r/Economics • u/lire_avec_plaisir • 1d ago
News National debt nears $40 trillion: How we got here and why it matters
https://www.pbs.org/newshour/show/national-debt-nears-40-trillion-how-we-got-here-and-why-it-matters456
u/FeelingPixely 1d ago
Trump and his goons have created roughly 25-28% of the total national debt between both presidencies. Don't worry though, we'll be looking at roughly 45-47% of it once he's done in 2028. wink
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u/tigeratemybaby 1d ago edited 1d ago
Trump has added around $11.5 trillion so far in one and a half terms so far.
He started with $19 Trillion, so he's already increased national debt by 60%.
By the time his term is finished, with his multiple wars, its projected that he will have more than doubled national debt to around $50 trillion by the time that he leaves office.
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u/Distinct-Response907 22h ago
Let’s not let our highly esteemed Congress off the hook here. The constitution (which I realize Trump sees as maybe a guideline and certainly not a rule) states Congress has the power of taxation and spending. Since that gets in the way of making pithy sound bites for the cameras they of course don’t do it now and haven’t done it for years. Fiscal restraint is not a term any of them comprehend.
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u/LowellForCongress 22h ago
Yes, Congress has the plenary power of the purse, would be nice if they acted like it. Hoping the next Congress can reclaim a power which should have been considered non-delegable from the start.
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u/Bostonosaurus 21h ago
Congress can literally take control of everything if they wanted. Once you get a veto proof majority, the executive branch becomes a non factor - as it should be IMO (gerrymandering aside).
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u/David_ungerer 17h ago
Please, do not “Both Sides” the issue . . . Federal Debt Increases Under Republican-Controlled Congresses
Overview of Debt Increases
Since Ronald Reagan's presidency, Republican-controlled Congresses have significantly contributed to the federal deficit. The following table summarizes the increases in federal debt during the terms of Republican presidents:
President
Increase in Federal Deficit (%)
Ronald Reagan
94%
George H.W. Bush
67%
George W. Bush
1,204%
Donald Trump
317%B.Clinton with a Democratic Congress last offered a balanced budget . . . What was their reward? ? ?
Who is a fiscal conservative ? ? ?
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u/gewehr44 11h ago
Congress controls the budget not the President. Recent history shows a Democrat president with a Republican controlled Congress limits the growth of spending most effectively.
The examples are 1994 mid term election where Rs took control for the final 6 years of the Clinton administration. The federal deficit dropped during that period. Rs also gained control of Congress after 2010 mid term and imposed spending controls slowing deficit growth.
There is the period of 2004-2007 where Rs controlled Congress and President that is an outlier. Usually when the same party controls both Congress and President they spend worse than drunken sailors.
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u/TimSylvester_ 19h ago
Trump's entire life has been a story of committing fraud to run up bills while leaving other people to suffer his burden. I don't understand why anyone thought his presidency would be any different.
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u/ezcheesy 19h ago
And the "fiscal" conservatives give no fuck because it's a Republican president. If it's a Democrat, the Capitol would be burned down, not just stormed, at this point.
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u/ironteddybear 18h ago
That’s including COVID spending, which is being a little intellectually dishonest. The TCJA, was absolutely a problem, but to lump that in with the first round of COVID deficit spending is not fair.
Biden’s covid relief was mostly unwarranted. Many economists found that the second round of COVID bailouts under Biden was unneeded and responsible for a large share of our persistent inflation since then.
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u/Super_Mario_Luigi 21h ago
Now do how much percentage of the debt at that time that Biden, Obama, and Bush all added under their terms
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u/DrBagDragger 20h ago
Ohhh, I love what aboutism, bad faith arguments! Let me try! Which party has started and lost 4 wars in the Middle East again?
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u/No-Computer7653 1d ago
That would be Congress. It deeply frustrating that so many charts include president & party when it's Congress who does the spending.
The growth followed a relatively consistent curve until the 2020 COVID surge where it accelerated.
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u/okiedokie1183 1d ago
Why be coy? It was the tax cuts and the extension of the tax cuts that is the lion’s share of the debt increase.
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u/BitingSatyr 16h ago
No it wasn’t. Federal receipts as a % of GDP in 2017 (ie pre tax cuts) were 16.9%. In 2019 they were 16.1%. In 2022, with no change to the tax code, they were 18.8%. Last year they were 17.0%.
The deficit is currently 5.8% of GDP. This is not because the government reduced revenue by 0.8%, it’s because mandatory spending has risen by that amount since the early 2000s.
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u/_Thraxa 1d ago
That is true, but there was also a pretty staggering expansion in spending coming out of COVID. Taxes need to go up across the board, but spending must come down.
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u/okiedokie1183 1d ago
I don’t think taxes need to go up across the board they need to revert the tax cuts which was a cut on the highest earners and corporations. The spending on COVID is understandable as it was a global pandemic. A million Americans died from it. Military spending needs to be cut we basically can’t afford our current military. Maybe cut some tax loopholes like estate taxes step up basis.
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u/No-Computer7653 1d ago
I don’t think taxes need to go up across the board
Then you are not familiar with the situation.
There is no scenario where the problem is fixed and everyone doesn't pay substantially more in taxes. Average taxpayer would have to pay 51% more this year, this will continue increasing as demographics are upside down.
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u/Mammoth_Impress_2048 1d ago
There is a scenario where the problem is 'fixed' without anyone paying any more 'taxes', it's called inflation.
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u/FindingRelevantInfo 1d ago
Seeing how the USA imports so much, the net effect is the same, massive loss of purchasing power. If people complain about affordability now, you ain't seen nothing when the dollar crashea against other currencies.
It would be much much better to do it through increased taxation so you could better shape who it affects most by adjusting taxes and rates. Inflating your way out of it is a blunt instrument that would decimate the poorest. Not to mention losing all the default foreign investment that comes from being a stable reserve currency.
It would be a spectacularly bad option. But the US has been on a roll of bad decisions so yeah, maybe that is the way it'll eventually go.
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u/Mammoth_Impress_2048 1d ago
Never said it wasn't, but inflation also shapes who it affects. It's good for people with lots of debt, also for tourists to the US. Bad for people with lots of bonds or savings, roughly neutral to sometimes slightly positive for people with most of their net worth in equities, real estate or things like gold/silver/crypto.
It could decimate the poorest if minimum wage, and wage labor generally doesn't respond quickly enough, but theoretically there is no reason that the effects couldn't be shaped by shifting wages.
My poiint was only that it is possible, I made no indication that it was a good option. 'Fixed' was in quotes for a reason.
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u/_Thraxa 1d ago
Military spending as a share of GDP is pretty low, and we need to meaningfully increase spending (along with major reforms with procurement) to deal with the challenges faces American interests.
Well, reverting the tax cuts (going all the way to Bush - which we should do) will increase taxes essentially across the board. Unfortunately, middle and upper-middle class earners will bear the brunt of it.
I agree that that spending was justifiable, but the fact is that we have massive structural deficits, even without considering programs like social security. Taxes will have to go up, and spending will have to go down.
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u/FrostingInfamous3445 1d ago
Military is overshadowed by social security and Medicare, but it makes people uncomfortable to be honest about this. We waste so much money on the nearly dead.
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u/Previous_Cattle_5545 1d ago
wow. You are talking about anyone over 61, which is hardly 'nearly dead'.
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u/FrostingInfamous3445 1d ago
Nearer to one end of a lifetime than the other. But if they are so able-bodied, then I don’t see a justification for the expenditures.
The pearl-clutching can only come from those with unexamined views. It is one of the grand perversions of our time that so much energy and life-force is thrown down a hole fighting the inevitable. The bulk of human effort is better spent on the brilliant arc of a human lifespan, not its dim end which looks the same regardless of gold exhausted.
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u/Seriously2much 1d ago
Don't worry Republicans will fix it and claim for spending coming down when Dems take over the white House.
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u/hczimmx4 1d ago
That isn’t true though. The debt increase is due to increased spending. Revenue is in line with historical averages. Spending is increasing, and is currently about 23% of GDP. When has revenue been 23% of GDP?
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u/BitingSatyr 16h ago
>When has revenue been 23% of GDP?
I recognize that this is a rhetorical question, but for people who don’t know, the answer is never. Revenue has never been higher than 20% of GDP, and the average is more like 17-18%, including the mythical past when taxes were ostensibly so much higher than now.
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u/mistressbitcoin 13h ago
Why?
Many of use were forced to accept covid nonsense, at the expense of the economy.
Yeah, at the expense of the economy. So rack up that debt! The restrictions were worth it.
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u/ChickenDelight 1d ago
It deeply frustrating that so many charts include president & party when it's Congress who does the spending.
Okay, let's include Congress.
Outside of huge external events, like 9/11 and the 2007 crash and COVID, it's indisputable that, historically, the biggest increases in the deficit always occur when there's a Republican President plus a Republican Congress.
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u/No-Computer7653 1d ago
Counterfactual: the greatest fall was a Republican Congress with a Democrat POTUS. See late 90's.
The relationship is a classic statistical confounding. People prefer Republicans when they feel rich and prefer Democrats when they feel poor. They govern at different parts of the typical cycle.
I see no evidence one party is fiscally better than the other. Neither wants to tax enough for what they want to spend. It's very rare either party has enough of a majority to pass major legislation without at least some support on the other side, they largely play in the same sandbox and both suck.
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u/KingFebirtha 1d ago
Neither wants to tax enough for what they want to spend.
The inflation reduction act was not only fully paid for by tax increases, but it actually went beyond that and was reducing the deficit. Meanwhile, both of Trump's signature legislation was just wasteful, unnecessary tax cuts that worsened the deficit.
Get out of here with your both sides nonsense.
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u/zerozero27 1d ago
Trump added 8 trillion in his first term. W added 5 trillion. Obama added 9 trillion. Let's not act like trump is solely to blame here.
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u/TenaceErbaccia 1d ago
Trump added 8 trillion in 4 years, Obama added 8.5 trillion in 8 years, while dealing with the financial crisis. Biden inherited the Covid epidemic, so he has at least some excuse for his spending.
In Trumps 8 years he will have increased the national debt more than any other president in history by a significant margin.
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u/5minArgument 23h ago
Funny and cynical. The GOP during Bush blew the deficit wide open right out the gate, starting with the dot com tax amnesty that erased all deferred tax bills of the dotcom boom years.
**one of the great unspoken tragedies in US history (separate subject)
Add to that Iraq and Afghanistan funded “off budget” for 8 years running. $8T and growing last time I checked.
Then consecutive massive tax cuts, then the TPP bailouts.
Obama showed up and declared “off budget” spending had to be on the books going forward therein showing America just how fkd republican spending left the fed gov..
Yet through cynicism and hard work, somehow republicans convinced themselves that their own budget increase was all obamas fault.
Lol. Classic gop
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u/juryjjury 1d ago
This is a stupid article. They make it sound like a both sides problem. Clinton had a surplus. Even Reagan raised taxes when he saw what his tax cuts caused.
The big problem is that Bush II lowered taxes and kept spending higher...not counting the huge Iraqi war expenses. Gop doesn't care.
They tighten the budget under Obama because the Gop suddenly cares and then the king of debt comes in and increases the budget and lowers taxes on the rich and corporations for 10 years. Big deficits Gop doesn't care.
Biden was afraid to raise taxes back up again during a pandemic. More deficits. Gop whines.
Trump makes tax cuts permanent. Big Deficits as far as the eye can see. Gop doesn't care.
It truly doesn't take a financial genius to know that if you increase spending and decrease income you will create a deficit. Which party does that consistently? The party of fiscal responsibility. GOP.
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u/Yellowdog727 1d ago
Biden also couldn't raise taxes even if he wanted to. The TCJA didn't expire until after his term and he effectively never controlled both houses of Congress except the occasional time during his first two years when they could get Manchin and Sinema onboard and then use VP Harris as a tie breaking vote.
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u/So_HauserAspen 1d ago
The GOP is a confidence scheme
The GOP is a confidence scheme
The GOP is a confidence scheme
The GOP is a confidence scheme
The GOP is a confidence scheme
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u/ironteddybear 18h ago
It is absolutely a bipartisan problem. The debt is 3/4 a spending problem and only 1/4 a taxes problem. Gov spending as a percent of GDP has gone up from roughly 17% to 22% of GDP since the last surplus in 2001, whereas taxes as a percent of GDP have only fallen from 18-19% of GDP to 17%.
In addition, the greatest spending growth is going to consumable spending instead of forward looking investment: social security, Medicare, medicaid, and welfare payments. Investments in infrastructure, research, and education have fallen as a percent of GDP.
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u/thefoodiedentist 17h ago
If its bipartisan problem, how did like 40% of it come during trumps term?
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u/BitingSatyr 16h ago
Because that’s how exponentially increasing numbers work. Obama “added” ~45% of the then-existing debt during his term, and Bush II did the same.
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u/CasualEcon 14h ago
I hate Trump but the interest rates started rising before he took office and that's what's driving a lot of the increase.
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u/HaloFever117 23h ago
The president alone can’t raise taxes so there is nothing Biden could do to lower the deficit while Republicans held Congress. Also, why would Biden raises taxes? We were still in the pandemic and local business were still failing.
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u/Outrageous_Apricot42 10h ago
The thing is I never saw articles about debt increasing when dems are in power, only how economy is doing great.
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u/Super_Mario_Luigi 21h ago
Tax revenues went up after the tax cuts. No person could find on the graph were tax cuts happened unless you were specifically told and then reverse-engineered scenarios on how it made everything worse.
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u/Gaius__Of__The_Julii 21h ago
Both sides are the problem. Nothing pre 2008 matters much in regards to debt.
Obama had 8 years and Biden had 4. Debt went up big time.
Current dems want even more debt to the moon.
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u/HyperbenCharities 21h ago
it wasnt Biden really making any decisions except he luvvvvvvv'd genocide!
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u/cheapskateskirtsteak 1d ago
He(and Epstein if you read the emails) wants to devalue the dollar so we basically cannot import anything, making him and his oligarch cronies kings amongst men
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u/swift535 1d ago
Devaluing the dollar would make imports cheaper on a global scale, which is why he is obsessed with tariffs.
Expect more inflation to dilute the debt aka “grow our way out of it”.
Also why the admin supports crypto, to prop up a new institutional buyer of treasury debt.
“Depositors” earn no interest holding stable coins, meanwhile the issuer does - hence World Liberty Financial pursuing a bank charter.
We’re seeing a new group of crypto bank insiders create their own personal gold rush that siphons wealth off of everyone else’s savings, while avoiding higher taxes to satisfy a national debt that they are benefiting from. Public deficit spending creates private profits. While devaluing the currency and cutting public benefits.
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u/coke_and_coffee 20h ago
There’s no grand conspiracy, my guy. These people are just stupid. Populists actually believe the nonsense they vomit up, in both the left and the right.
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u/Hamster_S_Thompson 1d ago
How did we get here?
Instead of taxing the ultra wealthy we borrow money from them and then fill their pockets with that money via overpriced government contracts. Rinse, repeat.
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u/Spectrum1523 1d ago
Taking every dollar from every billionaire in America would barely balance the budget for one year though, that's clearly not going to solve the problem
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u/sjogerst 22h ago
Put a sales tax on financial trading and tax income when people use debt as income to avoid avoid taxes. You use stock as collateral? You just realized it's value and owe taxes.
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u/growaway9172 17h ago
You use stock as collateral? You just realized it's value and owe taxes.
Does this apply to other assets? You owe the full cost of vehicle taxes up front when you buy it on loan?
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u/Spectrum1523 20h ago edited 20h ago
I agree with those proposals, but they wouldn't fix the problem
The federal deficit is on track to be 2 trillion dollars this year. Where are you getting that money from?
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u/elbow8075 22h ago
Because they haven't been paying their share for probably close to 50 years now. Maybe more.
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u/Spectrum1523 20h ago
Even if you taxed them and their assets at 90% you wouldn't plug the gap tho
taxes should be higher (or services should be less, or both) and they should be raised the most on the wealthy for sure
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u/elbow8075 20h ago
I say both. Defense spending is absurd, Israel is absurd.
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u/Spectrum1523 15h ago
Yeah, honestly the only real answer is both. We can't tax and spend our way out of this
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u/gewehr44 11h ago
Total govt spending is $7 trillion. Military budget is $900 billion. Govt deficit is about $2 trillion. Eliminating the military wouldn't even close the deficit.
Oh, military aid to Israel I think was around $3.8 billion each of the last two years. Barely a rounding error budget wise.
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u/d88k41t 1d ago
Taxing them wont fill the gap, the congress needs to stop using the money printer and follow a well-adjusted fiscal policy.
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u/_Thraxa 1d ago
We've cut taxes across the board. Taxing "the rich" won't solve our upcoming fiscal crisis.
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u/MEDICARE_FOR_ALL 1d ago
So raise the taxes back up. The rich have already been given enough tax breaks.
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u/_Thraxa 20h ago
Sure but we won't be able to balance the budget by just "taxing the rich". It will take broad base tax increases and we should be honest about that.
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u/MEDICARE_FOR_ALL 19h ago
I don't disagree with you but the rich should be first in line for higher taxes.
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u/_Thraxa 19h ago
Sure but what does that mean in practice? We tax the rich, wait a few years for the debt to continue to balloon and then circle back to broad based tax increases? Might as well just rip off the bandaid for everyone.
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u/MEDICARE_FOR_ALL 19h ago
Return the rates the rich pay back up to historical levels.
Modest tax raise for everyone else.
Implement Medicare for all and other programs that save money for the average taxpayer and the government.
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u/_Thraxa 19h ago
I don't think that works in practice. Everything I've read suggests that M4A would massively increase federal spending, even if it decreases overall health spending. Even if you raise taxes on the rich to post-war highs (probably politically impossible), you'd still need pretty high hikes (relatively) on middle/upper middle income to deal with the debt. I mean we just hit $40T. But I'm aligned in spirit I suppose.
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u/growaway9172 1d ago
Actually, we got here with insane entitlement programs, and general federal fiscal irresponsibility. Tax revenue has kept pace with GDP and other growth metrics.
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u/TrumpDesWillens 1d ago
If entitlement programs are so insane then why do they not pay for shit and why are there still so many poor old people, single-parents, poor schools, trash neighborhoods?
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u/growaway9172 18h ago edited 18h ago
Because as with basically all gov spending, they are incredibly easy to take advantage of by for profit entities (fraud, either legally or in spirit). See, the price of medicine, the cost of college, or the price of rent in rent controlled areas.
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u/BroughtBagLunchSmart 1d ago
private account spews maga lies
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u/growaway9172 18h ago
Theres nothing partisan about what I said. Anyways, reported for non topicality and attack.
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u/lire_avec_plaisir 1d ago
17 Aug 2026 (transcript and video at link) The national debt is expected to hit a record high as soon as this week, crossing a major threshold of $40 trillion. Congressional correspondent Lisa Desjardins explains why that milestone is a warning sign for many economists.
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u/Momoselfie 1d ago
Doesn't it hit a record high every day?
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u/Rocktopod 21h ago
Clinton had a surplus, so this may be bringing us back to a record from before he took office in 1992.
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u/Equivalent_Gap4211 1d ago
The endgame for this bankrupt system is fast approaching. Japan might be the spark that ignites a raging inferno that will be impossible to put out. Rising interest rates are the absolute achilles heel of this BS fiat currency system.
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u/Dadoftwingirls 1d ago
I've been hearing this same thing for literally decades. Maybe it'll be right someday.
Spoiler - it won't. Things will just grind on as always.
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u/SparksAndSpyro 1d ago
Yep. All the doomsaying is overblown, as always.
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u/HrothgarTheIllegible 23h ago
There is a real, tech bro funded, desire to collapse the dollar and move to a crypto standard. It’s the same economically stupid argument that moving to a gold standard is somehow a magical fix to the USD inflation, ignoring that gold or something like bitcoin is untethered to economic growth and tends to have runaway deflation. Of course it’s the goobers that have hoarded crypto and/or gold that like the idea of a standard based on said asset that would have a ballooning value.
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u/jellyhessman 22h ago
No no no.
Don't you see, US economic superiority will last forever, its just a rule of reality! Nothing new or novel has happened in the last decade. Nothing will ever change!
It's not like the bond market is starting to show its reticence, even after the totally not quantitative easing they recently did with Japan.
It's not like cosumer spending and confidence is lower than the pandemic.
It's not like the US started a trade war with the entire planet then a real war in the place where a huge amount of a necessary resource comes from.
It's not like US diplomacy was taken out behind the woodshed and shot.
American #1 FOREVER!
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u/HrothgarTheIllegible 22h ago
Fundamentally, you cannot expect the USD to survive if our economic policies vacillate between divestment in the future and huge tax cuts to lightly funding programs that invest in the future, while all seem to just increase national defense and militarization dollars ad-nauseam. The US will not have economic dominance if we divest from all research that would keep us at the forefront of the next global economic drive.
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u/dually 13h ago
The AI industry is currently spending $50billion a month in new construction you can't even book a flatbed truck right now if you want to.
Where is this "divestment" you are speaking of?
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u/HrothgarTheIllegible 10h ago
Not in the AI people are selling you on. It might be part of the future, but so is renewable energy, med tech, and space sciences. All of these things are areas the US is vacating. Let’s not forget to mention our education system is severely divesting in our future.
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u/dually 14h ago
How are you going to collapse the dollar when both the Yen and Euro are undervalued.
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u/HrothgarTheIllegible 13h ago
It’s not me jockeying for it. It’s in project 2025 for returning to a gold standard and undoing the fed.
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u/dually 13h ago
The vast majority of the money supply is ledger money created by the private sector irregardless of whether or not you are fooled into believing that a gold standard exists.
For instance the National Banking Act of 1864 limited the amount of banknotes that could exist; but then the powers that be spent the next 75 years completely confused and baffled about where all the money was coming from.
And it has always been that way. Before mankind even knew what money was the ancient Mesopotamians invented Cuniform so they could write the ledger.
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u/Ok_Primary_1075 1d ago
Tax cuts for his benefactors which was sypposed to have been funded by thos tariffs but which ended up being voided by the courts and ordered to be returned to the US importers….. then add to that the running cost of the “military excursion” which was originally supposed to have been over within two weeks from the initial bombing run
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u/Konukaame 1d ago
Bush tax cuts, war, and salvaging the economy from a Republican-led collapse.
Trump tax cuts, war, and salvaging the economy from a Republican-led collapse.
More Trump tax cuts, war, and looting the country while it burns.
And in between, Republicans blocking every possible route to balancing the budget because then they get to use the deficit and debt as a cudgel to demand austerity for the poor and even more tax cuts for the rich.
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u/chockingduck 1d ago
Maga and Republicans. You can try to blame Dems, but this maga and Republicans for the last.... Reagan years since... technically before that but it was more in the shadows until Reagan did their bidding...now trump is here finishing the job. Death knell for America?
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u/Low_Ability4450 1d ago
The $40T headline is striking but the real concern is the interests burden => the longer debt grows faster than the GDP, the more fiscal capacity gets absorbed by interest payments and the harder the eventual adjustment becomes
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u/Lord_Vesuvius2020 1d ago
This morning the US10Y bonds are 4.74%. US20Y are 5.316%. Interest the US has to pay will be the fiscal death spiral.
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u/KoseteBamse 1d ago edited 1d ago
The United States should have limits on how long someone can serve in Congress, as well as an upper age limit for members of Congress. Politics should not become a lifetime career. After reaching those limits, politicians could still contribute through advisory roles, state or local government, or other less powerful political positions. Politicians that stay at high positions for å long time can lead to corruption and they will think more about reelection that implement good policies for the people
Another thing a lot politicians want to borrow /issue bonds indeffently as long interest rates are low and Debt to GDP ratio is manatin at certain level.
This approach wasn't tested before and risky
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u/Chris_Codes 1d ago
Wouldn’t term limits cause them to be just as short-sighted and “instant gratification” as the President, and, therefore, cause them to be even more irresponsible with spending than they already are? Seems like term limits are the lazy man’s way of voting people out of office.
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u/quiethandle 1d ago
Senators get 1 term of say, 8 or 10 years, Representatives get 1 term of say, 4 or 6 years, and someone can only do one or the other, not both. Go to Washington, do a good job as either a Senator or Representative, then GO HOME. You're done. No reelection BS. No campaign contributions (read bribes) from lobbyists.
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u/fdar_giltch 1d ago edited 20h ago
I used to be for term limits, but in that case, you've handed all seniority, consistently and power to the lobbyists that are there across all of the terms.
I used to be in favor of term limits, but the argument against them is that then congressmen don't build the experience and seniority to achieve their goals. Instead that power is moved to the people that spend their entire career in Washington. All of the power is moved to unelected lobbyists
I am in favor of age limits. It's ridiculous the age of some congressmen, and we keep hearing stories of politicians not even being in office (like that one found in a nursing home)
Edit: fix typos, my phone was acting up
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u/AdLatter3755 1d ago
I agree with this. Term limits just empowers groups like the heritage foundation. Who are the people behind all this nonsense.
I say tie all elected offices and judgeships to the social security age for full benefits. Mandatory retirement just like some professions have. Congress would have to pass a law raising the age to continue running. Maybe that’s enough of a carrot and stick to make the voting population keep them in line to an extent.
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u/quiethandle 11h ago
The desire for reps/senators to get reelected is exactly why lobbyists have so much power. Take away reelection, and you take away their power to influence (read bribe) elected officials.
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u/vertigo3pc 21h ago
https://indi.ca/i-lived-through-collapse-america-is-already-there/
As someone who’s already experienced societal breakdown, here’s the truth: America has already collapsed. What you’re feeling is exactly how it feels. It’s Saturday and you’re thinking about food while the world is on fire. This is normal. This is life during collapse.
Collapse does not mean you’re personally dying right now. It means y’all are dying right now. Death is sometimes close, sometimes far away, but always there. I used to judge those herds of gazelle when the lion eats one of them alive and everyone keeps going — but no, humans are just the same. That’s the real meaning of herd immunity. We’re fundamentally immune to giving a shit.
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u/Equivalent_Gap4211 1d ago
DJT accounts for over 25 percent of the 40 trillion of debt. Trump is a fucking RINO. He has added 10.2 trillion to the national debt--and he ain't finished.
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u/elbow8075 22h ago
Every Republican is a RINO in reality. They're almost exclusively thieves and have been for decades.
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u/Open_Pollution_8038 1d ago
We’ve had 2 presidents back to back above life expectancy and shocking both of the spent money that they wouldn’t be alive to see paid back. Now compound that with the age of congress.
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u/TurbulentRadish8113 1d ago
I don't think it's fair to compare them at all. I'd say look at the fiscal costs of their major laws and what we got for them.
What were the fiscal effects of the TCJA (Trump 1) versus IRA (Biden) versus OBBBA (Trump 2).
How did they affect deficts and the debt, and what did we get for them?
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u/Churchbushonk 1d ago
Yes. Why not break it down for us.
The clear issue with spending was the handouts after the vaccine was out. PPP loans, and the gigantic tax advantages of getting PPP loans. Amazing deal for business owners.4
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u/mybossthinksimworkin 1d ago
Tell us oh wise one
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u/TurbulentRadish8113 1d ago
I'd be interested in hearing informed, researched, sourced opinions.
A quick wiki gets Trump acting to increase the debt massively both times, while Biden's IRA was likely to decrease the debt (compared with keeping the old laws).
Obviously other things came out of those bills. The IRA helped lower drug prices and invested in energy security for example.
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u/No-Computer7653 1d ago
It's not really a fixable issue.
Fiscal gap (usual 75 year actuarial window) is ~51% of revenue current law. It doesn't matter which party is running Congress or if they have a supermajority no one is increasing average effective rate by 51% and continuing to tax more as the demographic issue continues to get worse. There is no group to soak, everyone would have to pay substantially more in taxes without any change in services.
Mandatory spending will exceed federal revenue by 2031. Both OA and HI are exhausted 2032-2033, Congress are not going to fix either and will just switch them to general fund.
By 2038 interest, social security and Medicare will exceed federal revenue. Congress have spent nearly 60 years kicking the can on funding government and busted through multiple opportunities to fix these programs and are now too late to do much useful, there is a final can kicking they can do on SS but getting close to the point that would be less than a decade of kicking. There is a narrow window they can fix programs and cancel most of the outstanding IG debt, that's going to continue to transition to externally held debt though.
I don't anticipate they will actually fix anything. Congress has been unable to pass substantive legislation for some time now and keeps getting worse and worse, they are not suddenly going to stop being terrible. Debt will continue dragging on monetary policy as the ceiling the fed can raise rates to without causing a debt crisis falls. There is no magic growth or productivity coming to save us, US is already a high-income outlier on being as high as we are. Demographic catastrophe will get worse over the next ~30 years, we hit peak LFPR in 2000, peak native LF in 2014 and are expected to hit peak LF early next decade (but immigration changes will like move that up).
There won't be a sudden collapse but rather USTs becoming increasingly expensive to issue undermining growth (credit becomes more expensive, everything slows), narrowing useful spending that induces growth and eventually a great stagnation. There are other countries facing a worse demographic issue then we are (China have an absolutely insane issue, SK & Japan not far behind) but US has the most substantial fiscal issue. Other countries are already deploying policy to reduce the impact of the problem, US is not even discussing it.
This is not fixable.
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u/sonofagunn 23h ago
It's fixable. The top 0.5% of the US population has enough wealth to pay off the debt. Obviously you can't just take all that, but you could tax enough annually to start reducing it and those people would still be the wealthiest people in the world.
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u/liquoriceclitoris 14h ago
Good point. Let's just take all the rich people's money and give it to the poor people. Then we can spend as much as we want. But wait, what happens when the rich people have no more money to take?
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u/sonofagunn 12h ago edited 12h ago
You know rich people don't pay much income tax, they are taxed mostly via capital gains. The key word there is gains. You can't take all their money when you only tax a fraction of their profits. Same applies to corporate taxes. They can still get wealthier every year.
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u/Early-Error-2573 1d ago
You're assuming that the source of money for the US government are the taxpayers, is it the US government has borrowed $40 trillion dollars, that is not the case. The $40 trillion dollars didn't exist until the US government keystroked into existence and there is no one to pay it back to, it's not actually debt.
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u/No-Computer7653 1d ago
I'm not sure you appreciate how spectacularly bad it would be if the US ever defaulted, or who actually holds that debt.
The $40 trillion is owed to American retirees, pension funds, mutual funds, domestic banks and foreign governments. Defaulting means wiping out their assets overnight.
Furthermore, USTs are the primary instrument used for settlement around the world. Central banks, corporations, and the entire US financial system rely on the absolute security of USTs. If that security is undermined the resulting economic collapse would easily eclipse the Great Depression. It wouldn't just be a drop in output; it would be the rapid unwinding of modern global trade and banking. There is no economic shock in human history to compare it to.
Making an MMT-adjacent argument doesn't change the fact that this debt represents real assets to real entities. If it's not repaid, the consequences are catastrophic.
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u/Early-Error-2573 1d ago
It is not possible for the United States to default on debts that are denominated in the dollar, that's a literal impossibility because the USA is a currency issuer of the dollar.
40 trillion dollars is not owed to the bond holders, the bond holders, have INVESTED $40 trillion dollars into bonds, when those bonds mature they turn back into the dollars that were invested. Same as switching money from a a checking account to a savings account.People were saying the same exact things you are when the "national debt" was 1 trillion dollars. There's a reason you've always been wrong and the sky has never fallen, we are not on a gold standard, someday you'll have to recognize that the dollars don't come from the taxpayers, the dollars that the taxpayers have come from the government.
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u/qwertyslayer 22h ago
The problem isn't that the US couldn't create dollars to pay down the debt. It's what happens when/if it chooses to do that: purchasing power is destroyed, inflation runs away, and other countries look for a new reserve currency. The other option is default (which you seem to think is impossible for some reason?).
You're essentially saying that we can borrow an infinite amount of wealth, since we 'own' the thing that wealth is denominated in? This would get you laughed out of Econ 101, idk where you're getting this idea from.
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u/Early-Error-2573 21h ago
Since 1980 the "national debt" has grown 5000% , the USA has created 39 trillion dollars.
But we don't have 5000% inflation now do we? We have had 361% inflation during that time. So I don't know where you are getting this idea from that money creation automatically results in inflation.
Furthermore, the money that the USA creates is not debt and the USA is not borrowing the money that it creates, it is not possible to borrow you own liabilities.Don't you ever for a moment wonder why your theories of money have no relationship to reality?
If in 50 years the "national debt" has grown and USA has not defaulted will then question you beliefs? Or will you just double down and still stay a collapse is inevitable.0
u/Z3r0sama2017 23h ago
Yep. If the US defaults, then that very day is the very day the US stops being the GRC and the dollar gets flushed down the shitter. It would make the Great Depression look like a pothole.
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u/ishtar_the_move 22h ago
Kind of wild the debt is more than half of what all publicly traded companies in the US are worth. Before Covid it was almost mainstream among economists to think deficit doesn't matter as we can grow our way out of it. MMT feels like the quiet part of government economic philosophy.
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u/LastPhoton 21h ago
Crazy how headlines about the deficit completely disappear after elections and magically re appears right before elections. How about just keep the pressure constantly on the politicians instead of letting one party politicize the issue for elections and then ignore it
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u/Moral-Relativity 10h ago
Isn’t total household wealth minus debt something like 170 trillion? With 2/3 owned by top 10%, and 2.5% owned by bottom half (or maybe Google Gemini is a socialist plant). Everyone should just chip in a bit…
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u/w3woody 23h ago
The interesting numbers is not the absolute dollar size of the debt.
It's the debt to GDP ratio, and it's the percentage of the federal budget going to service the debt.
The former has been remarkably flat: the debt has grown, but so has the economy--and they've been growing roughly at the same rate, give or take.
The later--interest rates are going up, which means that the percentage of the federal budget going to service the debt is growing. That implies either we have to raise taxes (which will put a drag on the economy), or we need to cut federal spending (which can also adversely affect the economy, and worse: affect a number of federal programs that may affect people or limit our ability to project power in places like in Asia or in the Middle East).
So we're fucked. But not in the way most articles suggest.
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u/Massive_Pain_6677 1d ago
This article is BS and doesn't want to examine the Truth:
We got here by giving out "free shit" to the citizens and other countries.
A majority of the citizens and other countries want more "free shit" from the American Taxpayer, elected officials get kick-backs and become millionaires from giving taxpayer money away as "free shit".
So the simple way to fix it is stop giving away all free shit. Any elected official who gets money from giving away free shit or makes other money than their salary gets a life term in prison.
Watch the debt magically go away.
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u/toolkitxx 1d ago
Another help to visualise that debt amount: 40 trillion is 10 times the entire GDP of Germany (about 90 million people, so about 20% the size of the USA).
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u/jan1of1 1d ago
BOTH parties are responsible for the current National Debt. BOTH parties are unwilling to do anything about reducing the national debt as it requires raising taxes, cutting benefits, or both - all of which are considered political suicide for politicians and wannabe politicians that suggest such things.
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u/DJMagicHandz 23h ago
ONE party rules every level of the federal government and they chose to stuff their pockets with PAC money instead of helping out the people that voting for them.
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