National debt vs ESG & EVs, & the electrical grid

and another thing, tax all income at regular rates, that includes capital gains, George W’s capital gains tax cuts and trumps generous tax cuts to the rich are what has ballooned our debt and you can add George W’s 2 Iraq & Afghanistan wars on why our debt exploded

Climate change relates to EVs and the growth of EVs impacts Transocean. So discussing political ramifications to those subjects is relevant to this board. I addressed deficits and the national debt because it's a problem, and one that could impede funding for the immense cost of expanding the electrical grid pursuant to the energy transition, which, in turn, is pursuant to addressing climate change. I purposely did not discuss political remedies to the deficits and the national debt because that kind of discussion is why we have the nearby O.T. board and I felt that this board was inappropriate for that topic. It's the reason why we conceived the O.T. board when we originally created this forum... to keep this board focused on topics most impactful toward Transocean, and I prefer to adhere to that model.

With the national debt at $34 trillion and the total net worth of rich and wealthy at $43.444 trillion (and that $43 trillion is not cash, it's their corporations and stocks that cannot be readily or economically be sold off)... Here's why higher taxes on the rich will not work and never works. 

Total Net Worth Held by the Top 1% (99th to 100th Wealth Percentiles) -  fred.stlouisfed.org/series/WFRBLT01026

And now this...

1. Money is very fungible now. If taxes on the rich and wealthy become too onerous, they will move it out of the USA.
2. When the government taxes things people buy less of those things and sales drop. That causes unemployment and the government collects less overall.
3. Tax increases almost always result in less tax revenue as it becomes more advantageous to hire experts to hide assets, cheat, and, use loopholes.
4. Tax decreases incentivize... investment, less cheating, and means more money staying in the USA. In fact, lower taxes usually result in more total tax revenue and employment by stimulating the economy. More average Joe's working means more tax revenue.
5. Even a 100% income tax rate on the rich and wealthy would not dent the national debt. Less government spending is the best way to reduce national debt. Not robbing the rich via taxes.



Would Taxing the Rich More Fix the National Debt?


Craig Eyermann • Monday, February 26, 2024 10:57 AM PST

blog.independent.org/2024/02/26/taxing-rich-national-debt/

At more than $34.3 trillion, the fact the national debt is truly a national liability is becoming hard for politicians to hide. Especially since paying the interest owed on the national debt has become the fastest growing major category of government spending.

The same politicians responsible for running up the national debt are now trying to sell their solutions for fixing the nation’s fiscal problems. “It’s easy,” they say. “We won’t ever have to do anything to fix it that will hurt you!” And then they trot out their latest poll-tested proposals. Here are two very common pitches they make:

“We can grow our way out of the problem!”

“We can tax the rich more to fix the problem!”

Both these ideas are political snake oil. The idea that faster economic growth can make the national debt manageable was shot down by recent research. Not long after, so was the idea that only taxing the rich more to fix the nation’s fiscal problems could do the job.

Why wouldn’t taxing the rich more work?

Writing at the Wall Street Journal, Manhattan Institute senior fellow Brian M. Riedl summarizes why proposals to tax the rich are doomed to fail in today’s fiscal climate:

As budget deficits surge toward the stratosphere, Congress will soon have to get serious about savings proposals. Yet reforming Social Security and Medicare—the leading drivers of long-term deficits—remains a political nonstarter. Neither party is willing to raise middle-class taxes. And cutting defense and social spending would save at most $200 billion annually from deficits that are projected to approach $3 trillion by 2034.

That leaves one option: Tax the rich. It won’t be nearly enough.

There are a few excessive tax loopholes and undertaxed corporations that lawmakers could address. It’s farcical, however, to suggest that the tax-the-rich pot of gold is large enough to rein in our deficits and finance new spending programs. Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.

In a study for the Manhattan Institute, I set upper-income tax rates at their revenue-maximizing level, while paring back tax loopholes and fighting tax evasion. As background, the Congressional Budget Office projects that our budget deficits—which currently exceed 7% of gross domestic project—will surpass 10% of GDP over the next three decades. My research shows that the “tax the rich” model would raise at most 2% of GDP in additional revenue over the long term.

Riedl’s argument boils down to elementary budget math. Even if Uncle Sam taxed every “excess” dollar earned by the rich, what it would collect falls far short of being able to fill the budget gap. Without seriously restraining its growth, the federal government’s projected spending will still outpace its revenue by a vast margin.

That’s not the only problem with such a tax policy. But it is enough to discard it as a failure out of the gate. As a policy, it’s something only a snake oil-selling politician can love.

Craig Eyermann is a Research Fellow at the Independent Institute.

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United States net worth brackets for 2023.

Additionally, you'll see average net worth, median net worth, top 1% net worth, and a comparison with the previous net worth data.

Table of Contents show ▼

Net Worth Benchmarks in 2023

Just as with household income, the most important net worth statistics are:

Median net worth

Average net worth

Top 1% net worth

Of these, median net worth is the most important statistic.

Although average net worth is higher than median (at $1,059,470 vs. $192,084, respectively), median is the 'middle point' of wealth. That is, half of households in the United States have more net worth, and half less – average is biased by high net worth households dragging the average upwards.

The numbers in these sections are nominal – they are not adjusted for inflation (later sections are, however).

Note: This data comes from the Federal Reserve SCF, released October, 2023. It comes from interviews mainly conducted in 2022. 25% of interviews were conducted in 2023.

What was the median net worth?

In 2023, $192,084 was the median household net worth in the United States. This is up from $121,411 in 2020.

What was the average net worth?

The average household net worth in 2023 was $1,059,470. It was $746,821 in 2020. See the inflation adjustment, below.

What is the top 1% household net worth?

To be top 1% in 2023, a household needed a net worth of $13,666,778. $11,099,166 was the 1% threshold in 2020.

What is the top .5% net worth? What is the top .1% household net worth?

To be top .5% in 2023, a household needed a net worth of $20,149,352. The top .1% bracket started around $61,827,166.

Note: up here, net worth estimates have a much larger error. Think on the order of +/- two million dollars for the .1% bracket. There is less survey data to inform the stats (although it's not bad – the survey does oversample likely high wealth households).

Selected United States Household Net Worth Percentiles for 2023 and 2020

2020 vs. 2023 net worth breakpoints in the US, with inflation adjustment.


The most recent data is adjusted for CPI-U-RS [PDF] as detailed by the Fed. To do the inflation math versus the previous data, multiply 2020 dollar amounts by 1.1592.

Household Net Worth Percentiles for the United States in 2020

Below is every household net worth percentile in 2023, compared to inflation-adjusted 2020.

Percentile     2023     2020     Difference   Change

1% - $76,472.00 -$109,563.55 $33,092

2% - $45,428.00 -$63,602.13 $18,174

3% - $26,450.00 -$41,423.80 $14,974

4% - $14,983.00 -$30,065.29 $15,082

5% - $9,878.00 -$21,313.72 $11,436

6% - $4,381.00 -$13,824.69 $9,444

7% - $831.80 -  $8,658.63 $7,827

8% - $1.00  -   $4,446.27 $4,447

9% - $182.20 -$2,124.09 $2,306

10% $440.20 -$540.86 $981

11% $990.20 $3.98 $986 24804.08%

12% $2,552.00 $206.57 $2,345 1135.42%

13% $4,056.00 $582.43 $3,474 596.39%

14% $5,208.00 $997.98 $4,210 421.85%

15% $6,532.20 $1,828.28 $4,704 257.29%

16% $7,726.00 $3,005.57 $4,720 157.06%

17% $9,256.00 $4,001.60 $5,254 131.31%

18% $10,370.40 $5,193.71 $5,177 99.67%

19% $11,810.00 $6,234.61 $5,575 89.43%

20% $13,528.00 $7,382.19 $6,146 83.25%

21% $15,600.20 $8,535.73 $7,064 82.76%

22% $18,022.20 $9,866.87 $8,155 82.65%

23% $20,716.00 $11,231.67 $9,484 84.44%

24% $23,310.00 $12,493.09 $10,817 86.58%

25% $27,016.00 $14,408.98 $12,607 87.49%

26% $30,316.20 $16,458.08 $13,858 84.20%

27% $34,242.00 $18,617.90 $15,624 83.92%

28% $39,436.00 $20,989.19 $18,447 87.89%

29% $44,734.00 $23,579.15 $21,155 89.72%

30% $51,366.00 $27,467.96 $23,898 87.00%

31% $57,040.00 $31,588.28 $25,452 80.57%

32% $62,600.20 $35,928.65 $26,672 74.23%

33% $67,500.00 $42,175.13 $25,325 60.05%

34% $73,120.20 $47,082.79 $26,037 55.30%

35% $79,054.00 $52,258.85 $26,795 51.27%

36% $84,256.00 $58,434.33 $25,822 44.19%

37% $89,534.00 $64,229.63 $25,304 39.40%

38% $96,524.00 $69,023.35 $27,501 39.84%

39% $101,964.00 $73,150.04 $28,814 39.39%

40% $110,314.00 $78,210.15 $32,104 41.05%

41% $117,810.00 $83,233.43 $34,577 41.54%

42% $125,686.00 $87,868.97 $37,817 43.04%

43% $132,632.00 $93,207.42 $39,425 42.30%

44% $141,164.00 $97,845.99 $43,318 44.27%

45% $147,316.00 $103,804.45 $43,512 41.92%

46% $155,908.00 $110,104.53 $45,803 41.60%

47% $164,132.00 $116,603.53 $47,528 40.76%

48% $172,168.00 $123,264.12 $48,904 39.67%

49% $181,562.00 $132,374.65 $49,187 37.16%

50% $192,084.00 $140,740.06 $51,344 36.48%

51% $202,106.20 $147,735.90 $54,370 36.80%

52% $212,562.00 $155,573.60 $56,988 36.63%

53% $223,554.00 $164,167.82 $59,386 36.17%

54% $238,034.00 $173,913.48 $64,121 36.87%

55% $250,380.00 $183,652.59 $66,727 36.33%

56% $261,644.00 $194,130.85 $67,513 34.78%

57% $274,944.00 $202,794.81 $72,149 35.58%

58% $288,614.00 $211,090.39 $77,524 36.73%

59% $298,884.00 $222,484.91 $76,399 34.34%

60% $312,622.00 $233,360.13 $79,262 33.97%

61% $327,622.00 $244,703.29 $82,919 33.89%

62% $347,520.00 $254,335.13 $93,185 36.64%

63% 366,448.00 264,950.46 $101,498 38.31%

64% 384,910.00 276,252.96 $108,657 39.33%

65% 402,800.00 288,800.11 $114,000 39.47%

66% 415,460.00 301,562.41 $113,898 37.77%

67% 429,190.00 315,157.59 $114,032 36.18%

68% 447,958.00 334,427.04 $113,531 33.95%

69% 468,284.20 350,078.23 $118,206 33.77%

70% 493,068.00 365,055.97 $128,012 35.07%

71% 521,000.20 380,933.26 $140,067 36.77%

72% 551,988.00 404,981.00 $147,007 36.30%

73% 587,968.00 424,173.51 $163,794 38.61%

74% 622,546.00 443,871.17 $178,675 40.25%

75% 658,340.00 467,486.30 $190,854 40.83%

76% 697,576.00 496,859.82 $200,716 40.40%

77% 743,564.00 528,143.96 $215,420 40.79%

78% 785,484.00 562,417.04 $223,067 39.66%

79% 836,944.00 607,334.44 $229,610 37.81%

80% 891,750.00 647,053.48 $244,697 37.82%

81% 947,453.00 685,494.02 $261,959 38.21%

82% 1,009,860.00 738,468.50 $271,392 36.75%

83% 1,078,294.00 790,322.17 $287,972 36.44%

84% 1,154,634.00 854,472.96 $300,161 35.13%

85% 1,234,848.00 921,817.69 $313,030 33.96%

86% 1,308,426.00 991,010.22 $317,416 32.03%

87% 1,399,334.00 1,076,509.41 $322,825 29.99%

88% 1,510,942.00 1,148,986.00 $361,956 31.50%

89% 1,693,542.00 1,258,856.33 $434,686 34.53%

90% 1,920,758.00 1,413,211.39 $507,547 35.91%

91% 2,157,988.00 1,571,026.97 $586,961 37.36%

92% 2,382,960.00 1,787,377.41 $595,583 33.32%

93% 2,692,160.00 2,048,897.78 $643,262 31.40%

94% 3,088,722.00 2,411,796.58 $676,925 28.07%

95% 3,779,600.00 2,995,523.80 $784,076 26.17%

96% 4,699,180.20 3,818,855.14 $880,325 23.05%

97% 6,150,980.00 5,379,387.17 $771,593 14.34%

98% 8,464,740.20 7,600,900.82 $863,839 11.36%

99% 13,666,778.00 12,866,153.31 $800,625 6.22%

To read the chart: a dollar amount is the "threshold" between net worth brackets. More (or equal) wealth would go into the bracket shown, less would slot into the percentile right below.

////////////////////////

Note these numbers below are billions and trillions. The National debt is $34 trillion. 

And n ow this...

www.forbes.com/forbes-400/

The wealthiest people in the U.S. are as wealthy as ever—and the cutoff to make the list now stands at a record-tying $2.9 billion.

America's superrich are riding high again. After losing a collective $500 billion last year, the nation’s 400 wealthiest people have gained it all back. This elite set is now worth $4.5 trillion in aggregate, tying a record set in 2021, and it takes $2.9 billion to make The Forbes 400, another tied record. Half the gains came from rebounding technology stocks. Eight tech moguls added $10 billion or more to their fortunes. One name you won’t see: Donald Trump. The ex-president’s fortune fell 19% to $2.6 billion.

Net worths were calculated using stock prices from September 8, 2023.

Hotshot Wharton professor sees $34 trillion debt triggering 2025 meltdown as mortgage rates spike above 7%: ‘It could derail the next administration’

Story by Eleanor Pringle • 1d
www.msn.com/en-us/money/markets/hotshot-wharton-professor-sees-34-trillion-debt-triggering-2025-meltdown-as-mortgage-rates-spike-above-7-it-could-derail-the-next-administration/ar-BB1jfnRI

Among the illustrious nameplates adorning the offices of Ivy League business schools is one Joao Gomes. A Wharton Business School finance professor, Gomes is issuing a warning cry many of his peers so far have chosen to ignore: America's burgeoning public debt mountain.

Professor Gomes is what some might call up-and-coming: He was appointed senior vice dean of research in 2021, adding University of Pennsylvania's Marshall Blume Prize to his CV in 2018.

But the fresh-faced expert isn't afraid to step away from the pack if it means pushing presidential hopefuls for some answers. Gomes admits he's "probably" more worried than his colleagues about government debt, but refuses to stay silent on a broiling issue he believes will throw the global economy into disarray.

Gomes predicts America's $34 trillion debt burden may upset the world's financial markets as early as next year—should a president-elect announce a raft of expensive policies.

And remember the UK's mortgage meltdown following a disastrous premiership under Prime Minister Liz Truss? That's on the cards as well, as Gomes said rates could spiral to 7% "or higher" if the topic is swept under the rug by Washington.

The warning isn't chiming alone. Since the beginning of the year an increasing cacophony of alarm bells has been ringing out: JPMorgan Chase CEO Jamie Dimon says there will be a market "rebellion" over the issue while Bank of America CEO Brian Moynihan says it's time to stop "admiring" the problem and instead do something about it.

This fear is echoing outside of Wall Street, too. The Black Swan author Nassim Taleb says the economy is in a “death spiral,” while Fed Chairman Jerome Powell says it’s past time to have an “adult conversation” about fiscal responsibility.

But despite this, presidential candidates likely won't be getting on stage with promises of how they'll wrestle down the debt-to-GDP ratio to a more palatable figure (experts are currently predicting it will reach 190% by 2050.)

"I wish it was a big issue but I'm not sure it's in the interest of either party to make it a big issue," Gomes told Fortune. "As we discuss promises about: 'What we're going to do with tax and programs' it's going to be important to put it in the context of: 'Can we afford that?'"

"It's a really obvious moment in history for us to say: 'OK, what are our choices, what can we feasibly do, who has the better plan?' I suspect neither party is interested in that and it might all be pushed under the rug."

Indeed, while one party will have to make some unpopular decisions to tackle the issue, it's a problem created by both of them. Bank of America Research's Flow Show team, led by investment strategist Michael Hartnett, calculated in February that the deficits run up under the tenures of Presidents Trump and Biden are the greatest since Franklin D. Roosevelt in the 1930s.

Trump and Biden both dealt with a crisis-struck economy trying to navigate a global pandemic. FDR, of course, was firefighting the Great Depression and then oversaw the American entry into World War II.

Gomes believes that irrespective of who contributed to the mess, one party is going to have to shoulder the responsibility for unpicking it: "Toward the latter part of the decade we will have to deal with this."

"It could derail the next administration, frankly. If they come up with plans for large tax cuts or another big fiscal stimulus, the markets could rebel, interest rates could just spike right there and we would have a crisis in 2025. It could very well happen. I'm very confident by the end of the decade one way or another, we will be there."

Warning signs

As with any financial crisis, there will be warning signs when the national debt comes home to roost—though for consumers and markets this realization may not happen in synchrony.

At a policy level, Gomes believes, this will be when the parties buying debt decide the model is simply no longer sustainable. This could even be triggered by government policies announced early in the next administration, which in turn will spook a market seeing a hefty price tag attached.

“The most important thing about debt for people to keep in mind is you need somebody to buy it,” Gomes told Fortune. “We used to be able to count on China, Japanese investors, the Fed to [buy the debt]. All those players are slowly going away and are actually now selling.”

America’s ability to pay its debts is a concern for the nations around the world that own a $7.6 trillion chunk of the funds.

The nations most exposed are Japan, which owned $1.1 trillion as of November 2023, China ($782 billion), the U.K. ($716 billion), Luxembourg ($371 billion), and Canada ($321 billion).

“If at some moment these folks that have so far been happy to buy government debt from major economies decide, ‘You know what, I’m not too sure if this is a good investment anymore. I’m going to ask for a higher interest rate to be persuaded to hold this,’ then we could have a real accident on our hands,” Gomes said.

In this case, Gomes believes America would see something of a Liz Truss-like implosion. In 2022, the British MP backed a mini-budget featuring a raft of fiscal stimulus, spooking the City to the extent that the pound spiraled to its lowest value ever against the dollar.

After the shortest premiership in British history, Truss was promptly ousted, but not before leaving a legacy: British mortgage rates increased by approximately 2% in a matter of weeks.

And following this trend, mortgages—a cornerstone of Western economies—are precisely where consumers will start to feel the heat. When mortgage rates go above 7% is when consumers will start pushing for change, said Gomes, adding that if policymakers don't take steps now the public will be back to these rates, "if not worse."

Avoiding exposure

The good news is, there are a couple of ways to avoid this crisis. The bad news is, nothing at all needs to happen for government debt to become the economic issue of the next decade—and it'll be pretty unavoidable once it gets here.

And if you're wondering how much debt the government would need to recoup per person, it's not pretty: current estimates are that it's over $100,000 for each individual.

The route to avoiding this problem sounds simple: After all, if the debt-to-GDP ratio is what's got everyone so concerned, just upping the second variable will rebalance it, right? Yes, but it means growing the economy pretty swiftly, and few are convinced America can do that.

The second solution is unpopular, but may be the only alternative the government is left with: Cutting spending. "Responsible budget proposals" may suffice to stave off any market upset, Gomes said, while "imposing major cuts on some programs ... opens a Pandora's box of social unrest that I don't think anybody wants to think about."

If markets do indeed rebel across the globe and throw the world's largest economy into disarray, the ripple effects will be felt across borders. Unfortunately, Gomes believes there will be no avoiding it: "A government that runs into funding difficulties, that cannot convince investors to fund its debt, that government is going to probably have to raise taxes. There's no way you can protect yourself from that.

"Any exposure you have, whether it's mortgages or loans, is really hard to avoid in any dimension. It's bad across the board for the country but it's hard to avoid exposure wherever you live in the world."

This story was originally featured on Fortune.com