I want to understand the deficit issue better

[Anonymous]

Anonymous wrote:I’m not listening to anyone and I don’t read MAGA news. I’m just a normal Maryland mom who thinks our country’s financial situation is unsustainable. If there is evidence that I am worried for nothing, I’d love to read it. I guess I’m over 50 so I’ll probably be ok but I have kids and am sad to see our country in decline both morally, politically, and financially.

“I’m not a MAGA but I sure parrot the MAGA party line”. 🤣😂

[Anonymous]

Anonymous wrote:

Anonymous wrote:OK, so we need to raise taxes on the wealthy to pay for the spending. But the wealthy are in power so that probably won’t happen. I’m a moderate and just want a sustainable country that works. It’s all so bleak.

Well you need a growing economy which requires consumers making enough money to buy products/services from the private sector. This administration's answer to the deficit is to do mass layoffs across the country, raise the price on most goods, cut taxes on billionaires, increase government spending, and abolish free trade. You don't understand the deficit because it's just a chant Republicans bring up whenever there's a Democrat in office

Unfortunately, "growing" the economy, means population growth, which just means more social programs, which just means more deficits.

It's an efficiency problem, not a growth problem. Our economy isn't producing enough goods and services for the number of people that want or need goods and services. Just adding more people makes the problem bigger.

[Anonymous]

Countries can handle debt. They just finance it. Japan, for example, has a debt to GDP ratio of nearly 235%. The US is around 125%.

Is it good? No, but is it sustainable, for now? Yes. It is a drag but the country won't implode.

No, running up trillions in debt every year is not sustainable, because the time will come when investors no longer buy US debt. The only way to entice them to buy our debt will be to give them way more interest, which will hamstring the country's finances. You can look at that negatively or look at it as if it is a sort of automatic built in natural cap anyway that the US has for spending.

Despite alllllllllllllll of the politics, the US runs up deficits every year for 3 major reasons: Medicare/caid, social security, and the military.

2 out of those 3 reasons are virtually entirely due to healthcare. The biggest reason the US is racking up so much debt is because the country refuses to completely overhaul our healthcare system that is bankrupting the country without runaway costs. Fix healthcare and you end up fixing the national debt with combine cuts to the military. Everything else is politics and small beans compared to those 3.

[Anonymous]

Anonymous wrote:Countries can handle debt. They just finance it. Japan, for example, has a debt to GDP ratio of nearly 235%. The US is around 125%.

Is it good? No, but is it sustainable, for now? Yes. It is a drag but the country won't implode.

No, running up trillions in debt every year is not sustainable, because the time will come when investors no longer buy US debt. The only way to entice them to buy our debt will be to give them way more interest, which will hamstring the country's finances. You can look at that negatively or look at it as if it is a sort of automatic built in natural cap anyway that the US has for spending.

Despite alllllllllllllll of the politics, the US runs up deficits every year for 3 major reasons: Medicare/caid, social security, and the military.

2 out of those 3 reasons are virtually entirely due to healthcare. The biggest reason the US is racking up so much debt is because the country refuses to completely overhaul our healthcare system that is bankrupting the country without runaway costs. Fix healthcare and you end up fixing the national debt with combine cuts to the military. Everything else is politics and small beans compared to those 3.

We could just get rid of Medicare.

[Anonymous]

Anonymous wrote:First, deficits could be solved by higher, rather than lower, taxes on the very wealthy, who got that way partly due to subsidized interest rates and tax loopholes.

Second, the debt has been there and been growing for decades. The current "crisis" is Republican propaganda -- but one they seem set on making a self-fulfilling prophecy: We don't have a crisis as long as investors and other countries are willing to invest in our government bonds. They will dump the bonds and we'll have a true crisis when they deem the US unstable and unlikely or unwilling to pay off our debts.

Third, if you compare our debt to our assets, then the situation looks pretty good, even in household budget terms.

The country's assets include things like
natural resources
an educated workforce
a stable political environment
an apolitical and stable federal workforce
an apolitical military
an honest and apolitical judicial system
a thriving and sound business environment
a system of primary research that fuels industry and progress
a healthy natural environment
etc
etc

See the real problem?

Not entirely true. Our debt to GDP ratio was in decline until 2008 and TARP etc.

Our debt exploded under Bush-Obama-Trump. There are historical reasons of course, but our explosion in debt is actually quite recent, and really only after the last 15 years:

https://fred.stlouisfed.org/series/GFDEGDQ188S

[Anonymous]

Anonymous wrote:

Anonymous wrote:Countries can handle debt. They just finance it. Japan, for example, has a debt to GDP ratio of nearly 235%. The US is around 125%.

Is it good? No, but is it sustainable, for now? Yes. It is a drag but the country won't implode.

No, running up trillions in debt every year is not sustainable, because the time will come when investors no longer buy US debt. The only way to entice them to buy our debt will be to give them way more interest, which will hamstring the country's finances. You can look at that negatively or look at it as if it is a sort of automatic built in natural cap anyway that the US has for spending.

Despite alllllllllllllll of the politics, the US runs up deficits every year for 3 major reasons: Medicare/caid, social security, and the military.

2 out of those 3 reasons are virtually entirely due to healthcare. The biggest reason the US is racking up so much debt is because the country refuses to completely overhaul our healthcare system that is bankrupting the country without runaway costs. Fix healthcare and you end up fixing the national debt with combine cuts to the military. Everything else is politics and small beans compared to those 3.

We could just get rid of Medicare.

Or just fix US healthcare

[Anonymous]

Anonymous wrote:Countries can handle debt. They just finance it. Japan, for example, has a debt to GDP ratio of nearly 235%. The US is around 125%.

Is it good? No, but is it sustainable, for now? Yes. It is a drag but the country won't implode.

No, running up trillions in debt every year is not sustainable, because the time will come when investors no longer buy US debt. The only way to entice them to buy our debt will be to give them way more interest, which will hamstring the country's finances. You can look at that negatively or look at it as if it is a sort of automatic built in natural cap anyway that the US has for spending.

Despite alllllllllllllll of the politics, the US runs up deficits every year for 3 major reasons: Medicare/caid, social security, and the military.

2 out of those 3 reasons are virtually entirely due to healthcare. The biggest reason the US is racking up so much debt is because the country refuses to completely overhaul our healthcare system that is bankrupting the country without runaway costs. Fix healthcare and you end up fixing the national debt with combine cuts to the military. Everything else is politics and small beans compared to those 3.

But also we have a DOD who never passed an audit. We need to completely overhaul military spending. We are r"ped by defense contractors charging us exorbitant amounts of money which get paid by our tax dollars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:First, deficits could be solved by higher, rather than lower, taxes on the very wealthy, who got that way partly due to subsidized interest rates and tax loopholes.

Second, the debt has been there and been growing for decades. The current "crisis" is Republican propaganda -- but one they seem set on making a self-fulfilling prophecy: We don't have a crisis as long as investors and other countries are willing to invest in our government bonds. They will dump the bonds and we'll have a true crisis when they deem the US unstable and unlikely or unwilling to pay off our debts.

Third, if you compare our debt to our assets, then the situation looks pretty good, even in household budget terms.

The country's assets include things like
natural resources
an educated workforce
a stable political environment
an apolitical and stable federal workforce
an apolitical military
an honest and apolitical judicial system
a thriving and sound business environment
a system of primary research that fuels industry and progress
a healthy natural environment
etc
etc

See the real problem?

Not entirely true. Our debt to GDP ratio was in decline until 2008 and TARP etc.

Our debt exploded under Bush-Obama-Trump. There are historical reasons of course, but our explosion in debt is actually quite recent, and really only after the last 15 years:

https://fred.stlouisfed.org/series/GFDEGDQ188S

+100

Defense/war spending post 9/11, Covid related spending, smaller factors- social spending & tax cuts. Last time budget was balanced- Clinton pre 9/11

[Anonymous]

Deficits in any budget, personal or country, are not what anyone would call good. However, they can be manageable and sustainable and a normal part of business if done right. Particular if they ebb up and down in meaningful ways.

The U.S. deficit in and of itself hasn’t been a problem because the U.S. has/had the ability to pay the interest on the loans. But like any deficit it should be paid attention to and plans made to lower it or eliminate it as best as possible. When you get to trillions of dollars in deficit, that is not something that will be rectified over night so you have to put together strategic meaningful plans to address.

Much of the root of the U.S. deficit is Medicaid/Medicare, Defense Spending, and not enough taxes to cover overall spending. The biggest root of this is not doing a new budget each year and instead doing CRs.

The U.S. spends more in defense than the next 20 industrial countries combined. This needs to change. Do we need to maintain a strong and capable military, sure. Do we need to pay for improvements and research, sure. But, manufacturing war and shipping it around the globe needs to change drastically.

Social Security despite what is said is a fully funded program. It’s an “entitlement” becuase folks are actually entitled to it because they paid into it aka they worked. Its future is not sustainable because people are living longer and not everybody is paying enough based on what they will collect. This is a solvable situation as long as people come together to alter the funding algorithm and move forward.

Medicaid and Medicare are by far the most efficient and effective insurance programs. Like many other things in our country’s budget they are hamstrung by people’s unwillingness to change as times change and greed. For example, it makes no sense that for the longest it could negotiate drug prices. Similarly it makes no sense that the DoD was paying significantly more for things than any other business or organization. These things are done because of crony side deals that prop up private companies and industries.

How can these things be changed? 1)Closing tax loopholes holes, 2) Single issue bills tied to a specific funding line, 3)Campaign finance reform, 4)Congressional term limits, 5)requirements for Congress to create and pass a balanced budget each year. Most importantly people need to stay aware and involved and hold their Representatives accountable. It’s not enough to just vote one day. Government is the business we are all in charge of and because we the people fail to pay attention, ask questions and demand answers and accounting, the business keeps being looted and abused. Start shining a light on things(see:these recent town halls and conversations with civil employees) and you’ll clearly begin to see where changes are needed. AND you’ll begin to see that some of your representatives need to go.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:First, deficits could be solved by higher, rather than lower, taxes on the very wealthy, who got that way partly due to subsidized interest rates and tax loopholes.

Second, the debt has been there and been growing for decades. The current "crisis" is Republican propaganda -- but one they seem set on making a self-fulfilling prophecy: We don't have a crisis as long as investors and other countries are willing to invest in our government bonds. They will dump the bonds and we'll have a true crisis when they deem the US unstable and unlikely or unwilling to pay off our debts.

Third, if you compare our debt to our assets, then the situation looks pretty good, even in household budget terms.

The country's assets include things like
natural resources
an educated workforce
a stable political environment
an apolitical and stable federal workforce
an apolitical military
an honest and apolitical judicial system
a thriving and sound business environment
a system of primary research that fuels industry and progress
a healthy natural environment
etc
etc

See the real problem?

Not entirely true. Our debt to GDP ratio was in decline until 2008 and TARP etc.

Our debt exploded under Bush-Obama-Trump. There are historical reasons of course, but our explosion in debt is actually quite recent, and really only after the last 15 years:

https://fred.stlouisfed.org/series/GFDEGDQ188S

+100

Defense/war spending post 9/11, Covid related spending, smaller factors- social spending & tax cuts. Last time budget was balanced- Clinton pre 9/11

Ah but 9/11 was a Visa issue. Really really very bad visa issue.

[Anonymous]

This is the problem with Globalism. It costs so much to defend all these corporations' projects in foreign countries.

[Anonymous]

This is the problem with Globalism. It costs so much to defend all these corporations' projects in foreign countries.

The counter-argument would be that increased inter-dependence reduces that chances that one nation would choose to attack another.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I can’t see how the USA can run a trillion dollar deficit forever. How does this get addressed? I don’t like that DOGE targeted certain agencies but how can we continue spending more than we have by $1.7 trillion dollars a year?

Is that sustainable? What resources can I use to educate myself on this? Cutting spending is never popular and obviously Trump will offset any savings with tax cuts but I’m not understanding why the deficit isn’t a big deal to us Americans.

Stop giving a $4 trillion tax cut to the wealthy. It’s interesting you don’t even mention that.

Where does the number 4 come from? you want to raise taxes 4 trillion/year?

[Anonymous]

Anonymous wrote:

This is the problem with Globalism. It costs so much to defend all these corporations' projects in foreign countries.

The counter-argument would be that increased inter-dependence reduces that chances that one nation would choose to attack another.

Right, and bringing in migrants improves race relations. The counter argument being that it just causes strife when done at high rates.

[Anonymous]

So, the thesis is that we need to reduce defense spending and consequently in general move towards a more isolationist stance including reducing immigration and dependence on foreign goods.

Gosh I love the peaceful fella.