GDP to population ratio, and ability to pay down the debt

Good point. If Trump really wanted to help the poor he could use a CPI that actually reflects reality. Instead I predict that the Republicans will change CPI again to make increases in SS even less reflective of reality.

Probably another try at chain weighted CPI is in the offing.

 

You're comparing apples and oranges. the 2.5% average GDP growth rate is already adjusted for inflation.

Which is nowhere near 10x more as was claimed that housing prices grew more than incomes.

But what matters is the cost of living increase relative to income increase.

??? What absolutism?

 

Yes, we are indeed comparing apples and oranges, and everything else money is spent on.

Has income grown more than housing prices?

When wants become viewed as needs, or worse yet entitlements, the cost of living grows much more rapidly.

An entitlement based upon National residency rather than productive contribution to the local society in which one lives.

 

Don't forget that an increase in the lower income segment of the population is also going to mean an increased government cost for providing public services. These are a lot of public services we simply take for granted, or most people don't really bother keeping track of. Things like education, law enforcement, administration of the court system, medical emergency rooms in hospitals (although a lot of that is simply shifted to the cost on all the other hospital patients).

If you look at it from one perspective, averaging it out, the bottom 40% of U.S. households consume more government services than they pay in taxes, illustrated in these graphs:






https://www.heritage.org/welfare/re...on-government-benefits-services-and-taxes-the

 

I agree, but it looks more like the bottom 60% are consuming more government services than they are paying in taxes. While some of the bottom 60% are actually paying taxes, few if any are paying anything near what governments are spending, especially relative to what is being spent per person of the population.

Although it's difficult to find hard numbers, the best I can come up with on Federal, State, and local government spending for FY 2018 is:
Federal $4,147,000,000,000
State.... $1,408,683,333,333
local..... $1,300,000,000,000
Total..... $6,855,683,333,333
Assuming a population of 325,700,000 that equates an average of $21,049 per member of the population, and with the current full time work force claimed to be 127,340,000 a cost of about $53,837.62 per full time employed person being spent by government, or the equivalent of $25.82 per hour worked, assuming a 40 hour work week.
We have the poorest, the middle class, the richest, and the governments, Federal, State and local. Is inflation the solution all our problems? What were the annual unemployment numbers prior to the 20th century?

 

The National Debt has already exceeded annual GDP!!

 

median house price
1963 $17,600 average price $19,300
2016 $213,700
53 year change 12.14 times more
your numbers show 17.35 times more

median household income
1963 $6,200 ($48,628.87 in 2016 dollars)($54,887.88 using your figures)
2016 $57,617
53 year change 9.29 times more
your numbers show 13.91 times more

Regardless, both show house prices outpaced income increases

Home loan interest rates
1963 5.9%
2016 using average 2016 Freddie Mac interest rate 3.65%

A 30 year loan for the full cost of the home in 1963 would result in the following
1963 - $17,600 at 5.9% for 30 years = $104.39 per month or $1,252.68 per year 20.2% of household income.
leaving $4947.32 from which property taxes and insurance would be paid and all other expenses paid.

A 30 year loan for the full cost of the home in 2016 would result in the following
2016 - $213,700 at 3.65% for 30 years = $977.95 per month or $11,735.40 per year 20.4% of household income.
leaving $45,881.60 from which property taxes and insurance would be paid and all other expenses paid.

As best I can tell, home loan interest rates currently are greater than 4% and maybe even 5%.
But factor in the property taxes, insurance, home maintenance costs, and I think it should be obvious that home ownership consumes significantly more of the household income today than in 1963. Not to mention a great many additional items have become a part of our needs and wants that didn't exist or were less desirable than they have become today.

 

Begs the question, if the 'P' in GDP stands for 'product', what 'Products' are being created in increased quantity each year?

 

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Watching todays hearing with Chairman Powell of the FED only to learn that wage increases, for rank and file employees, were actually higher during the Obama second term than they have been thus far under Dirty Donald.

 

Could that simply have to do with inflation?

Perhaps bounce-back, recovering from the Recession?

I could research both of these possibilities to see if they could hold any merit but don't really want to expend the time. But they do help demonstrate why it's really problematic to associate economic change with a presidential administration just because there's a time overlap.

 

Inflation is higher now!!Just as an example gasoline at a 4 year high.

 

U.S ranks 41st in the world for home ownership Russia,China and India are all ahead of us???

 

First, Americans prove all the time that they generally do not care about government debt...out of sight out of mind. What's even more interesting to me is if the US is doing so great then why aren't we paying down debt with surplus? Obviously we have a spending problem! Politically our current president feels he must pay voters to support the administration both by tax policy and higher debt spending...no matter the impact on debt. And Americans love it because we are generally self-serving and greedy...we want more and more but balk at funding more and more...so we get more debt. IMO it makes no difference GDP to population or GDP to debt ratios since no matter government income voters appreciate higher and higher spending...

 

The GOP wants to cut Social Security and Medicare payments to seniors at a time when there are more senior citizens working today than at anytime in our nations history, because they desperately need the money they earn just to make ends meet.American credit card debt is at an all time high,student loan debt all time high,auto loan debt all time high,mortgage loan debt all time high.The picture is not nearly as rosy as the right would have you believe.

 

You don't have to pay for it all.

There's no such thing as a national debt. Only a communist or socialist would claim there is. States are not legally bound to it under US and international law.

It's federal debt, and it consists of two components, public debt and government debt.

The public debt is about $15 TRILLION and 40% of that is owed to foreign investors. The other 60% is owed to States, counties, local governments, public and private pension plans, banks and insurance companies.

The government debt, which is $7 TRILLION, is owed to the OASI and OADI Trust Funds, HI (Medicare) Trust Fund, SMI Trust Funds (Medicare Part B & Part D), and various pensions for railroad workers, government and military retirees.

Conversion of government debt to public debt does not increase federal debt, since it's just a shift in the accounting columns. Because the interest on special treasury securities is often higher than treasury bills, notes and bonds, the cost to service public debt is lower than the cost to service government debt.

While it is true that federal debt is currently greater than 1/4th of World GDP, and it is true that by about 2025 or so it will be 1/3rd of World GDP and 50% of World GDP by about 2042, that has little bearing on anything.

Worst case scenario is that foreign investors would not be able to buy as much debt, and that creates inflationary pressure in the US, but the remedy for that is for the government to reduce spending, and it will ultimately be forced to do that.

 

No, worse case scenario is that investors refuse to buy any more debt, or renew the debt they already have, and then the U.S. Treasury defaults (because they can't find anyone else to borrow from to pay the investors they borrowed from as those older debts periodically become due). I suspect then the Federal Reserve would become the lender of last resort, but then you're going to have 2000% inflation.

 

Mircea so since as you claim there is no such thing as national debt then using your logic there should be no national income tax??We have a NATIONAL DEBT of almost $22 Trillion collectively the American public has personal debts of over $13.5 Trillion and Americas corporations have a cumulative $9.1 Trillion debt.