>Budget hawks have fretted for decades about America’s deficits and debt
These republican budget hawks were only hawks when Liberals were in power. They were all for blowing huge holes in our budget if it meant tax cuts for the rich.
Trump is now responsible for 25-28% of all US debt. Those budget hawks were no where to be found during his two presidencies. Total hypocrites.
As far as Bidens cheif economist and the rest of the liberal economists, I remember not too long ago when ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever. Yes, all those idiots said this.
I've come to the conclusion that most of this debt is just one big transfer of wealth from the middle class to bondholders, which mostly belong to the rich.
Both parties are in on this. And when things get really bad, the rich will just leave.
In fairness, Biden economists were correct. When you run deficits to spend on infrastructure, healthcare, education (all the things that make your populace healthier and more productive and Biden was doing) in the long run you are better off. When you spend like Trump administration on tax cuts and corruption then it is a terrible way to go into debt
A simple example from my household. Tariffs were waved on ebikes. And Biden provided rebate funds on ebikes. We were able to get three bikes for less than a single car payment. They are a car replacement. We still have a car, but last year we used just 3 tanks of gas. This year still on the first tank. A car that is driven 90% less will last 10x as long, will need 90% less maintenence, and is eligible for a low mile insurance policy. Our transportation budget has gone from $900 a month to $900 a year. That allowed us to grow our business and spend an additional $9900 a year in the local economy. We pay more taxes and our additional local spending circulates 5 times as it moves from hand to hand. MAGA mentality sees that as a handout, completely disregarding the positive effect on the economy. Its not just the big projects like bridges, deep water ports, and roads. Its making education more effective by making sure kids arent hungry all day. Its realizing that its cheaper to subsidize health care than to have desperately sick people use the emergency room.
I hate to be that guy, but you're incorrect on your car's lifespan and maintenance.
If you're driving that little, it can actually be quite detrimental to your car's drivetrain and overall health. It certainly won't last longer, and in theory, only saves on what would be considered regular maintenance.
No argument on the initial economic side, at least in theory, but something to consider. Cars generally don't like being driven too little as odd as that may sound.
Yup.
Many years ago I didn't change the oil as it was well below the mileage - but there is also a timelimit as I found out when the engine eventually seized. I also only drove it very short distances during which the various engine systems probably never got hot enough for the oil to properly circulate and mix.
Exactly! It's similar with tires. Most people don't know that they should be replaced after 6-8 years. I've purchased several modem collector's cars with 20+ year old tires on them.
Yes, besides the mechanical stress and strain, the oxygen in the air (and water) and sunlight react with almost everything earlier or later which may significantly alter their various properties.
Oils and fats get rancid, rubber and plastic mushy and brittle, colors fade etc.
Temperature dependent.
Whenever possible keep stuff cool/cold/frozen, dry (or properly lubricated), sealed from air/oxygen and protect from (sun)light.
And be realistic that stuff that cannot be always and fully protected needs to be changed, e.g. cables and hoses. And oil.
Biden/Harris/the Dems also would have raised taxes on the rich if they had the chance.
If you follow the economic path from the Great Recession through the Trump admin you can see just how stupid his tax cuts were.
Tax cuts can be genuinely helpful during economic downturns, but when the economy is doing well you should prioritize balancing the budget instead of pouring gasoline onto the business cycle.
Trump was handed a decent Obama economy in his first term yet signed the Tax Cuts and Jobs, which strongly slashed taxes all the way through 2025 and was horrible for the deficit.
Then when the economy tanked at the end of Trump's term, fiscal stimulus was needed for recovery and a lot more deficit spending was understandably passed.
Biden didn't have a Congress that was willing to repeal the TC&J Act and he was pretty much stuck with the low rates. By the end of his term, the economy was once again decent and it would have been a perfect time to let the tax cuts expire and work towards a more balanced budget.
Once again we elect Trump and instead of doing anything about that, he once again idiotically restarts the massive tax cuts despite it not being a recession. And once again he is blowing up the deficit.
Democrats shouldn’t have to hike taxes during periods of economic weakness just because republicans are poison. The debt isn’t good for the country but neither is that.
> When you run deficits to spend on infrastructure, healthcare, education (all the things that make your populace healthier and more productive and Biden was doing) in the long run you are better off
Only with a multiplier greater than 1 and most of our spending is not. Health and tertiary education are particularly bad, they are important for other reasons but trying to argue them on a fiscal perspective is not supported by evidence.
Congress is terrible at picking good spending. Now that we have almost no high multiplier projects left they accidentally get it right very rarely.
Yeah you are dead wrong buddy on education especially. It is 2:1 income for every dollar govt spends. On healthcare, especially preventative care it is higher because your populace doesn’t get sick
K-12 has a high multiplier (4.3, the highest of any spending we do), tertiary does not. Most of the benefits for tertiary are individual which is why public tuition funding is poorly supported; it's a regressive transfer.
Healthcare spending outside of childhood has a much smaller impact then you think it does. Basic preventative care has a relatively high multiplier, more advanced care does not because it's benefits accrue mostly towards the end of life when you are no longer part of the labor force. Personal health investments like diet and exercise have larger individual returns then pubic spending does too.
There are many real and sensible ways to argue the government should spend on these services. I'm not sure why you feel the need to make it a fiscal question when it's not.
Our healthcare system is among the worst for preventative care among developed nations and the data is clear on spending money to fix it. As incomplete as it is, Obamacare was putting on us on a path to better outcomes. The government should absolutely continue running deficits for a healthier populace.
On education, yes spending money on tertiary education has a good ROI making it worth running a deficit. Maybe not as good as primary but its high. There is a strong college wage premium not to mention that higher taxes they pay back into the system via higher wages. This then feeds into better health as college educated populace has better access to healthcare which feedbacks on itself positively
Healthcare - every dollar you spend on healthcare the government gets more than one dollar back via economic activity and government revenue
Education - You spend $1 improving education inclusive of tertiary, you driving higher incomes with your populace, more economic growth and higher tax revenues aka you get back more than $1
What is the multiplier for higher eduction then, the other commenter said 2 and you just said no. Additionally, does the care take into effects such as removing others from work? For example, my mom had to take care of my grandma when she got Alzheimer’s, and she had to leave her job in order to do that.
0.27 for universal funding as it don't induce a productivity improvement, you don't cause people to earn more as they would have got the degree anyway. Specific types of funding (eg pell grants) are relatively high as you are inducing an income gain that wouldn't exist otherwise.
Institution and research spending are higher still and likely higher than we can measure as they cause positive spillovers.
Universal funding can be above one but requires a differently configured tertiary system.
My favorite example is Germany which ties university availability to labor demand projections and there isn't an automatic route to university (eg if you want to study something with low future labor demand but lots of people want to study the same thing it's highly competitive, not just in terms of school but ability to study it). They also use the three secondary tiers to better prepare secondary students for work or future study.
> Additionally, does the care take into effects such as removing others from work?
It's spending based so not included. LF effects of home healthcare are measured separately though, CPS actually includes questions about it and surveys like ATUS includes it.
> For example, my mom had to take care of my grandma when she got Alzheimer’s, and she had to leave her job in order to do that.
Which is bad and a great example of why spending shouldn't only be bound to fiscal multiplier considerations.
Being out of the labor force for a long time causes terrible outcomes for people.
US has the lack of public services, the labor force shortage and the demographic catastrophe occuring all at the same time. I'm not sure how we are going to function in a decade.
I’d imagine the education part would also free up income to be spent elsewhere with lower student loans despite not increasing productivity. Esp if it’s effectively a wealth transfer from the wealthiest since lower and middle income people spend a larger amount of their paycheck it’d probably spur the economy a little
Luckily I am a beneficiary of the Germany higher education system and my masters is $0 tuition (tho they still have a semester fee but that includes things like public transportation which I would’ve gotten anyways and would’ve been more expensive on its own)
Well, with anything, there are strengths and weaknesses to different strategies. And again, not saying the US has a better higher education strategy than say, Germany, but they have different strengths and weaknesses, and produce different outcomes.
Germany has a very effective structure, but then if you need to move outside of that structure, it tends to be pretty terrible. IE, innovation, and the funding for it, tends to be limited. An easy example would be that funding for innovation in an engineering industry is going to happen a lot easier/faster than say, innovation for a designer handbag. Also, it's significantly harder to get structured support in Germany if you don't jump through specific hoops (IE, people won't talk to you if you are not "credentialed" properly) So innovation from adjacent spaces tends to be muted.
Germany arguably has a much better education-to-labor pipeline than the US does since it's structured to do so. The US has at least 50 different education systems, since most of the control comes from local governing bodies, and not the federal government.
So the US has basically shifted investing from education, into the private sector, with the philosophy that a thriving private sector will be more effective at creating more/better jobs, that will incentivize people to become more highly educated, versus spending more on the education and having companies move there because of a higher educated workforce. Kind of a chicken-egg argument. Do companies move to where the best workers are? Or do workers move to where the best companies are? And both can be true to an extent at the same time.
But....it can definitely be said that if a company wants to earn more $$, it's almost always going to want to be located in the US, over a country like Germany. Which is why capital intensive innovations just don't really happen in Germany/the EU at large.
I just want to point out that it depends on what factors you are using to calculate a given "multiplier", as well as what fiscal cycles you are tracking, etc. Some investments have short term outcomes/benefits, versus medium, versus long term. So any tracking model/equation will have it's own limitations.
End-of-life healthcare for example, will have a lower multiplier from a purely economic perspective. So theoretically, if we just killed retired people actively or passively (just denying them healthcare is a more passive mindset), it's overall better for the economy since we can then take those $$ and put them into keeping more economically productive people healthier. But, also understand that in economics, there is a HUGE psychological component that is normally not addressed through pure fiscal speculation. IE, would someone work hard over their life, and look forward towards retirement to begin with if I knew that their society was going to just let them die? So, you could save money by literally killing people off, but then you may have an economic impact by affecting the psychological basis for why productive people are working to begin with.
Tertiary education has a solid impact for a variety of reasons, since the benefits of having a more educated/innovative workforce and the societal structures to capitalize on that workforce have huge multiplicatives (more innovative companies, companies locating there to employ the best workers, etc.) more educated adults also become the primary educators for their children, so having the time/knowledge to teach offspring is a very high correlate towards student success.
The reason I am actually kinda interested in having this discussion is that I genuinely think having learning systems throughout life is has significant economic advantages, and I'm currently learning how to effectively discuss that. How DO you factor in these psychological components mathematically?
Ignoring your multiplier estimates - the other commenter touched on that - you're not entirely right. Interest rates on government debt are - generally - below inflation. Thus you don't even need to break even for it to be "paid off."
This isn't to say you can infinitely take on debt without consequence - it can become crippling eventually - but the true cost is generally much lower than it appears.
We’re in the economics subreddit, and you’re really trying to say the fed interest rate is always higher than inflation? Current rates and 2022 disprove this.
Yes. You understand that factors in all debt the government holds that has not yet matured, some nearly 30 years old right?
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=202606 are the current yields.
My mortgage rate is 2.25%, that doesn't mean I can get a new mortgage with that rate.
Yeah, I absolutely understand. I feel like maybe we're talking about different things.
I'm simply saying that the cost of the debt is generally lower than it looks at first blush, because it's often below inflation. The exact same logic applies to your mortgage.
I explicitly noted that that does NOT mean it's always okay to borrow.
Except they weren't correct because we didn't actually do anything to improve the regulatory environment for the entities that actually create all those things so we just ended up with inflation.
I appreciate your argument here, and mathematically it makes sense.
I’d be curious for evidence of which debt avenues in fact achieve this.
I would imagine, off the top of my head, that the main drivers of our structural debt - social security, medicare, and medicaid - do not present such a positive return although I’m open to being shown incorrect.
I am particularly interested in how entitlement programs for retired Americans who are out of the workforce could possibly offer such a return.
> healthcare, education (all the things that make your populace healthier and more productive and Biden was doing)
Not if that healthcare is going to very old people or people that retired early and could only afford to do so because now they were getting heavy subsidies from the ACA. There is a moral argument involved (we can have that debate) but from an economic point of view that isn't making the populace 'more productive'
The devil is in the details. Many stories of covid "education" funds being used to refurbish athletic facilities, give employees salary bumps, and other things that the money wasn't intended for. https://www.mackinac.org/32063
Then there were the PPP loans. Every scammer in the country seemingly got some.
> to spend on infrastructure, healthcare, education
That's true when the money is actually being used to build infrastructure, healthcare, and education; instead of the majority of that spending going to private contractors.
Biden's infrastructure bill put lipstick on a pig
Spending on healthcare with insurance companies is lipstick on a pig
I mean I am all for taxing the rich more but this isn’t a great argument for why. Even social security is funded by debt. If you want to use this logic, it can be used for anything on the spending side as well.
Is definitely a good argument, social security is a common good and is exactly what the government is for. A tax cut for the rich is just funneling money for the top and increasing inequality.
So there is your argument. That it’s a common good.
If you get focused on the debt, then you have just argued against SS.
Because the spending is so out of whack, that even if you taxed every dollar earned over 500k, it still wouldn’t balance the budget.
Taxing the rich appropriately is important, but if you are worried about the deficit, and you should be, then that is a totally different animal far larger than just taxing the wealthy. Which is in itself a huge problem.
I'm not sure that logic holds. The argument in the article and being made here is that tax cuts substantially increased the deficit. So reversing those tax cuts would logically shrink the deficit then... No?
Sorry I meant debt. It may make a small dent in the deficit. But it would far from balance the budget. We would still be going further into debt incredibly fast. In order to balance the budget we would need to cut social spending AND raise taxes on the working class. As well as tax the rich fairly and effectively.
Social Security is not funded by debt. It’s funded by social security taxes and drawing on the Social Security Trust Fund to make up the deficit. The Trust Fund is made up of the previous surplus of the taxes.
This is just an accounting trick. The truth is if the social security fund did not need to be funded with previous surpluses, it could have gone to balancing the overall debt. This is the same trick people do when they come across a windfall and label it “vacation money” instead of paying off their debt with it, which is what they should do with it.
Just because you label that money doesn’t mean it couldn’t be put to better use.
I mean yes we are talking about a legal matter. Of course we are talking about legal things. Thst goes without saying. And laws can be changed. By the same group of people.
If laws were changed, then we could have more money going against the debt. This is just a fact.
not before they've bled us dry. The three biggest IPO's ever imagined are coming up this summer, and it's hard to see that as anything other than bleeding us dry, as all three are about 90% fairy-dust and lies.
“ As far as Bidens cheif economist and the rest of the liberal economists, I remember not too long ago when ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever. Yes, all those idiots said this.”
Anytime anyone says all of anybody said anything extreme my BS detector goes off and this is no different. Biden routinely bragged about cutting the deficit (usually politely ignoring that it was mostly the end of the pandemic and economy that was closing the budget gap).
Berstein (this guy) didn’t say that debts didn’t matter, rather he was a deficit dove in the sense that he believed low borrowing costs made debt driven investments make sense
> I've come to the conclusion that most of this debt is just one big transfer of wealth from the middle class to bondholders, which mostly belong to the rich.
don’t bonds tend to do worse in a ballooning debt, high inflationary environment compared to just normal shares?
Its also that this statement you quoted is flatly illogical. Transfer of wealth either means that there is no debt to begin with and this will not show up in economic data, or its the rich owing the middle-class money, which doesn't make sense.
I get people hate on Trump, but this sub has bee increasingly filled with moral/political claims with no economic literacy.
I think when you are born in a system where there was already a transfer from the rich to the middle class, that taking action to return the money to the rich and cut the transfers to the poor and middle class can be seen as a wealth transfer. If that's the case, as long as we understand what is meant, I don't think it's a problem.
There is also the idea that deficits ultimately create inflation, or at least create upward pressure on prices rather than downward pressure. So, when the government doesn't collect the money and instead prints it as IOU's, then the poor and middle class feel squeezed as they don't own the assets that hedge against inflation.
It's certainly a complex thing, but I feel like listening and understanding what we each mean is a lost art that is due for a reawakening. We have to learn to hear, interpret, clarify, and respect each other before we can make the proper long-term decisions that actually get to the core of the US debt problem.
> ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever
I mean, they weren’t entirely wrong but it was a different situation. Debt was less concerning when interest rates were near zero and nominal GDP growth was strong. As rates rose and deficits remained large, debt sustainability became a more serious issue
Perhaps there’s a lesson to be learned here that high borrowing at low interest eventually leads to higher interest rates as the debt and servicing costs mount…
I’m fairly sure this was something Keynes figured out a century ago.
I have my own theory on this. Both parties know the debt is a problem. Both parties also know how to fix it, we have fixed it before. In the 1950's we had a huge debt and we paid it down quickly by leveling high taxes on rich people, this was however greatly aided by a rapidly growing economy. To fix it this time will require both leveling high taxes on the rich _and_ some amount of austerity, and even this may not be enough to avoid high inflation from the debt. Basically solving the problem would make the party in power _very_ unpopular, very quickly, so both would like to blame the other party.
Who said “our debt and deficits don’t matter”? When did they say that?
This is just a classic right wing apologist line that is entirely unsubstantiated by reality. There were some MMTers saying that, but they were never mainstream in any Democratic administration or among liberal economists.
Raising taxes to curb the effect of profligate spending is less efficient (due to the cost of servicing debt) than simply reducing deficit spending from the get-go.
It seems like chasing a dragon that you will never catch.
There's that too! MMT is being used as a post facto excuse to spend more money. It's utter insanity when you have a 39 trillion dollar debt ($357k per taxpayer! I like to include that number because people have mo concept of 39 trillion). In fairness, MMT advocates seem to have backed into the bushes since inflation has come roaring back.
Imagine arguing for essentially unlimited deficit spending and only a few years later we all witness the inherent flaw of their logic as the cost of servicing our debt exceeds our entire defense budget.
Let’s hope MMT is relegated to the dustbin of history. Shame on all those who fell for it - and that includes the so-called professors who brainwashed an entire generation on this gibberish.
How on earth did he manage to accrue all this debt? I still don't understand how after cutting every service and firing nearly every government worker he still managed to take on more than a trillion in debt. How? Make it make sense
He didn’t even come close to firing nearly every government worker lol. The government lost 8% of its employees, mostly through attrition (retirements/early retirements). Firings made up a tiny fraction of that 8%.
One way to look at it is in terms of the USD as global reserve currency, leading to ever widening deficits. Then surplus countries with large and persistent underconsumption export their domestic problems to the US, causing more deficits.
I.e. contrary to all the anti-Trumpian trumpeters here, the issue is one of global trade imbalances, not governance.
They don't have to leave. The financial repression playbook has been played in the US before. This issue is the core reason behind the k shaped economy.
It doesn’t. You are responding to a nonsensical Reddit argument.
Everyone who wants to see their money grow invests in the stock market and maybe other ventures like real estate, which offer a return that actually exceeds inflation.
Didn’t Clinton have a 20 year plan to erase the debt? I remember that even in his term, it was already working until bush got into office. Then, the GFC Obama had to spend to get out of recession but even he started to balance the deficit. It kind of seems like one party is significantly more responsible.
Sure although Larry Summers was there for some reason. I do think it is important for context there at times. I know with Obama and interest is low than spending to help the economy is probably something you can write off.
That said the GOP also said every bit of spending would cause hyperinflation if they didn't like ittoo.
Why would the rich leave? Gated communities for the rich, private jets and luxury yachts for travel. Even if the entire country turned into a ghetto, would they care?
The rich can't just leave, capital flight is a bit of a myth and there's recent studies exposing this.
Capital isn't just free cash they move overseas with them whenever they feel like it. Capital is companies, infrastructure, buildings, office, staff that can't be relocate on a whim.
Most billionaires and millionaires own companies, they can't just liquidate on a whim and run off with the bag, or they lose most of their wealth. Especially when they all trey and do it at once. That's called a stock market crash.
The Dems and Pubes were both ALLL ABOARD when they were handing out the PPP, CARES, and IRA money. They were BALLS TO THE WALL when it came time to “fix” “nobody wants to work” with throwing the borders open for low paid workers instead of legislating higher minimum wages. They would rather throw money at foreign theocracies and health insurance companies instead of using the trillions to fix healthcare and raise taxes on the top 10% of earners in order to cut the wealth gap. Our entire country is fucked by lawyers and there is no mechanism or will to unfuck it. America is a nation of dumb, self-indulgent children and I can only imagine the tantrums when eventually economics forces it to metaphorically go to bed with no supper or tv.
Since 2020 and beyond, it has been one big wealth transfer.
What you've seen in the past few years is the greatest price squeeze of a generation that you'll ever see. You ever wonder why most Millennials can't get ahead in life (family family planning, jobs, housing, etc), its because of the Great Price Squeeze. I'm calling it the GPS at this point and am surprised no economist hasn't phrased that term yet.
This is going to have long term downward consequences. Less kids are being born, less people buying homes, less people moving jobs. What is going to happen in 20 years, for Millennials, is going to be the GPD or the Great Price Drop. The markets will slide from our meth like highs with AI. It's not going to be immediate but its going to be a downward spiral.
Essentially, what I am predicting, is that there will be a oversupply of homes in 20-30 years. The economy will be smaller. The debt owed will be much greater. Its a population time bomb. Less younger people and much more older people. The pyramid is inversed. Who is going to pay into SS? Who is going to support old people? Who is going to support the military?
Don't worry, you're current politicians know this and will be long dead before these big issues arise.
Belt tightening is going to be need. Programs fundings will be slashed. Healthcare in this country won't ever be fixed. They'll just open the border to keep the economy running with fake pent up demand, putting downward pressure on wages, upward pressure on cheap housing.
Or maybe I'm just my rocker and spouting non-sensical garbage lol
To close the current law gap requires average taxes to be raised by 51% and this doesn't even account for the increasing demographic catastrophe. There is no group is who is soakable, everyone has to pay substantially more taxes without any change in services.
By 2031 mandatory spending will exceed federal revenue. By 2038 spending on OA and interest on the debt will exceed federal revenue.
It doesn't matter which perspective you look at the issue politically. Democrats are not proposing massive tax increases on most people and Republicans are not proposing massive cuts in SS & Medicare.
This wasn't fixed 40 years ago when it was a minor problem and there was the benefit of a growing LF. I'm not sure why people think it will be fixed now it's a much much larger issue that is actually painful to fix, particularly when all the solutions are political suicide.
Again, it's too late as the OA fund only has 6 years to exhaustion. That your are quoting a range makes it clear you don't even know what you are talking about, even when it was feasible it had a specific number of extension years not a range.
Lifting the cap this year would not increase OA lifetime beyond next decade, it exhausts 2039 instead of 2032.
I don't understand why you think this fixes or helps anything even it did extend OA significantly. It has a negligible impact on the fiscal problem and just kicks the can again. Congress will fund OA from the general fund rather than accept the old people getting a cut.
You worker don't understand, or don't care to expand your knowledge. Eliminating the cap extends solvency of the fund 20-30 years. You don't like facts do you?
Your "fact" is not true. Do you not understand how numbers work? What is the additional revenue and what is the fund deficit?
Again how does this have anything to do with what I mentioned originally when it's clear Congress are not going to allow OA to bust? Do you just like making to things to argue against?
We should cut the military budget. Its $1T and we waste additional $XB on arming Israel. We could cut this all to $100B and close all the foreign bases. Let's get real, we can't afford this ridiculous army and its actually dangerous to have such an expensive department when we don't actually have any enemies.
Cutting the defense budget to $100 billion is completely unrealistic, but I do think we should cut defense spending. $650-700 billion is a realistic amount that would still allow for military readiness. There is so much waste in our defense budget. The DoD has 800,000 civilian federal employees, most of whom make close to $200,000 per year and receive bonuses and cash awards on top of their salary. Add in at least as many contractors, plus spending on assets we know we’ll never use that have extremely high maintenance costs.
We could cull the defense budget down to $650 billion easily, but Democrats are captured by federal employee union lobbyists, Republicans are captured by defense contractor lobbyists. Neither will give an inch, and both sides will say none of this makes a dent in the deficit (and they’re almost right).
No, it's not that there are no enemies, it's just not possible to militarily take out a country completely without scorched earth strategies. Most if not all modern countries even the theological crazies know its a losing proposition.
No modern military can really win a war of attrition, including the US. The more powerful and advanced the military gets, the more expensive it becomes to use. We focused on policies of overwhelming inefficient power, and it's a largely worthless strategy in today's world.
But most of those countries have an equal or higher debt level relative to GDP.
Our public debt is nearly 100% of our GDP.
The same is true for Canada.
Japan is at like 250%.
If we had the same debt to gdp ratio as japan we'd be carrying like 80 trillion in debt rather than the 39 trillion we currently have. Japan only has a yearly income (GDP) of 4.4 trillion yet they have 11.3 trillion in public debt. It will take a miracle to ever pay it off.
Yes, but Japan is also the biggest creditor. Part of their debt is stimulated by their low rates, causing the Yen carry trade. So their debt is mostly financed into assets with a higher return than the interest rate. The US in contrast is a debtor nation, with a net debt of 60% of GDP.
the chart that actually matters is interest payments as a percentage of revenue, not the absolute debt number. when debt service costs start crowding out discretionary spending the constraint becomes real regardless of what
You really needed a chart for that? Debt had been an issue for the last two decades. We had a “Tea Party” in the early 2000s to reduce national debt back when it was not even close to $40 trillion. Unfortunately that Tea Party has turned into the Anything Goes Trump Party and now debt is a nonissue….
A tea party complaining about a program that Bush signed into law for an economy he and the GOP tanked. Convincing people to spend and borrow recklessly while we invaded countries unnecessarily. Killing possibly millions. And most of the money spent on the war against people that worship god with a different book of fever dreams was done with emergency appropriation bills that were being left off the books in a nice act of fiscal cooking. About $8 trillion in appropriations outside of the budget. Plus the doubling of the defense budget from $250 billion under Clinton to $500 billion after the invasion.
Yes, Off-Budget spending is the best kept secret. Congress loves it, presidents love it. The national debt just magically goes up while the official budget looks not so bad for decades. The Trump Iran war goes mostly off-budget.
Thing is Biden reduced the deficit. Deficit hawks never care unless it is attacking policies that do not make people richer. No new taxes and we can afford war and slush funds but not medicaid.
The deficit and debt for sure need to be stabilized and reduced but in the climate there is I do not see it happening. It was never approached in a balanced way. Those wanting cuts wanted to ax all social aid and go full austerity.
By raising taxes in the middle class they lower the standard deduction back to 12k which made more people have to pay taxes and the children tax credit was reduced under Biden. Trump has doubled the child tax credit that and raised the standard deductions.
I see nothing in this proposal about concrete plans to bring Democrats together to complete this objective if they hold House, Senate, and Presidency. I get that Republicans play lip service to deficit reduction and spend the same amount while lowering taxes which is something no one should be in favor of in this tight demand and supply economic balance, but Democrats have not had any coherent policies to maintain current spending levels and raise taxes. I’ve only seen tax more and spend more which ends up running deficits in the end.
Can someone prove that Democrats can come together in the past and future to do something about deficits?
The US electorate functionally prefers this. We will never vote for someone that wants to both increase taxes and cut spending. We would rather vote for someone who promises to ease the pain, then yo-yo back to the opposite party when that fails.
No we don’t. We might say we want that, but our actions don’t follow. Neither party might tax the rich right now, but it is abundantly clear which is *closer* to doing that. But we don’t vote that way, in fact virtually every county shifted the *other* way less than two years ago.
> our parties are owned by billionaires
If we collectively cared, like *actually* cared, that wouldn’t matter. We could grassroots fund actual good candidates and cancel our cable news memberships. All the billions in campaign financing really just amounts to advertising. As attractive as they want to make a shit sandwich in commercials (i.e. mainstream media), we don’t have to buy it. But we collectively do, because we’d rather be told who to vote for than spend any amount of time figuring it out ourselves.
Only about a third of eligible voters vote in primaries like this week’s California one. Only 28% of “young eligible voters” voted in NY mayor race, and even that was a “historic” enough turnout to put a “socialist” in charge of Wall Street’s hometown.
Unless you believe actual vote counts are rigged, the ultimate responsibility, *and power*, lies with the electorate. Billionaires can advertise us their candidates all they want, but we don’t have to buy them.
If you actually care, convince everyone you know to vote every fucking time they can, down the whole ballot. Otherwise, we get what we deserve.
No one can prove a future event. However, Clinton had a budget surplus and was on track to payoff all the debt well before today. That is a fact.
But bush was elected and thought that the government shouldn't run a surplus, so he cut taxes and spent a bunch on an absolute meaningless war, kinda like what's going on now.
Do I think this can be done today? Absolutely not. Too many people prefer hate over compromise. Especially voters...
Your take ignores the historical precedent that every "Democratic house+senate" has to deal with, or what actually happened during those administrations and congresses. Also that what you are discussing has occurred exactly twice since 1980. And Clinton increased taxes in 1993, and then his party paid politically for it.
As best as I can tell, the only two administrations to balance a budget were democrat. Granted one was before Nixon reworked the executive office of the presidency resulting in Congress changing the budgetary process, but that's a little more in depth that I would like to get into.
Our country is not capable of that. That would involve high taxes for the billionaires, high taxes on financial vehicles that don't make anything, nor create jobs. People not billionaires or corporations getting a service for their taxes, example health care, child care, college. So they don't join in an agree that Elon musk pays too much in taxes.
This leaves out the reduction to the defense budget. I remember that being one of the GOP's primary talking points during the 98 and 2000 election cycles.
Also remember Al Gore being ridiculed for wanting to put Social Security in a lock box.
Reagan had big tax cuts for the rich alongside increased defense spending, which contributed to rising federal deficits. Clinton practiced anti-Reaganomics & lowered the deficit.
Under Reagan the U.S. transitioned from being the world's largest international creditor to the world's largest debtor nation.
Al Gore was right about climate change. Everything else is politics.
The last president to have a supermajority in Congress was LBJ. During that period LBJ passed Medicare and Medicaid, the Voting Rights Act, the Higher Education Act, the Immigration and Nationality Act of 1965, etc.
Always got to be some reason to not accept the facts that democrats are actually good for the country while republicans are only good for themselves and their donors...
50 million jobs to 1.5 million jobs and that still doesn't provide reason for you to think for yourself.
The GOP is a confidence scheme and if you look around the table and can't find the mark, it because you overlooked the mirror.
The same stats that show we're better off with a Democrat President also show we're better off with a Republican House and Senate.... especially the House. Though I get the feeling that's the kind of thing most of Reddit wouldn't want to admit. The 90s had Gingrich, and 2010 through 2016 had the Tea Party. Both resulted in rapid decreases in our yearly deficit.
I'm not willing to say one party is better than the other. I am willing to say the friction that occurs when there is no single party rule slows down the expansion of government.
Am I crazy or is it embarrassing that the a president's chief economist needed a special chart to see this problem.?
The math isn't difficult. If we borrow at rates higher than growth we will accumulate debt, ceteris paribus. Raising taxes and cutting spending aren't politically palatable. Financial repression is the solution both parties will find themselves nudged towards. We simply cannot grow fast enough. 20th century growth was an outlier event, not a new baseline.
It’s basic basic economics that better technology increases productivity and therefore gdp growth. Especially with the type of stuff that’s on the horizon like AI. So your lazy one sentence dismissal of that makes me think your opinion is absolutely worthless. Have a good one, chief.
Not all technologies are created equal. Many of the technological transformations we experienced in the 20th century are one time changes (indoor plumbing, air conditioning, ICE). Many of the 21st centuries biggest advancements are in consumer entertainment-not capital goods (The current gen iPhone isn't meaningfully adding to productivity compared to a model 4 or 5 years ago. TVs get cheaper and cheaper but they aren't contributing to more productivity).
Plus the US, faces severe headwinds: demographics, debt, inequality to name a few.
And don't forget about Baumol's cost disease- industries that rely on human labor will continue to outpace inflation and need huge systemic change to see productivity increases.
Yes there is AI, but AI is probabilistic text, it doesn't reason from first principles-can it ever be accurate enough to meaningfully replace huge numbers of human workers across the economy by being more productive than humans? Additionally AI is already experiencing diminishing returns instead of Moore's Law 2.0, AND it's current deployment is terribly underpriced, when the venture capital dries up who will be able to afford AI for which tasks?
lol. Those are not the 21st century’s biggest advancements. You’re a joke, and you're clearly bad faith so I’m outta here.
Google: what are some important technological advancements of the 21st century?
The 21st century has seen unprecedented technological leaps that have fundamentally reshaped global society, communication, and industry. [1, 2]
Communication & Computing
Smartphones & Mobile Internet: Handheld computers connected to high-speed cellular networks revolutionized how humanity accesses information and communicates.
Cloud Computing: Shifting data storage and processing power from local machines to remote data centers enabled mass digital scalability.
Social Media Platforms: Digital networks transformed global communication, political movements, culture, and information dissemination.
Quantum Computing: The realization of operational quantum processors began solving calculations too complex for standard supercomputers.
Intelligence & Automation
Generative Artificial Intelligence: Large language and multimodal models enabled machines to create human-like text, code, images, and video.
Advanced Robotics: Autonomous drones, advanced humanoid robots, and robotic manufacturing reached new levels of precision and agility.
Autonomous Vehicles: Self-driving algorithms and advanced sensor arrays allowed cars and trucks to navigate public roads without drivers. [1]
Biomedical & Genetic Science
CRISPR-Cas9 Gene Editing: A precise molecular tool allowed scientists to easily modify DNA sequences to treat genetic diseases and alter crops.
mRNA Vaccine Technology: The deployment of synthetic genetic blueprints enabled rapid vaccine development and distribution during global health crises.
Prosthetics & Brain-Computer Interfaces: Direct neural interfaces allowed paralyzed patients to control robotic limbs and digital interfaces using thought.
Energy & Sustainability
Grid-Scale Energy Storage: Massive lithium-ion and solid-state battery installations allowed power grids to store and utilize intermittent renewable energy.
Commercial Reusable Rockets: Vertical takeoff and landing rocket stages dramatically lowered the cost of entering space, launching a new satellite era.
Electric Vehicles (EVs): Improvements in battery density and manufacturing scaled zero-emission transportation into the automotive mainstream.
By this chart 1995-2000 would’ve been bad signs but they were boom years under Clinton. And 2008-10 would’ve been good and yet we were in a recession bordering on collapse. And the fact that this economist had no problem printing under a dem but now is against the same policies is another big red flag
Convenient things to say when not in power. When dems get back in power, it’s no longer an issue. Frustrating that no one is taking accountability for this f’ing mess.
I saw an interview or read an article or something that said behind closed doors lots of legislators admit it’s a problem but say they’ll be long gone before it comes to a head.
...I feel like you've got the opposite take here buddy. The budget hawks only come around when democrats are in power, and are silent during republican administrations.
Likewise, where were they when Trump was running up the deficit year over year, accounting for nearly $10T of overall debt over the next decade?
“I can’t tell the difference between tax cuts for the rich, worthless wars, and subsidizing fossil fuels vs investment in infrastructure, education, science, and health.”
“I can’t tell the difference between spending to stabilize a struggling economy and cutting taxes when the economy is already doing well.”
I’m questioning it because our healthcare system is among the worst for preventative care among developed nations and the data is clear on spending money to fix it. As incomplete as it is, Obamacare was putting on us on a path to better outcomes. The government should absolutely continue running deficits for a healthier populace.
On education, yes spending money on tertiary education has a good ROI making it worth running a deficit. Maybe not as good as primary but its high. There is a strong college wage premium not to mention that higher taxes they pay back into the system via higher wages. This then feeds into better health as college educated populace has better access to healthcare which feedbacks on itself positively
DeRpY_CUCUMBER | a day ago
>Budget hawks have fretted for decades about America’s deficits and debt
These republican budget hawks were only hawks when Liberals were in power. They were all for blowing huge holes in our budget if it meant tax cuts for the rich.
Trump is now responsible for 25-28% of all US debt. Those budget hawks were no where to be found during his two presidencies. Total hypocrites.
As far as Bidens cheif economist and the rest of the liberal economists, I remember not too long ago when ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever. Yes, all those idiots said this.
I've come to the conclusion that most of this debt is just one big transfer of wealth from the middle class to bondholders, which mostly belong to the rich.
Both parties are in on this. And when things get really bad, the rich will just leave.
TreeInternational771 | a day ago
In fairness, Biden economists were correct. When you run deficits to spend on infrastructure, healthcare, education (all the things that make your populace healthier and more productive and Biden was doing) in the long run you are better off. When you spend like Trump administration on tax cuts and corruption then it is a terrible way to go into debt
CelticJewelscapes | a day ago
A simple example from my household. Tariffs were waved on ebikes. And Biden provided rebate funds on ebikes. We were able to get three bikes for less than a single car payment. They are a car replacement. We still have a car, but last year we used just 3 tanks of gas. This year still on the first tank. A car that is driven 90% less will last 10x as long, will need 90% less maintenence, and is eligible for a low mile insurance policy. Our transportation budget has gone from $900 a month to $900 a year. That allowed us to grow our business and spend an additional $9900 a year in the local economy. We pay more taxes and our additional local spending circulates 5 times as it moves from hand to hand. MAGA mentality sees that as a handout, completely disregarding the positive effect on the economy. Its not just the big projects like bridges, deep water ports, and roads. Its making education more effective by making sure kids arent hungry all day. Its realizing that its cheaper to subsidize health care than to have desperately sick people use the emergency room.
O-3_Howling_Mad | a day ago
I hate to be that guy, but you're incorrect on your car's lifespan and maintenance.
If you're driving that little, it can actually be quite detrimental to your car's drivetrain and overall health. It certainly won't last longer, and in theory, only saves on what would be considered regular maintenance.
No argument on the initial economic side, at least in theory, but something to consider. Cars generally don't like being driven too little as odd as that may sound.
infinity404 | a day ago
What’s the minimum miles per year you should drive a gas car to optimize for longevity?
SaxRohmer | 21 hours ago
i think it’s more about the kind and frequency of trips as well as the conditions you drive in
Fit_Significance8598 | a day ago
Yup. Many years ago I didn't change the oil as it was well below the mileage - but there is also a timelimit as I found out when the engine eventually seized. I also only drove it very short distances during which the various engine systems probably never got hot enough for the oil to properly circulate and mix.
O-3_Howling_Mad | a day ago
Exactly! It's similar with tires. Most people don't know that they should be replaced after 6-8 years. I've purchased several modem collector's cars with 20+ year old tires on them.
Fit_Significance8598 | 13 hours ago
Yes, besides the mechanical stress and strain, the oxygen in the air (and water) and sunlight react with almost everything earlier or later which may significantly alter their various properties. Oils and fats get rancid, rubber and plastic mushy and brittle, colors fade etc.
Temperature dependent. Whenever possible keep stuff cool/cold/frozen, dry (or properly lubricated), sealed from air/oxygen and protect from (sun)light. And be realistic that stuff that cannot be always and fully protected needs to be changed, e.g. cables and hoses. And oil.
Yellowdog727 | a day ago
Biden/Harris/the Dems also would have raised taxes on the rich if they had the chance.
If you follow the economic path from the Great Recession through the Trump admin you can see just how stupid his tax cuts were.
Tax cuts can be genuinely helpful during economic downturns, but when the economy is doing well you should prioritize balancing the budget instead of pouring gasoline onto the business cycle.
Trump was handed a decent Obama economy in his first term yet signed the Tax Cuts and Jobs, which strongly slashed taxes all the way through 2025 and was horrible for the deficit.
Then when the economy tanked at the end of Trump's term, fiscal stimulus was needed for recovery and a lot more deficit spending was understandably passed.
Biden didn't have a Congress that was willing to repeal the TC&J Act and he was pretty much stuck with the low rates. By the end of his term, the economy was once again decent and it would have been a perfect time to let the tax cuts expire and work towards a more balanced budget.
Once again we elect Trump and instead of doing anything about that, he once again idiotically restarts the massive tax cuts despite it not being a recession. And once again he is blowing up the deficit.
morbie5 | a day ago
> Biden/Harris/the Dems also would have raised taxes on the rich if they had the chance.
They did have the chance and they didn't do it
Scrandon | a day ago
Democrats shouldn’t have to hike taxes during periods of economic weakness just because republicans are poison. The debt isn’t good for the country but neither is that.
morbie5 | a day ago
They could have passed a law that delayed the implementation of the tax hikes a year or two.
They could have also reformed the estate/gift tax and trusts that the wealthy use to pass on money and they didn't do that either.
aka they are worthless
cronies4life | 6 hours ago
that's why all corps supported trump's second election as they were worried that the tax cut won't be extended
No-Computer7653 | a day ago
> When you run deficits to spend on infrastructure, healthcare, education (all the things that make your populace healthier and more productive and Biden was doing) in the long run you are better off
Only with a multiplier greater than 1 and most of our spending is not. Health and tertiary education are particularly bad, they are important for other reasons but trying to argue them on a fiscal perspective is not supported by evidence.
Congress is terrible at picking good spending. Now that we have almost no high multiplier projects left they accidentally get it right very rarely.
TreeInternational771 | a day ago
Yeah you are dead wrong buddy on education especially. It is 2:1 income for every dollar govt spends. On healthcare, especially preventative care it is higher because your populace doesn’t get sick
No-Computer7653 | a day ago
K-12 has a high multiplier (4.3, the highest of any spending we do), tertiary does not. Most of the benefits for tertiary are individual which is why public tuition funding is poorly supported; it's a regressive transfer.
Healthcare spending outside of childhood has a much smaller impact then you think it does. Basic preventative care has a relatively high multiplier, more advanced care does not because it's benefits accrue mostly towards the end of life when you are no longer part of the labor force. Personal health investments like diet and exercise have larger individual returns then pubic spending does too.
There are many real and sensible ways to argue the government should spend on these services. I'm not sure why you feel the need to make it a fiscal question when it's not.
TreeInternational771 | a day ago
Our healthcare system is among the worst for preventative care among developed nations and the data is clear on spending money to fix it. As incomplete as it is, Obamacare was putting on us on a path to better outcomes. The government should absolutely continue running deficits for a healthier populace.
On education, yes spending money on tertiary education has a good ROI making it worth running a deficit. Maybe not as good as primary but its high. There is a strong college wage premium not to mention that higher taxes they pay back into the system via higher wages. This then feeds into better health as college educated populace has better access to healthcare which feedbacks on itself positively
No-Computer7653 | a day ago
What does any of what you said have to do with fiscal multipliers?
TreeInternational771 | a day ago
Healthcare - every dollar you spend on healthcare the government gets more than one dollar back via economic activity and government revenue
Education - You spend $1 improving education inclusive of tertiary, you driving higher incomes with your populace, more economic growth and higher tax revenues aka you get back more than $1
DeArgonaut | a day ago
What is the multiplier for higher eduction then, the other commenter said 2 and you just said no. Additionally, does the care take into effects such as removing others from work? For example, my mom had to take care of my grandma when she got Alzheimer’s, and she had to leave her job in order to do that.
No-Computer7653 | a day ago
0.27 for universal funding as it don't induce a productivity improvement, you don't cause people to earn more as they would have got the degree anyway. Specific types of funding (eg pell grants) are relatively high as you are inducing an income gain that wouldn't exist otherwise.
Institution and research spending are higher still and likely higher than we can measure as they cause positive spillovers.
Universal funding can be above one but requires a differently configured tertiary system.
My favorite example is Germany which ties university availability to labor demand projections and there isn't an automatic route to university (eg if you want to study something with low future labor demand but lots of people want to study the same thing it's highly competitive, not just in terms of school but ability to study it). They also use the three secondary tiers to better prepare secondary students for work or future study.
> Additionally, does the care take into effects such as removing others from work?
It's spending based so not included. LF effects of home healthcare are measured separately though, CPS actually includes questions about it and surveys like ATUS includes it.
> For example, my mom had to take care of my grandma when she got Alzheimer’s, and she had to leave her job in order to do that.
Which is bad and a great example of why spending shouldn't only be bound to fiscal multiplier considerations.
Being out of the labor force for a long time causes terrible outcomes for people.
US has the lack of public services, the labor force shortage and the demographic catastrophe occuring all at the same time. I'm not sure how we are going to function in a decade.
DeArgonaut | a day ago
I’d imagine the education part would also free up income to be spent elsewhere with lower student loans despite not increasing productivity. Esp if it’s effectively a wealth transfer from the wealthiest since lower and middle income people spend a larger amount of their paycheck it’d probably spur the economy a little
Luckily I am a beneficiary of the Germany higher education system and my masters is $0 tuition (tho they still have a semester fee but that includes things like public transportation which I would’ve gotten anyways and would’ve been more expensive on its own)
wubwubwubwubbins | a day ago
Well, with anything, there are strengths and weaknesses to different strategies. And again, not saying the US has a better higher education strategy than say, Germany, but they have different strengths and weaknesses, and produce different outcomes.
Germany has a very effective structure, but then if you need to move outside of that structure, it tends to be pretty terrible. IE, innovation, and the funding for it, tends to be limited. An easy example would be that funding for innovation in an engineering industry is going to happen a lot easier/faster than say, innovation for a designer handbag. Also, it's significantly harder to get structured support in Germany if you don't jump through specific hoops (IE, people won't talk to you if you are not "credentialed" properly) So innovation from adjacent spaces tends to be muted.
Germany arguably has a much better education-to-labor pipeline than the US does since it's structured to do so. The US has at least 50 different education systems, since most of the control comes from local governing bodies, and not the federal government.
So the US has basically shifted investing from education, into the private sector, with the philosophy that a thriving private sector will be more effective at creating more/better jobs, that will incentivize people to become more highly educated, versus spending more on the education and having companies move there because of a higher educated workforce. Kind of a chicken-egg argument. Do companies move to where the best workers are? Or do workers move to where the best companies are? And both can be true to an extent at the same time.
But....it can definitely be said that if a company wants to earn more $$, it's almost always going to want to be located in the US, over a country like Germany. Which is why capital intensive innovations just don't really happen in Germany/the EU at large.
Irrelevant_Bookworm | a day ago
That surprises me. Do you have a source that we can review?
wubwubwubwubbins | a day ago
I just want to point out that it depends on what factors you are using to calculate a given "multiplier", as well as what fiscal cycles you are tracking, etc. Some investments have short term outcomes/benefits, versus medium, versus long term. So any tracking model/equation will have it's own limitations.
End-of-life healthcare for example, will have a lower multiplier from a purely economic perspective. So theoretically, if we just killed retired people actively or passively (just denying them healthcare is a more passive mindset), it's overall better for the economy since we can then take those $$ and put them into keeping more economically productive people healthier. But, also understand that in economics, there is a HUGE psychological component that is normally not addressed through pure fiscal speculation. IE, would someone work hard over their life, and look forward towards retirement to begin with if I knew that their society was going to just let them die? So, you could save money by literally killing people off, but then you may have an economic impact by affecting the psychological basis for why productive people are working to begin with.
Tertiary education has a solid impact for a variety of reasons, since the benefits of having a more educated/innovative workforce and the societal structures to capitalize on that workforce have huge multiplicatives (more innovative companies, companies locating there to employ the best workers, etc.) more educated adults also become the primary educators for their children, so having the time/knowledge to teach offspring is a very high correlate towards student success.
The reason I am actually kinda interested in having this discussion is that I genuinely think having learning systems throughout life is has significant economic advantages, and I'm currently learning how to effectively discuss that. How DO you factor in these psychological components mathematically?
Virillus | a day ago
Ignoring your multiplier estimates - the other commenter touched on that - you're not entirely right. Interest rates on government debt are - generally - below inflation. Thus you don't even need to break even for it to be "paid off."
This isn't to say you can infinitely take on debt without consequence - it can become crippling eventually - but the true cost is generally much lower than it appears.
No-Computer7653 | a day ago
Interest rates are always higher than inflation. ZLB wouldn't exist if they were unbound.
They are less bound since the fed stopped relying on OMO to do monetary policy but still always higher than inflation.
Virillus | a day ago
Not true. For example, the current weighted average interest rate for the US Federal government is 3.36%. inflation is currently 3.8%.
It's certainly not always that way all the time, but in general the bulk of government debt historically has been lower than inflation.
Mace109 | a day ago
We’re in the economics subreddit, and you’re really trying to say the fed interest rate is always higher than inflation? Current rates and 2022 disprove this.
Virillus | a day ago
Dude. Read my comment again.
No-Computer7653 | a day ago
Yes. You understand that factors in all debt the government holds that has not yet matured, some nearly 30 years old right?
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=202606 are the current yields.
My mortgage rate is 2.25%, that doesn't mean I can get a new mortgage with that rate.
Virillus | a day ago
Yeah, I absolutely understand. I feel like maybe we're talking about different things.
I'm simply saying that the cost of the debt is generally lower than it looks at first blush, because it's often below inflation. The exact same logic applies to your mortgage.
I explicitly noted that that does NOT mean it's always okay to borrow.
herosavestheday | a day ago
Except they weren't correct because we didn't actually do anything to improve the regulatory environment for the entities that actually create all those things so we just ended up with inflation.
BigCommieMachine | a day ago
Exactly. There is good debt and bad debt. As long as the economic return on the debt is greater than the cost of servicing it, it is good debt.
Prestigious_Load1699 | 9 hours ago
I appreciate your argument here, and mathematically it makes sense.
I’d be curious for evidence of which debt avenues in fact achieve this.
I would imagine, off the top of my head, that the main drivers of our structural debt - social security, medicare, and medicaid - do not present such a positive return although I’m open to being shown incorrect.
I am particularly interested in how entitlement programs for retired Americans who are out of the workforce could possibly offer such a return.
morbie5 | a day ago
> healthcare, education (all the things that make your populace healthier and more productive and Biden was doing)
Not if that healthcare is going to very old people or people that retired early and could only afford to do so because now they were getting heavy subsidies from the ACA. There is a moral argument involved (we can have that debate) but from an economic point of view that isn't making the populace 'more productive'
Anxious_Cheetah5589 | 9 hours ago
The devil is in the details. Many stories of covid "education" funds being used to refurbish athletic facilities, give employees salary bumps, and other things that the money wasn't intended for. https://www.mackinac.org/32063
Then there were the PPP loans. Every scammer in the country seemingly got some.
Too much money, not enough oversight.
Pokmonth | a day ago
> to spend on infrastructure, healthcare, education
That's true when the money is actually being used to build infrastructure, healthcare, and education; instead of the majority of that spending going to private contractors.
Biden's infrastructure bill put lipstick on a pig
Spending on healthcare with insurance companies is lipstick on a pig
chillinewman | a day ago
The tax cuts for the rich are debt funded.
Choosemyusername | a day ago
I mean I am all for taxing the rich more but this isn’t a great argument for why. Even social security is funded by debt. If you want to use this logic, it can be used for anything on the spending side as well.
chillinewman | a day ago
Is definitely a good argument, social security is a common good and is exactly what the government is for. A tax cut for the rich is just funneling money for the top and increasing inequality.
Choosemyusername | a day ago
So there is your argument. That it’s a common good.
If you get focused on the debt, then you have just argued against SS.
Because the spending is so out of whack, that even if you taxed every dollar earned over 500k, it still wouldn’t balance the budget.
Taxing the rich appropriately is important, but if you are worried about the deficit, and you should be, then that is a totally different animal far larger than just taxing the wealthy. Which is in itself a huge problem.
chillinewman | a day ago
Taxing the rich is the place to start and focus after decades of tax cuts.
Choosemyusername | 23 hours ago
Yes it is and it won’t make a dent in the deficit.
chillinewman | 17 hours ago
Not true.
Choosemyusername | 11 hours ago
How much would it pay off the debt?
doctorocelot | 13 hours ago
I'm not sure that logic holds. The argument in the article and being made here is that tax cuts substantially increased the deficit. So reversing those tax cuts would logically shrink the deficit then... No?
Choosemyusername | 11 hours ago
Sorry I meant debt. It may make a small dent in the deficit. But it would far from balance the budget. We would still be going further into debt incredibly fast. In order to balance the budget we would need to cut social spending AND raise taxes on the working class. As well as tax the rich fairly and effectively.
cstar1996 | 20 hours ago
Social Security is not funded by debt. It’s funded by social security taxes and drawing on the Social Security Trust Fund to make up the deficit. The Trust Fund is made up of the previous surplus of the taxes.
Choosemyusername | 11 hours ago
This is just an accounting trick. The truth is if the social security fund did not need to be funded with previous surpluses, it could have gone to balancing the overall debt. This is the same trick people do when they come across a windfall and label it “vacation money” instead of paying off their debt with it, which is what they should do with it.
Just because you label that money doesn’t mean it couldn’t be put to better use.
cstar1996 | 5 hours ago
It legally could not be, so no, it’s not an account g trick.
Choosemyusername | 3 hours ago
I mean yes we are talking about a legal matter. Of course we are talking about legal things. Thst goes without saying. And laws can be changed. By the same group of people.
If laws were changed, then we could have more money going against the debt. This is just a fact.
Clawdius_Talonious | a day ago
Yep the ultra-capitalists plan to abandon the US and scapegoat it in particular as if it weren't capitalism but some uniquely American failing.
Surely infinite growth would have been possible anywhere else, they just need people willing to embrace the dream... since it's all you'll get.
dxrey65 | a day ago
"ultra-cap;italists plan to abandon the US"....
not before they've bled us dry. The three biggest IPO's ever imagined are coming up this summer, and it's hard to see that as anything other than bleeding us dry, as all three are about 90% fairy-dust and lies.
GrandMoffTarkan | a day ago
“ As far as Bidens cheif economist and the rest of the liberal economists, I remember not too long ago when ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever. Yes, all those idiots said this.”
Anytime anyone says all of anybody said anything extreme my BS detector goes off and this is no different. Biden routinely bragged about cutting the deficit (usually politely ignoring that it was mostly the end of the pandemic and economy that was closing the budget gap).
Berstein (this guy) didn’t say that debts didn’t matter, rather he was a deficit dove in the sense that he believed low borrowing costs made debt driven investments make sense
cl1518 | a day ago
OP doesn’t understand that not all debt is equal. There’s a difference between a mortgage and putting a vacation on a CC
VaughanThrilliams | a day ago
> I've come to the conclusion that most of this debt is just one big transfer of wealth from the middle class to bondholders, which mostly belong to the rich.
don’t bonds tend to do worse in a ballooning debt, high inflationary environment compared to just normal shares?
ROIDie777 | a day ago
The real comparison is getting interest from a bond vs paying higher taxes. The rich will take that deal every day if the week.
Prestigious_Load1699 | 9 hours ago
The rich pay taxes on that interest income…
ROIDie777 | 4 hours ago
Yes, and that is a derivative of the directional gain. The net must clearly be a win for the rich, as a tax of a gain is not greater than 100%
Virtual-Alps-2888 | a day ago
Its also that this statement you quoted is flatly illogical. Transfer of wealth either means that there is no debt to begin with and this will not show up in economic data, or its the rich owing the middle-class money, which doesn't make sense.
I get people hate on Trump, but this sub has bee increasingly filled with moral/political claims with no economic literacy.
ROIDie777 | a day ago
I think when you are born in a system where there was already a transfer from the rich to the middle class, that taking action to return the money to the rich and cut the transfers to the poor and middle class can be seen as a wealth transfer. If that's the case, as long as we understand what is meant, I don't think it's a problem.
There is also the idea that deficits ultimately create inflation, or at least create upward pressure on prices rather than downward pressure. So, when the government doesn't collect the money and instead prints it as IOU's, then the poor and middle class feel squeezed as they don't own the assets that hedge against inflation.
It's certainly a complex thing, but I feel like listening and understanding what we each mean is a lost art that is due for a reawakening. We have to learn to hear, interpret, clarify, and respect each other before we can make the proper long-term decisions that actually get to the core of the US debt problem.
DrinkResponsible6752 | a day ago
> ALL of them were saying our debt and deficits didn't matter at all. That we could just continue to spend way past our means forever
I mean, they weren’t entirely wrong but it was a different situation. Debt was less concerning when interest rates were near zero and nominal GDP growth was strong. As rates rose and deficits remained large, debt sustainability became a more serious issue
Prestigious_Load1699 | 9 hours ago
Perhaps there’s a lesson to be learned here that high borrowing at low interest eventually leads to higher interest rates as the debt and servicing costs mount…
I’m fairly sure this was something Keynes figured out a century ago.
robustofilth | a day ago
Leave……and go where exactly
Bootwacker | a day ago
I have my own theory on this. Both parties know the debt is a problem. Both parties also know how to fix it, we have fixed it before. In the 1950's we had a huge debt and we paid it down quickly by leveling high taxes on rich people, this was however greatly aided by a rapidly growing economy. To fix it this time will require both leveling high taxes on the rich _and_ some amount of austerity, and even this may not be enough to avoid high inflation from the debt. Basically solving the problem would make the party in power _very_ unpopular, very quickly, so both would like to blame the other party.
Instead both just kick the can down the road.
Prestigious_Load1699 | 9 hours ago
Appreciate the balanced take.
cstar1996 | 20 hours ago
Who said “our debt and deficits don’t matter”? When did they say that?
This is just a classic right wing apologist line that is entirely unsubstantiated by reality. There were some MMTers saying that, but they were never mainstream in any Democratic administration or among liberal economists.
Prestigious_Load1699 | 9 hours ago
Please be sure to say this to all the MMT folks on this sub.
Anxious_Cheetah5589 | 9 hours ago
MMT say that
Deficit spending is OK
If it causes inflation, you just raise taxes to pull money out of circulation
The big spenders ignore that second part. In practice, any politician that tried to do that in today's world would be unemployed in a blink of an eye.
Prestigious_Load1699 | 9 hours ago
Doesn’t this seem like faulty logic?
Raising taxes to curb the effect of profligate spending is less efficient (due to the cost of servicing debt) than simply reducing deficit spending from the get-go.
It seems like chasing a dragon that you will never catch.
Anxious_Cheetah5589 | 9 hours ago
There's that too! MMT is being used as a post facto excuse to spend more money. It's utter insanity when you have a 39 trillion dollar debt ($357k per taxpayer! I like to include that number because people have mo concept of 39 trillion). In fairness, MMT advocates seem to have backed into the bushes since inflation has come roaring back.
Prestigious_Load1699 | 9 hours ago
Imagine arguing for essentially unlimited deficit spending and only a few years later we all witness the inherent flaw of their logic as the cost of servicing our debt exceeds our entire defense budget.
Let’s hope MMT is relegated to the dustbin of history. Shame on all those who fell for it - and that includes the so-called professors who brainwashed an entire generation on this gibberish.
trickier-dick | a day ago
Agree. When everything goes to shit, the wealthy will be just fine.
SavvyKnucklehead | a day ago
[ Removed by Reddit ]
struct_iovec | a day ago
How on earth did he manage to accrue all this debt? I still don't understand how after cutting every service and firing nearly every government worker he still managed to take on more than a trillion in debt. How? Make it make sense
alan_oaks | a day ago
He didn’t even come close to firing nearly every government worker lol. The government lost 8% of its employees, mostly through attrition (retirements/early retirements). Firings made up a tiny fraction of that 8%.
Virtual-Alps-2888 | a day ago
One way to look at it is in terms of the USD as global reserve currency, leading to ever widening deficits. Then surplus countries with large and persistent underconsumption export their domestic problems to the US, causing more deficits.
I.e. contrary to all the anti-Trumpian trumpeters here, the issue is one of global trade imbalances, not governance.
shryke12 | a day ago
They don't have to leave. The financial repression playbook has been played in the US before. This issue is the core reason behind the k shaped economy.
Choosemyusername | a day ago
I must say as a bond holder myself, the returns are absolute shit. Negative real returns actually. How is this wealth transfer to me supposed to work?
Prestigious_Load1699 | 9 hours ago
It doesn’t. You are responding to a nonsensical Reddit argument.
Everyone who wants to see their money grow invests in the stock market and maybe other ventures like real estate, which offer a return that actually exceeds inflation.
PricklyyDick | a day ago
Diluting bonds with more bonds definitely does not help bond holders get rich lol.
The money goes into securities like the stock market. Reducing debt would increase the value of bonds.
It’s a wealth transfer but it’s not happening in the bond market. It’s happening through the inflation the debt creates combined with tax cuts.
ConfidentPilot1729 | a day ago
Didn’t Clinton have a 20 year plan to erase the debt? I remember that even in his term, it was already working until bush got into office. Then, the GFC Obama had to spend to get out of recession but even he started to balance the deficit. It kind of seems like one party is significantly more responsible.
Prestigious_Load1699 | 9 hours ago
If Clinton’s plan to erase the debt included the tech stock bubble never bursting, then it was never realistic to begin with.
That said, Clinton was the last fiscally-responsible president we have had and I give him credit for his efforts.
bd2999 | 23 hours ago
Sure although Larry Summers was there for some reason. I do think it is important for context there at times. I know with Obama and interest is low than spending to help the economy is probably something you can write off.
That said the GOP also said every bit of spending would cause hyperinflation if they didn't like ittoo.
KarlikQstar | 10 hours ago
Why would the rich leave? Gated communities for the rich, private jets and luxury yachts for travel. Even if the entire country turned into a ghetto, would they care?
BalrogPoop | a day ago
The rich can't just leave, capital flight is a bit of a myth and there's recent studies exposing this.
Capital isn't just free cash they move overseas with them whenever they feel like it. Capital is companies, infrastructure, buildings, office, staff that can't be relocate on a whim.
Most billionaires and millionaires own companies, they can't just liquidate on a whim and run off with the bag, or they lose most of their wealth. Especially when they all trey and do it at once. That's called a stock market crash.
Bakingtime | a day ago
The Dems and Pubes were both ALLL ABOARD when they were handing out the PPP, CARES, and IRA money. They were BALLS TO THE WALL when it came time to “fix” “nobody wants to work” with throwing the borders open for low paid workers instead of legislating higher minimum wages. They would rather throw money at foreign theocracies and health insurance companies instead of using the trillions to fix healthcare and raise taxes on the top 10% of earners in order to cut the wealth gap. Our entire country is fucked by lawyers and there is no mechanism or will to unfuck it. America is a nation of dumb, self-indulgent children and I can only imagine the tantrums when eventually economics forces it to metaphorically go to bed with no supper or tv.
JitteryJoes1986 | a day ago
Since 2020 and beyond, it has been one big wealth transfer.
What you've seen in the past few years is the greatest price squeeze of a generation that you'll ever see. You ever wonder why most Millennials can't get ahead in life (family family planning, jobs, housing, etc), its because of the Great Price Squeeze. I'm calling it the GPS at this point and am surprised no economist hasn't phrased that term yet.
This is going to have long term downward consequences. Less kids are being born, less people buying homes, less people moving jobs. What is going to happen in 20 years, for Millennials, is going to be the GPD or the Great Price Drop. The markets will slide from our meth like highs with AI. It's not going to be immediate but its going to be a downward spiral.
Essentially, what I am predicting, is that there will be a oversupply of homes in 20-30 years. The economy will be smaller. The debt owed will be much greater. Its a population time bomb. Less younger people and much more older people. The pyramid is inversed. Who is going to pay into SS? Who is going to support old people? Who is going to support the military?
Don't worry, you're current politicians know this and will be long dead before these big issues arise.
Belt tightening is going to be need. Programs fundings will be slashed. Healthcare in this country won't ever be fixed. They'll just open the border to keep the economy running with fake pent up demand, putting downward pressure on wages, upward pressure on cheap housing.
Or maybe I'm just my rocker and spouting non-sensical garbage lol
No-Computer7653 | a day ago
The problem won't be solved.
To close the current law gap requires average taxes to be raised by 51% and this doesn't even account for the increasing demographic catastrophe. There is no group is who is soakable, everyone has to pay substantially more taxes without any change in services.
By 2031 mandatory spending will exceed federal revenue. By 2038 spending on OA and interest on the debt will exceed federal revenue.
It doesn't matter which perspective you look at the issue politically. Democrats are not proposing massive tax increases on most people and Republicans are not proposing massive cuts in SS & Medicare.
This wasn't fixed 40 years ago when it was a minor problem and there was the benefit of a growing LF. I'm not sure why people think it will be fixed now it's a much much larger issue that is actually painful to fix, particularly when all the solutions are political suicide.
GhostofBeowulf | a day ago
SS can be extended like 70 years if we raise the income cap. I don't remember the exact figure, but it was significantly longer.
Prestigious_Load1699 | 9 hours ago
And what of Medicare?
No-Computer7653 | a day ago
That was 15 years ago. OA is exhausted in 2033, it's too late for a patch.
OddlyFactual1512 | a day ago
Eliminating the cap would extend solvency by 20-30 years. Use your preferred internet search before you pay one of your assumptions.
No-Computer7653 | a day ago
Again, it's too late as the OA fund only has 6 years to exhaustion. That your are quoting a range makes it clear you don't even know what you are talking about, even when it was feasible it had a specific number of extension years not a range.
Lifting the cap this year would not increase OA lifetime beyond next decade, it exhausts 2039 instead of 2032.
I don't understand why you think this fixes or helps anything even it did extend OA significantly. It has a negligible impact on the fiscal problem and just kicks the can again. Congress will fund OA from the general fund rather than accept the old people getting a cut.
OddlyFactual1512 | a day ago
You worker don't understand, or don't care to expand your knowledge. Eliminating the cap extends solvency of the fund 20-30 years. You don't like facts do you?
No-Computer7653 | a day ago
Your "fact" is not true. Do you not understand how numbers work? What is the additional revenue and what is the fund deficit?
Again how does this have anything to do with what I mentioned originally when it's clear Congress are not going to allow OA to bust? Do you just like making to things to argue against?
So_HauserAspen | a day ago
No reason not to try it now
No-Computer7653 | a day ago
Raising taxes is fine. Believing uncapping SS contributions will fix the OA fund issues is empirically wrong.
Professional_Flan466 | a day ago
We should cut the military budget. Its $1T and we waste additional $XB on arming Israel. We could cut this all to $100B and close all the foreign bases. Let's get real, we can't afford this ridiculous army and its actually dangerous to have such an expensive department when we don't actually have any enemies.
No-Computer7653 | a day ago
Mandatory spending does not include defense.
khoa-bear | a day ago
We do have an enemy in Russia.
AENM1776 | a day ago
And China.
Fit_Significance8598 | 13 hours ago
Don't forget $20 or $40(?) Billion to Argentina!
alan_oaks | a day ago
Cutting the defense budget to $100 billion is completely unrealistic, but I do think we should cut defense spending. $650-700 billion is a realistic amount that would still allow for military readiness. There is so much waste in our defense budget. The DoD has 800,000 civilian federal employees, most of whom make close to $200,000 per year and receive bonuses and cash awards on top of their salary. Add in at least as many contractors, plus spending on assets we know we’ll never use that have extremely high maintenance costs.
We could cull the defense budget down to $650 billion easily, but Democrats are captured by federal employee union lobbyists, Republicans are captured by defense contractor lobbyists. Neither will give an inch, and both sides will say none of this makes a dent in the deficit (and they’re almost right).
Vesploogie | a day ago
Perhaps our world dominating military is the reason we don’t have enemies.
KyuKitsune_99 | a day ago
No, it's not that there are no enemies, it's just not possible to militarily take out a country completely without scorched earth strategies. Most if not all modern countries even the theological crazies know its a losing proposition.
No modern military can really win a war of attrition, including the US. The more powerful and advanced the military gets, the more expensive it becomes to use. We focused on policies of overwhelming inefficient power, and it's a largely worthless strategy in today's world.
g1rthqu4k3 | a day ago
Do you think Bin Laden attacked us because “he hated our freedoms” or something?
AENM1776 | a day ago
We could cut the entire defense budget and we would still have a deficit.
MajesticBread9147 | a day ago
Government revenue as a percentage of GDP is lower in America than Basically anywhere else in the developed world.
In America is 29%, in Japan it's 32%, Australia 36%, Canada 41% etc.
Greece and Poland are at 47% and 43% respectively and that doesn't stop them from growing faster than the EU average.
Whaddduptho | a day ago
But most of those countries have an equal or higher debt level relative to GDP.
Our public debt is nearly 100% of our GDP.
The same is true for Canada.
Japan is at like 250%.
If we had the same debt to gdp ratio as japan we'd be carrying like 80 trillion in debt rather than the 39 trillion we currently have. Japan only has a yearly income (GDP) of 4.4 trillion yet they have 11.3 trillion in public debt. It will take a miracle to ever pay it off.
reeeeecist | a day ago
Yes, but Japan is also the biggest creditor. Part of their debt is stimulated by their low rates, causing the Yen carry trade. So their debt is mostly financed into assets with a higher return than the interest rate. The US in contrast is a debtor nation, with a net debt of 60% of GDP.
Scrandon | a day ago
That’s because we don’t have as much government healthcare which is a huge source of spending, and we have that cost in addition to taxes.
magicroot75 | a day ago
the chart that actually matters is interest payments as a percentage of revenue, not the absolute debt number. when debt service costs start crowding out discretionary spending the constraint becomes real regardless of what
Prestigious_Load1699 | 9 hours ago
This is precisely where are now and the one undeniable fact that everyone has refused to acknowledge for two decades now.
Believe it or not, borrowing comes at a cost.
Shocking, I know.
coalescence2071 | a day ago
You really needed a chart for that? Debt had been an issue for the last two decades. We had a “Tea Party” in the early 2000s to reduce national debt back when it was not even close to $40 trillion. Unfortunately that Tea Party has turned into the Anything Goes Trump Party and now debt is a nonissue….
So_HauserAspen | a day ago
A tea party complaining about a program that Bush signed into law for an economy he and the GOP tanked. Convincing people to spend and borrow recklessly while we invaded countries unnecessarily. Killing possibly millions. And most of the money spent on the war against people that worship god with a different book of fever dreams was done with emergency appropriation bills that were being left off the books in a nice act of fiscal cooking. About $8 trillion in appropriations outside of the budget. Plus the doubling of the defense budget from $250 billion under Clinton to $500 billion after the invasion.
coalescence2071 | a day ago
Yes, Off-Budget spending is the best kept secret. Congress loves it, presidents love it. The national debt just magically goes up while the official budget looks not so bad for decades. The Trump Iran war goes mostly off-budget.
seanmonaghan1968 | a day ago
So if global investors no longer buy treasuries and avoid the USD...then interest rates will rise and so will inflation. Sort of funny really
bd2999 | 23 hours ago
Thing is Biden reduced the deficit. Deficit hawks never care unless it is attacking policies that do not make people richer. No new taxes and we can afford war and slush funds but not medicaid.
The deficit and debt for sure need to be stabilized and reduced but in the climate there is I do not see it happening. It was never approached in a balanced way. Those wanting cuts wanted to ax all social aid and go full austerity.
tawaydont1 | 3 hours ago
By raising taxes in the middle class they lower the standard deduction back to 12k which made more people have to pay taxes and the children tax credit was reduced under Biden. Trump has doubled the child tax credit that and raised the standard deductions.
DeathMetal007 | a day ago
I see nothing in this proposal about concrete plans to bring Democrats together to complete this objective if they hold House, Senate, and Presidency. I get that Republicans play lip service to deficit reduction and spend the same amount while lowering taxes which is something no one should be in favor of in this tight demand and supply economic balance, but Democrats have not had any coherent policies to maintain current spending levels and raise taxes. I’ve only seen tax more and spend more which ends up running deficits in the end.
Can someone prove that Democrats can come together in the past and future to do something about deficits?
streamofbsness | a day ago
The US electorate functionally prefers this. We will never vote for someone that wants to both increase taxes and cut spending. We would rather vote for someone who promises to ease the pain, then yo-yo back to the opposite party when that fails.
Professional_Flan466 | a day ago
the US electorate wants to tax the rich and the corporations, but of course thats not on offer when our parties are owned by the billionaires.
streamofbsness | a day ago
No we don’t. We might say we want that, but our actions don’t follow. Neither party might tax the rich right now, but it is abundantly clear which is *closer* to doing that. But we don’t vote that way, in fact virtually every county shifted the *other* way less than two years ago.
> our parties are owned by billionaires
If we collectively cared, like *actually* cared, that wouldn’t matter. We could grassroots fund actual good candidates and cancel our cable news memberships. All the billions in campaign financing really just amounts to advertising. As attractive as they want to make a shit sandwich in commercials (i.e. mainstream media), we don’t have to buy it. But we collectively do, because we’d rather be told who to vote for than spend any amount of time figuring it out ourselves.
Only about a third of eligible voters vote in primaries like this week’s California one. Only 28% of “young eligible voters” voted in NY mayor race, and even that was a “historic” enough turnout to put a “socialist” in charge of Wall Street’s hometown.
https://circle.tufts.edu/latest-research/young-voters-power-mamdani-victory-shape-key-2025-elections
Unless you believe actual vote counts are rigged, the ultimate responsibility, *and power*, lies with the electorate. Billionaires can advertise us their candidates all they want, but we don’t have to buy them.
If you actually care, convince everyone you know to vote every fucking time they can, down the whole ballot. Otherwise, we get what we deserve.
Swimming-Dealer293 | a day ago
No one can prove a future event. However, Clinton had a budget surplus and was on track to payoff all the debt well before today. That is a fact.
But bush was elected and thought that the government shouldn't run a surplus, so he cut taxes and spent a bunch on an absolute meaningless war, kinda like what's going on now.
Do I think this can be done today? Absolutely not. Too many people prefer hate over compromise. Especially voters...
Prestigious_Load1699 | 9 hours ago
It is a fact presuming the tech stock bubble that fueled Clinton’s surplus would never pop…
Which it did soon after he left office.
DeathMetal007 | a day ago
Note that I said a Democratic House and Senate of which your example has neither.
GhostofBeowulf | a day ago
Your take ignores the historical precedent that every "Democratic house+senate" has to deal with, or what actually happened during those administrations and congresses. Also that what you are discussing has occurred exactly twice since 1980. And Clinton increased taxes in 1993, and then his party paid politically for it.
As best as I can tell, the only two administrations to balance a budget were democrat. Granted one was before Nixon reworked the executive office of the presidency resulting in Congress changing the budgetary process, but that's a little more in depth that I would like to get into.
Swimming-Dealer293 | a day ago
So it was rhetorical then? Gotcha.
Point is it has been done, but not under a Republican president, but under the leadership of a Democrat president.
DeathMetal007 | a day ago
Wouldn’t you prefer not having to deal with a contrarian Republican House/Senate/President?
In the current political climate, there will be no coming together like before. It will have to happen under one color.
Swimming-Dealer293 | a day ago
Personally, I don't care how it happens as long as it does...
Could theoretically still happen with representatives from both parties, if the electorate didn't focus on "owning" the other side...
SeaEmployee787 | a day ago
Our country is not capable of that. That would involve high taxes for the billionaires, high taxes on financial vehicles that don't make anything, nor create jobs. People not billionaires or corporations getting a service for their taxes, example health care, child care, college. So they don't join in an agree that Elon musk pays too much in taxes.
OddlyFactual1512 | a day ago
Interesting that you require proof the Democrats will fix the mess, but ignore all the evidence Republicans created it and continue to make it worse.
Odd_Repeat_6092 | a day ago
https://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/
So_HauserAspen | a day ago
This leaves out the reduction to the defense budget. I remember that being one of the GOP's primary talking points during the 98 and 2000 election cycles.
Also remember Al Gore being ridiculed for wanting to put Social Security in a lock box.
Al Gore was right about everything too.
Odd_Repeat_6092 | a day ago
Reagan had big tax cuts for the rich alongside increased defense spending, which contributed to rising federal deficits. Clinton practiced anti-Reaganomics & lowered the deficit.
Under Reagan the U.S. transitioned from being the world's largest international creditor to the world's largest debtor nation.
Al Gore was right about climate change. Everything else is politics.
DeathMetal007 | a day ago
Note that I said a Democratic House and Senate of which your example has neither
Odd_Repeat_6092 | a day ago
The last president to have a supermajority in Congress was LBJ. During that period LBJ passed Medicare and Medicaid, the Voting Rights Act, the Higher Education Act, the Immigration and Nationality Act of 1965, etc.
Clinton's Omnibus Budget Reconciliation Act of 1993 passed even though every Republican in Congress voted against it & some Democrats. It took the VP, Al Gore, to break the tie in the Senate. https://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993
So_HauserAspen | a day ago
Always got to be some reason to not accept the facts that democrats are actually good for the country while republicans are only good for themselves and their donors...
50 million jobs to 1.5 million jobs and that still doesn't provide reason for you to think for yourself.
The GOP is a confidence scheme and if you look around the table and can't find the mark, it because you overlooked the mirror.
mtg-Moonkeeper | a day ago
The same stats that show we're better off with a Democrat President also show we're better off with a Republican House and Senate.... especially the House. Though I get the feeling that's the kind of thing most of Reddit wouldn't want to admit. The 90s had Gingrich, and 2010 through 2016 had the Tea Party. Both resulted in rapid decreases in our yearly deficit.
I'm not willing to say one party is better than the other. I am willing to say the friction that occurs when there is no single party rule slows down the expansion of government.
AdCertain5491 | a day ago
Am I crazy or is it embarrassing that the a president's chief economist needed a special chart to see this problem.?
The math isn't difficult. If we borrow at rates higher than growth we will accumulate debt, ceteris paribus. Raising taxes and cutting spending aren't politically palatable. Financial repression is the solution both parties will find themselves nudged towards. We simply cannot grow fast enough. 20th century growth was an outlier event, not a new baseline.
Scrandon | a day ago
Yet, the rate of technological progress continues to grow exponentially.
AdCertain5491 | a day ago
Technological progress does not equal GDP growth. Remove the historic budget deficit and GPD growth is likely lower.
Scrandon | a day ago
It’s basic basic economics that better technology increases productivity and therefore gdp growth. Especially with the type of stuff that’s on the horizon like AI. So your lazy one sentence dismissal of that makes me think your opinion is absolutely worthless. Have a good one, chief.
AdCertain5491 | a day ago
Check out Robert Gordon's NBER papers on growth.
Not all technologies are created equal. Many of the technological transformations we experienced in the 20th century are one time changes (indoor plumbing, air conditioning, ICE). Many of the 21st centuries biggest advancements are in consumer entertainment-not capital goods (The current gen iPhone isn't meaningfully adding to productivity compared to a model 4 or 5 years ago. TVs get cheaper and cheaper but they aren't contributing to more productivity).
Plus the US, faces severe headwinds: demographics, debt, inequality to name a few.
And don't forget about Baumol's cost disease- industries that rely on human labor will continue to outpace inflation and need huge systemic change to see productivity increases.
Yes there is AI, but AI is probabilistic text, it doesn't reason from first principles-can it ever be accurate enough to meaningfully replace huge numbers of human workers across the economy by being more productive than humans? Additionally AI is already experiencing diminishing returns instead of Moore's Law 2.0, AND it's current deployment is terribly underpriced, when the venture capital dries up who will be able to afford AI for which tasks?
Scrandon | 23 hours ago
lol. Those are not the 21st century’s biggest advancements. You’re a joke, and you're clearly bad faith so I’m outta here.
Google: what are some important technological advancements of the 21st century?
The 21st century has seen unprecedented technological leaps that have fundamentally reshaped global society, communication, and industry. [1, 2]
Communication & Computing
Smartphones & Mobile Internet: Handheld computers connected to high-speed cellular networks revolutionized how humanity accesses information and communicates.
Cloud Computing: Shifting data storage and processing power from local machines to remote data centers enabled mass digital scalability.
Social Media Platforms: Digital networks transformed global communication, political movements, culture, and information dissemination.
Quantum Computing: The realization of operational quantum processors began solving calculations too complex for standard supercomputers.
Intelligence & Automation
Generative Artificial Intelligence: Large language and multimodal models enabled machines to create human-like text, code, images, and video.
Advanced Robotics: Autonomous drones, advanced humanoid robots, and robotic manufacturing reached new levels of precision and agility.
Autonomous Vehicles: Self-driving algorithms and advanced sensor arrays allowed cars and trucks to navigate public roads without drivers. [1]
Biomedical & Genetic Science
CRISPR-Cas9 Gene Editing: A precise molecular tool allowed scientists to easily modify DNA sequences to treat genetic diseases and alter crops.
mRNA Vaccine Technology: The deployment of synthetic genetic blueprints enabled rapid vaccine development and distribution during global health crises.
Prosthetics & Brain-Computer Interfaces: Direct neural interfaces allowed paralyzed patients to control robotic limbs and digital interfaces using thought.
Energy & Sustainability
Grid-Scale Energy Storage: Massive lithium-ion and solid-state battery installations allowed power grids to store and utilize intermittent renewable energy.
Commercial Reusable Rockets: Vertical takeoff and landing rocket stages dramatically lowered the cost of entering space, launching a new satellite era.
Electric Vehicles (EVs): Improvements in battery density and manufacturing scaled zero-emission transportation into the automotive mainstream.
Massive-Island1656 | a day ago
By this chart 1995-2000 would’ve been bad signs but they were boom years under Clinton. And 2008-10 would’ve been good and yet we were in a recession bordering on collapse. And the fact that this economist had no problem printing under a dem but now is against the same policies is another big red flag
ComfortableParsley83 | a day ago
Convenient things to say when not in power. When dems get back in power, it’s no longer an issue. Frustrating that no one is taking accountability for this f’ing mess.
rawkguitar | a day ago
I saw an interview or read an article or something that said behind closed doors lots of legislators admit it’s a problem but say they’ll be long gone before it comes to a head.
Great system we have.
3Dchaos777 | a day ago
Boomers doing boomer things
GhostofBeowulf | a day ago
...I feel like you've got the opposite take here buddy. The budget hawks only come around when democrats are in power, and are silent during republican administrations.
Likewise, where were they when Trump was running up the deficit year over year, accounting for nearly $10T of overall debt over the next decade?
busyHighwayFred | a day ago
Massie debt clock pin on his jacket even now
ComfortableParsley83 | a day ago
Repubs are definitely worse about it, but dems love to spend also
Scrandon | a day ago
“I can’t tell the difference between tax cuts for the rich, worthless wars, and subsidizing fossil fuels vs investment in infrastructure, education, science, and health.”
“I can’t tell the difference between spending to stabilize a struggling economy and cutting taxes when the economy is already doing well.”
That’s you
TreeInternational771 | a day ago
I’m questioning it because our healthcare system is among the worst for preventative care among developed nations and the data is clear on spending money to fix it. As incomplete as it is, Obamacare was putting on us on a path to better outcomes. The government should absolutely continue running deficits for a healthier populace.
On education, yes spending money on tertiary education has a good ROI making it worth running a deficit. Maybe not as good as primary but its high. There is a strong college wage premium not to mention that higher taxes they pay back into the system via higher wages. This then feeds into better health as college educated populace has better access to healthcare which feedbacks on itself positively
Sea_Dawgz | a day ago
Ah yes, Democrats might win some elections.
Time to care about the Debt again.
My goodness the NYT is so predictable. And man, they fucking hate their readers.
AkitaBijin | a day ago
This article is nearly one year old having been published in July of 2025. What is the purpose of it being posted today in June of 2026?
Is there some new development that would justify posting it 11 months later without a specific disclaimer indicating how old it is?