Theoretically Governments Live forever while their citizens are subject to the restraints of mortality.
There are larger countries on earth than the United States of America in terms of size or population but the United States being the largest and wealthiest county is uniquely set to be an enormous money machine for years and years to come. Every time a commentator talks about leaving your grand-children with too much debt, or deficits that are unsustainable or that the country is spending too much does not mean they know what they are talking about. The whole idea that China will own the US economy even as much as Japan once was said to do so when it hoarded most US treasury notes is absurd. The American people were created by God to be taxed. Property owners in the state of New Jersey happily vote for politicians who have made their state and federal tax rates as high or higher than the residents of New York City who also love paying taxes at exorbitant rates. The going rate at the moment including state , local and federal taxes now is said to average 60% of their income verses something closer to 45% in other states. There is no limit to what voters will trade a sense of entitlement for when it comes to higher taxes in the USA and this is in spite of being a relatively well educated population with more major Universities than any other place on the planet. Tax rates have been higher than 70% including state and local taxes at the top progressive rate in the not so distant past so there is nothing to say the rates cannot exceeded that at some point because Americans seem to love the pain of high taxes with New Jersey , Oregon , and California as living high tax laboratories.
The reason the biggest money machine ever in world history is the USA is for a variety of reasons. The first is that Americans are among the most productive people on the planet and if a tax rate is assessed against productivity which it is in every sense than one has to look out into the future and compound the governments interest in taxing productivity as annual tax year payments. The government can afford to spend wildly in an economy that produces 10-20 trillion dollars worth of products a year in goods and services. What is not taxed this year is taxed next year or there after if there is a deferment process. Retirement funds except for the Roth IRA funds, which are only taxed once at the annual time of deposit, are subject to income taxes each and every year a retiree takes any distribution even in retirement years with the tax rate being considered to be progressive. If one earns less and spend the cash on goods and services the companies providing those goods and services simply collect the taxes for those who may not directly pay by raising prices as necessarily that the tax amount due exceeds their cost in proving the services still leaving some reasonable profit. Many companies whose names are famous survived many years of corporate taxes of various forms and even the highest years of 70 plus percent top rates . This is because of deductions and deferrals which only means that someone else some where in the economy has the taxes passed though for them to pay or that they will have to pay the taxes later.
The government devised 401k plans , IRAs and other tax deferred retirement funds because they know very well they plan to tap the distributions coming out of these plans for taxes as it happens the distributions become taxable and mandatory at a particular age that defines retirement distributions beginning by law. This was no accident. Government let people think they have the security of having retirement funds on the basis that they allow themselves to tax all the distribution at progressive rates later on. That is some cash flow game and something that many of the baby boomer’s are not really yet aware of that might not leave them feeling as liberal as they now think they are once the bill comes due and they realize how much more limited their retirement assets really prove to be in spite of seeing heaping piles of cash value in their retirement statements. As tax rates tend to rise they will find that the government already own more than half their retirement funds and that is a very substantial pot of money even after 40% correction in a stock market crash. As the funds grow so does the government’s interest. Property taxes in states like oregon are at such high rates that eventually the state knows it will own 100% of all property as their interest compounds. Anytime taxes are not paid by a property owner the state can foreclose. One hears little about state foreclosures after the housing bubble busts but it a fact that is not always given much play in liberal newspapers that cast the State governments as the paternalist saviors of the people. States seize plenty of property and thanks to the supreme court that virtually gave them infinite authority to use eminent domain to grab any property for virtually any reason the seizures have really just begun. Once government is given powers it can abuse it definitely will and does. Since property has value that means that the governments can virtually own everything once it feels like grabbing it. If they are printing paper money with wild abandon they can then just go out and buy every bit of property there is forcing people to take ever more worthless currency. The seizure game is on and that is one more reason government will never go broke as long as there is something left to seize for any reason. If the government wants to go in the soft drink business the supreme court really essentially said they can go into that business and then seize both the Coke and Pepsi corporations paying the shareholders “just compensation” unless they take the company because they first bankrupt it the way they took Chrysler corporation and General Motors not to mention the major money center banks after that.
Add to all of this estate taxes and a rate of 50 percent or more and then thanks to the mortality of people eventually the state owns everything. The problem then is if the state owns everything then there is nothing left to tax and the fantasy that government is a great investment house is a complete fabricated myth once you come to realize that the highly subsidized US post office and Amtrak are not supposed to make money but are supposed to loose it and then beg congress for more and more. This only means that once government comes to own seized property or huge piles of money in taxes that it then has to either sell these assets back to people who will pay taxes on them later on or give them away in redistribution programs to buy future votes. The economics of buying votes selling major seized and taxed assets is not something that a giant money machine government is going to like to do compared to selling the properties but easy come to the government still tends to be easy go. Government officials balance their time being Santa Claus to friends and selling properties taken at auctions where they really still practically give them away. Worse though is government taking productive lands and making those lands environmental showpieces that can never ever be used or exported again, at least on paper, till a new administration comes in and changes those rules or sells them outright to fiends or at auction.
When you see the debt clock ticking away trillions of dollars thanks to Washington then you now know that debt is not as bad as you might think it is. Yup some measure the total debt at 80,000 dollars per person and more going up to 300,000 dollars in due 20 years or more. Government officials already know they will print so much money in the future that 80,000 will be reduced to 10,000 in 20 years thanks to inflation which by proportionality Masons 300,000 will only cost tax payers 30,000 which means just 3000 in another 20 years. Beware this 80,000 dollars per capita is not due in just one year or so many months but is amortized annually which really means something like $222 per month with out interest costs amortized into it. Government then will not break the bank as long as they can help keep national productivity high.
There is no other government on earth that can raise trillions of dollars in taxes although the Yen certainly gets bigger number play just because a yen is closer to a penny than a dollar. Astronomical figures are entirely affordable so that the US government can continue wasting all the money it wants for centuries to come just so long as citizens are convinced that government waste is an important service. This is the main reason government is always selling services or proposing to take over health care. It is an excuse to keep the tax money rolling in at ever increasing rates. If the government propaganda just told people the truth that their taxes are 70% wasted on projects that benefit no one other than special interests than people would not vote to be taxed at rates the way the idiots in New Jersey do. Government vocabulary has practically reinvented a number of words to promote public accepting ridiculously high tax rates these include “government services”, “essential services” , “welfare”, “security”, “keeping you safe”, “protecting you” and “saving the earth” as their las test greatest catch phrase to justify ever higher rates of taxation and seizure of private property for special interests and for their own profit.
This money machine is sustainable for a very long period of time and does not need to collapse for as long as maybe 500 years. The Romans money machine kept working but the problem for Rome proper is the emperor moved the treasury to Constantinople and that eventually robbed Roman citizens of everything they thought they collectively shared as Cesarean communist citizens in the last major western money machine. The Roman Money machine at the time of the Empire, transfered the taxation from the Roman citizens entirely to the conquered provinces which is not the imperial nature of the US government at least not yet but it could be if the citizens attempted to stop their being tax slaves for government waste. There is nothing like a good foreign military campaign for booty if the citizens start saying no to government property and tax grabs. There was nothing imperialist about the conquest of Iraq or Afghanistan or the attempted Vietnam conquest because there was no treasure to gain. The united state gets a bad foreign policy name as imperialist when the imperialism is really directed at our own population in unpleasantly high taxes that discourage the kind of growth seen in places like china at compound rates exceeding 10 percent.
China’s growth is somewhat over-rated as the US rate of grow is just subdued by government grabbing. There is no reason to believe that the US economy could not grow at a rate that exceeds the fastest developing countries especially with our higher rates of productivity , greater access to technological tools , computing power exceeding all the fancy minds coming out of all the worlds best universities and American creative genius. There is good reason to believe that the subdued growth rate that does not match China’s is not because the US has grown too big and wealthy as an economy but because of government’s parasitic sucking . In terms of getting an exact number it probably is because of real total taxes exceeding 50% of income and wealth of individuals and families including corporate taxation which translates into a friction rate of as much as 80 % on what productivity might otherwise be. Government administration costs as much as 5 times what administrative costs do in private corporations which is interesting because the Pay Czar under Obama has no interest in limiting pay to inefficient bureaucrats they way they do to private owners or managers hire to run privately owned corporations.
The US is not just the biggest short term money machine on earth but will probably remain the long term biggest money machine. Evidence shows that when governments lower taxes productivity rises and they ultimately can end up with more money thus in the long run taxing at a lower marginal rate. The money machine can be tweaked like a smooth running engine to grow more resources for later taxation. Differed taxation can also expand the money machine. Other countries may be able to complete in the future including Europe as it becomes a united states in its own right with the common market euro government. The Russians , Chinese and Brazilians might also catch up at some point. For the moment and for the foreseeable future the US government will operate the biggest money machine on earth. Fortunately we all get what we pay for which might encourage voters to vote against new new and higher taxes and to think about what government services are really worth paying for. Those who believe in free markets and private property rights verses government taking control of these think this money machine really belongs to the people who are working and not an overlord class of government bureaucrats. We Americans can see how our cities grew with skyscrapers built by industrial leaders who controlled more of their money in the past so as to create their landmark towers. Government tells us that that sort of spending is wasteful and then goes out and builds its own landmarks as far as the eye can see but those are always a service not mere free market waste for the sake of profit.
Who does this greatest money machine really belong to? Right now with over 50% of the US economy belonging to the government it does seem that there is no need for any government deficit spending. The question really is why not limit the growth of government and expand the economy as a service to the American people from our higher base line and create wealth that far exceeds any other country given high rates of real productivity here. There are reasons why Americans can buy Chinese labor goods that cost only 5 dollars a day wages to Chinese workers and why Chinese workers cannot afford US goods not manufactured in Chinese plants. Imagine the US was growing wealth much faster than letting the government spend at a 50% annual compound income rate such that our economy grew at 8-10 percent per year matching or exceeding Chinas then the effective cost of importing Chinese goods would likely fall. We don’t get to see the dynamics until we visit a free port city and see the difference in standard of living that came out of a dirt poor place that Singapore was before it adopted free trade. Taxes have gone up in Singapore but at least there the level of government waste is nothing like the US model. People in Singapore loathe paying taxes for things that are a complete waste of money because they are too busy working hard as savers.
The US government has long been in the redistribution business and the big money machine it control has already made citizens factional slaves as a percentage of their hourly work that goes to pay for the “government services” that are promised. The worker that pays 35% of his or her income is 65% a free citizen and 35% slave. It does not take 35% of anyone’s income to maintain roads, schools and other basic services most citizens agree are actual services. The services provided go way way beyond anything that could be described as basic and many of the services provided are just the way government propaganda mouths off its wasteful practices. The voters who obviously don’t mind becoming 70% wage slaves otherwise they would not have elected the present Obama government that is promising the impossible in new services including lower cost government health care with no cuts to services you already expect to get. There are voters willing to become 99% wage slaves or just the property of the state as actual slaves for the the “services” of getting free health care, and welfare so they can sit at home and watch TV instead of going to work. Why miss Oprah.