I’m old enough to remember when a Democrat was president and the Republicans couldn’t stop howling about the deficit and the national debt.
The nation’s fiscal outlook looks ever bleaker, thanks in part to deficit spending during President Donald Trump’s first term, Congress’ nonpartisan budget scorekeeper projected Tuesday.
Within 16 years, the federal deficit is expected to be the largest in history, outpacing even the fiscal shortfalls that followed World War II, according to Congressional Budget Office estimates.
Congress’ recent tax and spending laws — along with ballooning costs of programs like Social Security and Medicare — also are driving up the amount the government pays in interest on money borrowed to make up for the gap in cash coming in and going out.
Indeed, those interest payments will exceed the cost of all Social Security spending within decades, CBO predicts. Interest costs also will be higher than discretionary spending, which amounts to all federal dollars Congress controls.
Back then, we used to point out that Republicans always act like deficit scolds when they’re out of power but then spend like drunken sailors when they are in power themselves. This was our way of suggesting there was a certain lack of sincerity involved in their rhetoric. When they forced government shutdowns and damaged our national credit rating with their threats to default on our debt, we tried to point out that they didn’t actually care about deficit spending in the least, but only cared about tax cuts and not letting funds be spent on Democratic priorities.
Some people listened, but mostly we were told that we needed to compromise with the terrorists.
I am just using this opportunity to point out that Trump is the third Republican president in a row to follow a Democrat into office and then immediately balloon the deficit with overly large tax cuts that disproportionately favor the rich and fail to deliver on their promise that increased economic growth will make them pay for themselves.
Personally, I don’t like spending money on interest payments. Unless you’re making smart and timely investments, this is usually wasted money. That’s why in a time of historically low interest rates, we should have made massive investments in infrastructure rather than giving all the cheap money away to our richest citizens.
But, we don’t seem to ever learn, so I expect to back here again one day after a Democratic president comes in does his or her best to right our flagging ship. We’ll be told they’re not doing enough to fix the deficit and then a new Republican president will immediately move to give what little money we have to their donors in the name of freedom and apple pie.
I generally don’t see much point in paying lots of interest on Government debt either. The easy way permanently avoid that is for the Fed to keep interest rates zero, which they can do because a government that prints its own money has total control over interest rates on that money.
In theory, anyway. In practice, banks demand higher rates and of course in this country the banks get what they want.
Sorry about the bad syntax, I was distracted. And I should have said that a government that prints its own money has total control over interest rates on public debt.
You are clearly versed in MMT. I try to make the same arguments on FB. But my conservative friends there are far more interested in the debt. Ask them why and you generally get a blank response. But they are fully convinced we must cut our spending to eliminate the deficits and lower the debt. It is unfortunate that too many of our dem friends agree with them. Well, they want to raise taxes again so we don’t have to cut spending. Trapped in a nice neat box. No win in sight.
I get a bit obsessive about deficit hysteria because all too often our own side argues for “fiscal responsibility” when the other side has demonstrated over and over that they don’t care about deficits and only use the argument when it furthers their anti-government agenda. But the other side is actually right not to worry about the deficit, and every time we express mistaken deficit concerns we become useful idiots and advance that agenda.
A budget deficit or surplus happens when the Federal Government prints and spends one amount of money, and taxes a different amount. There’s really no more to it than that. It should be viewed only as a mechanism for making sure that total combined private and public spending is neither too much nor too little, thereby preventing either inflation on the one hand or unemployment on the other. A budget deficit will not burden future generations; it never has and it never will. It has no moral dimension and does not shift taxes onto future generations. The taxes that future generations will need to levy on themselves will be dictated only by the choices they make about public spending and their need to thread a path between inflation and unemployment.
..there was a certain lack of sincerity involved in their rhetoric…
I’m glad I wasn’t drinking a hot beverage when I read this.
. . . from your nostrils can have a certain cleansing effect.
The worst aggravating part of this whole situation is that we Americans apparently don’t (or can’t) distinguish between “the economy” and “the deficit”. Which sounds stupid, but bear with me.
A recent Pew study asked voters many questions about politics and about their views on our two parties. The chart titled “Democrats hold large advantage over GOP on several issues” lists immigration, drug addiction, health care, and abortion as strong issues for Democrats. The GOP holds an edge on terrorism and taxes. It’s the “economy” and “deficit” numbers that confound me, though: they’re almost identical. Economy: GOP 45%, Dem 36%, Both/Neither 14%. Deficits: GOP 41%, Dem 35%, Both/Neither 18%. Who the hell are these people that don’t distinguish the two? I know we’re not supposed to yell at voters, but this is nuts.
On a more positive note, GOP gets really shitty numbers for health care, abortion, and drug addiction. I imagine that successful GOP-to-Dem Congressional campaigns will emphasize these themes.
I think it’s poor framing of a complex issues with a lot of high paid lying by the GOP and business interest representatives.
Extractive resource industries hide their own ratfucking of their workforces and contractual obligations under the cover of “burdensome regulations.”
Carrier, Harley Davidson, etc. were all going to outsource their manufacturing LONG before President Stupid came along. They use “burdensome taxation” arguments to improve their margins and extort local governments.
GOP candidates constantly refer to government budgeting as “sitting around the kitchen table,” which is a beyond absurd analogy….unless you frame it as sitting at the kitchen table but NO ONE is allowed to suggest Daddy stop drinking so much, cut back on the guns and ammo, and doesn’t get his new truck. Then it is probably an accurate depiction of GOP budgeting.
And these huge deficts are all happening with a 3.8% unemployment rate.
And that could be a problem. (I say could be.)
I want to reiterate what has already been said above. We do not need to pay higher interest rates on our debt, since the federal reserve controls interest rates. In fact you may want to ask yourself why, since we are the sovereign issuer of the currency, we need to have treasury debt at all.
There is, however, one circumstance that deficits can lead to a problem. That problem is inflation. And since we are at full employment this is the place where inflation could ignite. The usual response would be to raise interest rates on the debt in an effort to create more unemployment and reduce the price level. In fact the fed is raising interest rates. A better way to fight it would be, you guessed it, increase taxes and take money out of the economy. Or the republican way, to reduce spending on SSMM and such liberal programs.
The absolute amount of the debt is meaningless, since we own the printing press. Let the debt/deficit wars begin.
I am so sick and tired of “inflation could ignite” and “it could lead to a rise in inflation” and “it might start an inflationary spiral.” Get back to me when the CPI is actually persistently above 5% and has been for a couple of years. So far wages are not rising fast enough and the rate of increase in the Fed’s preferred measure, the Cost of Personal Expenditures hasn’t even hit 2% for five years. I remember the years from World War II to Carter, and inflation was normally between 3% and 5% a year and life was good.
LOD is on tv now replaying Trumps rage on the debt when he was a candidate. Funny how he thought it was the end of the world back then and now the debt is going out of sight.
So how does he reduce and eliminate the debt? Cut spending of course. Like already on food stamps. And interest Costs will go out of sight since the fed knows from nothing and is trapped in its response (raise interest rates). Recession on the horizon. Yep. Only question is when. I feel like this is late 2006.
In the meantime, the military budget is bloated beyond belief.
We’ve always been able to afford war (and the profiteers there of) and corporate tax cuts (aka. us paying for executive bonuses), proving government spending, debit, and deficits concerns are illusions created to weaken government and make average peoples lives more precarious in order to control them.
For the last two days the Booman homepage doesn’t load properly. I keep getting: http://www.boomantribune.com.nyud.net:8080/
However I can get to this story page from an offsite blog link no problem. Even when I click on the HOME button on this page the Homepage still returns ‘Page Won’t Load’ and shows that inncorrect URL address.
It’s been happening to me too. When I got to a story today I tried logging out, wound up on “server not found”, relinked in from the same offsite link, logged back in, and wound up on the home page with all the stories available.
And still getting the “server not found” if I tried using my BT bookmark or the “home” link at the top of the page.
I hope Martin can get this squared away.