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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (6119)	5/6/2006 8:12:24 PM
From: Moominoid	Respond to of 219167

Most of the Federal Budget already goes to transfer payments now.... and will do in the future. This isn't like having a 49 trillion debt now which must be serviced immediately. It is likely though that taxes would have to rise in the future if payments on these transfers rise faster than nominal GDP. Inflation isn't the solution because the initial level of social security for example is indexed to average wages - and subsequent payments are indexed to inflation. OTOH underestimating the CPI does help. My exit plan still is Australia where such benefits and transfers are much smaller and the Federal Government has pretty much paid down its debt. What it is now doing is addressing the unfunded pensions of civil servants by accumulating tax revenue in the Future Fund. Hopefully Australia will keep its relatively investment friendly tax regime and cut the top rate of personal income tax or keep pushing the level where it kicks in higher. We will see what is in the latest budget on Tuesday.