Taxes are a necessary evil, like government,  and should be treated as such.  What we have now is a bastardization of what government, IMO,  should be.

As far as deficits,  they don't matter until they do.  And when you reach the tipping point, it's too late to fix it.  The multi-trillion dollar question is "What is the tipping point"?  I hope we don't find out,  but I am thinking we will,  sooner or later. Deficit spending has become "normal" and we have no elected officials who seem to care or know the solution on either side of the aisle.  The only debate is in how the deficit is spent.

So you are saying if we don't pay taxes the tipping point comes sooner

Somebody posted it doesn't look as if there is a currency to replace the USD, now or in the future

Some might say we would have inflation

Others argue inflation actually is transitory as many states have stopped the extra unemployment cheques and all added benefits will come to an end this yr

I suppose the question might be

What would the tipping point actually be or look like

I see the G-7 are close to agreement on a common corporate tax so taxation most definitely will not stop

Biden adding many more to the IRS pay roll

I suppose I should have included this was a "what if" question

I've been looking at both sides of the inflation issue but after seeing this, it's almost inevitable that higher to much  inflation is coming:

Raising the federal minimum wage to $15 by 2025 would lift the pay of 32 million workers

A demographic breakdown of affected workers and the impact on poverty, wages, and inequality

https://www.epi.org/publication/raising-the-federal-minimum-wage-to-15-by-2025-would-lift-the-pay-of-32-million-workers/

Obviously spending with no income will amass debt more quickley.

But,  we need some taxes to finance legitimate government function.   The problem is that more than half of government spending (conservatively) is not legitimate..  Even more if you strictly adhere to the constitution. 

Can some of the meta-constitutional spending be justified?   Certainly,  But the government has no business in social engineering or charity.  #1,   it's not their job.  #2,  they do an absolutely abysmal job of it, generally creating far more problems than they solve.

Thanks Tim,

I am for raising the min wage but this is pretty extreme. Some of the stats and reasoning at the link above are biased to flawed to wrong but some are good. 

Their objective with this article is to convince people this decision is really, really good and there are no negative consequences.

https://mediabiasfactcheck.com/economic-policy-institute/

The minimum wage debate is a joke.   

If you work at a Burger king for minimum wage, and it goes up,  either the owner will adjust the prices to offset the cost, meaning an hour's wages will buy the same amout of food as it did before, leaving the increase meaningless. This will hold true for that same hour's wage in every establishment affected.

Or.. the owner will cut employee hours and add automation, leaving the employee with less hours,  or no hours, making the minimum wage less than worthless.

The minimum wage was instituted as a result of racism.   Blacks would work for less than whites,  so the powers that be set the wage.

On another note..    If your goal is to work for minimum wage,   you need to take a step back and reevaluate. All you have to do is develop your skills,   show up, do the work, and your chances of remaining at minimum wage for a year are almost nill. 

There are a lot of jobs offering 20/hr plus some times a signing bonus if you stay a minimum length of time

IMO if you aren't worth 20/hr then most aren't worth 15/hr

But I feel for the waitress making maybe 12/hr plus tips and a couple of kids from the ex

Big adjustment coming when they have to find a job

“If you work at a Burger king for minimum wage, and it goes up,  either the owner will adjust the prices to offset the cost, meaning an hour's wages will buy the same amout of food as it did before, leaving the increase meaningless.”

That would only be true if the population of burger buyers (or other consumers) were all minimum wage earners. Most of that increase will be borne by folks making more than minimum wage, therefore the raise will be more than the increase in cost to the minimum wage earner.

Things like this are very seldom as simple as we wish them to be.

there is always a tradeoff. 

deficits are not significant if they are temporary, and modest.

but when you run a country with the notion that "deficits don't matter", then you will cause some very bad long term problems.  all of our very naive politicians will then pursue the wrong policies to try to address those bad side effects.  

almost all empires go down the drain because of debasing the currency, too much debt, too many deficits, too much socialism, too much taxation, too much military spending.  etc.  

when economies suffer,  officials will print too much fiat (trying to help too many people),  and our country will eventually look like argentina.  (by my estimate, somewhere around 2070).  we will have 30% inflation, and 30% unemployment.  ( as a long term problem,  not just for a year or 2). 

that also means eventually we will have high interest rates of maybe 30% or 40%.  

in other words by 2070, things will be much worse than 1980...

That would only be true if the population of burger buyers (or other consumers) were all minimum wage earners. Most of that increase will be borne by folks making more than minimum wage, therefore the raise will be more than the increase in cost to the minimum wage earner.

Not at all true.

The labor cost is built into the cost of the burger.  If the labor cost increases,  the cost of the burger has to go up proportinately. I can just about garantee the owner is not going to take much of a cut in pay,  if any, to finance the wage increase.

So,  he either lowers his labor costs through cutting back hours and adding automation,    or he raises the prices.  This leaves the minimum wage earners at "break even" as the best case scenario.

And anywhere that the minimum wage earner shops that's affected by the minimum wage increase, which would be virtually everywhere, would be the same case. 

"but when you run a country with the notion that "deficits don't matter", then you will cause some very bad long term problems.  all of our very naive politicians will then pursue the wrong policies to try to address those bad side effects.  

almost all empires go down the drain because of debasing the currency, too much debt, too many deficits, too much socialism, too much taxation, too much military spending.  etc."

Agree bear.

There are several reasons that people are not concerned about this right now.

1. We've heard the warnings from the financially responsible sources that the deficit and/or money printing would cause inflation and devalue the dollar for a long time and now it's turned into the "Boy that cried Wolf mentality".....and crying "inflation Wolf' is being ignored just like in the fable.

2. There have been some cross current forces that helped keep inflation in check. One of them has been the lack of wages jumping much higher.

3. There has been an over abundance of cheap crude, natural gas and coal, the life blood energy sources for every economy. Cheap energy prices fuel productivity and cheap means without inflation. Every industry is affected by fuel costs as well as consumers. 

4. There are other elements not on the top of my head at the moment that people smarter than me about this understand. 

#2 Minimum Wages are clearly going higher to much higher....going  from suppressing  inflation to supporting it.

#3 is on the verge of flipping from a negative to inflation to being greatly supportive for inflation. This administration is having a war on fossil fuels and they WILL soon impose a carbon tax(99% certain) on all fuels that we use and carbon penalties to industries that emit(just another tax). They are discouraging production(they WANT lower supplies and higher energy prices). This is the absolute recipe for higher energy prices we pay. Every industry in the US will have higher costs and they will pass that increase on to consumers.  This is an almost absolute law in economics. This by itself is likely to cause inflation. 

#1. It's exactly because people have not experienced great inflation in decades, despite the warnings of inflation during that time frame that make it most likely to happen this time. Like with  the Boy that cried wolf................the wolf did come. In this case, when the inflation wolf hits, it will be impossible to stop it. Suddenly, the interest rate on the super duper massive national debt will be crushing..............and the debt will really matter...........but it will be too late to stop the damage.

Here is a calculation of the debt, projecting out with a continuation of low interest rates. 

Imagine if we double or even triple those interest rates(with the raging inflation).

Interest on the National Debt and How It Affects You

Plus Four Ways to Reduce It

https://www.thebalance.com/interest-on-the-national-debt-4119024

Thank you, guys, for the interesting discussions.

One quick comment about the Dollar as the reserve currency of the world…

If I remember history correctly… a long time ago, when the US send its oil people to Saudi Arabia, to help this country develop its oil industry, the agreement was made for Saudi Arabia to sell all its oil in US dollars.

This made It necessary for all oil-importing countries to hold dollars in their reserves.

This is no longer so…. Recently Iran, Russia, China, etc have already conducted oil business (and other international business ) in their own currencies.

We must not underestimate China. Our news tells us about the sabre-rattling in disputed waters, but very little is mentioned of China’s huge advances into LDCs (Lesser Developed Countries)… peaceful advances, be it in So East Asia, or in multiple African countries.

China has become a significant contributor to the economic development in those countries. China builds highways, factories, hotels, apartment buildings all over the world. Take the time and google for images in some of those far-away places. You will be surprised how modern their cities look…. most of it done by China.

Once these countries are obligated to, and connected with China, they will want to keep Chinese currency in reserve.

Add to this the escalating creation of US dollars out of thin air, and we should expect the US dollar to lose its shine and attraction by other countries

Don’t be surprised to see the Chinese currency showing up as the world’s reserve currency, in the not too far future

That’s my opinion… others may disagree

the big reasons why we had very low growth (prior to covid), is because of excessive debt, excessive bureaucracy, etc.  remember, under obama, we had growth of only 1.5 or 2 % .  

in the old days (50's, 60's, 70's, 80's we had growth of 5,6  or 7% y-o-y in between recessions. 

in the 1800's we often had growth of 5, 10, even 12% y-o-y in between recessions.   

if the city has too much debt, then they can only give small raises to their workers.  if the state has too much debt, then they can only give small raises to their workers.  

if i have too much debt, then i cannot ramp up my spending.  

too much taxation is also a drag on the economy.

too much bureaucracy is also a drag on the economy.  

we will have a big bounce out of the covid crash,  then growth will go back down to a very low level.