Please help

ksammut

Please help me understand.

If our annual tax collection for businesses and individuals is approximately $2.5 trillion (including payroll taxes) per year and our anticipated expenses for the next few years projected to be $3.5 trillion per year, how does raising taxes and cutting expenses by only $3 to $4 trillion over the next ten years really help us?

Our national debt is already $16.4 trillion. Even if the politicians agree to a combination of $4 trillion in revenue increases and spending cuts, that still leaves a huge yearly budget deficit of $600,000 billion.

To make things worse, that assumes the spending cuts are real and expenses do not actually come in higher than what the CBO is now projecting for health care and other programs.

The FED plans on long term QE and none of us know what unexpected events can happen with our economy or world issues causing more even more debt so my question is, are the leaders of our country that economically foolish to be discussing only $4 trillion in cuts and revenues when they should be discussing $10 trillion or more over 10 years?

Pain will happen with those cuts but a heck of a lot more pain will happen if they continue to push our debt problem down the road and the national debt goes higher instead of being reduced.

Gold, silver and a defensive portfolio are my family's insurance. Sadly, the debt is growing so quickly that even with higher employment and a stronger GDP, we will not be able to grow our way out of this debt crisis unless drastic measures are taken.

Why aren't the economic talking heads on TV bringing up these questions? I know there are a few here and there but the majority talk about the short term and do not bring up the big picture.

What am I missing? I respect your opinions so please share them.

Ken

gsa1fan

JMHO, they plan on keeping the "CC" maxed as long as they can. I'm like you nothing they do makes ANY sense.

Justacommeman

Ken, you are not missing anything. Just keep making money and sending in your taxes and shut up. That is all.

MJ

ksammut

<< <i>Ken, you are not missing anything. Just keep making money and sending in your taxes and shut up. That is all.

MJ >>



MJ,

Thanks for the laugh.

I shake my head when some of the CNBC "experts" come on and say once the financial cliff situation is settled, there will be certainty and everything will be right with the world. Magically, employers will feel confident and begin hiring, GDP will grow to 4 percent, and we will be headed in the right direction.

The discussions going on in DC will not change the dynamics as the basic tax plan that has been around for a good number of years will remain the same and the only ones to see an actual income tax hit will be high income earners.

With that said, If some of them are small businesses, that will not help when it comes to hiring. Since there is a good chance that deductions, capital gains, and dividends will be taxed higher, many in the middle class may be in for a surprise which means less money for them to spend - not a good thing for the economy.

Wall Street share prices may knee-jerk higher if a compromise is reached but once the details are digested, it will be obvious that the compromise will not solve any problems but only add to them and any highs reached will not last. Liquidity by the FED may keep share prices inflated for 2013 but the debt problem will not go away and eventually the house of cards will crash to the ground. Wall Street, which has been the false indicator to the everyday person and sadly to many who should know that present share prices are high only because the FED is doing everything possible to keep 2008 from happening again, will see share prices crash too.

I wish I knew enough to have the solution.

carew4me

The solution is to keep stacking.

Take any extra FRNs that you can afford (assuming you are debt free except mortgage, have 3 mos emergency fund) and buy physical metal.

derryb

sounds like you got it figured out. The only other catch is interest rates. If FED loses control and they rise, national debt wil hit its bubble due to interest on the debt. FED's zero interest rate policy is the only thing keeping their game going.

Justacommeman

The fiscal cliff situation appears to lower on the totem pole of concern then Obamacare for small businesses ironically enough. That's a hurdle a lot of small businesses with not be able to scale. Small businesses our the life blood of the US economy............MJ

Justacommeman

cueing Frankscoins

MJ

tneig

<< <i>What am I missing? I respect your opinions so please share them.
Ken >>



You are not missing anything. You are in a front row seat and its happening right now in 3-D.

At this point I don't think the politicians are in control of it either. Once the ponzi scheme gets so far
along the same thing usually happens. Same thing in nature. A correction occurs.
Unless someone else knows something I don't. Add it to your pile of things to address
and prepare for depending upon your beliefs of probability.

DoubleEagle59

Enjoy and take advantage of today's PM price drop.

Keep stacking.

jmski52

There are many aspects to what is happening, most of which can't be discussed here. The problems are pervasive.

johnny9434

round and round it goes, where it ends no one knows

ksammut

<< <i>Enjoy and take advantage of today's PM price drop.

Keep stacking. >>



I have been adding to the stack each and every week for the past 5 years. For insurance purposes, I did a full inventory over this past weekend and although the amount is substantial, it is not enough if we continue down the economic path we have been taken.

Ken

ksammut

<< <i>There are many aspects to what is happening, most of which can't be discussed here. The problems are pervasive. >>



I have intentionally kept my posts non-political but more economic. As politicians have control over economic decisions, some politics will be part of our posts when we discuss the fiscal cliff or the economy in general. Their (politicians) decisions affect our investment strategy and since most of us, here on the precious metal's board, believe we need gold and silver in our portfolios, hopefully we can have some politics in our posts as long as we are not knocking individuals or specific parties.