and do something productive while not really having to care about the adoption of whatever I'm producing
Only because we choose to gift the capitalist class with preferential tax treatment. If we treated all income as income, the tax burden would shift from the middle class and higher-income working class to the capitalist class, where it rather self-evidently belongs
As far as the middle class paying for most of UBI, that's exactly what's supposed to happen. If you're an average taxpayer and UBI is $1000/month then your taxes should increase $1000/month.
> typically have only few thousand dollars in cash deposit savings see their money being wipes out by inflation
10% inflation on $1k savings vs 10% inflation on a $20k salary: you do the maths?
But… the fed is a business. They will operate to expand their domain to the maximum extent possible, regardless of internal opinion. Same with government.
MMT it's a description (a theory that can be validated) of how the system works, not a recipe. Finally, after unavoidable evidence, people are starting to accept that this is how modern money really works (and have been working for quite a while).
Now, we can have a conversation about what to do with it (I suspect that's a conversation many don't want to have), instead of talking about "public debt" and "borrowing from our grandchildren".
By the way, most MMT economist recommend very different policies of what has been done, what is vindicated here is the "the state creates money and spends it into existence" only limited by inflation part. That doesn't mean that they recommend Quantitative Easing for instance.
I think what you mean is that the super-wealthy are the primary benefactors of the system which everybody else (mostly the moderately wealthy) is forced to pay for.
But you’ll never get ‘fairness’ by force. Whoever wields power will use it to their own benefit.
If this is the case, it seems to me, that when, politicians say that there is not enough money, or the public debt is too high, they are basically lying to the population. That's the kind of lying that we don't hear when is time to spend in a war, or cut taxes for the rich, for instance.
We agree that many politicians are in the pockets of wealthy fat cats.
Public debt is simply shifting inflation in time, with the costs that additional inflation will be created, due to the additional spending on interest.
In short it is simply reducing inflation today in order to have that inflation in the future, and that shift in time will require additional taxes to pay for it.
There is a suspicion in MMT that issuing bonds and high interest rates could be actually inflationary because the interest payment of that bonds. They don't think that there is a clear proof of it, though. Note that this is the opposite of what mainstream economics believe.
Now, from the MMT perspective, issuing bonds is not necessary in order to fund spending. From the MMT perspective, bond issue is a "choice". It's not exactly a choice because there is a legal mandate, but from the practical point of view bonds are not necessary to facilitate spending. So, you could just expend without creating new bonds, and keep the public debt number as accounting device (that it's what basically is).
Even if a government "choose" to issue bonds, the interest is decided by the government through the Central Bank. The Central Bank have the capacity to keep the interest at any point they decide (as you can see in the Euro-Area at the moment). And, of course, if the bonds are owned by the Central Banks (as is the case of a lot of the USA, Euro or Yen debt at the moment), the interest will go to the government who can decide if to run a deficit or a surplus depending of the fiscal space available at the moment.
>>"and that shift in time will require additional taxes to pay for it. "
Because governments are the issues of the currency, they don't need to tax in order to spend. Increasing taxes could be necessary if you want to spend and the fiscal space is not there in the economy, but that's highly dependent of the circumstances of the economy at that point in time, not a given.
So, no, it's not reducing inflation today in order to have inflation in the future and, not, it will not require additional taxes to pay for it.
A long-term increasing interest rate (especially at a low absolute level) ought to push inflation from income-producing assets to other things, because rising interest rates would undermine the reason for buying the claim on future income. I think that's backed by theory and empirical evidence from the 70s, and simply amplifies how tenuous the macro financial situation has become. Even more alarming, the Fed thinks the lever to reduce inflation is interest rate increases ... which as noted at some point in the rate-raising process should shift asset inflation into consumer inflation, which would beget more raises.
If it ran on autopilot then it might work, but in a democracy it won't run on autopilot.
>>"If it ran on autopilot then it might work, but in a democracy it won't run on autopilot."
If you listen to the MMT economist, you will see that they are big proponents of automatic stabilizers. The infamous "job guarantee program" is basically an automatic stabilizer of inflation and unemployment.
Instead we will allow them to retire at 60/65, pay pensions independent of their personal wealth, and run the system into the ground.
(Government spending on the healthcare and welfare - which is overwhelmingly baby boomers with expensive chronic health conditions, and their pensions - is about 50% of Government spending).
We could also tax the rich to fund the pensions and healthcare of the masses. The amount of wealth the mega-rich have gained over the last year alone is absurd.
It should be mandatory (either formally or through the pension/taxation system) for example to downsize your home and portfolio before you receive any subsidies or welfare.
Good thing about producing money this way is that it has a fixed lifetime. When credit is paid back money becomes borrowed one time less and thus disappears from the economy.
So the way to control inflation is to just adjust rates so that more credits are being paid back than issued. This scales down money in the economy.
Taxes have barely anything to do with it.
The only fault of this system is that when people default on their loans en mass, the additional money stays in the economy and can't be removed which results in inflation.
https://en.wikipedia.org/wiki/Money_multiplier
(The chart does not yet reflect hitting the $8T due to update intervals.)
Even if you wait until the next crash to buy, the chances are big that you will be paying more that if you bought today at an all-time high.
An alternative, which would not require strong labor unions, would be massive final consumer spending on the part of the government: this is the spending where the government is the final consumer, which is currently only 33% of the Federal budget. A massive program of rebuilding infrastructure would help force the money into the real economy, and this would have some of the same effects as strong labor unions.
The key distinction isn't so much between "workers" and "capitalists" as between "voters for whom cashflow is critical" and "voters for whom asset income and fixed income is critical" (i.e. pensioners! A huge fraction of the voters!) Within the "cashflow" category you also have the question of whether you've paid off enough mortgage to regard house price inflation as good rather than bad, or whether you're staring up at the wall of deposit required to enter the housing market.
The US went off the gold standard in mid 1971, and the productivity/comp divergence starting happening in 1972.
A lot of changes to the economy can be traced to 1972.
https://www.epi.org/publication/understanding-the-historic-d...
https://www.mckinsey.com/featured-insights/employment-and-gr...
You can see that labor begins to weaken after 1960.
maybe there are other factors involved ?
https://www.pgpf.org/budget-basics/what-is-the-earned-income....
For intra-US conflict, I guess you're looking at the question of armed militia groups storming a government that maybe this time aren't complete bozos infiltrated by the FBI?
Whatever is going to happen is going to happen soon. Such is the nature of exponential growth. Everything seems to happen all of a sudden at the end, despite the rate of growth potentially remaining constant. Then some period of radical adjustment, as all exponential growth of any system in the real world is unsustainable and must end.
Food is one, but it's somewhat unlikely in developed countries.
What is a lot more likely, is housing.
Masses of people with no place to live get angry almost as fast as starving people.
8T divided by the population of the USA 328M = $304 per person?
No. 8 trillion divided by 328 million is $24,390 per person.
Demand comes mostly from investment. Taxes try to exert a direct effect on supply and demand, but they also exert a massively negative effect on private activity. I think, at this point, the negative effect is far greater. They’re complicated and expensive, and ineffective at collecting from the benefactors of the spending activity. Even 100% taxes would be catastrophically inflationary because there would be no private investment demand to absorb new money creation. So we have to consider the possibility that forcible tax collection is just ineffective, inefficient, and obsolete.
Also consider that there is now global competition, maybe even supranational, for choice of economic systems to participate in. Efficiency and value of governance will be paramount.
Edits: many. Sorry.
But my point is that those market factors easily dominate balance of supply and demand, such that the only thing that matters is the efficiency of the economy. So even if taxes could balance the budget, the reduction in investment would kill more demand than supply. Therefore, if correct, the only thing that matters is efficient spending.