Dow 39,000

[Briar Lee]

A question.

Of all the issues this nation fusses and squabbles over, wouldn’t right now be a good time for Congress to plan out a balanced budget?

It would mean a little higher taxes and a little less spending but are we going to wait for the next recession to do it?

Just sayin’.

 

[condorlover1]

I am afraid that would not be a vote winner for the sitting party as a re-election platform! When the electorate discovered they could vote themselves ever greater indulgences the entire 'balanced budget thing' went up in smoke.

 

[hoosierpipeguy]

The higher they rise, the further they fall. This is all feeling more and more like 2008. But worse, the Fed continues to artificially prop up a weak economy by printing more money and increasing the debt. Just a matter of when, not if. And it is overdue.

 

[Servant King]

The higher they rise, the further they fall. This is all feeling more and more like 2008. But worse, the Fed continues to artificially prop up a weak economy by printing more money and increasing the debt. Just a matter of when, not if. And it is overdue.

^^^^^^^^ THIS ^^^^^^^^^^^^^^

 

[serpentx]

How 'bout we fix some infrastructure first? Maybe divert some funds from the military-welfare complex

 

[Briar Lee]

I can’t imagine anyone for, the idea of the government spending more than it takes in, during times we aren’t at war or there’s not a major recession.

It’s a bad idea to keep up budget deficits year after year.

In a few prosperous years in the late 1990s the budget was balanced and even a small surplus.

The revenue was 19.5% of GDP and Congress spent a little less.

If you take away all the passion and hollering and emotion from the problem, since World War Two the federal government has averaged 15-20% of GDP taken in as revenue and all hut a few years spent a little more.

The current federal revenue is about 16% of GDP. If it could be slowly increased to 20% we’d have a balanced budget, if at the same time we decreased spending to say, 18% of GDP.

It is doable, we’ve done it before.

Until the next recession it would benefit us all. We’d pay lower interest rates, have more investment, more growth, have more confidence.

But if we don’t do it with 3% headline unemployment and markets setting records by the month,,,,we can’t when there is the nexf downturn.

 

[Briar Lee]

How 'bout we fix some infrastructure first? Maybe divert some funds from the military-welfare complex

America fixed bridges and built schools and airports during 1997-2001, with a balanced budget.

And a balanced budget helps growth. It lifts all boats. You get more butter and more guns, both.

What is wrong is not one politician wants to spend a dime less or tax a dime more.

Instead they promise to spend more, and tax less.

 

[bayareabriar]

Corporate personhood and the ability to contribute funds politically may have a small part to do with it as well.

 

[Briar Lee]

Corporate personhood and the ability to contribute funds politically may have a small part to do with it as well.

And corporate personhood and unlimited contributions are now enshrined in the decisions of the Supreme Court which must be followed without question.

We can tax 19% of GDP instead of 16%.

We can spend 17% of GDP instead of 21%.

Doing it in one year is unrealistic.

The last time it happened it took about three years.

Instead I see on television talk about IVF in Alabama. Somebody screwed up the laws.

Watch them reopen those fertility clinics in Alabama. Nobody is against more babies being born to willing parents, nobody.

They’ll fix it. They’ll pass a new law.


If they only could gather the courage to fix the budget.

 

[Servant King]

In a few prosperous years in the late 1990s the budget was balanced and even a small surplus.

The national debt in 1990 was about 3 trillion. By the end of the decade, it was 5.6 trillion, with increases every year. In fact, it increased every year since the inception of the country; not in one single year has it gone down, or even just stayed steady.

I think that effectively debunks any notion of any supposed "surplus" at any time, late 90s or otherwise!

 

[Briar Lee]

The national debt in 1990 was about 3 trillion. By the end of the decade, it was 5.6 trillion, with increases every year. In fact, it increased every year since the inception of the country; not in one single year has it gone down, or even just stayed steady.

I think that effectively debunks any notion of any supposed "surplus" at any time, late 90s or otherwise!

It wasn’t a large surplus, and there were only surpluses in 97 through 2001.

But it was real, it helped the economy in every way you can measure, and by 2001 the politicians were all arguing how to squander it. Some wanted to cut taxes and some wanted to build more stuff.

It was a wonderful problem to debate.

Then 9/11 and a small recession and an invasion or two and we’ve not balanced the budget since.

The debt is 34 trillion now.

The deficit is 1.7 trillion.

It won’t heal itself.

They have to tax a little more than they spend.

 

[Servant King]

My point was, because of the mere existence of a deficit during those years, the conclusion of a surplus is therefore factually impossible. Just calling it a surplus by measuring numbers selectively (i.e. lying) does not change the reality...that there wasn't one.

Sure, I could claim to be free of TAD by measuring only Lakeland blends I have cellared (none), and exclude all VAs, VaBurs, VaPers, Englishes and aromatics (all), and then, voila, I can safely demonstrate the "fact" that I am 100% TAD free.

It's amazing what an accounting sleight-of-hand can do.

 

[brian64]

 

[Briar Lee]

It’s fun to look up current financials of the USA:

Xxxx

US GDP is at a current level of 27.94T, up from 27.61T last quarter and up from 26.41T one year ago. This is a change of 1.19% from last quarter and 5.80% from one year ago.

Xxxxx

One per cent of current GDP is 280 billion dollars.

The projected deficit this year is 1.7 trillion and current debt 34 trillion.

Let’s suppose Congress raised 280 billion in revenue for next year, on top of the natural increase, restrained spending next year another 280 billion. And they kept that up.

In three years, we’d have a balanced budget.

In five years we’d have about a trillion a year surplus.


I’d hope they’d pay down debt with it.

Can you imagine a trillion a year, every year, being invested by debt holders?

We’d not run out of other issues to argue over, I promise.

 

[karam]

The higher they rise, the further they fall. This is all feeling more and more like 2008. But worse, the Fed continues to artificially prop up a weak economy by printing more money and increasing the debt. Just a matter of when, not if. And it is overdue.

Not quite on "the further they fall", and not at all like 2008.

On the first point, such a succession of bull years mean that year on year more gains are being locked in, meaning that even a 20% drop today would just bring the value to what it was 1 year ago, all gains before that are therefore locked in. Of course money invested in 2023-2024 could be in danger, but worrying about that is just getting too greedy. That's why the quote "time in the market beats timing the market" sticks.

Still, everyone gets FOMO, I bought nVidia at $200, sold at $400 because "it had gone far too good"...right? I mean, it's at fuckin' $785 today, predictions say $1200 by end of the year with no sign of cooling off. I know a couple of people in my immediate circle who bought it at $40 and are still holding it, their gains are essentially locked in for good unless something really absurd happens. Hell I know a couple of people who bought Apple for $5 and Microsoft for $40 and are still holding them. Can their gains crash?

I also think there's no relation to 2008, no relation at all. There could be parallels with 1999-2000, the .com bubble, but that was really a bubble. Paper napkin "companies" valued in the billions before they even rented an office, let alone make and sell anything. The big tech nowadays is surely ridiculously overbought, but it is actually doing something many people around the world are paying for, as seen by their earnings reports. I accept my ignorance, certainly, when it comes to AI and what it can do, but are Microsoft, Apple, Google, Meta and nVidia themselves also ignorant spending all this money? I doubt it!

And this brings my thinking full circle - can one afford the opportunity cost of being out?
I hear in the US one can get 4-5% interest CDs, that's great! If I was there I'd park my spare cash in such instruments until the market became more calm. No such thing in Switzerland, 1.5-1.75% is the absolute max one can get here, govt bonds are near 0% interest (some even have negative interest, basically you pay the Swiss govt for the privilege of lending them money!).

I would love a consolidation and cooling off phase, currently I am not buying anything, maybe that's also an opportunity cost I am paying, but it's balancing itself by locking in more and more gains I've had since 2022 which is when I started investing. Currently I am having Warren Buffett's quote "be fearful when others are greedy, and greedy when others are fearful" is echoing in my ears every day I see massive green candles, so I am sitting on my hands while enjoying the ride!

 

[fireground_piper]

They take enough of my money.

How 'bout we fix some infrastructure first? Maybe divert some funds from the military-welfare complex

Before you even start cutting anything, they can simply just stop giving tens and hundreds of billions away to people. Just simply stop giving away money, you don’t even have to fire anyone and that will get things started.

 

[captpat]

No doubt a reckoning is in our future. Continued efforts to spend more and reduce tax rates will only exacerbate the issue. I can only hope that those spineless chuckleheads (AKA our representatives) are around to experience the results of their ignorance and indolence.

 

[sablebrush52]

Let’s suppose Congress raised 280 billion in revenue for next year, on top of the natural increase, restrained spending next year another 280 billion. And they kept that up.

Or, the IRS could get the funding to go after the estimated yearly $150,000,000,000 in illegal tax avoidance.
I hate paying taxes, but I hate tax cheats even more because they are stealing from all of us.

 

[Peter Turbo]

How 'bout we fix some infrastructure first? Maybe divert some funds from the military-welfare complex

Nah, cant do that, it would be crazy to spend money here at home and not send it to Ukraine, Israel and Taiwan.

 

[condorlover1]

The economy is being run like a teenager with a credit card. Excess spending + making minimum monthly payment = disaster. The only options are to spend less or ask for a credit line increase! The end result without discipline is always financial melt down!