Preventing US economic collapse

[Stunt]

What does the USA need to do in order to prevent economic collapse?

These are my thoughts...

1. Drastic reform of its public education system. Strict standards for science and math. Strict standards for discipline. No more coddling of students - fail them if they don't meet standards, only gives an "A" to those who are clearly excellent. Introduce competition.

2. Reform the tax system to encourage savings and discourage consumption (consumption taxes). The USA current fuels the growth of other economies like China through consumption and it does so at the expense of its current accounts.

3. Reign in government spending. Deficits are fine so long as they are financed internally. Currently, the US debt is largely being financed by China (a potential enemy).

4. Stop nation building. It is too expensive. Crush your enemies and then either take over completely or leave - no more of this infrastructure and democracy building.

 

[HombrePequeno]

I like all of your ideas. I would add that social security needs to be reformed (partially privatized) so that everyone doesn't get taxed out the arse to help pay for my retirement.

 

[babylon5]

1. We are not an education-oriented culture. And Too much politics/socials interference in education system. This will never happen.

2. Raising tax on stuff is unpopular, dont' see it possible.

 

[Stunt]

Not raising taxes, reforming the tax code so there's more sales tax, less personal income and corporate taxation.

 

[GrGr]

Stop using 25 % of the worlds resources. Shrink the dependency on foreign oil. The lion share of the trade deficit comes from energy imports.

Shrink the military budget. It is ridiculous to have such an oversized military compared to the rest of the world. Unless you want to rule the world. Which of course the US cannot afford since it will lead to the economic collapse of the domestic economy.

In essence to prevent a US economic collapse the US has to shrink. This will not of course happen voluntarily (has it ever in history).

 

[mfs378]

Does the purchase of stock or investments count as consumption in your view?

 

[Stunt]

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

 

[yobarman]

Get rid of the Federal Reserve?

 

[mfs378]

Originally posted by: Stunt

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

So people with more income, who have more money to invest will be paying fewer taxes as a fraction of their income?

 

[Stunt]

Originally posted by: mfs378

Originally posted by: Stunt

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

So people with more income, who have more money to invest will be paying fewer taxes as a fraction of their income?

There can still be investment taxation. I am merely suggesting shifting the tax code to discourage wasteful spending and encourage saving. This can be done in many ways, not just cutting investment taxes. You can have more tax shelters like education savings plans, retirement savings plans, etc. Lower income taxes, lower corporate taxes (could be connected to infrastructure investment, automation, training). Basically increasing prices on goods with a sales tax and offset that revenue with cuts in areas that will encourage savings/investment.

 

[Rainsford]

Originally posted by: Stunt

Originally posted by: mfs378

Originally posted by: Stunt

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

So people with more income, who have more money to invest will be paying fewer taxes as a fraction of their income?

There can still be investment taxation. I am merely suggesting shifting the tax code to discourage wasteful spending and encourage saving. This can be done in many ways, not just cutting investment taxes. You can have more tax shelters like education savings plans, retirement savings plans, etc. Lower income taxes, lower corporate taxes (could be connected to infrastructure investment, automation, training). Basically increasing prices on goods with a sales tax and offset that revenue with cuts in areas that will encourage savings/investment.

That would have the opposite effect of what you're after here. Savings and investments don't drive economic growth, consumption does. Discouraging spending would not be a step in the right direction. Granted, investment helps sustain economic growth, but it alone can't actually drive growth...we don't live in a supply driven economy.

 

[Rainsford]

Originally posted by: Stunt
What does the USA need to do in order to prevent economic collapse?

These are my thoughts...

1. Drastic reform of its public education system. Strict standards for science and math. Strict standards for discipline. No more coddling of students - fail them if they don't meet standards, only gives an "A" to those who are clearly excellent. Introduce competition.

There is competition, there are standards. The myth that school is one big feel-good social experiment doesn't really reflect reality to a large extent. Not everyone gets to go to the college of their choice, after all, and many schools now have multiple academic tracks so the smarter students can still be challenged. If there is a problem with the schools, it's that they are underfunded. No matter how you rearrange the school system, you aren't going to attract the very best teachers with the pathetically low salaries they get paid.

2. Reform the tax system to encourage savings and discourage consumption (consumption taxes). The USA current fuels the growth of other economies like China through consumption and it does so at the expense of its current accounts.

3. Reign in government spending. Deficits are fine so long as they are financed internally. Currently, the US debt is largely being financed by China (a potential enemy).

Agreed (with 3). I don't think China financing US debt is as bad as you think it is. Like the old saying goes, if you owe the bank a thousand dollars, you're in trouble, if you owe the bank a million dollars, the bank is in trouble. China couldn't possibly take any action against the US in economic terms, they are too tied to our success to finance their own.

4. Stop nation building. It is too expensive. Crush your enemies and then either take over completely or leave - no more of this infrastructure and democracy building.

Indeed...and that goes double for nation building in countries that weren't our enemies to begin with.

All that being said, the US still has the biggest economy in the world and is showing no signs of being passed any time soon. Like most news, the coverage of the economy paints a picture much different from what's really going on.

 

[mfs378]

Originally posted by: Stunt

Originally posted by: mfs378

Originally posted by: Stunt

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

So people with more income, who have more money to invest will be paying fewer taxes as a fraction of their income?

There can still be investment taxation. I am merely suggesting shifting the tax code to discourage wasteful spending and encourage saving. This can be done in many ways, not just cutting investment taxes. You can have more tax shelters like education savings plans, retirement savings plans, etc. Lower income taxes, lower corporate taxes (could be connected to infrastructure investment, automation, training). Basically increasing prices on goods with a sales tax and offset that revenue with cuts in areas that will encourage savings/investment.

If you reduce consumption and increase investment, how are all those companies we are investing supposed to turn a profit and make our investments grow?

 

[Stunt]

Originally posted by: mfs378

Originally posted by: Stunt

Originally posted by: mfs378

Originally posted by: Stunt

Originally posted by: mfs378
Does the purchase of stock or investments count as consumption in your view?

No...stocks and investments are savings; complete opposite of consumption.

So people with more income, who have more money to invest will be paying fewer taxes as a fraction of their income?

There can still be investment taxation. I am merely suggesting shifting the tax code to discourage wasteful spending and encourage saving. This can be done in many ways, not just cutting investment taxes. You can have more tax shelters like education savings plans, retirement savings plans, etc. Lower income taxes, lower corporate taxes (could be connected to infrastructure investment, automation, training). Basically increasing prices on goods with a sales tax and offset that revenue with cuts in areas that will encourage savings/investment.

If you reduce consumption and increase investment, how are all those companies we are investing supposed to turn a profit and make our investments grow?

Invest in equipment and improvements that don't have the required IRR (internal rate of return) to increase efficiency/productivity and profits.

 

[Gonad the Barbarian]

1. Disagree with the subjects. Stress civics and economics. Every student will grow up to be an active participant in our government (voter) and an active participant in the economy (consumer/producer). Agree with the rest.

2. Disagree. Reform tax system to a flat rate on income and stop the government from coercing economic transactions.

3. Agree. One specific thing I'd like to see is the cessation of all financial transactions between the federal and state governments not directly related to defense or emergencies.

4. Agree, but maybe for slightly different reasons.

 

[Acanthus]

Originally posted by: Gonad the Barbarian
1. Disagree with the subjects. Stress civics and economics. Every student will grow up to be an active participant in our government (voter) and an active participant in the economy (consumer/producer). Agree with the rest.

2. Disagree. Reform tax system to a flat rate on income and stop the government from coercing economic transactions.

3. Agree. One specific thing I'd like to see is the cessation of all financial transactions between the federal and state governments not directly related to defense or emergencies.

4. Agree, but maybe for slightly different reasons.

How can you think that maintaining a high emphasis on science and math isnt important?

Our technological superiority is the only thing that keeps us on top, and it's dwindling fast.

 

[Gonad the Barbarian]

Originally posted by: Acanthus

Originally posted by: Gonad the Barbarian
1. Disagree with the subjects. Stress civics and economics. Every student will grow up to be an active participant in our government (voter) and an active participant in the economy (consumer/producer). Agree with the rest.

2. Disagree. Reform tax system to a flat rate on income and stop the government from coercing economic transactions.

3. Agree. One specific thing I'd like to see is the cessation of all financial transactions between the federal and state governments not directly related to defense or emergencies.

4. Agree, but maybe for slightly different reasons.

How can you think that maintaining a high emphasis on science and math isnt important?

Our technological superiority is the only thing that keeps us on top, and it's dwindling fast.

Leave it to the colleges. They are better suited to teach it and higher level math and science isn't useful to those that don't go anyway.

 

[Acanthus]

Originally posted by: Gonad the Barbarian

Originally posted by: Acanthus

Originally posted by: Gonad the Barbarian
1. Disagree with the subjects. Stress civics and economics. Every student will grow up to be an active participant in our government (voter) and an active participant in the economy (consumer/producer). Agree with the rest.

2. Disagree. Reform tax system to a flat rate on income and stop the government from coercing economic transactions.

3. Agree. One specific thing I'd like to see is the cessation of all financial transactions between the federal and state governments not directly related to defense or emergencies.

4. Agree, but maybe for slightly different reasons.

How can you think that maintaining a high emphasis on science and math isnt important?

Our technological superiority is the only thing that keeps us on top, and it's dwindling fast.

Leave it to the colleges. They are better suited to teach it and higher level math and science isn't useful to those that don't go anyway.

Without the fundamentals in high school, a career in engineering can be a 5 or even 6 year program if you leave it to the colleges...

College Algebra, College Trig, Calc I, II, III, Linear Alg, Differential Equations... the list goes on.

Science is even worse, Physics, Chem, Bio, and all combinations thereof require math skills that many of our students dont get from high school. So for them to START their science tracks they have to wait on the math fundamentals they didnt get.

The solution? Students take non-science/eng Majors.

 

[Gonad the Barbarian]

Originally posted by: Acanthus

Originally posted by: Gonad the Barbarian

Originally posted by: Acanthus

Originally posted by: Gonad the Barbarian
1. Disagree with the subjects. Stress civics and economics. Every student will grow up to be an active participant in our government (voter) and an active participant in the economy (consumer/producer). Agree with the rest.

2. Disagree. Reform tax system to a flat rate on income and stop the government from coercing economic transactions.

3. Agree. One specific thing I'd like to see is the cessation of all financial transactions between the federal and state governments not directly related to defense or emergencies.

4. Agree, but maybe for slightly different reasons.

How can you think that maintaining a high emphasis on science and math isnt important?

Our technological superiority is the only thing that keeps us on top, and it's dwindling fast.

Leave it to the colleges. They are better suited to teach it and higher level math and science isn't useful to those that don't go anyway.

Without the fundamentals in high school, a career in engineering can be a 5 or even 6 year program if you leave it to the colleges...

College Algebra, College Trig, Calc I, II, III, Linear Alg, Differential Equations... the list goes on.

Science is even worse, Physics, Chem, Bio, and all combinations thereof require math skills that many of our students dont get from high school. So for them to START their science tracks they have to wait on the math fundamentals they didnt get.

The solution? Students take non-science/eng Majors.

I'm all for getting the fundamentals in before college. It's the trying to cram in more than that for all students at the expense of civics and economics that I have a problem with. Like I said, you have subjects everyone will benefit from, or subjects that only benefit some based on occupation. I'd like to leave those latter subjects to post-HS education. Mandating them before, at the expense of the former subjects I think is detrimental to our society.

 

[jackace]

Income tax under the original constitution was basically illegal. We need to stop taxing people on what they make for a living and start taxing them on what they consume or use. This also teaches people to be responsible citizens and consumers and teaches them how to manage money.

We need to stop all this foreign aid and "diplomacy" we do. look at Pakistan, we gave them $10 billion to stop AL Qaeda and what do our reports show, Al Qaeda is back to pre-911 strength. Look at N. Korea, they are basically blackmailing the rest of the world and us into giving them free energy and possibly even money to stop using their nuclear program.

Government spending needs to be reigned in a lot. Military spending is OUT OF CONTROL. Politicians need to be held accountable for the money they do spend. So much of it goes to waste in the current system. Lobbying needs a major change or to be eliminated all together.

 

[imported_Tango]

Originally posted by: Stunt
What does the USA need to do in order to prevent economic collapse?

These are my thoughts...

1. Drastic reform of its public education system. Strict standards for science and math. Strict standards for discipline. No more coddling of students - fail them if they don't meet standards, only gives an "A" to those who are clearly excellent. Introduce competition.

2. Reform the tax system to encourage savings and discourage consumption (consumption taxes). The USA current fuels the growth of other economies like China through consumption and it does so at the expense of its current accounts.

3. Reign in government spending. Deficits are fine so long as they are financed internally. Currently, the US debt is largely being financed by China (a potential enemy).

4. Stop nation building. It is too expensive. Crush your enemies and then either take over completely or leave - no more of this infrastructure and democracy building.

1. Agreed

2. Very tricky. As you know, 75% of the US GDP is represented by domestic consumption. Increasing consumption taxes and lowering income taxes (this is the new taxation plan in France by the way) would very likely have dramatic effects on the economy, some of which are quite hard to forecast.

But you are right, Americans should save more. One way to achieve that is by increasing interest rates. This is preferable to your plan because interest rates are more easily manageable over time. However, of course, this would clash with the FED inflation linked monetary policy.

One solution could be (as in other countries) have interest paying checking accounts, or other structural, non-monetary policy to promote savings.

But remember a lot of the problem is cultural. When I first moved here I was puzzled by the extravagant spending everybody seems to enjoy here. People seem to get a lot of gratification from shopping, maybe to justify their long working hours. It's something very hard to change overnight, also because companies like this a lot, and the whole US economy relies on aggressive consumers.

3. China is not a potential enemy. If you think it could be an enemy, then the US is screwed already, as the two economies are way too much interlocked to even envision a war.
The problem in the US budget (in my opinion) is not the size of expenditures, but the quality of it. It wouldn't be a problem if expenditures went into fields promoting future growth. Instead, a lot of money went into a couple of wars that, if anything, will promote future expenditures, not revenues. Also some fields, as health care, have abysmal results considering the amount of money spent in the country to improve them. The per-capita public spending on health care in the US is higher than the same figure for public-healthcare-systems as the French or German ones. Then you have to add all the private expenditures (which are two or three times the public ones). Still, the US system lags behind other countries. In the US is simply too easy for the health care industry to bill insurance companies every sort of exotic expense no question asked.

4. Agreed.

 

[1prophet]

Spend less than you make not more.

 

[IEC]

My list:

1. Non-interventionist foreign policy. Wow, we suddenly stopped spending $billions a day.
2. Stop "nation-building". Our Founding Fathers wisely advised us to avoid "foreign entanglements"
3. Limited government. Our government has grown too large, powerful and SPENDS WAY TOO MUCH
4. Sound currency. Reform the Federal Reserve system, cut the national debt, and transition from our current fiat currency to a commodities-backed currency. No fiat currency lasts.
5. Reform taxes. Hell, cut taxes. We can afford it once we do the following (as a start):
6. Get rid of Dept. of Homeland Security for starters, then cut other unnecessary bureaucracies.
7. Get rid of Social Security. It's a Ponzi scheme which taxes the young to pay the elderly and it will only work for a short while longer. While we're at it, get rid of Medicare and some other programs.

 

[WhipperSnapper]

Originally posted by: Stunt

1. Drastic reform of its public education system. Strict standards for science and math. Strict standards for discipline. No more coddling of students - fail them if they don't meet standards, only gives an "A" to those who are clearly excellent. Introduce competition.

Ignoring the increased costs of providing better education, how will better education help the economy?

It's nice to think that truck drivers can contemplate quantum mechanics and that waitresses understand differential equations, but do they really need that knowledge? The U.S. still has a gigantic number of colleges and college graduates and a great many unemployed and underemployed college graduates, including in technical fields (especially in the sciences and computer fields).

2. Reform the tax system to encourage savings and discourage consumption (consumption taxes). The USA current fuels the growth of other economies like China through consumption and it does so at the expense of its current accounts.

But if you discourage consumption...that means people purchase less stuff...which means fewer jobs...which means less money to spend on stuff...and it becomes a downward cycle. So, I don't think it's that simple. What we really hope for is for the economy to be strong so that people would have the goods they want and thus would begin saving excess cash, not because the economy sucks and they're scrimping by and saving bits of money as a matter of principle.

The problems with China can be easily solved with a tariff. Curbing consumption has nothing to do with it.

3. Reign in government spending. Deficits are fine so long as they are financed internally. Currently, the US debt is largely being financed by China (a potential enemy).

I'm with you there. In fact, it's retarded that our federal government allows itself and state governments to borrow from any source other than American sources.

4. Stop nation building. It is too expensive. Crush your enemies and then either take over completely or leave - no more of this infrastructure and democracy building.

I agree.

 

[WhipperSnapper]

Originally posted by: Acanthus

How can you think that maintaining a high emphasis on science and math isnt important?

Our technological superiority is the only thing that keeps us on top, and it's dwindling fast.

It's dwindling because it no longer makes economic sense for Americans to specialize in math and science intensive fields. Change the dynamics of the economy so that it makes economic sense and you solve the problem.

(Notice that there doesn't seem to be any shortage of Americans applying to medical schools? There's a reason for that. Ever heard of an unemployed doctor or a doctor who earned less than $100,000/year and without a sense of career security and social status? I didn't think so. Your local biologist, mathematician, or physicist might only earn $35,000/year and might be involuntarily-out-of-field, but man oh man, the local doctor (who works in a field that is protected from oversupply problems) sure is doing well.)

Why learn computer science when computer programing will be done in Bangalore? Why get a Ph.D. in Biochemistry when research jobs will be taken by foreigners on H-1B and L-1 visas? Why get an engineering degree when the work will be done in Mumbai? Why get a science Ph.D. so that you can work as a gypsy scientist postdoctoral researcher (postdoc), moving from postdoc to postdoc every 2-3 years?

By the way, the notion that the United States does not have people who know math and science is a huge myth. Rather, what the media doesn't want you to know, is that the work that utilizes such knowledge is either being offshored or filled by foreigners on H-1B and L-1 visas.

To learn more about the realities of careers in the science fields, read Contemporary Problems in Science Jobs:

http://science.freeshell.org/