Social Security??? Let the government do their thing with SS, they will anyway, and give them absolutely not a penny more than you have to by law. Plan on not needing or even not getting your SS back, if you do get some all the better. Save some of your money, you can manage it much better than anyone else, anyone, even if you use advice from someone you respect financially. Even as a child I worried about my own finances and future. I might still have some money left from my paper route or from pulling weeds for $5 all day. If you're young enough (physically and mentally) save some and invest some in things like real estate, something that appreciates a lot over time. It’s also nice to have those investments that make the majority of your payments and taxes for you, like rental property. There are headaches, appliance breakdowns, maintenance, stupid people, people that don’t care, etc. Right now I get some retirement (actually my wife gets it to run the household), some SS, and a lot more monthly from my savings and investments. My income (and expenses) are much larger than when I was working, by far. Life is good, but you gotta make it so.

My theory and experience is what makes it difficult for me to understand one of my sons that is on the fence as to turning left or right (and he's just over 50). Even that is a decision he’ll have to make for himself, I can only make suggestions on occasion. The evidence is right in front of his face, I just hope he can see it and exercise what he sees. Wife and I decided to work really hard on spending our money now so the majority of it goes away right around the time we go away. We do this, and tell the kids, so as not to ruin any of our children by allowing them to sit back and depend on their inheritances. And as far as the grandkids, they will only learn and earn from what their parents try to teach them They're kind of brats anyway.

Wife and I do help with a little support of a grandniece that at the age of 16 lost her mother to alcohol, and is now just completing her senior year at the University of Washington to become a forensic scientist. We’re already looking forward to graduate school, as her drive and effort have kept her on the dean’s list, and she’s pushing for magna cum laude. Sorry, but I had to brag a little, she is such a beautiful young lady, and having to put up with all those liberal leftists at the U of W, she's still got her head on straight. Beside she may have to do our autopsies someday.

Thanks for the concise summary, though I'm not seeing any real difference here whatsoever. Whether the Fed does it or this new method does it, both still amount (pun intended) to inventing money out of thin air - without any value in its backing. The rest is semantics.

Please correct me if I'm reading this wrong. Its a nice idea. I just can't get the accounting to work and to me that's pretty important.

The "very source" of our current money is: government "prints" bonds, federal reserve "prints" money to (indirectly) buy those bonds. The "very source" of the proposed alternative is: government "prints" money directly. No bonds, no taxpayers on the hook for perpetual interest payments on these bonds. No increase in the national debt.

I'm really trying to understand and appreciate this proposal, but I can't get past the fundamental notion that money has to be representative of actual value for it to function. Indeed, after reading through their explanations to the Drawbacks, I am quite concerned by the amount of dodging present in the answers.

#1 While admittedly their solution is hypothetical, they choose to downplay the possibility of hyperinflation but offer no true disassociation between the circumstances.

#2 They argue not that their solution is immune to the same problems, only that since the current ones are going to kill us that this can't be worse. False dichotomy.

#3 Honestly I pretty much stopped reading after I saw yet another dodge here. They make the same cardinal mistake of attempting to divorce deficit spending from the resulting debt. You can't spend money you don't have. https://vimeo.com/199334296

I work with accounting systems all day long and for every credit to one account there is a debit to another. I can't see what account they are trying to debit in order to generate the credit necessary to offset the "debt" account. This proposal is very nice in its goals and objectives, but the very source of the "money" itself doesn't pass the smell test.

For a more thorough explanation, see www.fixourmoney.com .

"Government borrowing drives up the debt, not government spending."

While one can argue that the two are technically separate, the argument they are unrelated falls rather flat. When one implements deficit spending, they incur borrowing to pay for it. It's a cause-effect pairing that's basic to accounting: credits and debits. (Please note that I'm not saying the government isn't engaging in "creative" accounting with the Federal Reserve.)

While I agree that a fiat-based monetary system would be a step in the right direction - a huge one - I'm struggling to follow your scenario. I'm not sure I understand what you mean by "unbacked" money. Money has value because it represents something - it has some "backing." One can't pay off debts with money which doesn't represent real value (unless you're the Federal government who cheats). I'd appreciate a more thorough explanation.

The debt is not the deficit. And the deficit is not the debt. They are separate problems. See http://www.fixourmoney.com .

Government borrowing drives up the debt, not government spending.

The solution to our debt problem is simple: Stop issuing debt-based money. Begin issuing pure “unbacked” fiat money to fund the deficit, rather than going further into debt. The inflationary impact of unbacked dollars is no worse than the inflationary impact of the same amount of debt-backed dollars. Issuing unbacked dollars will halt the increase in the national debt and its crushing $600+ billion in annual interest. Paying off part of the maturing debt each year and rolling over the rest will eventually bring the national debt (and its taxpayer-financed interest payments) down to zero.

We the people just have to vote in ZERO deficits, and no printing of money by the federal reserve. AND THEN LIVE BY IT.

politicians enter politics to flex their power over other people. I order to flex that power, they have to spend money, and its NOT their money, its ours.
Therefore, the government will never cut its own spending.

When interest rates rise again, which they will HAVE to at some point, the government will have to increase taxes and/cut spending to be able to afford to pay the interest- the alternative being to just deficit spend even more to pay the interest.

You proposed the proverbial "king for a day" scenario and I responded. You are under no obligation to feel the same way I do.

"I asked you for specifics because you said it was easy. Nothing about it is easy."

If replacing my use of "easy" with "simple" clarifies, I offer such an amendment (nods to Lucky). You are welcome to disagree with that assessment. But the original question was posed to me. If you want to ask if I think Congress has the will to implement my opinion, I would be happy to answer that question (No) but that is not the question you asked.

"The economy in the short term will be devastated if you balance the budget without someone making sacrifices."

You're welcome to speculate, but such a hypothetical is going to remain unpersuasive to me until you can be specific ("devastated" is an ambiguous term) and provide sources. It's also going to be a tough sell given that we already agree that the alternative is without any doubt worse.

For a contrary example to your scenario, I would point out that Estonia, Latvia, and Lithuania had to go through a similarly radical restructuring when they obtained their freedom from the USSR. Those respective nations had to undergo significant austerity efforts and reformation in order to put their house in order and provide for a stable future. Were those times of austerity uncomfortable for them? Undoubtedly. But the end results speak for themselves. I recognize that it is not a precise parallel, but I consider it germane in the critical aspects: representative government facing an economic crisis due to a bloated bureaucracy which recognizes a need for reform and adoption of free-market principles.

"There is no call for you to insult me. Yes, calling me a Keynesian is an insult."

Please re-read my comments. I said you were arguing Keynesian economic policies, I did not call you a Keynesian. (I agree that being called a Keynesian should be viewed as repugnant to the thinking person.) But if you argue that we can not cut federal spending because it would disrupt the economy, you are arguing that government is the key to a sound economy. I pointed to Hazlitt's explanation of the broken window fallacy as a rebuttal. You can either get angry or you can address the fundamental flaw in your proposition.

Will there be some disruption if a government agency is shut down/defunded? Sure. I never implied otherwise. I simply didn't take it to the extreme you did.
You asserted a hypothetical with no possible alternative outcome than doomsday - a straw man argument. I specifically used my analogy of the lawn to indicate that it would take time, effort, and planning to accomplish (and a recovery period) the necessary revitalization. If you would prefer, I could switch to a medical analogy of a patient with a malignant tumor.

I think our primary disagreement is on the extent of the discomfort such changes would initiate - matters of opinion rather than of substance as we are dealing with a hypothetical in the first place. But I note with finality that we agree in an eventuality of economic crisis if no other action is taken.

Simple- can be described in everyday language in one or two short sentences.
Easy- not difficult to do, beginners can learn it quickly, not much if any training needed.

I already read the original article. It states that the fedgov is stealing from us an ever increasing amount and wasting even more than they steal. That has been true for decades. I got excited about this 30 years ago. I don't get excited any more because government has a vested interest in growing and they will do so until everything collapses.

"It's easy - you don't allow Congress to spend as much as they want."
I simply want you to explain what an how you EASILY cut government spending, what you cut and what the result is.
How will you FORCE con-gress to cut spending? They will not do it voluntarily.
You have provided a link for proposed spending cuts. None of the cuts consider the effect on the economy in the short term or the political difficulty in actually making the cuts.
I asked you for specifics because you said it was easy. Nothing about it is easy. The economy in the short term will be devastated if you balance the budget without someone making sacrifices. Who will do that voluntarily? Much of the "savings" will reduce private sector revenues and productive people will lose jobs in the short term. That is much more likely than government workers being let go (average pay of about $80,000/yr.)
(In the past, analyses pointed out that credit would be easier without competition from government deficit funding. I can't see how this is valid now. I don't think banks will make credit more available to small businesses that really need it (and cutting the profits of banking looters- not a chance), and credit for big business is easier now than ever before-unless I completely misunderstand the analytic reasoning. )

Bottom line is you and I both know it isn't easy. If it was easy it would have been done rationally in the late 80's when the Cold War ended and there was a real opportunity to cut defense costs and the deficit was much smaller.

There is no call for you to insult me. Yes, calling me a Keynesian is an insult.
I know you have read my posts in the past. Nothing I have ever posted indicates approval of Keynesian policies. However, I do recognize economic and political reality.

We have a population that has been "educated" to never expect any need to sacrifice regardless of economic reality. Millions of adults won't even give up their right to buy a new $1000 iphone every year.
Young people don't even consider whether taking out $200,000 in loans for a college education is financially wise or not. We have a nation of fools with little ability to think rationally or to analyze whether the evening news is true or not.

I agree that something should be done. It should have been done 30 years ago when the effect would have been easier to do politically and the economy was stronger with much less private debt service (and 50 million fewer immigrants.) I think it's too late and there is no way out short of default, collapse, and/or armed revolt.

Yes, it will be much worse this time because people are much more dependent. They can't fathom not having the internet for an hour. I can imagine their shock when there isn't enough to eat. It will be much much much worse.
Buy ammunition. Buy seeds. Learn to grow food. Buy vitamin supplements in bulk. Drill a deep well for water. Get a generator and a large below ground fuel tank. Buy books for reference when the internet is not working or power fails. Get out of the city. Keep all your purchases private- pay cash whenever possible. The NSA is listening and they are not benign.

Excellent. Then you should be as concerned as I am about the waste and useless government positions it talks about: positions which if eliminated would have almost zero negative effects for taxpayers.

BTW, I posted the article you reference on the Gulch last week.
https://www.galtsgulchonline.com/post...

First, please at least skim the article I linked to. One can hardly call people who watch porn on the Peoples' dime a good use of taxpayer dollars. And given the number of agencies infected, it's neither an isolated incident nor an inexpensive one.

Second, the Heritage Foundation every year puts out a report on the wasteful activities of government and duplicated programs. https://www.heritage.org/debt/comment.... The initial price tag is $262 BILLION per year. That's money coming out of the pockets of taxpayers which is going to serve no useful purpose whatsoever. This is money which can be saved even before we have a moral debate about what else needs to be done. That's just eliminating duplicate programs. Those aren't even reformative changes like what is necessary for Social Security, Medicare, or Medicaid (all of which I would transition to private accounts).

You asked where I'd cut. That would be for starters.

"People lose jobs, spend less, and more people lose jobs."

You insist that the scenario MUST be that we cut spending without laying off government workers. It's a false choice. It's a completely unworkable and quite frankly idiotic demand. We MUST shrink the size of the Federal workforce and focus on activities which are actually necessary and Constitutional - rather than watching porn or using one's office as a political weapon against one's adversaries. That will necessarily mean "forcibly transitioning" people to the civilian workforce. But to argue that we can cut government spending without shrinking the Federal workforce is disingenuous.

Government has been growing out of control for decades. What we have right now is a government like the front yard of my house when I first bought it. The weeds were literally up to my thigh, and I'm 6'4" tall. It took me almost 16 hours (actual time over three days) to mow the lawn the first time, and I put nearly 40 30-gallon bags of weeds out for collection. (They weren't very happy and made me put out a few every week.) I then had spray the whole thing down with weed killer then overseed to get it to grow back in where I had pulled the large weeds. It took two years to get things under control but now - with a little maintenance - it looks great. The same principle must be taken to the Federal government. And it will very likely take a couple of years to accomplish.

I've answered your question with specifics. Time to answer mine. Please back up your arguments that cutting government spending is going to cause the domino effect you propose - especially in the current market where unemployment is at a 60-year low and businesses are begging for workers. Cite specifics and provide links. (What you're arguing is Keynesian economic policy, which Hazlitt debunks specifically under the heading: the Broken Window Fallacy.)

The second question I would ask is quite simply: what is the alternative? Wait and have everyone - all ~360 million of us - floating in the porcelain spiral of doom? There is no real-life Gulch one can hide in and avoid this. If we don't fix this mess, we'll all suffer when it breaks. We're in the Roaring Twenties again. I fully expect the whole thing to come crashing down, only it will be far worse this time than a century ago.

"The Republicans controlled the House, the Senate, and the White House in 2017 and 2018 and didn't get it done. You can be sure it isn't going to pass a Democratic House or a Democratic White House. Not one Democratically-controlled House has passed anything resembling spending reform - ever. "

Exactly. That is why I was asking the question b/c it is political to balance the budget.

Cutting spending? God Almighty! The Dems will never do it and the GOP is frozen in fear how it is going to affect their re-elections chances if they go for it.

It will have to be default. On this, I agree with Peter Schiff, as he was the first person I heard say this - default.

Again I ask: You cut spending where? Be specific or you are not supporting your argument.
How does that effect the economy? People lose jobs, spend less, and more people lose jobs. All cause lower tax collection, lower demand for services and goods, and higher unemployment payments.
Result: less govt revenues and more spending = higher deficits.
Government doesn't drive a booming economy but the cuts in spending have a direct and indirect effect on private business.
Would it result in a balanced budget eventually? Possibly, but that depends on what is cut and how long hungry people are willing to wait for results. (Especially with 200 million people who have been "educated" to feel they should never have any discomfort or have to sacrifice anything.) Cuts must be in areas that are non-productive, even counter-productive. The biggest non-productive or counter-productive things are social security, medicare/medicaid (the fastest growing item causing deficits), and the IRS (which causes trillions in wasted counter-productive efforts.) None of these will be cut by any congress or POTUS. Military spending is the the next largest non-productive item and it won't be cut very much or for very long either.
The banking cartel has a vested interest in deficits continuing, too, and their political pull is unsurpassed.
In Hazlitt's day the effects of government spending were much, much lower than today. In the short run the economy would be crippled and the political fallout would be that cuts would not last long enough for long term improvement.
I can't see how anything short of default, collapse, or armed rebellion is likely.
( I don't disagree that cuts must happen, but I think it requires sacrifices and too few are willing to make sacrifices for it to happen in any controlled fashion.)

I'm hard-pressed to think of any way in which shrinking government would lead to either larger deficits or economic destruction. Government workers are overhead - not producers. Transitioning many of them to the private sector would be a huge boon by supplying desperately needed workers to a robust economy AND reducing government bloat. It's a purely Keynesian (and false) notion that the government can drive a booming economy. Hazlitt exposes the many fallacies behind this thinking well.

Not sure if you saw this, but it illustrates my point: https://www.judicialwatch.org/corrupt...

"Modest spending cuts, tax increases and spending growth cuts would solve it. Or we could just freeze all spending increases."

The biggest problem is spending - as is pointed out in the article. And "modest" cuts aren't going to do it. We have to get a budget that is at very minimum ZERO deficit. That means cutting spending by at least a third and more likely half. And what makes this incredibly difficult is that most of the budget is so-called non-discretionary funding (all the welfare programs) which require new laws to phase out those programs.

Tax increases only serve to stifle the economy - and tax revenues. We've seen it every single time its been done. From Carter to Bush to Clinton to Obama. All of them raised taxes and we saw the economy stumble (or stagger along) as a result. Only Reagan and Trump have had the good sense to cut taxes. (And when I point to the Presidents, it is because they have worked with the House to pass those tax bills - for good or for evil.)

Freezing spending increases would work, but only AFTER establishing a zero deficit budget in the first place. Freezing spending when you have a $1.4 TRILLION deficit isn't really going to get us anywhere before we're bankrupt.

"We should be doing some modest combination of these right now while the economy is strong."

Yes, but I'm skeptical. The Republicans controlled the House, the Senate, and the White House in 2017 and 2018 and didn't get it done. You can be sure it isn't going to pass a Democratic House or a Democratic White House. Not one Democratically-controlled House has passed anything resembling spending reform - ever.

There is no easy fix. But, there is a simple one. Spend less. A lot less. But, I totally agree that this will be a "Deficit Doomsday" when the chickens come home to roost because there is no politically expedient way to get off this runaway freight train now. So...yes...nothing will be done until the train ends up in a burning heap at the bottom of the canyon.

I pay about $800/month toward social security. I'll never get any of it back after d-day. There's a personal example. Why not charge me $1500/month? If we're going to be farcical let's really get with it...$2000/month? F' it.

We've all read Atlas Shrugged. When we're sitting in the mountains watching the distant sky darken with smoke this probably will have been the fuse...

So where will con-gress make cuts to satisfy your new limits without laying off millions of workers- which would destroy the economy and cause large budget deficits?

What's your easy fix?

Neither party has a goal of fiscal responsibility and they haven't had such a goal since 1913.

The only things that are likely to fix the deficit now are default or armed rebellion. Neither is easy.

It's easy - you don't allow Congress to spend as much as they want. My idea is to limit the total budget outlays for a given year to the actual revenues brought in two years earlier. Those revenues must cover the costs of debt service and ALL other spending. Congress only gets to determine how to spend the money which comes in - they don't get to manipulate it and manufacture it.

Of course I'd also repeal the 16th Amendment and declare unConstitutional all federal welfare benefits and shut those programs down as per the Ninth and Tenth Amendments.