What's really striking is the current administration performed one of the most brutal cost cutting programs in recent memory. And despite the massive amount of disruption caused (and to be caused) there is almost nothing to show for it financially. Just pennies in the ashtray of a Lamborghini.
Obviously the people behind it were not serious, and did nothing to actually address government waste or reform the welfare system. But the result is the same - the idea of cost cutting as a means of addressing the deficit is effectively dead. There is no dry powder on the "slash budgets" side of the ledger. All that's left is raising taxes. (Or do nothing until there's an actual hyperinflation event).
We won't solve the problem by raising taxes. Let me be clear that I agree that raising taxes should be part of the solution, I just don't think the people will vote for that. People will at most take a token increase on the "rich" that will bring in a lot less money than planned because they will find a way to dodge it.
Most likely, the bulk of the solution will come through debasement and stealth default. Real inflation plus manipulating the official inflation numbers to default on a part of inflation adjusted obligations like TIPS and social security.
The problem is that taxes are never actually raised "fairly" or even at least proportionally. And the higher taxes rise, the faster the social split accelerates, with fewer and fewer (relatively) people paying first 40%, then 45%m then 50%, all the while watching their richer neighbors tax evading first at 30%, then 25%, then 8% then 1% then whatever comes after. I assure you, nothing motivates voting for literal Lucifer if he promises to reduces taxes even a tiny bit from the levels already reaching 50%+. I'm at the bottom quartile per my position and I pay 40% annually, my richer peers from top quartile pay something which would amount to around 22-24% annually from a higher gross too. Same country, same industry, same bands/grades. M for Motivation. I personally wouldn't vote for Lucifer at next election, but only because I do realize that he would simply lie about everything. But I do understand everyone from middle class who would believe sweet lies.
And while the notes above are my observations and thoughts, they are not something outlandish or wrong. Sociologists have also noticed this effect, it even has its own name and studies:
Trumps spent hours every day on the campaign trail rambling random ideas off the top of his head. He "telegraphed" everything from baby bonds, flying cars, free women's healthcare, "Freedom Cities", etc.
The reality is that he promised so many things to so many people that no matter what he does it can be spun to look calculated.
Regardless, from a realpolitik point of view, it's easier to remind people that are not getting what they wanted and were tricked, rather than try to convince them they were wrong this whole time.
And yet denied by the President, never heard of it, nothing to do with it etc. anyone who takes his word was convinced that dems were just being paranoid
On one hand agreed, on the other though I don't know if we can take this as especially important from a President that lies about literally everything. Not sure if him telling the truth about their plans would have actually changed anything.
They have no intention of raising taxes on the rich. In amongst all the DOGE "work" in the media, behind the scenes, Trump's administration delivered some of the biggest tax cuts for the rich the country has ever seen.
Huh? From what I heard, no combination of groups in the beltway bothered to expend the political capital to actually force through across the board cuts. Not even a meagre 5% cut per annum from the total budget.
They all backed out when it came to walk the talk.
(Or to cut $1 billion here and there, hundreds of times per annum, which would have needed like a dozen DOGEs and iron discipline in Congress)
> From what I heard, no combination of groups in the beltway bothered to expend the political capital to actually force through across the board cuts.
The administration successfully passed through some recisissions (the ones that gutted the entire USAID program, CPB, and etc) and passed the OBBBA. To say the "backed out" I think is a bit too generous. They essentially threw out anything that wasn't hard bolted down by the Constitution.
The reality is there is not any real way to achieve significant cuts without entitlement reforms or defense cuts (lol).
You don’t make meaningful progress when you focus on a rounding error part of the budget. It’s like targeting private jet use for climate change. It’s for the feels so you can pretend you’re on the right side of things while doing absolutely nothing that matters in final effect even if 100% successful.
If you want to solve the budget deficit you need to go after the things that matter which is mandatory social spending these days. That and the revenue side combined are all that matter. Even the military is starting to become more and more irrelevant as social spending and debt service eats up all the air in the room. You could end it entirely tomorrow and you’d still have a deficit. It’s not the 1990s anymore.
Anything else can be immediately written off as unserious action brought by unserious people. The bike shedding of budgetary politics.
> It’s like targeting private jet use for climate change.
Bad example, because private jet use (and flying in general) is still relevant and shouldn't be ignored and it is easy to address with the overall solution which is carbon taxes.
At some point I realized: there is no plan to fix it. Both of the parties are just hoping that the upcoming crisis happens while the other party is in power.
The Two Santas strategy <https://www.milwaukeeindependent.com/thom-hartmann/two-santa...> is the American implementation of the famous Alexander Fraser Tytler quote: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
> Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.
Good times have made weak men. People unwilling to stand up for our values. Afraid to even declare what we stand for. Afraid to be proud of our traditions and what makes our way of life superior and worth defending and fighting for. These weak people will vote for candidates who demoralise us and weaken us and ensure our demise.
One characteristic of democracy is that it is ever-rewritten by those who strive to change it and vote. (Also, occasionally assassination, in Long's case)
That is extraordinary insightful. It's frightening to see how correct it is, and to recognise that Europe and the US are both well past the abundance phase.
There would be abundance if the trillionaires were happy with 5% returns and invested in housing instead of gambling (and being bailed out eventually) on "Super Intelligence".
> The average age of the world's greatest civilizations has been 200 years.
Sounds like total bullshit. I briefly googled it and apart from AI also telling me that it was total bullshit, the first list I found split the Roman empire in two so it would neatly match the hypothesis!
Someone just thought of that and then found data to fit their neat idea.
>> The average age of the world's greatest civilizations has been 200 years.
> Sounds like total bullshit.
You're right. It more like an avg of 118 years (median 73), not 200, depending on what you mean by "greatest" ofc. The Ancient Romans, US, and Dutch pulling that average up and 1/3 of historically modern continuing democracies having a short lifespan being founded around WW2, pulling it down.
The Roman Empire was not stable for an uninterrupted period of time. It's conceptually called a single state for simplicity, because such a large period of time and area of land naturally had instability (less than current Europe, granted). The Roman Empire democratic government lasted about 487 years before falling into autocratic rule.
It turns out that I'm not impressed with "we still have a deficit, but it's smaller than under the previous administration". No budget that runs at a deficit is acceptable.
Who cares if you’re impressed when you’ve fallen for propaganda (I guess maybe politicians care).
“No budget that runs at a deficit is acceptable”
Why not? Deficits can be healthy and safe when they’re managed. Literally most persons, businesses, and governments use debt. It helps manage purchases over time, and it’s an inflationary hedge.
The idea that “any deficit is bad” was literally pushed as propaganda to make you fatalistic about managing the deficit. As said, one party raises it, one party lowers it, and the party that raises it claims that lowering it to anything but zero is “just as bad” as their runaway debt growth. Propaganda.
>> “No budget that runs at a deficit is acceptable”
> Why not?
The household analogy works for some people because it answers a moral question, not an economic one: Why should government be exempt from rules that individuals must follow?
The development of the household budget idea as a way of reasoning about the the federal government's is as old as economics itself. The Greek word for economics is oikonomia, consisting of
- oikos = household
- nomos = management
This analogy broke 90 years ago in the US, when, in the aftermath of the great depression, Keynes argued that governments should do things that households cannot: borrow during recessions, spend when private demand collapses, tolerate deficits until recovery. And that these have a beneficial effect on the economy and its participants because government spending becomes someone else's income, essentially injecting demand into the economy.
During the 1970s, US politicians realized that the household budget analogy was an effective rhetorical tool for arguing for fiscal conservatism. Its effectiveness bore no relation to its reflection of present reality. What it did reflect was a set of values: thrift, responsibility, independence, and skepticism of debt. But most of all, it speaks to a sense of justice - that the rules for me were also the rules for thee. The difference that the government plays by a different set of economic constraints than I do is the fundamental tension that the household analogy attempts to address. This is a moral intuition not an economic intuition. The sentiment still holds power today despite it being a bad intuition pump for economic reasoning.
That is an amazingly flawed idea. By that reasoning, only a neutral budget is acceptable, and a positive debt surplus a boon. Unfortunately, the opposite is empirically true: the only places running total budget surpluses tend to be undemocratic shitholes because they need to promise nothing and do not rely upon the consent of the governed to loan them savings and pay them taxes.
That is quite beside the point that sovereign debt is considered one of the safest places to store savings and by diminishing the stockpile of debt with a budget in surplus one is diminishing the economy’s ability to save at a low risk level.
I’ve been in municipalities and provinces running healthy surpluses and the economy booms during those times. People do better and schools are better run and so on. And for that matter, Canada boomed after the government fixed the budget in the late 90s. We went south again when the new government showed a complete lack of respect for money.
Were those municipalities and provinces receiving any money from the federal government and is that how they had surpluses? That's certainly how it works here in the US.
Not how it worked in my home state growing up. The state intermittently ran budget surpluses and were net givers to the federal budget. Still are today.
I’m also not entirely sure how relevant that is due to states (and provinces) not printing their own currency though. Very different situations.
Well, the goal is not to impress HN user bigstrat2003. The goal is to have a government and country that continue to function. A fiscal deficit by itself is not a bad thing, and I suspect you would have an extraordinarily difficult time coming up with coherent arguments to the contrary.
1. They’re unable to get enough support to pass more taxes (yet), so “balancing the budget” after republicans lower them on the rich would mean killing people by cutting services.
2. The vast majority of our spending is not discretionary, anyway. You can’t refinance social security.
3. Democrats held the executive for the past two recession recoveries, and spent accordingly at the advice of new school economists. Which worked both times, BTW.
4. The government’s budget is not like a household budget — a deficit isn’t necessarily a terrible thing. Obviously the current situation is absurd, but we should also avoid simplifying complex matters of state like libertarians do with ethics just to avoid hard conversations.
What? That is so not true I don’t even know where to begin. The President, of course, has some input into what the budget will be but we have seen plenty of times that Congress can and will flex their power when the parties of the Congress and President do not match.
The president has a huge say in which bills and budget items are passed, they routinely put enormous pressure on individual senators to whip votes for their agenda. This goes double or even triple for Trump! Congress might literally create the budget, but in our age they're – at the bare minimum – starting from the president's agenda and working with him to pass what he wants first.
Sure, when the party controlling both members of Congress matches the President. Less so when it doesn’t. Some of the biggest reductions in the growth of spending come when the parties do not match for that very reason.
Entitlements and interest expense are more than 100% of revenue in 2026. That's the before the military, foreign aid, the courts, NASA, and anything beginning with "Department of". The deficit is structural, and while "tax the rich" is easy politics, I don't think you'll find $2T there.
In my opinion the following graph should be mandatory viewing before any discussion on major tax policy changes in the US.
That isn’t enough; there would have to be cuts to social security & medicare. The rich don’t have enough money to cover the federal government’s obligations.
that's yet another "both sides are the same!" fallacy
you are right in that neither can fix it entirely
only one party consistently raises the debt->deficit
and only one party consistently lowers it
hint: you cannot spend $21 TRILLION on militarizing the country and going to war without exploding the deficit, there's no profit in war, only massive expense
and that $21 Trillion was before the Iran War which is going to go on for years and cost another trillion to replace all the weapons and ships, remember all those bases and planes that were destroyed which this administration is covering up
Doing the both sides thing here is so, so frustrating… Obama and Biden both spent big to avoid/alleviate recession conditions, that is true. But it’s just not comparable at all:
1. First off: the deficit article were commenting under right now. This is unusual and terrible and 100% due to GOP norm breaking.
2. The BBB raised the debt astronomically, so this will continue well past the end of the war.
3. We’re engaged in a war of choice with a huge country with no end in sight and no stated objective, and the pentagon is getting more money than ever.
4. The corruption and graft is so rank and blatant that it might actually make a dent here, which is absurd. God forbid they carry out their ethnic cleansing plan for Gaza and then we pay for Trump City, there. Not to mention all the subordinate graft.
5. Only one party has divorced itself from reason entirely. Democrats are deeply flawed and I disagree with many of them on many things, but none of them dare try the ‘nuh uh shut up’ approach that is central to the GOP in the days of Trump. Imagine if they said anything as absurd as “Haitians are eating our cats and dogs” or “I’ll give everyone $5k” or “I didn’t lose the election that every single watchdog said I did” — they would be lambasted and forgotten within days.
6. Only one party is planning for the other party to ever be in power ever again. That is, assuming you don’t take Miller’s word for it that there are seven bajillion illegal aliens that the democrats ship in to win elections, which just hasn’t happened to work yet because the GOP is just too popular, and hasn’t been uncovered in any actual investigations because they’re just too darn tricky.
Sorry. Presumably this whole thread will be wiped anyway. But this is not a “both parties” thing! We’ve had a balanced budget and a positive treasury balance in my lifetime, and I’m a baby person!
(People said it was impossible then as well, FWIW.)
It’s important to remember that Obama and Biden’s predecessors also both spent big to alleviate those economic problems.
I’m convinced that a big part of our political woes come from the fact that major elections are at the end of the year. Obama election, 2008. Great financial crisis, 2008. So who oversaw the big bailouts and massively spiked the deficit dealing with the crisis? Obama, of course. Except it wasn’t, it was Bush.
Likewise, Biden 2020. Pandemic 2020. Who oversaw lockdowns and massive federal payroll loans and big government checks sent out? Biden! (No, Trump.)
Bullshit on the lazy “both parties are the same” framing. Bill Clinton actually balanced the federal budget and ran a $236 billion surplus in 2000. His 1993 deficit-reduction package passed without a single Republican vote. You just keep eating up the Republican bullshit...
I agree that Republicans are probably worse on this topic, but as far as I can tell, the parties are closer to parity on this than they were in 1993. The Democratic party doesn't seem have people like Bill any more.
While literally true, this is not very insightful/useful information because Obama entered office at peak deficit spend to counter the mortgage crisis, and Biden entered at peak deficit spend to counter COVID lockdowns. Because both the mortgage crisis and COVID eventually ended, deficit spend came down from those peaks without either president meaningfully reforming the budget.
Structurally, the budget has gotten worse every year since the 1990s. In large part for reasons not attributable to presidents. For example the number of old people (as a % of the population) in the US has doubled since the '90s, thus ballooning medicare and social security spend. Without cutting eligibility to those programs, increased spend was always going to be an inevitability due to seismic underlying demographic trends. Second, the persistent deficit has led to now $2T in annual interest expense. Again, not something an administration can simply "reform" or back out of; that is now structural inherited spend.
It's overly simplistic to say that Clinton balanced the budget. While the 1993 bill raised taxes and reduced defense spending, there would not have been a surplus without further cuts driven by Republicans in 1997.
There was also the dot-com boom, which of course wouldn't have happened without Al Gore inventing the Internet.
The pattern is extremely clear. During my lifetime, the deficit had increased under Republican presidents and decreased under Democrats. This has held steady for decades. That’s the more important thing than the question of exactly why one of them managed to get it to zero one time.
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Thanks I agree its very relevant to a lot of things too especially societal/political paradigms that will never end without a gigantic shift that is AI. Glad you can see through the noise and understand that too
The US federal deficit is growing at an alarming rate; if nothing is done, it will solve itself with inflation. US debt is denominated in USD, so the US will not default; the value of money just steadily declines until the debt burden matches the capacity of the US economy to pay for it. Also, US tax rates are relatively low, US can pay the debt by increasing tax rate if there is political will.
The country with the worst debt crisis is France. Their tax rate is 40%, they don't have their own currency (It's EUR), they have a large primary deficit and it's politically impossible to cut spending. EU must rescue France in next 4-5 years.
they will raise taxes while cutting the budget.
in a multiparty system there are ways to achieve politically unpalatable things.
in Italy we have what we call "technical governments", we don't vote for the government, only for parliament, and they elect the government, when nobody has a clear majority they vote for a "compromise" government where they elect a prime minister that is from no party, usually an economist or someone like that, which carries out the politically unpalatable reforms, in France they will do it with a split parliament/presidency
>Also, US tax rates are relatively low, US can pay the debt by increasing tax rate if there is political will.
The whole point of debt is that it never gets paid. Not. a. single. country. has ever paid it off (and the few times it did happen, hundreds of thousands died). It keeps rolling forward, and gets eaten by inflation. The vast majority of "first world" countries have a 50%+ debt to GDP ratio (except when you do like Germany and manipulate the eurozone currency to your advantage) and are doing just fine. Countries have debt because people want to lend to them, because it's where things happen. Bhutan doesn't have debt, because it doesn't have the money to build it up.
>EU must rescue France in next 4-5 years.
zzzz
Can the american bots worry about their own country and their deeply ingrained problems before repeating the propaganda you read in the atlantic ? It's getting a bit boring.
In the 1970’s the Belgian deficit ran from 66 to 100+ percent of the BNP. Every governement since had serious trouble getting the deficit manageable. We never really got it unde control, and the intrest is hurting us. Afaik we got to 104% because we had to when joining the euro, which was our best. We are now at 109% again, and even that is hurting us hard.
Some mitigating circumstances are COVID in his first term (also effecting Biden), but there's also a lot of 'self-inflicted' damage, especially the last two years.
It turns out tax cuts may not actually pay for themselves (never mind ill-considered military adventures).
> obama nearly doubled the national debt in 8 years ($11T -> $22T).
Helping to recover from the GFC (which happened under the GOP). Notice how the deficit in Obama's second term was way lower than his first term? Notice how Obama2 isn't that much more than Bush2 (who started all sorts of military adventures)?
Way to change the goal post when we are discussing budget deficits. Even then Obama added around $10 trillion to debt in eight years. Trump added close to $8 trillion in just four years in his first term.
In 2009, the budget deficit had risen to $1.42 trillion thanks to the massive bailouts of financial institutions. By 2016, when Obama left the office, it was down to $0.59 trillion.[1]
> obama nearly doubled the national debt in 8 years ($11T -> $22T). this is not a problem specific to a party or a president
It's almost like there was a Republican-policy-created crisis that called for massive spending in his term. And then he expanded healthcare for many people who'd never get it otherwise!
But that pales in comparison to the Russian diesel that's going to bring down my gas prices, and my private investment in arms manufacture that's growing quite well these days. So yes, we're doing much better with the debts incurred by the current administration.
>It's almost like there was a Republican-policy-created crisis that called for massive spending in his term.
As an European it's pretty funny to read this thread. "Your party debt was reckless and incompetent. My party debt was necessary and caused by your party anyway". Seriously, having just two parties looks like nightmare for democracy.
Having said that, before I get crucified as a centrist, there are bad and worse, and Trump is clearly worse.
The level of debt is an issue when the revenue doesn't cover the spending, leading to a budget deficit. Obama reduced the deficit even after he increased the debt. Trump increased the debt and reduced the revenue widening the deficit. That's not the same thing.
The smart thing to do would be to raise taxes (not just on the wealthy) and cut entitlements. Reducing the deficit would indeed slow down inflation, give the Fed room to cut interest rates, and boost business investment. The economy would be in a much healthier place.
Oddly enough, there are plenty of European countries with lower taxes holistically, higher entitlements, and lower debt / deficit levels.
As far as I can tell, the solution isn't nearly that hamfisted. It requires:
- Reinstituting rule-of-law (not just Trump; the whole system)
- Instituting basic proper management of funds
In Europe, I can walk into a government agency and be done in 15 minutes, with a smile from the administrator, for what would take months of fighting in the US. If a part of the government is breaking a rule, I can point them to it, and they'll follow it. Courts are slow, but follow clear laws; I don't see black robe syndrome. And police follow and enforce laws.
US used to be closer to that too; it actually led the world in good governance for much of history.
That's hard work of diving in and cleaning up every piece of the administration. There's no stomach for that. Until there is, the deficit will keep going up.
> Reinstituting rule-of-law (not just Trump; the whole system)
It's probably more correct to just say instituting. While Trump has certainly turned the rule of law on its head, it's a not-so-secret secret that the law has never really applied to the rich and powerful. If we're already going to be making fixes, we should make a real effort to honor the rule of law.
That would necessarily include things like reforming bail and fines so they scale properly with ability to pay, especially in the case of corporate fines.
Targeting "entitlements" as a universal fix ignores both the fiscal math and the human costs. Healthcare makes up the lion's share of that spending; cutting it just shifts uncompensated care burdens onto hospitals and inflates private premiums. Cutting programs like SNAP and WIC means pulling food support from children, which causes long-term economic damage.
If the goal is deficit reduction through spending cuts, policy needs to evaluate actual economic ROI. Programs like nutritional and income supports have positive fiscal multipliers, which is why blunt austerity measures trigger negative feedback loops and contract growth.
Spending cuts have a place, but treating entitlements as a slush fund without accounting for the economic return or impact on people isn’t a productive policy proposal.
>Healthcare makes up the lion's share of that spending;
I heard US healthcare, rather famously, spends more per capita than any country in the world, despite still being rather terrible. Maybe the solution is actually reforming it in an European way (including universal free healthcare)? Your other points are very interesting to me, especially negative feedback loops of austerity - I never thought about that before.
The primary factor (in my view) is that we pay healthcare providers (doctors and nurses) 2x to 3x as much as other developed countries.
That creates knock-on effects throughout the healthcare system:
* Doctor time is worth $xxx/hour, so every second counts. We hire a bunch of support staff to make sure doctors aren't "wasting" time on paperwork, taking vitals or talking to patients. Now it costs more to run a practice.
* Doctor time is worth $xxx/hour, so we need to make sure that health insurance only pays for procedures that people truly need. That leads to insurance companies hiring a bunch of doctors and nurses to adjudicate claims (that's expensive, plus fewer doctors practice medicine). It also leads to denied care.
* Doctors have a lot of money, so if a procedure goes bad and you want to sue someone, they make a juicy target. Now you have higher malpractice insurance, so doctors bill even more.
* Doctors are afraid of being sued (see previous), so they often order more tests than necessary to prove they are providing adequate care. Those tests cost money.
The cause of high doctor salaries is an artificial shortage of doctors. Medical schools collude to limit the number of medical students who matriculate each year, which squeezes supply.
We could very easily fix the American healthcare system in about 10 years by simply allowing doctors and nurses trained in other developed countries to practice here, plus forcing medical schools to accept more students.
Regarding the latter, there is no shortage of qualified applicants:
1. Nearly everyone who starts medical school finishes. Matriculants are so statistically overqualified that hardly anyone washes out.
2. Medical schools have silly-stupid entrance requirements which have little to do with being a good doctor. Beyond GPA, you need many hours of volunteer work outside of class, extracurricular activities, and often research experience. These admissions requirements are imposed because there are simply too many qualified applicants for the number of slots and med schools need some "fair" way to cull the herd.
Yes the US could save a ton with a more efficient healthcare system. Additionally we have shockingly high costs for basic infrastructure as compared to other developed nations which could also provide savings if we could streamline that.
For the economic impact of austerity there has been a lot of good scholarship about this recently. Check out Austerity in Crisis?: A Narrative Review of Its Economic, Social, and Political Effects in Times of Crisis https://arxiv.org/abs/2510.10449
It isn’t as hopeless as it looks. Places like Oregon have been long experimenting with things like coordinated care organizations to better manage healthcare. Also health system like Kaiser Permanente compare more favorably to national healthcare systems than you might think.
There's no "entitlements" you can cut that wouldn't cause more harm to the economy than they would save up in federal spending. And there isn't enough income that taxing it to pay off the debt would be practical. You have to tax capital, that's where the entire world's wealth has been sucked up in the last decades. That's the only solution that doesn't involve the country defaulting on its debts.
Billionaires know that and are already starting to speak against such taxes[0], before there's even any real possibility of them being adopted. They would rather see everything turn to shit than give back a single cent.
How do you arrive at the conclusion that cuts to transfer payments (entitlements) cause economic harm but cuts to productivity (capital investment) does not?
One has a disproportionate first-order effect on the poorer, it's true, but that wasn't your contention.
1. I'm not proposing we tax "capital investments". I want to tax wealth, like unrealized capital gains. Because that's where the majority of the wealth is.
2. Why do you equate "capital investment" with "productivity"? If anything, the current situation should show you that record capital investments (in AI, mostly) are completely decorrelated from how the real economy is doing (which isn't great).
3. I never claimed that such taxes wouldn't cause harm to the economy, simply that cutting transfer payments would be much worse and wouldn't be enough to solve anything. We've been doing austerity for 50 years, it's time we think of something better.
If you want a healthy economy, you have to reduce inequalities. Transfer payments are a way to do it, wealth taxes are another. Cutting "entitlements" only worsens the problem.
If you print you cause more inflation and all the debt you need to renew requires higher yield to shift. So in practice printing yourself out of trouble is in itself a cause of trouble
It doesn’t just print money. It raises money or backs it by assets. It amazes me that people have no understanding of basic economics, or what qualitative easing is. Study the 2008 financial crisis to understand the power of modern monetary theory.
It works great, right up until it doesn't, according to historians.
According to anthropologists, we are all still the same barbarians we've ever been.
According to biology, scarcity ( the ultimate downstream effect outcome of money printing in the US since at least 1971 ) promotes aggression and reduced breeding.
According to Confucious, it's good to live in interesting times, unless that was meant as a curse ?
$1 billion/day way the initial estimate, but it was never actually that high. CBO estimates $38B through August 1, or ~ $7B/month. https://www.cbo.gov/publication/62756
I've tried this ~2 months ago with GPT pro and lost the chat. Basically assumming a scenario where it has technocratic control over the budget and it has to manage it.
It really didn't come up with anything crazy. It was basically cutting spending and raising and creating new taxes. With the plan being to spread the pain based on tolerability and medium to long term sustainability. With actions like a fedral consumption tax with planned rebates depending on household wealth.
Its also tried to be careful around things that might create long term problems like dramatic education cuts and what not.
The reforms it gives are altogether pretty numerically radical but its not radical in the internet way where its a polarized solution. It's not a reddit style eat the rich or a business trickle down wealth solution.
These kinds of exercises are great thought experiments but a little bit useless if they're not grounded in political feasibility.
The interesting reforms are the ones that are easy to sell to the general public with a 30 second elevator pitch, or a one paragraph comment online - even if the people that are currently in power might hate the idea.
The fires of those ideas can be stoked, and if enough people get behind them, then those aspiring to greater political power will begin to adopt the ideas as part of their platforms.
You're half joking but that is what will happen. We don't dare interfere with the military or police or the comfort of billionaires so obviously we need to make life even worse for poor people and old people.
The deficit is an illusion. We owe most of it to ourselves. The real problem is balance of trade and steady deindustrialization, which no administration has been able to tackle yet.
It’s a question of inputs and outputs.
Right now we’re moving towards more balanced trade by shipping gold overseas. Nonmonetary gold and metals are our largest export YTD. That’s not going to work forever.
We need to take one on the chin and allow the currency to devalue versus gold, then revalue the gold reserves which haven’t been revalued since 1973. It will result in some short term pain, but it doesn’t have to fall in the usual distribution. (Distribution of financial pain is a policy choice.)
Only after the currency is weakened will manufacturing return home. Gold revaluation can be used to buy back some bonds to reduce the interest expense.
Edit: to the drive by downvotes, if you’ve got a better idea then free to share it. This is the only option I’ve seen recently that may work before we’re in a total crisis. I don’t love it either, but this actually puts the process in our control rather than having it happen involuntarily. Continued devaluation of the dollar is guaranteed at this point.
It’s all verifiable. We haven’t revalued US gold reserves since 1973. If gold were worth, say, $8k/oz, and were revalued from the current $42/oz set in 1973, that would instantly add almost 2 trillion on paper to US reserves. All it’s doing is acknowledging the current market price for accounting purposes.
FDR used a similar trick to devalue the dollar, allowing him to expand the money supply. Of course this was when the value of the dollar depended on the value of gold, so the motivation and the effects were different.
Domestically held debt is nothing more than promises to pay future interest to US bondholders. Foreign debt is another story, but most of our “debt” is domestic. A deficit that results in growing domestic debt simply means that we’re selling more of these promises to people and institutions at home.
Domestic debt mostly matters in that it represents money that is “tied up” rather than circulating within the economy for more productive use. It’s a little more complicated since 20% of the “owners” are internal to the government, such as Social Security. And there’s also institutions like mutual funds. But half is domestic private ownership.
If anything, the size of the deficit simply indicates that USD should be valued lower than it currently is, as there’s too many existing claims on future dollars. People bought those claims assuming that the dollar wouldn’t continue to weaken, but that was apparently a mistake.
What's really striking is the current administration performed one of the most brutal cost cutting programs in recent memory. And despite the massive amount of disruption caused (and to be caused) there is almost nothing to show for it financially. Just pennies in the ashtray of a Lamborghini.
Obviously the people behind it were not serious, and did nothing to actually address government waste or reform the welfare system. But the result is the same - the idea of cost cutting as a means of addressing the deficit is effectively dead. There is no dry powder on the "slash budgets" side of the ledger. All that's left is raising taxes. (Or do nothing until there's an actual hyperinflation event).
I would settle for "not actively cutting taxes while claiming you're balancing the budget."
The DOGE cuts last year were paired with, yes, massive tax cuts for the rich: [0]
[0]: https://www.nbcnews.com/politics/doge/doge-trumps-agenda-cal...
But then they also tried raising revenue through tariffs.
So they DID massively try raising taxes, just on everybody.
We won't solve the problem by raising taxes. Let me be clear that I agree that raising taxes should be part of the solution, I just don't think the people will vote for that. People will at most take a token increase on the "rich" that will bring in a lot less money than planned because they will find a way to dodge it.
Most likely, the bulk of the solution will come through debasement and stealth default. Real inflation plus manipulating the official inflation numbers to default on a part of inflation adjusted obligations like TIPS and social security.
The problem is that taxes are never actually raised "fairly" or even at least proportionally. And the higher taxes rise, the faster the social split accelerates, with fewer and fewer (relatively) people paying first 40%, then 45%m then 50%, all the while watching their richer neighbors tax evading first at 30%, then 25%, then 8% then 1% then whatever comes after. I assure you, nothing motivates voting for literal Lucifer if he promises to reduces taxes even a tiny bit from the levels already reaching 50%+. I'm at the bottom quartile per my position and I pay 40% annually, my richer peers from top quartile pay something which would amount to around 22-24% annually from a higher gross too. Same country, same industry, same bands/grades. M for Motivation. I personally wouldn't vote for Lucifer at next election, but only because I do realize that he would simply lie about everything. But I do understand everyone from middle class who would believe sweet lies.
And while the notes above are my observations and thoughts, they are not something outlandish or wrong. Sociologists have also noticed this effect, it even has its own name and studies:
https://en.wikipedia.org/wiki/Laffer_curve
> Let me be clear that I agree that raising taxes should be part of the solution, I just don't think the people will vote for that.
Maybe the trick is to not tell them about your plans until after their vote? That's how this admin got a lot of their projects done after all.
This admin project was clear, not a secret. All of what they have done was telegraphed long before. And talked about before.
Trumps spent hours every day on the campaign trail rambling random ideas off the top of his head. He "telegraphed" everything from baby bonds, flying cars, free women's healthcare, "Freedom Cities", etc.
The reality is that he promised so many things to so many people that no matter what he does it can be spun to look calculated.
Regardless, from a realpolitik point of view, it's easier to remind people that are not getting what they wanted and were tricked, rather than try to convince them they were wrong this whole time.
And yet denied by the President, never heard of it, nothing to do with it etc. anyone who takes his word was convinced that dems were just being paranoid
On one hand agreed, on the other though I don't know if we can take this as especially important from a President that lies about literally everything. Not sure if him telling the truth about their plans would have actually changed anything.
Let me refresh your memory: https://edition.cnn.com/2026/06/08/politics/fact-check-trump...
They have no intention of raising taxes on the rich. In amongst all the DOGE "work" in the media, behind the scenes, Trump's administration delivered some of the biggest tax cuts for the rich the country has ever seen.
The DOGE distraction was 100% effective.
Huh? From what I heard, no combination of groups in the beltway bothered to expend the political capital to actually force through across the board cuts. Not even a meagre 5% cut per annum from the total budget.
They all backed out when it came to walk the talk.
(Or to cut $1 billion here and there, hundreds of times per annum, which would have needed like a dozen DOGEs and iron discipline in Congress)
> From what I heard, no combination of groups in the beltway bothered to expend the political capital to actually force through across the board cuts.
The administration successfully passed through some recisissions (the ones that gutted the entire USAID program, CPB, and etc) and passed the OBBBA. To say the "backed out" I think is a bit too generous. They essentially threw out anything that wasn't hard bolted down by the Constitution.
The reality is there is not any real way to achieve significant cuts without entitlement reforms or defense cuts (lol).
You don’t make meaningful progress when you focus on a rounding error part of the budget. It’s like targeting private jet use for climate change. It’s for the feels so you can pretend you’re on the right side of things while doing absolutely nothing that matters in final effect even if 100% successful.
If you want to solve the budget deficit you need to go after the things that matter which is mandatory social spending these days. That and the revenue side combined are all that matter. Even the military is starting to become more and more irrelevant as social spending and debt service eats up all the air in the room. You could end it entirely tomorrow and you’d still have a deficit. It’s not the 1990s anymore.
Anything else can be immediately written off as unserious action brought by unserious people. The bike shedding of budgetary politics.
> It’s like targeting private jet use for climate change.
Bad example, because private jet use (and flying in general) is still relevant and shouldn't be ignored and it is easy to address with the overall solution which is carbon taxes.
At some point I realized: there is no plan to fix it. Both of the parties are just hoping that the upcoming crisis happens while the other party is in power.
The Two Santas strategy <https://www.milwaukeeindependent.com/thom-hartmann/two-santa...> is the American implementation of the famous Alexander Fraser Tytler quote: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
-
It reminds me of the quote from G. Michael Hopf:
> Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.
Good times have made weak men. People unwilling to stand up for our values. Afraid to even declare what we stand for. Afraid to be proud of our traditions and what makes our way of life superior and worth defending and fighting for. These weak people will vote for candidates who demoralise us and weaken us and ensure our demise.
Here's a blog post by Bret Devereaux with an examination of why that theory is specious:
https://acoup.blog/2020/01/17/collections-the-fremen-mirage-...
Does Bret argue that good times do not create weak people? The blog reads as "good times create pretty great military power", which is something else.
It feels like we're seeing a bit of a turn in things... we'll see.
I was struck yesterday by reading Huey Long's "Share Our Wealth" proposals from the 1930s in the midst of the Great Depression.
https://en.wikipedia.org/wiki/Share_Our_Wealth#Proposed_legi...
One characteristic of democracy is that it is ever-rewritten by those who strive to change it and vote. (Also, occasionally assassination, in Long's case)
Today we are dominated by weak men afraid of what a greater mass of weak men might say about them or accuse them of.
The lion doesn't concern itself with the opinion of sheep.
It doesn't sound like this breaks the cycle. It just sounds like it's advocating for the dictatorship part of the cycle.
Historians fairly uniformly think that this adage is trash.
The quote is bullshit. It is not consistent with observable reality where population under pressure breaks up.
That is extraordinary insightful. It's frightening to see how correct it is, and to recognise that Europe and the US are both well past the abundance phase.
There would be abundance if the trillionaires were happy with 5% returns and invested in housing instead of gambling (and being bailed out eventually) on "Super Intelligence".
Cultural inability to advance?
One-liner bot?
This is some quaint editorial work, and compelling, but this totalizing historical assertion is smuggling a lot it assumptions into the conversation.
Plus I don’t think history plays this a-to-b. Counter examples are out there, Ottoman empire, Assyrian empire, Spartans.
Otherwise known as anacyclosis. It's a cycle.
that 200 years average does not sound correct. and so the rest actually.
> they can vote themselves largesse from the public treasury.
It isn't 2024 any more and you cannot repeat that election campaign.
Under the Trump administration, nothing goes to the voters and everything goes to BigTech, the MIC and Trump's friends.
Yeah, the quote comes across as the rich + elites upset that the poors want government programs too.
> The average age of the world's greatest civilizations has been 200 years.
Sounds like total bullshit. I briefly googled it and apart from AI also telling me that it was total bullshit, the first list I found split the Roman empire in two so it would neatly match the hypothesis!
Someone just thought of that and then found data to fit their neat idea.
>> The average age of the world's greatest civilizations has been 200 years.
> Sounds like total bullshit.
You're right. It more like an avg of 118 years (median 73), not 200, depending on what you mean by "greatest" ofc. The Ancient Romans, US, and Dutch pulling that average up and 1/3 of historically modern continuing democracies having a short lifespan being founded around WW2, pulling it down.
The Roman Empire was not stable for an uninterrupted period of time. It's conceptually called a single state for simplicity, because such a large period of time and area of land naturally had instability (less than current Europe, granted). The Roman Empire democratic government lasted about 487 years before falling into autocratic rule.
republican government. I wouldn't call that a democracy, not in the modern sense of the term.
https://amarkfoundation.org/reports/u-s-presidents-and-the-f..., though you could just google the topic and click exactly any link, clearly shows that Republican admins grow the deficit, Democratic admins shrink it.
These are just straight up numbers increasing or decreasing. It’s not complicated shit. Quit equivocating.
It turns out that I'm not impressed with "we still have a deficit, but it's smaller than under the previous administration". No budget that runs at a deficit is acceptable.
Who cares if you’re impressed when you’ve fallen for propaganda (I guess maybe politicians care).
“No budget that runs at a deficit is acceptable”
Why not? Deficits can be healthy and safe when they’re managed. Literally most persons, businesses, and governments use debt. It helps manage purchases over time, and it’s an inflationary hedge.
The idea that “any deficit is bad” was literally pushed as propaganda to make you fatalistic about managing the deficit. As said, one party raises it, one party lowers it, and the party that raises it claims that lowering it to anything but zero is “just as bad” as their runaway debt growth. Propaganda.
>> “No budget that runs at a deficit is acceptable”
> Why not?
The household analogy works for some people because it answers a moral question, not an economic one: Why should government be exempt from rules that individuals must follow?
The development of the household budget idea as a way of reasoning about the the federal government's is as old as economics itself. The Greek word for economics is oikonomia, consisting of - oikos = household - nomos = management
This analogy broke 90 years ago in the US, when, in the aftermath of the great depression, Keynes argued that governments should do things that households cannot: borrow during recessions, spend when private demand collapses, tolerate deficits until recovery. And that these have a beneficial effect on the economy and its participants because government spending becomes someone else's income, essentially injecting demand into the economy.
During the 1970s, US politicians realized that the household budget analogy was an effective rhetorical tool for arguing for fiscal conservatism. Its effectiveness bore no relation to its reflection of present reality. What it did reflect was a set of values: thrift, responsibility, independence, and skepticism of debt. But most of all, it speaks to a sense of justice - that the rules for me were also the rules for thee. The difference that the government plays by a different set of economic constraints than I do is the fundamental tension that the household analogy attempts to address. This is a moral intuition not an economic intuition. The sentiment still holds power today despite it being a bad intuition pump for economic reasoning.
That is an amazingly flawed idea. By that reasoning, only a neutral budget is acceptable, and a positive debt surplus a boon. Unfortunately, the opposite is empirically true: the only places running total budget surpluses tend to be undemocratic shitholes because they need to promise nothing and do not rely upon the consent of the governed to loan them savings and pay them taxes.
That is quite beside the point that sovereign debt is considered one of the safest places to store savings and by diminishing the stockpile of debt with a budget in surplus one is diminishing the economy’s ability to save at a low risk level.
I’ve been in municipalities and provinces running healthy surpluses and the economy booms during those times. People do better and schools are better run and so on. And for that matter, Canada boomed after the government fixed the budget in the late 90s. We went south again when the new government showed a complete lack of respect for money.
Were those municipalities and provinces receiving any money from the federal government and is that how they had surpluses? That's certainly how it works here in the US.
Not how it worked in my home state growing up. The state intermittently ran budget surpluses and were net givers to the federal budget. Still are today.
I’m also not entirely sure how relevant that is due to states (and provinces) not printing their own currency though. Very different situations.
Ah.
So you don’t understand the concept of sovereignty then.
If you keep shrinking it then eventually it will go away. The only reason it hasn’t gone to zero is that the shrinking keeps getting interrupted.
Well, the goal is not to impress HN user bigstrat2003. The goal is to have a government and country that continue to function. A fiscal deficit by itself is not a bad thing, and I suspect you would have an extraordinarily difficult time coming up with coherent arguments to the contrary.
1. They’re unable to get enough support to pass more taxes (yet), so “balancing the budget” after republicans lower them on the rich would mean killing people by cutting services.
2. The vast majority of our spending is not discretionary, anyway. You can’t refinance social security.
3. Democrats held the executive for the past two recession recoveries, and spent accordingly at the advice of new school economists. Which worked both times, BTW.
4. The government’s budget is not like a household budget — a deficit isn’t necessarily a terrible thing. Obviously the current situation is absurd, but we should also avoid simplifying complex matters of state like libertarians do with ethics just to avoid hard conversations.
And this might mean something if the President created the budget.
The president effectively does because of Veto. They inly cant control the most bipartisan aspects which is very limited today.
What? That is so not true I don’t even know where to begin. The President, of course, has some input into what the budget will be but we have seen plenty of times that Congress can and will flex their power when the parties of the Congress and President do not match.
The president has a huge say in which bills and budget items are passed, they routinely put enormous pressure on individual senators to whip votes for their agenda. This goes double or even triple for Trump! Congress might literally create the budget, but in our age they're – at the bare minimum – starting from the president's agenda and working with him to pass what he wants first.
Sure, when the party controlling both members of Congress matches the President. Less so when it doesn’t. Some of the biggest reductions in the growth of spending come when the parties do not match for that very reason.
The Democratic plan to fix the deficit is clear and practical. Tax the rich and stop the war.
Entitlements and interest expense are more than 100% of revenue in 2026. That's the before the military, foreign aid, the courts, NASA, and anything beginning with "Department of". The deficit is structural, and while "tax the rich" is easy politics, I don't think you'll find $2T there.
In my opinion the following graph should be mandatory viewing before any discussion on major tax policy changes in the US.
https://i.imgur.com/5VKtAIo.jpeg
That isn’t enough; there would have to be cuts to social security & medicare. The rich don’t have enough money to cover the federal government’s obligations.
Clinton and Gingrich balanced the budget. is it coincidence that those are now two of the most hated last names in politics? perhaps not.
The administration has said it out loud. Printing press.
The deficit get consistently worst under republican leadership. Again amd again.
that's yet another "both sides are the same!" fallacy
you are right in that neither can fix it entirely
only one party consistently raises the debt->deficit
and only one party consistently lowers it
hint: you cannot spend $21 TRILLION on militarizing the country and going to war without exploding the deficit, there's no profit in war, only massive expense
* https://ips-dc.org/report-state-of-insecurity-cost-militariz...
and that $21 Trillion was before the Iran War which is going to go on for years and cost another trillion to replace all the weapons and ships, remember all those bases and planes that were destroyed which this administration is covering up
> there's no profit in war
* There's lots of profit for military contractors and other insiders, which is the entire point!
Doing the both sides thing here is so, so frustrating… Obama and Biden both spent big to avoid/alleviate recession conditions, that is true. But it’s just not comparable at all:
1. First off: the deficit article were commenting under right now. This is unusual and terrible and 100% due to GOP norm breaking.
2. The BBB raised the debt astronomically, so this will continue well past the end of the war.
3. We’re engaged in a war of choice with a huge country with no end in sight and no stated objective, and the pentagon is getting more money than ever.
4. The corruption and graft is so rank and blatant that it might actually make a dent here, which is absurd. God forbid they carry out their ethnic cleansing plan for Gaza and then we pay for Trump City, there. Not to mention all the subordinate graft.
5. Only one party has divorced itself from reason entirely. Democrats are deeply flawed and I disagree with many of them on many things, but none of them dare try the ‘nuh uh shut up’ approach that is central to the GOP in the days of Trump. Imagine if they said anything as absurd as “Haitians are eating our cats and dogs” or “I’ll give everyone $5k” or “I didn’t lose the election that every single watchdog said I did” — they would be lambasted and forgotten within days.
6. Only one party is planning for the other party to ever be in power ever again. That is, assuming you don’t take Miller’s word for it that there are seven bajillion illegal aliens that the democrats ship in to win elections, which just hasn’t happened to work yet because the GOP is just too popular, and hasn’t been uncovered in any actual investigations because they’re just too darn tricky.
Sorry. Presumably this whole thread will be wiped anyway. But this is not a “both parties” thing! We’ve had a balanced budget and a positive treasury balance in my lifetime, and I’m a baby person!
(People said it was impossible then as well, FWIW.)
It’s important to remember that Obama and Biden’s predecessors also both spent big to alleviate those economic problems.
I’m convinced that a big part of our political woes come from the fact that major elections are at the end of the year. Obama election, 2008. Great financial crisis, 2008. So who oversaw the big bailouts and massively spiked the deficit dealing with the crisis? Obama, of course. Except it wasn’t, it was Bush.
Likewise, Biden 2020. Pandemic 2020. Who oversaw lockdowns and massive federal payroll loans and big government checks sent out? Biden! (No, Trump.)
Bullshit on the lazy “both parties are the same” framing. Bill Clinton actually balanced the federal budget and ran a $236 billion surplus in 2000. His 1993 deficit-reduction package passed without a single Republican vote. You just keep eating up the Republican bullshit...
I agree that Republicans are probably worse on this topic, but as far as I can tell, the parties are closer to parity on this than they were in 1993. The Democratic party doesn't seem have people like Bill any more.
okay? and Obama? and Biden? why are you pointing back 30 years ago for this argument I wonder?
Obama inherited a housing crisis and two wars.
Biden had to deal the tail end of a pandemic and the financial fallout of that.
Not saying both couldn't have done much better on the budget but, if you compare them to Bush and Trump, they honestly do look quite competent.
Neither of those excuse having a budget in the negative.
Both reduced the deficit substantially during their time in office.
While literally true, this is not very insightful/useful information because Obama entered office at peak deficit spend to counter the mortgage crisis, and Biden entered at peak deficit spend to counter COVID lockdowns. Because both the mortgage crisis and COVID eventually ended, deficit spend came down from those peaks without either president meaningfully reforming the budget.
Structurally, the budget has gotten worse every year since the 1990s. In large part for reasons not attributable to presidents. For example the number of old people (as a % of the population) in the US has doubled since the '90s, thus ballooning medicare and social security spend. Without cutting eligibility to those programs, increased spend was always going to be an inevitability due to seismic underlying demographic trends. Second, the persistent deficit has led to now $2T in annual interest expense. Again, not something an administration can simply "reform" or back out of; that is now structural inherited spend.
It's overly simplistic to say that Clinton balanced the budget. While the 1993 bill raised taxes and reduced defense spending, there would not have been a surplus without further cuts driven by Republicans in 1997.
There was also the dot-com boom, which of course wouldn't have happened without Al Gore inventing the Internet.
The pattern is extremely clear. During my lifetime, the deficit had increased under Republican presidents and decreased under Democrats. This has held steady for decades. That’s the more important thing than the question of exactly why one of them managed to get it to zero one time.
The mental gymnastics one must do to believe in what they write is unbelievable. The answer lies right in front and you skipped over it with grace.
It take a hero to dive on the grenade.
Such dives tend to be fatal.
Until AI can produce a blast-management plan to ensure the hero's survival, the necessary courage shall remain elusive.
I just want to congratulate the users of this website on shoehorning AI into literally every damn thing.
Please check out my startup, SmartHorn. We have integrated superintelligence technology into a "Smart Shoehorn" that will collect data and provide recommendations to footwear purchasers at the point of sale. Think of it like Pocket for the shoe or boot buyer. Use to increase profits, provide discounts to loyal customers, or increase profits.
Thanks I agree its very relevant to a lot of things too especially societal/political paradigms that will never end without a gigantic shift that is AI. Glad you can see through the noise and understand that too
Just a friendly reminder, mainly for your own safety.
Remember to call it SI ("Super Intelligence"), not AI otherwise you make yourself enemy of the United States of America.
The US federal deficit is growing at an alarming rate; if nothing is done, it will solve itself with inflation. US debt is denominated in USD, so the US will not default; the value of money just steadily declines until the debt burden matches the capacity of the US economy to pay for it. Also, US tax rates are relatively low, US can pay the debt by increasing tax rate if there is political will.
The country with the worst debt crisis is France. Their tax rate is 40%, they don't have their own currency (It's EUR), they have a large primary deficit and it's politically impossible to cut spending. EU must rescue France in next 4-5 years.
they will raise taxes while cutting the budget. in a multiparty system there are ways to achieve politically unpalatable things. in Italy we have what we call "technical governments", we don't vote for the government, only for parliament, and they elect the government, when nobody has a clear majority they vote for a "compromise" government where they elect a prime minister that is from no party, usually an economist or someone like that, which carries out the politically unpalatable reforms, in France they will do it with a split parliament/presidency
No political will is akin to the parent giving into the child’s tantrum
"The US federal deficit is growing at an alarming rate; if nothing is done, it will solve itself with inflation. "
AKA: Take on massive loans. Buy assets fast or stick into HSA.
There is no political will to increase taxes in the U.S.
You have progressive income tax brackets that don’t change with inflation, inflation is a tax increase.
>Also, US tax rates are relatively low, US can pay the debt by increasing tax rate if there is political will.
The whole point of debt is that it never gets paid. Not. a. single. country. has ever paid it off (and the few times it did happen, hundreds of thousands died). It keeps rolling forward, and gets eaten by inflation. The vast majority of "first world" countries have a 50%+ debt to GDP ratio (except when you do like Germany and manipulate the eurozone currency to your advantage) and are doing just fine. Countries have debt because people want to lend to them, because it's where things happen. Bhutan doesn't have debt, because it doesn't have the money to build it up.
>EU must rescue France in next 4-5 years.
zzzz
Can the american bots worry about their own country and their deeply ingrained problems before repeating the propaganda you read in the atlantic ? It's getting a bit boring.
Category error. These comments are only relevant with a democratic administration.
It's the biggest most beautiful deficit ever. If the democrats were in charge they would have spent far more on sex changes for kids, it's the TRUTH!
For all of the sex changes not being laid by federal dollars!
I assume you're being satirical.
Edit: I don't really need it explained to me, I literally just said I assumed it's satire. Also who would downvote this? Calm down.
It's the unironic view of most of the US media as well.
(The UK media are similar, but we did manage to get rid of the most disastrous budgetary Prime Minister Liz Truss in a couple of months)
The GOP only defines a deficit as bad when Democrats hold power.
They appear to be stating what’s essentially the official position of one of the parties if that’s evaluated based on actions. So is it really satire?
The cabal of elitist here at HN love a good down vote on anything questioning thier fence riding agenda.
Should you choose to, you can make a gift towards paying the public debt:
https://www.pay.gov/public/form/start/23779454
In 2022, this amounted to $180,310 - so not even a drop in the bucket.
https://www.treasurydirect.gov/government/public-debt-report...
That's about the nominal GDP of Spain.
So the solution is to annex Spain. ;)
49 million people live in Spain. and it's a non industrial economy.
So ... low?
In the 1970’s the Belgian deficit ran from 66 to 100+ percent of the BNP. Every governement since had serious trouble getting the deficit manageable. We never really got it unde control, and the intrest is hurting us. Afaik we got to 104% because we had to when joining the euro, which was our best. We are now at 109% again, and even that is hurting us hard.
The party of fiscal responsibility.
Over his 1.5 presidential terms, Trump has accumulated over a quarter of the US debt ($11T / $40T):
* https://www.us-debt-clock.com/presidents
Some mitigating circumstances are COVID in his first term (also effecting Biden), but there's also a lot of 'self-inflicted' damage, especially the last two years.
It turns out tax cuts may not actually pay for themselves (never mind ill-considered military adventures).
It’s okay, it’s all part of the political cycle:
1. Republicans start a war and cause a recession
2. Democrats get swept into power, barely.
3. Democrats clean up the mess but key reforms are blocked by some lone asshole like Joe Lieberman.
4. Everyone complains that Democrats didn’t do enough, it’s all the immigrants’ fault, and put Republicans back in power.
5. Return to step 1.
Also, how long has it been since the Democrats have had unobstructed power like the Republicans have assembled? Both houses and the supreme Court?
Apparently the last time the Supreme Court had a liberal majority was under Lyndon Johnson.
Not sure if they ever had it in modern history.
obama nearly doubled the national debt in 8 years ($11T -> $22T). this is not a problem specific to a party or a president
> obama nearly doubled the national debt in 8 years ($11T -> $22T).
Helping to recover from the GFC (which happened under the GOP). Notice how the deficit in Obama's second term was way lower than his first term? Notice how Obama2 isn't that much more than Bush2 (who started all sorts of military adventures)?
* https://www.us-debt-clock.com/presidents
Way to change the goal post when we are discussing budget deficits. Even then Obama added around $10 trillion to debt in eight years. Trump added close to $8 trillion in just four years in his first term.
In 2009, the budget deficit had risen to $1.42 trillion thanks to the massive bailouts of financial institutions. By 2016, when Obama left the office, it was down to $0.59 trillion.[1]
[1] https://fiscaldata.treasury.gov/americas-finance-guide/natio...
> obama nearly doubled the national debt in 8 years ($11T -> $22T). this is not a problem specific to a party or a president
It's almost like there was a Republican-policy-created crisis that called for massive spending in his term. And then he expanded healthcare for many people who'd never get it otherwise!
But that pales in comparison to the Russian diesel that's going to bring down my gas prices, and my private investment in arms manufacture that's growing quite well these days. So yes, we're doing much better with the debts incurred by the current administration.
>It's almost like there was a Republican-policy-created crisis that called for massive spending in his term.
As an European it's pretty funny to read this thread. "Your party debt was reckless and incompetent. My party debt was necessary and caused by your party anyway". Seriously, having just two parties looks like nightmare for democracy.
Having said that, before I get crucified as a centrist, there are bad and worse, and Trump is clearly worse.
The level of debt is an issue when the revenue doesn't cover the spending, leading to a budget deficit. Obama reduced the deficit even after he increased the debt. Trump increased the debt and reduced the revenue widening the deficit. That's not the same thing.
This is expected. Every Republican administration increases the deficit, every Democrat administration lowers it
The smart thing to do would be to raise taxes (not just on the wealthy) and cut entitlements. Reducing the deficit would indeed slow down inflation, give the Fed room to cut interest rates, and boost business investment. The economy would be in a much healthier place.
The problem is is that whatever party does this will never win again, at any level of government.
Oddly enough, there are plenty of European countries with lower taxes holistically, higher entitlements, and lower debt / deficit levels.
As far as I can tell, the solution isn't nearly that hamfisted. It requires:
- Reinstituting rule-of-law (not just Trump; the whole system)
- Instituting basic proper management of funds
In Europe, I can walk into a government agency and be done in 15 minutes, with a smile from the administrator, for what would take months of fighting in the US. If a part of the government is breaking a rule, I can point them to it, and they'll follow it. Courts are slow, but follow clear laws; I don't see black robe syndrome. And police follow and enforce laws.
US used to be closer to that too; it actually led the world in good governance for much of history.
That's hard work of diving in and cleaning up every piece of the administration. There's no stomach for that. Until there is, the deficit will keep going up.
> Reinstituting rule-of-law (not just Trump; the whole system)
It's probably more correct to just say instituting. While Trump has certainly turned the rule of law on its head, it's a not-so-secret secret that the law has never really applied to the rich and powerful. If we're already going to be making fixes, we should make a real effort to honor the rule of law.
That would necessarily include things like reforming bail and fines so they scale properly with ability to pay, especially in the case of corporate fines.
Targeting "entitlements" as a universal fix ignores both the fiscal math and the human costs. Healthcare makes up the lion's share of that spending; cutting it just shifts uncompensated care burdens onto hospitals and inflates private premiums. Cutting programs like SNAP and WIC means pulling food support from children, which causes long-term economic damage.
If the goal is deficit reduction through spending cuts, policy needs to evaluate actual economic ROI. Programs like nutritional and income supports have positive fiscal multipliers, which is why blunt austerity measures trigger negative feedback loops and contract growth.
Spending cuts have a place, but treating entitlements as a slush fund without accounting for the economic return or impact on people isn’t a productive policy proposal.
>Healthcare makes up the lion's share of that spending;
I heard US healthcare, rather famously, spends more per capita than any country in the world, despite still being rather terrible. Maybe the solution is actually reforming it in an European way (including universal free healthcare)? Your other points are very interesting to me, especially negative feedback loops of austerity - I never thought about that before.
The primary factor (in my view) is that we pay healthcare providers (doctors and nurses) 2x to 3x as much as other developed countries.
That creates knock-on effects throughout the healthcare system:
* Doctor time is worth $xxx/hour, so every second counts. We hire a bunch of support staff to make sure doctors aren't "wasting" time on paperwork, taking vitals or talking to patients. Now it costs more to run a practice.
* Doctor time is worth $xxx/hour, so we need to make sure that health insurance only pays for procedures that people truly need. That leads to insurance companies hiring a bunch of doctors and nurses to adjudicate claims (that's expensive, plus fewer doctors practice medicine). It also leads to denied care.
* Doctors have a lot of money, so if a procedure goes bad and you want to sue someone, they make a juicy target. Now you have higher malpractice insurance, so doctors bill even more.
* Doctors are afraid of being sued (see previous), so they often order more tests than necessary to prove they are providing adequate care. Those tests cost money.
The cause of high doctor salaries is an artificial shortage of doctors. Medical schools collude to limit the number of medical students who matriculate each year, which squeezes supply.
We could very easily fix the American healthcare system in about 10 years by simply allowing doctors and nurses trained in other developed countries to practice here, plus forcing medical schools to accept more students.
Regarding the latter, there is no shortage of qualified applicants:
1. Nearly everyone who starts medical school finishes. Matriculants are so statistically overqualified that hardly anyone washes out.
2. Medical schools have silly-stupid entrance requirements which have little to do with being a good doctor. Beyond GPA, you need many hours of volunteer work outside of class, extracurricular activities, and often research experience. These admissions requirements are imposed because there are simply too many qualified applicants for the number of slots and med schools need some "fair" way to cull the herd.
Why is it the salary of the doctors and nurses that is the primary factor and not profit seeking insurance industries and corporate health facilities?
Yes the US could save a ton with a more efficient healthcare system. Additionally we have shockingly high costs for basic infrastructure as compared to other developed nations which could also provide savings if we could streamline that.
For the economic impact of austerity there has been a lot of good scholarship about this recently. Check out Austerity in Crisis?: A Narrative Review of Its Economic, Social, and Political Effects in Times of Crisis https://arxiv.org/abs/2510.10449
Yup. It’s full of waste, inefficiency, and pocket lining.
Fixing the healthcare system might be harder than fixing the budget at this point
It isn’t as hopeless as it looks. Places like Oregon have been long experimenting with things like coordinated care organizations to better manage healthcare. Also health system like Kaiser Permanente compare more favorably to national healthcare systems than you might think.
Kaiser sucks unless you're healthy.
Kaiser is by far my best experience with healthcare in the US that wasn’t just a government run plan.
I’ve enjoyed it
There's no "entitlements" you can cut that wouldn't cause more harm to the economy than they would save up in federal spending. And there isn't enough income that taxing it to pay off the debt would be practical. You have to tax capital, that's where the entire world's wealth has been sucked up in the last decades. That's the only solution that doesn't involve the country defaulting on its debts.
Billionaires know that and are already starting to speak against such taxes[0], before there's even any real possibility of them being adopted. They would rather see everything turn to shit than give back a single cent.
[0] https://paulgraham.com/winc.html
How do you arrive at the conclusion that cuts to transfer payments (entitlements) cause economic harm but cuts to productivity (capital investment) does not?
One has a disproportionate first-order effect on the poorer, it's true, but that wasn't your contention.
1. I'm not proposing we tax "capital investments". I want to tax wealth, like unrealized capital gains. Because that's where the majority of the wealth is.
2. Why do you equate "capital investment" with "productivity"? If anything, the current situation should show you that record capital investments (in AI, mostly) are completely decorrelated from how the real economy is doing (which isn't great).
3. I never claimed that such taxes wouldn't cause harm to the economy, simply that cutting transfer payments would be much worse and wouldn't be enough to solve anything. We've been doing austerity for 50 years, it's time we think of something better.
If you want a healthy economy, you have to reduce inequalities. Transfer payments are a way to do it, wealth taxes are another. Cutting "entitlements" only worsens the problem.
The US is in debt to itself, in a currency it can print. What could go wrong?
If you print you cause more inflation and all the debt you need to renew requires higher yield to shift. So in practice printing yourself out of trouble is in itself a cause of trouble
It doesn’t just print money. It raises money or backs it by assets. It amazes me that people have no understanding of basic economics, or what qualitative easing is. Study the 2008 financial crisis to understand the power of modern monetary theory.
It works great, right up until it doesn't, according to historians.
According to anthropologists, we are all still the same barbarians we've ever been.
According to biology, scarcity ( the ultimate downstream effect outcome of money printing in the US since at least 1971 ) promotes aggression and reduced breeding.
According to Confucious, it's good to live in interesting times, unless that was meant as a curse ?
> The red ink has led to dire warnings from economists that the US now routinely runs annual deficits that were previously seen only during recessions
imagine what's going down after two more years of this
Iran War will still be happening at a BILLION dollars a day
gas will still be draining an extra BILLION dollars a day from everyone's pockets
how much healthcare and homes could have been bought with that
It bought a whole ballroom!
I hope everyone is enjoying American Yanukovich, and looking forward to Amerimaidan to get rid of him.
Theres noone in charge.
Algorithm for surviving "rats on a sinking ship":
1. Watch the program execute
2. Examine behavior patterns
3. Best guess where they point
4. Prepare for that, whatever that is.
5. Error correct and repeat step 1.
ps. If enough rats adopt the algorithm the ship won't sink.
$1 billion/day way the initial estimate, but it was never actually that high. CBO estimates $38B through August 1, or ~ $7B/month. https://www.cbo.gov/publication/62756
Ah, much better, then – I mean it’s not like the US is already in debt or anything.
exhausting the entire supply of Tomahawks and Patriot missiles will cost exponentially more than $38 billion to replace
CBO is not told about all the military bases destroyed in the middle-east, it's a secret by this administration, so they cannot expense that
and this is not going to end before February 2029
and there is still a billion dollars EVERY day being taken out of the US economy by excessive gas and diesel prices even for those that don't drive
I aced economics in college but I don't get how we are not in a recession
Everyone is putting gas and groceries on their credit cards now, how does that end?
Please, please, please don’t use “exponentially” as a synonym for “a lot”.
I’m with you. How many more quarters of declining savings before the music stops?
what matter is he printed money to send people in rest of world to hell.
1. Elect Claude.
2. Prompt Claude for a balanced budget.
...
??? Profit!
I've tried this ~2 months ago with GPT pro and lost the chat. Basically assumming a scenario where it has technocratic control over the budget and it has to manage it.
It really didn't come up with anything crazy. It was basically cutting spending and raising and creating new taxes. With the plan being to spread the pain based on tolerability and medium to long term sustainability. With actions like a fedral consumption tax with planned rebates depending on household wealth.
Its also tried to be careful around things that might create long term problems like dramatic education cuts and what not.
The reforms it gives are altogether pretty numerically radical but its not radical in the internet way where its a polarized solution. It's not a reddit style eat the rich or a business trickle down wealth solution.
These kinds of exercises are great thought experiments but a little bit useless if they're not grounded in political feasibility.
The interesting reforms are the ones that are easy to sell to the general public with a 30 second elevator pitch, or a one paragraph comment online - even if the people that are currently in power might hate the idea.
The fires of those ideas can be stoked, and if enough people get behind them, then those aspiring to greater political power will begin to adopt the ideas as part of their platforms.
Paperclips are famously not that expensive to maintain
Isn't Anthropic on some sort of a blacklist?
3. Prompt it to make no mistakes
Abolish medicare medicaid social security and welfare. The system will sort itself out by mass unrest.
I'm half joking but I think we keep being saved from our bad decisions at the ballot box so we don't learn.
You're half joking but that is what will happen. We don't dare interfere with the military or police or the comfort of billionaires so obviously we need to make life even worse for poor people and old people.
The deficit is an illusion. We owe most of it to ourselves. The real problem is balance of trade and steady deindustrialization, which no administration has been able to tackle yet.
It’s a question of inputs and outputs.
Right now we’re moving towards more balanced trade by shipping gold overseas. Nonmonetary gold and metals are our largest export YTD. That’s not going to work forever.
We need to take one on the chin and allow the currency to devalue versus gold, then revalue the gold reserves which haven’t been revalued since 1973. It will result in some short term pain, but it doesn’t have to fall in the usual distribution. (Distribution of financial pain is a policy choice.)
Only after the currency is weakened will manufacturing return home. Gold revaluation can be used to buy back some bonds to reduce the interest expense.
Edit: to the drive by downvotes, if you’ve got a better idea then free to share it. This is the only option I’ve seen recently that may work before we’re in a total crisis. I don’t love it either, but this actually puts the process in our control rather than having it happen involuntarily. Continued devaluation of the dollar is guaranteed at this point.
I think the downvotes are mostly due to the gold thing. it sounds...deranged
It’s all verifiable. We haven’t revalued US gold reserves since 1973. If gold were worth, say, $8k/oz, and were revalued from the current $42/oz set in 1973, that would instantly add almost 2 trillion on paper to US reserves. All it’s doing is acknowledging the current market price for accounting purposes.
FDR used a similar trick to devalue the dollar, allowing him to expand the money supply. Of course this was when the value of the dollar depended on the value of gold, so the motivation and the effects were different.
Or the deficits don’t matter thing lol
Domestically held debt is nothing more than promises to pay future interest to US bondholders. Foreign debt is another story, but most of our “debt” is domestic. A deficit that results in growing domestic debt simply means that we’re selling more of these promises to people and institutions at home.
Domestic debt mostly matters in that it represents money that is “tied up” rather than circulating within the economy for more productive use. It’s a little more complicated since 20% of the “owners” are internal to the government, such as Social Security. And there’s also institutions like mutual funds. But half is domestic private ownership.
If anything, the size of the deficit simply indicates that USD should be valued lower than it currently is, as there’s too many existing claims on future dollars. People bought those claims assuming that the dollar wouldn’t continue to weaken, but that was apparently a mistake.