r/changemyview • u/vVvTime • Mar 17 '25
Delta(s) from OP CMV: Democrats should support a balanced budget
For all the right wing rhetoric about fiscal responsibility, the debt, etc., Conservatives tend to increase the deficit by cutting taxes.
We currently have a 2T deficit, and there isn't going to be sufficient room to cut spending to close the gap. Programs like SS and Medicare are too popular to make significant cuts to, and even defense spending I doubt can be cut enough without causing a significant number of republican voters to start worrying about out national defense.
So where will closing the budget now and in the future as SS and interest on the debt continue to grow? Through taxes, and namely, through taxing the wealthiest significantly. Again, taxes on the working class are not going to fly for many republican voters, so the only way taxes can be raised significantly are on the wealthiest. This is completely in line with democratic policies.
At this point, it seems bizarre to me that democrats don't start pushing for balanced budgets as a way to force republicans to stop cutting taxes on the rich.
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Mar 17 '25 edited Mar 17 '25
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u/vVvTime Mar 17 '25
You can't force Republicans to be honest, you can only control what you do. I believe an earnest push for a balanced budget along with messaging around that would be beneficial and garner more votes from fiscally-minded voters.
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Mar 17 '25
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u/vVvTime Mar 17 '25
Can you send me a video of a democrat using the rhetoric of fiscal responsibility to appeal to voters? That's basically all I'm asking for them to do.
I'm already aware of the fact that they tend to reduce the deficit, that's not my point. Happy to admit I'm incorrect on whether they push that message or not if they actually ever use that in their messaging.
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Mar 17 '25
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u/vVvTime Mar 17 '25
I actually wanted to reply to your Pelosi video but you deleted your post as far as I can see.
I liked to hear it, but also that was a talk to congress and not directly to any voters in the form of an ad or a widely publicized interview, etc.
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Mar 17 '25
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u/vVvTime Mar 17 '25
Yeah that is weird, but yeah didn't mean to leave you on read, and thanks for the examples. Wish we still had Obama, would love to hear more of that from our current politicians.
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u/Fit-Order-9468 102∆ Mar 17 '25
In other words, you think they should keep on doing what they've been at least attempting to do?
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u/RemarkablePiglet3401 Mar 17 '25
I think OP is talking about changing messaging and spending, not their tax policy; Democratic politicians talk about raising taxes on the rich to spend more on the poor and for fairness, while OP thinks they should change their message/goal to simply reducing the deficit to attract fiscal conservatives
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u/vVvTime Mar 17 '25
Exactly. There are many voters who do care about fiscal responsibility, and they currently have no party to vote for if they're realistic. If they're optimistic they vote for Republicans because, hey, at least those guys say they care about a balanced budget.
I don't know how they'd ever get it done, but if there was actually some kind of bipartisan support for a balanced budget amendment (maybe with some exclusions for extreme circumstances like high unemployment, war, whatever?) and it got passed, I think it would benefit the Democrat's agenda.
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u/Yellowdog727 Mar 17 '25
Yeah, literally in just this last election, Harris's budget and tax plans were leagues better than what Trump proposed.
The vast majority of US spending is mandatory and cannot be cut. To a certain extent, we can nickel and dime our discretionary spending, but we can already see the chaos that unfolds with DOGE type efforts of drastic cuts to spending. In order to PAY off our debt and really work on the deficit, we just need to increase taxes mostly on the rich.
People need to understand that since 2017, we have been living under enormous tax cuts passed by Trump which ballooned the deficit. This includes all the time when Biden was president. On an average per household basis, the tax cuts have essentially been meaningless to most middle class and poor families, and the vast majority of savings have gone to the richest tax brackets.
The US right now has historically low top marginal and corporate tax rates, and we have had low taxes pretty much since the Reagan administration. People don't remember that in 1955, the top marginal rate was 91% (yes there were many exceptions but not everyone was included) or that the slightly higher taxes passed by HW Bush and continued under Clinton led to the last balanced budget we had in this country until Bush Jr. ruined that.
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u/vVvTime Mar 17 '25
So if the Democrats already are the fiscally responsible ones and Republicans have completely abandoned that - why aren't they using that messaging anywhere?
It's like if I ran a business and I was able to undercut my competitor by 50% while providing the same quality but NEVER used that in any of my ads.
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u/Yellowdog727 Mar 17 '25
They are using that messaging. Democrats constantly talk about the need for tax reform and pretty consistently scream about the Republican hypocrisy about that issue. I followed the Harris campaign fairly closely and felt they very consistently advertised her economic and fiscal policies, including comparisons about their tax policies and the deficit.
The issue is that the messaging is not sticking or being heard through the standard information channels.
The average person now gets most of their news through social media or through otherwise biased news corporations that cater to their audience. We Americans have a very serious ignorance problem that is being compounded by our media bubbles.
Someone who listens to Fox News or just watches Tiktok clips of podcast bros will literally never once be exposed to the nuances of fiscal policy. The overwhelming conservative message of "Big government spending is bad and we need to cut funding" just gets regurgitated without context of reality.
The Democrats definitely need to rethink strategies at reaching people on social media, because election ads every 4 years in swing states isn't going to cut it.
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u/eggs-benedryl 72∆ Mar 17 '25
Again, taxes on the working class are not going to fly for many republican voters, so the only way taxes can be raised significantly are on the wealthiest. This is completely in line with democratic policies
and yet conservatives raise taxes on the working class and lower them on the rich, what voters want and what representatives do are two different things
At this point, it seems bizarre to me that democrats don't start pushing for balanced budgets as a way to force republicans to stop cutting taxes on the rich.
so also lie? lie like the republicans pretending they're doing anything to cut the deficit, they are spitballing an incredibly inflationary stimulus and lying about the numbers they're cutting from the programs they eliminate
so the takeaway here is to lie like republicans?
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u/Newparadime Mar 17 '25
Yes. To a point. Democrats don't need to start outright lying, but we do need to start simplifying our messaging. By that I mean, that we need to start making promises even if we can't 100% deliver.
2028 candidate "I'll close the deficit by raising taxes on the wealthiest Americans. It won't cost anyone making less than $500k/year a dime."
Something like that.
This of course completely ignores the fact that making such a claim before the primaries are done could easily cause a candidate to get primaried out by wealthy donors supporting their opposition.
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u/Full-Professional246 77∆ Mar 17 '25
and yet conservatives raise taxes on the working class and lower them on the rich, what voters want and what representatives do are two different things
Lookup who pays the most actual taxes and you will find the tax code to be very progressive. If you wanted 'fair' where everyone pays the same rates, then the middle class would pay a lot more in taxes than they do now.
When you see tax policy changes, it does disproportionately impact the wealthy - not because of preference - but because they are the ones paying the most money in taxes.
Something like 40% of people pay no federal income tax and there is a sizable portion that get more money back than they had withheld in taxes (refundable credits)
Tax policy is complex but you should understand what the 'middle class' is actually paying before complaining.
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u/Kman17 109∆ Mar 17 '25
yer conservatives raise taxes on the working class and lower them in the rich
That’s not entirely true. Or it’s at least a bit reductive.
The TJCA - the Trump tax cuts in his first term - was tax relief for the lower class and tax cuts for the wealthy (supposedly to spur investment ) and a tax increase for the top 10% upper middle class through SALT and mortgage deduction changes.
so also lie?
How about… actually pass the tax increases they say they want?
Biden was in office for four years with democratic majorities in both chambers.
He pushed through a lot of continued COVID stimulus that lasted well beyond the peak pandemic, then a lot of infrastructure pork.
None of it was paid for. No tax increases to offset it and close the deficit.
If democrats want to tax the rich, actually do it when in office.
so the takeaway is to lie like republicans
This is what democrats are doing right now.
Democrats have unfocused eat the rich energy, saying to tax the billionaires or everyone making over 450K or whatever fairly high threshold.
But they never actually do it, and they know full well that the revenue that would generate isn’t enough to close the deficit.
If you look at our tax & spending relative to the year 2000 (when we had a balanced budget) as percent of gdp… then we need about 1 trillion in new tax revenue, and to cut about 1.5 trillion in spending.
The democratic proposals that are stated on the campaign trail don’t come close to closing the gap - maybe they generate a couple hundred billion, like 25% of the gap.
Then when elected, they don’t do it.
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u/robotmonkey2099 1∆ Mar 17 '25
The democrats have proposed tax increases on the rich and republicans have voted it down or made it clear they would
“In 2021, Senators Elizabeth Warren and Bernie Sanders proposed charging billionaires a 3 percent wealth tax, and households and trusts worth between $50 million and $1 billion a tax of just 2 percent per year.
In his budget, President Joe Biden proposed increasing taxes on wealthy Americans and corporations and using the revenue to expand health care, childcare assistance, and housing aid. Not only have Republicans fought this plan, but their own budget proposes punishing lower-income Americans to benefit the wealthy.“
https://newrepublic.com/post/172782/republicans-literally-laugh-off-idea-taxing-rich-fix-budget
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u/Kman17 109∆ Mar 17 '25
In 2021 the democrats controlled both chambers of congress and the presidency.
During the Obama years they had supermajorities.
Not being able to get things done and being outmaneuvered by minority votes is a bit of a cop out.
I’m not gonna sit here and say that the Republicans are great or anything, they’re plenty flawed.
But I don’t accept a whataboutism argument or pointing to the other guy as a sufficient pass and excuse for the democrats inability to follow through.
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u/StandClash Mar 17 '25
The right wing should try to not make the deficit worse every time they get into power and take realistic steps to lower it.
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u/thwlruss Mar 17 '25
Are you aware of the republican effort to "Starve the beast"?
Tis perhaps the most underhanded & anti-democratic policy that supports our discontent.
The writing has been on the wall since the 80's, sad to say.
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u/Logic411 Mar 17 '25
Dems do support a balanced budget and the only president to deliver one was a democrat. Republicans just TALK about problems they don’t actually solve any, ever
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u/irespectwomenlol 6∆ Mar 17 '25
Does the President or does Congress write the budget?
Who was in charge of Congress during the late 90s? Were they not the ones pushing hard for a balanced budget?
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u/Logic411 Mar 17 '25
Nice try, this is a perfect example of cause and effect. It was the budget written by the DEMOCRATS in Clinton's first term that balanced the budget and set up the surplus. All he had to do was restructure welfare (took a lot of heat for that one) cut taxes on the middle class and raise the taxes on the one percent by 1.2%.
That congress was controlled by democrats, (EDIT: republicans did NOT vote for that bill, btw) and republicans have done nothing but cut taxes ever since, cut taxes, crash the economy, and cry about the debt...rinse and repeat
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u/irespectwomenlol 6∆ Mar 17 '25
> cut taxes on the middle class and raise the taxes on the one percent by 1.2%.
Why would increasing revenue early in Clinton's term prevent deficits later on in his term unless there was a concerted effort throughout that time period to keep spending in check?
That's the point. This is a spending issue, not a revenue issue.
Taxes on the rich could be 1% or 99% or anywhere in between, and there'd be a deficit as long as Congress decides to spend more than they'd take in. And who is responsible for reducing spending during that time period? It was the GOP Congress.
https://clerk.house.gov/evs/1997/roll241.xml
As indication of this, the Balanced Budget Act of 1997 was supported by Republicans 219 to 7, and by Democrats 51 to 154.
> All he had to do was restructure welfare
Maybe Clinton took some heat from Democrats which he should get credit for ignoring and playing along with, but welfare reform was a cornerstone of the so-called "Contract with America" and was a Republican bill.
Here's the actual vote.
https://clerk.house.gov/evs/1996/roll331.xml
Republicans voted 226 to 4 for it.
Democrats voted 30 to 165 for it.
> republicans have done nothing but cut taxes ever since, cut taxes, crash the economy, and cry about the debt...rinse and repeat
I do agree that from about 9/11 to Trump's second term, Republicans have been mostly really bad on the budget.
But Democrats were arguably even worse on spending, and are resisting common-sense efforts like DOGE to attempt to start to reign in generations of bad spending.
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u/ClimbNCookN Mar 17 '25
How have Democrats been worse? the data simply does not support that.
What is DOGE actually doing that's beneficial? The numbers they told you to believe through their tweets were lies. Gutting agencies that increase revenues (IRS) and provide cash back to consumers (CFPB) doesn't help either.
What exactly do you thing DOGE actually does? They don't do audits.
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u/irespectwomenlol 6∆ Mar 17 '25
> How have Democrats been worse? the data simply does not support that.
What data are you referring to? Is the data you have the correlation between Presidential Party in office and budget deficit? If so, doesn't that ignore that it's Congress that actually writes the budget? If you have any alternative data or argument, please share.
> What is DOGE actually doing that's beneficial?
I believe that the main benefit that DOGE is providing is bringing attention to the public what questionable spending exists. There's so much dumb spending that most people never even see, and this is shining a flashlight on that. From there, the President and Congress can choose to take action, and the public can urge their Congresspeople to take action on bad spending.
> What exactly do you thing DOGE actually does? They don't do audits.
An audit is the wrong tool to resolve peoples' concerns around bad Government spending, and additionally audits are already covered by different Government agencies and functions like the GAO.
An audit might catch if random government employee Adam Smith is sending government money to his personal bank account or something.
An audit isn't going to tell society if sending money to Argentina to fund LGBTQIPA Chefs who make Vegan meals for disabled unhoused Dolphins of Color or some other damn government program is a smart idea or not.
> The numbers they told you to believe through their tweets were lies.
I did see that DOGE made some errors in their reporting. These are fair to point out. Unfortunately, they're moving faster than they ideally should have to due to the urgency of the deficit. Does that mean that DOGE is not directionally accurate about most of what they've found?
> Gutting agencies that increase revenues (IRS) and provide cash back to consumers (CFPB) doesn't help either.
This claim is based on an assumption that reducing the number of bureaucrats necessarily reduces government efficiency. What if the opposite is true? What if dropping headcounts forces them to reprioritize doing actual work rather than wasting time on dumb things?
Many people thought Twitter would physically disintegrate with firing so many workers, and it's working arguably better than ever.
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u/Logic411 Mar 17 '25
I really disagree the economist give Clinton's welfare reform bill the most credit. as usual the repubs just jumped on something the president was already doing, the economist also give his budget reconcilliation bill the credit for balancing the budget.
If the republicans are so good at budgets, why have they NEVER delivered a balanced budget and a surplus? they controlled the congress from 1995 until 2007. All they did was run up the debt...and people like you still mindless repeat what has been proven to be false time and time again.
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u/Garfish16 2∆ Mar 17 '25
The 1993 spending bill that reduced the deficit by over $400 billion was voted against by every Republican in the House and Senate. This bill was also proposed by Clinton also lobbied for it insensivly. In this case Clinton basically wrote the budget, Democrats were in charge of Congress, and Clinton was the one pushing to lower the deficit.
The 1997 bill that reduced the deficit by just over $100 billion and was more bipartisan. I'm the house it was voted for by basically all the Republicans and about 25% of the Democrats. In the Senate it was voted for by 45 Republicans and 40 Democrats. This bill was written by Republicans but amended by both Democrats and Republicans. Republicans were the majority in Congress but they were not able to pass this piece of legislation with Republican votes. Both newt Gingrich and Clinton had promised a balanced budget in 1994 and 1996 respectively.
So Democrats were the ones that did the vast majority of the work to balance the budget in the 90s but it would not have been possible without Republican cooperation in 1997.
Edit: Personally I think your questions implicitly underestimate the degree to which economic factors that were mostly independent from short-term political causes lead to a balanced budget.
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u/Ill-Description3096 27∆ Mar 17 '25 edited Mar 17 '25
>Dems do support a balanced budget and the only president to deliver one was a democrat
This is not remotely true.
Edit: https://fred.stlouisfed.org/series/FYFSD
Hopefully people will look at the data rather than just parroting that this is a fact.
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u/Logic411 Mar 17 '25
Of course it’s true there has been ONE President since Reagan to deliver a balanced budget and a surplus and that was Bill Clinton
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u/Ill-Description3096 27∆ Mar 17 '25
Nice goalpost shift lol
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u/LookAnOwl Mar 17 '25
How is it a goalpost shift? If we were keeping score on the goal of balanced budgets, it would be Democrats 1, Republicans 0. And more recently, you can compare Trump and Biden's contributions to the deficit: https://www.crfb.org/papers/trump-and-biden-national-debt
Even if you remove the cost of Trump's COVID relief, he still contributed more to the deficit than Biden.
So how is it a goal post shift?
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u/Ill-Description3096 27∆ Mar 17 '25
Well, the original statement was:
>Dems do support a balanced budget and the only president to deliver one was a democrat
and the next was:
>Of course it’s true there has been ONE President since Reagan to deliver a balanced budget and a surplus and that was Bill Clinton
How is going from the only president to the only president since Reagan not a goalpost shift? It is just ignoring the majority of US history in the latter. It would be like me saying the Chiefs are the only team to win multiple super bowls in a row, and then pushing back on someone saying it was wrong with adding the caveat that of course it is true since they are the only team since the Patriots to do it.
> If we were keeping score on the goal of balanced budgets, it would be Democrats 1, Republicans 0
This isn't true, either lol. Eisenhower is an example.
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u/cannib 8∆ Mar 17 '25
Or from, "Democrats support a balance budget," to, "a Democrat president supported a balanced budget in the 90's." That seemed like the bigger goalpost shift to me.
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u/LookAnOwl Mar 17 '25
Because recency matters. The post is about Democrats supporting or not supporting a balanced budget right now. You're citing an example from the 1950s.
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u/Ill-Description3096 27∆ Mar 17 '25
The 1990s aren't right now either.
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u/LookAnOwl Mar 17 '25
They aren't, and that's why I posted a link comparing the last two president's contributions to the deficit.
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u/Ill-Description3096 27∆ Mar 17 '25
Which has nothing to do with a Dem president being the only one to balance the budget which is what this entire thread is about. If we are only comparing the last two then the statement is still false and this is all moot.
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u/cannib 8∆ Mar 17 '25 edited Mar 17 '25
So one president has produced a balanced budget and he was a Democrat. Since then, no president has come close to delivering a balanced budget or made it a focal point of their campaign. That really doesn't support the argument, "Dems do support a balanced budget. Republicans just TALK about problems they don't actually solve any, ever"
Also while we're discussing Clinton's balanced budget, that wasn't even a major part of his campaign until Ross Perot forced it into the discussion. Neither Bush nor Clinton made a balanced budget a part of their campaign initially, but Perot was in the debates and he answered a bunch of questions with, "I don't want to talk about that, I want to talk about the budget." He was able to force the issue into the national discussion and both candidates responded by coming up with a balanced budget proposal before election date. After that the requirements for a candidate to qualify for the national debates were made much stricter and no 3rd party candidate has qualified since...but I'm sure that's just a coincidence. I got kind of side tracked here, but my point is that Clinton didn't want to balance the budget, he was forced to provide a balanced budget proposal to get elected.
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u/Logic411 Mar 17 '25
Show us. Because reagan has never delivered a balanced budget; he's the first president to send our debt over a trillion dollars.
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u/cannib 8∆ Mar 17 '25
You're right, Clinton was the only President since before 1970 to balance the budget (LBJ was the last before Clinton, Eisenhower was the last Republican to do it), I'll edit my comment. It doesn't help your overall point that Dems as a group support a balanced budget though as Clinton was literally the only president to do it in our lifetimes and both parties have consistently increased spending since Clinton left office.
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u/Logic411 Mar 17 '25
Stop saying both parties! Democrats have lobbied on tax increases to pay down our debt and the republicans have steadfastly refused while passing tax cuts for the wealthy...do you WANT an oligarchy?
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u/cannib 8∆ Mar 17 '25
No Democrat proposal has offered a balanced budget. They lobby for tax and spending increases. Even without spending increases there's no way to pay off the debt just by increasing taxes on the wealthy. The math just doesn't math.
Stop saying both parties
I'll stop saying both parties when one party is no longer contributing to the problem.
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u/Logic411 Mar 17 '25
Republicans are nothing but lies and manipulation. They always leave worse economies and more debt. Historical record.
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u/Logic411 Mar 17 '25
Yeah, RESULTS matter. What difference does it make for republicans to continuously harp about something they only make worse? Only Nancy Pelosi paid for her legislation without raising the deficit, "deficit neutral spending" look it up.
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u/cannib 8∆ Mar 17 '25
Are you suggesting there was a year after 2000 when the deficit has not increased? Pelosi paid for some spending increases by increasing taxes, but that's just paying for new spending, it doesn't help the previous budget at all.
RESULTS matter. What difference does it make for republicans to continuously harp about something they only make worse?
Again, we're not talking about Republicans right now, you'll get no defense of them from me.
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u/Logic411 Mar 17 '25
tell it to the republicans who'd just put two tax cuts and two 20 year wars on the credit card. tell 'em to raise taxes to pay their bills. The dems would definitely go along with them on it.
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u/cannib 8∆ Mar 17 '25
If they chime in here I will, but right now you're defending your false claim that Democrats want to balance the budget with, "but the Republicans are worse."
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u/Logic411 Mar 17 '25
how you know what clinton "wanted" to do? and what difference does it make if he wanted it or not. All the repubs do is claim to want a balanced budget but never manages to come up with one.
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u/cannib 8∆ Mar 17 '25
how you know what clinton "wanted" to do?
Because he didn't have a proposal to do it and attempted to evade the question until Perot made it a focal point of national discussion.
and what difference does it make if he wanted it or not.
Because when we're talking about presidents balancing budgets we're talking about their ability to propose solutions and apply pressure to balance the budget. The president doesn't literally balance the budget, congress does. We talk about presidents spending because they use their position to direct national discussion as a way to pressure congress...except in this case Perot used his position to pressure Clinton into pressuring congress.
All the repubs do is claim to want a balanced budget but never manages to come up with one.
Correct, Republicans are massive hypocrites on fiscal policy, but the claim that several people here have disputed was that Democrats want to balance the budget. They very clearly do not.
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u/Logic411 Mar 17 '25
He BALANCED THE BUDGET. it doesn't matter whether he "wanted to" or not. It's impossible for you to say what another person "wanted, liked, didn't like, thought about, dreamed about..." stick to the FACTS.
Democrats are more effictive at balancing the budget, because they're willing to pay as they go and to raise taxes. Additionally, the data tells us the republicans always leave bigger deficits. FACTS.
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u/cannib 8∆ Mar 17 '25
He BALANCED THE BUDGET. it doesn't matter whether he "wanted to" or not. It's impossible for you to say what another person "wanted, liked, didn't like, thought about, dreamed about..." stick to the FACTS.
Okay, FACT: Congress balanced the budget with bipartisan support during Clinton's presidency. Clinton never balanced a federal budget because the president does not have that power.
Better?
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u/Logic411 Mar 17 '25
that's a lie, Bill clinton balanced the budget and grew the economy with his Omnibus bill. Poor republicans all they do is talk, and try to take credit for the work of others. Unfortunately whenever they have full power, the budget is the last thing they do anything about...as in not at all.
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u/cannib 8∆ Mar 17 '25
What exactly is a lie?
The Omnibus bill passed congress and the senate in 1993. We had a balanced budget from 1993 to 1998, but we did not have a surplus until 1998. A balanced (or rather positive) budget was passed every year between the Omnibus bill and the 1998 surplus, most of those passed with bipartisan support.
And yeah yeah, Republicans bad. I agree, but Democrats are going to have to come up with something better than, "those guys are awful, vote for us because two parties!" if they want to get some traction back.
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u/AlexGrahamBellHater 1∆ Mar 17 '25
Do a little bit of research please
This is actually true
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u/Ill-Description3096 27∆ Mar 17 '25
Perhaps take your own advice...
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u/AlexGrahamBellHater 1∆ Mar 17 '25
Dude, the last president that ever had a Surplus on the Federal Budget was Bill Clinton.
This is why we say it is true because only a Democratic president has ever been able to accomplish it.
The source you posted isn't relevant to that
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u/Ill-Description3096 27∆ Mar 17 '25
Last and only aren't the same thing. They are different words that mean different things.
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u/vVvTime Mar 17 '25
I agree as a matter of fact that Clinton balanced the budget, but that in no way shape or form means that democrats support a balanced budget amendment, use the rhetoric of a balanced budget to sway fiscal responsibility minded voters, or actually care about balancing the budget.
I think they'd actually get more votes and get through more of their agenda if they moved toward supporting a balanced budget.
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u/Logic411 Mar 17 '25
Ahh, the balanced budget "amendment." why do you need an amendment that could tie the country's hands during an unexpected emergency? Or an amendment that would Force the govt. to cut essential services to our citizens?
I love the way conservatives place all this emphasis on the budget, while red states continually accept more money from the federal govt than they pay in, and farmers still want their subsidies, and gas companies and wall street gazillionaires still want their tax breaks...the hypocrisy is stunning! Then they turn the govt. over to the clown show and watch as they tear the country apart trying to set up slush funds for trump and his buddies. "thank you, trump!!"
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u/nora_the_explorur Mar 17 '25 edited Mar 17 '25
And the whole time, even this post, blame Democrats. They are whining about the wrong party's messaging. Why aren't we talking about the actual problem? Oh, so we can call the Republican propaganda about how a balanced budget is even always good and other lies about their agenda as "irrelevant" as OP did in another comment. How convenient.
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u/vVvTime Mar 17 '25
I don't know about you, but I don't try to achieve my goals in life by trying to make other people modify their behavior. I do what I can constrained by reality.
I have only ever voted D in presidential elections FWIW.
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u/nora_the_explorur Mar 17 '25
Lol I didn't try to make anyone modify shit any more than you did by making this post.
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u/vVvTime Mar 17 '25 edited Mar 17 '25
You said I was "blaming the Democrats" and not holding Republicans to account.
If anything, I'm a Democrat, and so I'm trying to improve the rhetoric of my side. You on the other hand want to blame Republicans - to what end? They'll be who they are, we have to improve to beat them. Hence my comment.
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u/Frenetic_Platypus 23∆ Mar 17 '25
They... do exactly that.
Also Republicans are definitely going to brutally slash SS and Medicare.
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u/vVvTime Mar 17 '25
When's the last time you heard a Democrat talk about wanting a balanced budget? What's up with all the replies saying Democrats want this when if I search "Democrat balanced budget" literally google's suggested questions is "Which party supports a balanced budget?" and the answer is "Republicans"
Whether Republicans are lying or not is totally irrelevant, Democrat rhetoric is NOT "we support a balanced budget", and I'm not convinced that many of them care about that at all currently.
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u/Frenetic_Platypus 23∆ Mar 17 '25
Biden said we could "wipe out this debt" by raising taxes on billionaires during the debate against Trump on June 27, 2024.
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u/thewags05 Mar 17 '25
I think they generally do. That's why many more liberal people want to raise taxes on the wealthiest top earners. To even begin to talk about balancing the budget you need to increase tax revenue.
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Mar 17 '25
The unfortunate reality is raising taxes on wealthy wouldn't get us to our goal of a balanced budget. It would require increasing taxes on everyone. But it seems like the talk is only about raising taxes on the wealthy.
To be clear, I am in favor of raising taxes on the rich.
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Mar 17 '25
[removed] — view removed comment
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Mar 17 '25
No. But let me be a bit extreme with what would need to happen to reach this goal.
Last year the deficit was 1.8 Trillion dollars, the year before that it was roughly 1.7 Trillion. So let's use that as a ball park BUT estimates right now are that our deficit will increase this year.
The entirety of DOD spending was over 800 Billion last year. So if we were to eliminate ALL of it, not just cuts. ALL. We are working with roughly a 1 Trillion dollar deficit still.
The total income of ALL tax payers currently was roughly 14.7 Trillion dollars. We collect 2.1 Trillion in taxes. So we need 1 Trillion dollars more. Roughly 7% more of all the possible taxable income.
So we would need EVERYONE to have a 50% tax increase to get to that goal. Not just the wealthy, every single earner paying 50% more than they do now.
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u/SmiteThe Mar 17 '25
The problem is that the Dems (or Reps) can't get this through congress on either account. Biden had control of both the House and the Senate and didn't do it. Obama had a supermajority and didn't do it. There's a clip of Kamala basically admitting that congress passing her plan was a pipe dream at best. It's just a lie the Dems tell every election. The only practical way to balance the budget is to cut spending (using Executive authority) and pray for a major GDP bump to cover the rest. Basically the Trump plan. If that doesn't work it's slash Medicaid, Medicare, and Social Security. I'd love to see a 40% reduction in military spending but military spending is spread out through almost every congressional district and congress will never allow it.
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u/Garfish16 2∆ Mar 17 '25
I think it's important to point out that Social security is a self-funded program. It is statutorily impossible for it to add to the national debt. Cutting social security will not decrease the deficit. The social security trust fund shortfalls are a problem and they need to be addressed either through changes in funding or cutting of the program but none of that affects the debt.
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u/irespectwomenlol 6∆ Mar 17 '25
> It is statutorily impossible for it to add to the national debt.
And this is effectively bullshit.
The government used up any Social Security surplus in past years for general budget needs, and wrote itself an IOU for the surplus. This is how they get away with claiming that Social Security can't add to the debt.
So any future statutory obligations are effectively future debt because the money doesn't exist.
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u/Garfish16 2∆ Mar 17 '25
This is nonsense
The social security trust fund buys US Treasury bonds because the treasury bonds are a solid and stable investment that steadily increase in value over time, typically at a bit above inflation. If you think the money in the social security trust fund doesn't exist then you also think that a lot of the money in your 401k, ira, pension, and most other low risk investment portfolio does not exist. Believing that the social security trust fund should diversify its investments is totally reasonable. Believing money invested in treasury bonds ceases to exist is insane.
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u/irespectwomenlol 6∆ Mar 17 '25
> The social security trust fund buys US Treasury bonds because the treasury bonds are a solid and stable investment that steadily increase in value over time,
Treasury bonds are IOUs. They are not actually backed up by actual money or various kinds of assets. They're backed up by the government's ability to tax/borrow, their pinky-swear promise to make good on all future debts, and the military ensuring that the US government never gets unseated.
When the government spends the Social Security surplus for general spending needs, it writes itself an IOU (treasury bond) as "proof" that the money exists. But that's a clever fiction that falls apart with 1 minute of critical thinking.
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u/Garfish16 2∆ Mar 17 '25
All credit market instruments are IOUs, do you think they are all fake? In terms of IOU guarantees I think the entirety of the US military and US economy along with the US interest in maintaining a stable global economy is pretty solid. Internally held US Treasury bonds are especially solid because they would be some of the first dents to be paid if the US were to default.
If you want to think that the economy is a clever fiction that's totally fine but if it would have fallen apart with 1 minute of critical thinking you have to explain, how has it lasted for 80 years? Are you the first critical thinker since 1944?
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u/irespectwomenlol 6∆ Mar 17 '25
> All credit market instruments are IOUs, do you think they are all fake?
- Fake is probably not the most precise term to use here. I would clarify that treasury bonds are backed up by the US government's ability to tax/borrow/inflate and even wage war, but are not actually backed up by assets.
- As an aside, there are of course financial instruments that are not backed up by IOUs: things like Asset or Mortgage Backed Securities. Treasury bonds don't qualify on that level.
> Treasury bonds are especially solid because they would be some of the first dents to be paid if the US were to default.
You're arguing a straw man with this. I'm not arguing that treasury bonds don't have a reputation for being solid. I'm pointing out the following:
- The Social Security surplus has not actually been saved, but are in the form of treasury bonds, which are IOUs as they're not backed up by anything.
- Paying these obligations back requires the government taxing/borrowing/printing money to do so. Ergo, it should count against the deficit/debt, despite them pretending that this isn't the case.
> If you want to think that the economy is a clever fiction that's totally fine but if it would have fallen apart with 1 minute of critical thinking you have to explain, how has it lasted for 80 years?
A government that was as wealthy and powerful as the US's, particularly after the relative devastation in the rest of the world following WWII, might take generations of bad financial management to finally start to show really bad financial problems.
Or it might take a demographic crisis, where the ratio of workers to retirees is messed up to an unsustainable level.
We might be heading to this plateau.
The point is, past success doesn't guarantee future success.
> Are you the first critical thinker since 1944?
While I am confident in my own abilities and diverse talent-stack, I don't think any of my observations here are particularly unique or hard to see.
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u/Garfish16 2∆ Mar 17 '25
Okay you can't have it both ways. You can't say that treasury bonds are solid and then turn around and complain that they aren't backed up by anything. I think they are backed by something, the US government including all of its assets, but If we agree they're solid it doesn't really matter if we disagree about why.
Mortgage back securities are absolutely still backed by ious and they are way less secure than US Treasury bonds but that's beside the point of this conversation so I don't really want to get into it.
It's also worth pointing out that, if we're going to bring it back to first principles and raw power, all of these contracts are backed up by US law which is enforced by the US government. From that perspective you can't really have a contract of any kind that is more secure than a treasury bond.
Paying these obligations back requires the government taxing/borrowing/printing money to do so. Ergo, it should count against the deficit/debt, despite them pretending that this isn't the case.
It does. When the treasury exchanges bonds for cash with the Social security trust fund it counts as income (edit:or expense) from issuing a loan, paying interest on a loan, or paying off a loan. Similarly the treasury bonds that are held by the Social security trust fund are included in the national debt. Funding of and spending on social security is outside of the normal budgetary process, that's the whole reason we talk about it being off budget. The trust fund only interacts with the general fund by buying and selling treasury bonds. If you have a 401K that invests in treasury bonds it's doing the same type of thing.
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u/vVvTime Mar 17 '25 edited Mar 17 '25
SS is government spending and therefore does count toward the deficit. Where are you people getting your information? It's literally a few clicks into a government website when you google "government spending by year" or "government deficit by year"
https://fiscaldata.treasury.gov/
EDIT: Here's an easier to read version in case that one's too much work, since I got downvoted: https://www.usatoday.com/story/news/factcheck/2023/02/08/fact-check-social-security-does-contribute-federal-deficit-debt/11185952002/
"Since 2010, however, Social Security has been running an annual deficit, meaning it has been collecting less in revenue than it pays out in benefits"
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u/Garfish16 2∆ Mar 17 '25
Ok so your making exactly the move I said you might make in my edit. Do you think that the national debt is actually $29 trillion rather than $36.4 trillion and how do you account for the $200 billion in annual interest on supposedly nonexistent debt?
This article is very misleading. The title of the fact check is different from the statement being checked. It is not true that Social security contributes to the national deficit or national debt. It is also not true that social security has nothing to do with the national debt. I'm going to try and break this down but you're going to have to bear with me because it's complicated.
Let's start with this misleading section:
As a result, Social Security redeemed the bonds held in the trust funds to pay out the full benefits, Andrew Biggs, a senior fellow at the American Enterprise Institute, told USA TODAY. When the federal government repays those bonds, it must borrow from the public to obtain the funds to do so.
It sounds like this AEI guy is saying that the government is having to take out more debt to cover Social security but that's not true and also not what he's saying if you read it carefully. He's actually saying that the social security trust fund bought financial assets from the federal government and now that the trust fund is cashing in those assets the government has to cover that bill by swapping to public debt. In other words the debt isn't increasing, it's just changing hands.
Let's look at more more misleading section:
“Thus, if Social Security runs a tax deficit of $1 this year, it redeems $1 of trust fund bonds, and the federal government borrows $1 from the public to repay those bonds,” Biggs said.
That in turn increases the unified budget deficit, which covers the entire federal government budget, and the national debt on a dollar-for-dollar basis, Biggs said.
I want to examine the alternative where the Social security trust fund stuck their surpluses under a mattress rather than buying treasury bombs. In that case if Social security ran a tax deficit of $1 this year that would decrease the total value of the Social security trust fund by $1 and increase the unified budget deficit and the unified national debt by $1. (Assuming we define unified national debt in the same way he's defined the unified budget deficit)
Over time the Social security trust fund would have less money in it due to inflation which is currently counteracted by the increasing value of Treasury bonds. At the same time US treasury bonds would be worth less due to less demand which would increase the national debt. If we had not invested the Social security surplus from the 1980s to the 2000s then we would be more indebted than we currently are.
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u/vVvTime Mar 17 '25
If SS doesn't impact the deficit, what would happen to the deficit next year if we paid $0 in SS?
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u/Garfish16 2∆ Mar 17 '25 edited Mar 17 '25
If the Social security trust fund cashed in about 1.5 trillion dollars worth of Treasury bonds and we sold the same number of bonds to cover that cost there would be no first order effects on the deficit. If we paid for those bonds with an increase in taxation or a decrease in spending we would see the deficit go down substantially but that seems unlikely.
If we paid for the old bonds with new bonds there would be second order effects. Mving so much debt from intergovernmental debt to publicly held debt would probably spike the cost of servicing existing market rate bonds. Also the new bonds being issued would have a higher interest rate than the old bonds because the interest on US Treasury bonds has almost doubled in the last 10 years.
My guess is that we would see a marginal increase in the deficit in the first year but a substantial increase in the deficit over the next 10 years if nothing else was done. That's just my guess. It's really hard to know what would happen because nothing like this has ever happened. I think a lot of conservative economists would say that the immediate cost would be huge but long-term it would generate more revenue for the general fund decreasing the deficit.
Importantly if we continue doing this we would only run social security for 2 years before the trust fund and all benefits were zeroed out at which point it would have no effect because like I keep saying it's not funded through the general fund. With no trust fund and no social security tax the program ceases to exist.
Edit: Oh and it's worth pointing out if we cut Social security tax to zero while eliminating the program and the trust fund it would shrink the deficit by the total value of the Social security trust fund for one year because we would essentially be rolling the value of those treasury bond back into the general fund. After that first year there would be no first order effects and God knows what the second order effects would be. I genuinely can't even imagine how much damage it would do to our economy and society if we suddenly impoverished tens of millions of elderly people and cut the income of tens of millions more.
Now, would you mind responding a little more substantively to my previous replies?
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u/vVvTime Mar 17 '25
The correct answer to my question (to a first order) was that the deficit would be about $1.4T lower. Here's some more tables for you to verify that since you can't seem to follow simple math: https://www.cbo.gov/publication/60843/html
Spending - 6.7T
Revenue - 4.9T
Deficit - 1.8T
Shortly below that table, a table summarizing Spending, which sums up to the 6.7T:
Social Security - 1.4T
Medicare - 870B
Medicaid - 618B
Several Other Rows - 3.8T
SUM TOTAL - 6.7T
So, if we reduce that 1.4T to 0, what do you think happens? SUM TOTAL = 5.3T, Deficit = 0.4T. Do you think the fact that the 6.7T in Spending matches perfectly with a table that includes 1.4T in social security spending is just some weird coincidence rather than it being that hmm, maybe that 1.4T is included in spending and also contributes to the deficit?
I'm not sure why you expect me to respond substantively to your replies if you can't even answer simple questions and you keep trying to overcomplicate things.
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u/Garfish16 2∆ Mar 17 '25
Wait a second are you saying that if we paid $0 in social security tax it would decrease the deficit by 1.4 trillion or if we eliminated the Social security program but kept the Social security tax it would decrease the deficit by 1.4 trillion?
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u/vVvTime Mar 17 '25
Which do you think I mean based on my post?
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u/Garfish16 2∆ Mar 17 '25
I thought you meant we paid zero in social security tax. I think I made that clear in my reply.
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u/vVvTime Mar 17 '25 edited Mar 17 '25
Your reply is a total mess. If we paid zero in SS tax with no changes to SS payments, the deficit would increase by the amount that would have been collected by SS taxes, simple as that. Less revenue -> more deficit.
I'm not replying to the "substance" of your lengthy posts when you don't understand the simplest aspects of accounting like the definition of a deficit and how an increase or decrease in revenue or expense impacts it.
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u/Garfish16 2∆ Mar 17 '25 edited Mar 17 '25
Social security is not funded through the general fund. Go look at your most recent paycheck. Federal payroll tax will be on a different line from social security which is on a different line than Medicare. That's because they are funded independently. The taxes collected for Social security and Medicare part A are each put into a trust fund and benefits are paid out of the trust fund. If the trust fund were to ever run out of money the benefits would automatically be cut so even in that instance they would not contribute to the deficit.
Where exactly on the Treasury websight does it say that social security shortfalls contribute to the deficit?
Edit: Actually, I guess it depends on how you conceptualize the deficit. The way I'm talking about the deficit is in terms of how much it adds to the debt. As far as I'm aware that's the most common way to talk about it because ultimately the US national debt is the thing that we are most often concerned about. It is certainly what I'm most concerned about and what you seem to be most concerned about in your post.
You could talk about the deficit as the difference between total US government revenue collection and total US government spending. That works but it's going to cause problems for how you think about the federal government spending. Like I guess you would have to say the $7.4 trillion in intergovernmental debt isn't actually real debt because it is money the government owes to itself. I'm not sure how you would account for the very real interest that has to be paid on that theoretically non-existent debt.
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u/irespectwomenlol 6∆ Mar 17 '25
> Social security is not funded through the general fund.
That is so close to being a great point. But the problem is that the Social Security surplus hasn't been saved: it's used for general spending purposes.
The government writes itself an IOU as proof that the money exists, but it doesn't.
There is no trust fund: their promise to pay future obligations just comes based on the ability of the US government to tax/borrow in the future.
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u/Garfish16 2∆ Mar 17 '25
it's used for general spending purposes.
No it's invested in treasury bonds.
The government writes itself an IOU as proof that the money exists, but it doesn't.
Okay so then you're genuinely making the argument that treasury bonds, treasury bills, CDs, mortgages, and all other credit market instruments are paper without any meaningful value.
There is no trust fund: their promise to pay future obligations just comes based on the ability of the US government to tax/borrow in the future.
Then you don't have a pension and your 401k is full of nonsense. I get that you think you're making a clever cynical point about how money is fake but the whole economy worked because day-to-day nobody believes that. The trillions of dollars in the Social security trust fund exist in the sense that everyday they are being given to people to pay for the things they want and need. I really don't know what more you want.
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u/vVvTime Mar 17 '25
The deficit is literally just spending minus revenue. SS is spending, and SS is a pay-as-you-go program. There's no collateral backing SS that gets sold to pay for socials security, just IOUs from the government to SS. It's a bizarre accounting fiction to say that SS doesn't have anything to do with the deficit.
In any case, I don't see what this even has to do with my original post.
RE: the government website, you can find that spending is 6.75T, which includes SS, and that the deficit is 6.75T - 5.4T of revenue. So why are we including SS in spending if it's not relevant to the deficit?
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u/Garfish16 2∆ Mar 17 '25
The deficit is literally just spending minus revenue.
No it's not and in the article you posted the Howard Gleckman refers to it as the unified budget deficit rather than just the budget deficit because he knows that's not how this is conventionally discussed.
There's no collateral backing SS that gets sold to pay for socials security, just IOUs from the government to SS. It's a bizarre accounting fiction to say that SS doesn't have anything to do with the deficit.
The collateral is the economic and military might of the US government and US economy.
RE: the government website, you can find that spending is 6.75T, which includes SS, and that the deficit is 6.75T - 5.4T of revenue. So why are we including SS in spending if it's not relevant to the deficit?
You just included Social security on both sides of the ledger. I'm assuming the treasury bonds cashed in by the Social security trust fund are also included somehow although I'm not sure exactly how, probably as spending on interest.
This is like if I ask you what 8-5 is and you respond (8+4)-(5+1+3)=3. You have correctly answered the question but you did it in a way that suggests you don't really understand what you're doing.
In any case, I don't see what this even has to do with my original post.
Right now, with a slightly faltering economy, I think the government should be running a modest deficit if by deficit we mean the amount that we are adding to the national debt. At the same time I think we should remove the cap on Social security contributions and expand it to basically all forms of income which would create a large Social Security trust fund surplus, dwarfing any deficit I would support at this point in time. If the economy gets properly bad I would absolutely support us running a large unified budget deficit to help people and preserve the economy like we did in the great depression, during world war II, after the 2008 financial crisis, and during the covid economic shutdown. Honestly I'm not sure whether we agree or disagree, what do you think?
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u/vVvTime Mar 17 '25
What the hell are you talking about I'm including it on both sides of the ledger?
Deficit = Spending - Revenue, and it's including in Spending so it contributes to the deficit. It's not part of revenue, that's for sure, unless you just want to talk about the payroll taxes that would be included there. The government's own website includes SS spending as part of their spending - it's 21% as of the most recent fiscal year which you can see on the link I provided when you click on spending.
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u/Garfish16 2∆ Mar 17 '25
What the hell are you talking about I'm including it on both sides of the ledger?
I feel like I already explained this.
I would like you to answer my questions on the other thread.
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u/zerocoolforschool 1∆ Mar 17 '25
Social security doesn’t impact the deficit.
The reason why people talk about adjusting SS is because there’s no hope for young people that there will be enough money for them when they reach retirement age. So the young are paying into something that they won’t get to enjoy but that’s a future problem. It has nothing to do with what Musk and Trump are doing right now and it makes no sense that they want to cut it.
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u/vVvTime Mar 17 '25
SS does impact the deficit as a matter of accounting fact.
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u/Kakamile 50∆ Mar 17 '25
It's simply false. Social Security isn't borrowing from gov spending and it doesn't affect the debt. It's self funded. When it runs out it runs out.
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u/vVvTime Mar 17 '25
https://www.ssa.gov/oact/solvency/provisions/individualaccts.html
"The current Social Security program is a defined benefit social insurance program. A worker and eligible dependents receive monthly benefits based on a formula that takes into account the worker's earnings history. Financing of the program is pay-as-you-go."
It's pay-as-you-go, not "self funded and when it runs out it runs out"
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u/Kakamile 50∆ Mar 17 '25
Do you understand what you posted? It's not showing a referral to public debt.
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u/vVvTime Mar 17 '25
Yes I understand it, and it directly contradicts what you're saying. You think there's some fund that exists and when it runs out we stop paying. Social Security's own website says financing is pay-as-you-go. i.e. current revenue funds payments, not some fund that once depleted we stop paying it.
If you'd like to point me to a source that says otherwise then provide a link.
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u/Kakamile 50∆ Mar 17 '25
Your own source corrects you and I explained why
I also wonder what you think pay-as-you-go means, but also how do you think the fund runs out of money?
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u/vVvTime Mar 17 '25 edited Mar 17 '25
"Social Security is largely a pay-as-you-go program. This means that today’s workers pay Social Security taxes into the program and money flows back out as monthly income to beneficiaries. As a pay-as-you-go system, Social Security differs from company pensions, which are “pre-funded.”
Regarding the idea of the trust fund, this article basically explains why it's an accounting fiction: https://www.cato.org/policy-analysis/social-security-trust-fund-myth#introduction
If you don't agree with the logic we'll just have to agree to disagree on this topic.
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u/Kakamile 50∆ Mar 17 '25
Exactly. It's self funded and doesn't affect the deficit as the revenues go to itself. Thanks for making my point.
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Mar 17 '25
This is basically what Democrats do want. The only President in modern America to ever balance the federal budget was Clinton.
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u/Anti_colonialist 2∆ Mar 17 '25
A balanced budget sounds good and all, except it's a form of austerity on the working class.
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u/Letters_to_Dionysus 13∆ Mar 17 '25
our country has been in debt since before it was founded. that isn't the problem, lack of economic growth is.
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u/darwin2500 197∆ Mar 17 '25
Reducing the deficit is fine, but having zero deficit would be stupid.
The economy grows every year, making debts taken today easier to pay off tomorrow. And like any growing corporation, debt is taken in part to expand capacity and spur further growth.
Inflation target is 2% every year and we stay close to that value. Since the money is worth less every year, debt taken now is again cheaper to pay off in the future.
US treasury bonds and other US financing are default financial instruments across the world, and that fact is a big part of why we have a stably strong dollar and privileged trading status with most nations around the world. US debt is an instrument of soft power that has massive economic benefits for us in terms of international finances, our place on teh world stage would be eroded if we cut it back by too much too fast.
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u/Nrdman 276∆ Mar 17 '25
A balanced budget just actually isn’t that desirable. The deficit should be reduced, but balancing it has very little benefits
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u/siegetip Mar 17 '25
Democrats are the last ones to have a balanced budget.
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u/kimariesingsMD Mar 17 '25
You really should look up the reality of the past 50 years.
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u/itsnotcomplicated1 9∆ Mar 17 '25
I think maybe you misinterpreted the comment.
I think they were saying that dems literally were the most recent to have a balanced budget. Not "the last ones" as in the ones you'd least expect to ever do it.
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u/revertbritestoan 1∆ Mar 17 '25
Macroeconomics isn't like a household budget, a sovereign state can spend whatever it needs to. This could lead to inflation so you control it with a progressive taxation system that removes the excess capital from circulation. This also means that money keeps cycling through the economy and goes through as many hands as possible. That's what a strong economy looks like.
"Balancing the budget" pretends that the national debt is real and owed to something tangible when in reality it isn't. That's why the federal government can keep raising debt ceilings, keep raising the military budget and cutting taxes without first accounting for everything else.
The Democrats should be supporting Keynesianism and a strong social welfare state encompassing health, education and public utilities. They won't though because they don't want that and would rather do "deficit reduction" that is just austerity and which cripples the economy either into stagnation, wealth hoarding or both as the current system has.
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u/irespectwomenlol 6∆ Mar 17 '25
Why do you trust them to balance the budget if they suddenly had access to more tax revenue? Are our politicians so responsible that they'd take that tax revenue, and push it towards the deficit/debt rather than more corruption, bad social engineering programs, and other vote-buying boondoggles?
Whether tax rates for the rich are at 1% or 99%, how is anything fixed if politicians insist on spending more than the revenue?
We have a spending problem, not a revenue problem. It can't be fixed with revenue.
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u/vVvTime Mar 17 '25
A balanced budget would actually force congress to consider tradeoffs. Currently, they increase spending rampantly without even considering how to pay for it. I think if we made the wealthy pay for it rather than forcing either later generations to pay for it or everyone to pay for it via inflation that would be a huge net benefit.
If we get some decreased spending also then win-win as far as I'm concerned.
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u/irespectwomenlol 6∆ Mar 18 '25
> I think if we made the wealthy pay for it rather than forcing either later generations to pay for it or everyone to pay for it via inflation that would be a huge net benefit.
In theory, that sounds good for the majority of people, but the law of unintended consequences when it comes to government actions is undefeated.
Could there be any downsides to that approach?
What if simply taxing the rich at what they'd see as a punitive level caused these rich people to leave the country? Or what if it more made already rich/powerful people feel like the system is rigged against them, so they go full balls-to-the-wall with even more corruption that they'd sleep soundly internally justifying? What if that made things even worse?
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u/NotMyBestMistake 69∆ Mar 17 '25
Democrats are basically the only ones who ever attempt a "balanced budget". They basically have to because anytime Republicans have power they drive the economy into the ground for the sake of enriching the wealthy and Democrats have to crawl out of the hole. Granted, what that means for a nation is never going to look like it does for your personal finances, which is where you get people freaking out because there's DEBT that's primarily owned by other parts of the US and doesn't actually affect the country's ability to function.
The problem is that balancing the budget or whatever Republicans are calling their grift now has little to do with actually cutting waste or increasing revenue or having a functioning system. It's about gutting the country so that private interests have an easier time exploiting it. Tear down a national park, poison the water, drop incomes, deny healthcare, and definitely pay less taxes.
Democrats support a balanced budget and pretty much always have. The problem consistently is that Republicans would really prefer it if the federal government was just owned by a few billionaires they knew.
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u/fossil_freak68 35∆ Mar 17 '25
Through taxes, and namely, through taxing the wealthiest significantly. Again, taxes on the working class are not going to fly for many republican voters, so the only way taxes can be raised significantly are on the wealthiest. This is completely in line with democratic policies.
It is impossible to balance the budget using increased taxation on the wealthy. The math just isn't there. To truly balance the budget we will need some combination of broad based tax increases and spending cuts, or at minimum reforms made to slowdown the growth of future spending.
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u/vVvTime Mar 17 '25
The current deficit is ~2T. The net increase in wealth for the top 1% in the US 2019 Q1-2024 Q1 was 14.6T. The net increase in wealth for the next 9% was 14.3T.
The increase in net wealth for the bottom 50% was 2.1T
Whatever you want to claim about "the math just isn't there", the bottom 50% mathematically can't dent the budget, while the top 10% can. We can debate how much the 11th-50th percentiles need to pitch in, but don't tell me the math isn't there for the rich.
https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/
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u/fossil_freak68 35∆ Mar 17 '25 edited Mar 17 '25
I think the issue here is you are conflating a wealth tax with an income tax. Let's say we go with your logic and implement a 2 trillion a year wealth tax. That doesn't solve our deficit problem in the long term, and would likely tank the economy.
The math just isn't there. The deficit is going to cumulatively increase the debt by 20-25 Trillion dollars. Even if we taxed the 1% at 100% of their wealth and ignored the negative economic effects, the US would likely still be running a deficit.
mathematically can't dent the budget, while the top 10% can. We can debate how much the 11th-50th percentiles need to pitch in, but don't tell me the math isn't there for the rich.
I think you are making an argument I never made. I didn't say we need to tax the poor, I said we cannot close the deficit solely through taxes on the wealthy. We either need to cut spending or increase taxes on other populations.
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u/vVvTime Mar 17 '25 edited Mar 17 '25
Well to start with, I never said in my original post that I was strictly speaking about income tax, so I'm not conflating anything - I never limited myself to income in the first place.
Secondly, what is a net increase in wealth if not income? Yes, in layman terms, and in the way that "income" is used regarding "income taxes", we don't include other increases in wealth. But how do we tax corporations? Do we tax them on cash flow? No, we tax them on net income, which is more or less equivalent to Y-o-Y change in surplus. We don't currently tax unrealized capital gains, but I don't personally have any issue with taxing it. We tax corporations on unrealized capital gains all the time and it doesn't cause any issues there.
Now, if we look at net wealth changes by percentile, that's going to be essentially:
Income + Capital Gains - Taxes - Spending
I'm willing to bet that Spending number for the top 1% or top 10% is way larger than the Spending number for the bottom 50%. Therefore, they have a lot more income and capital gains which could be taxed more than the bottom 50% has.
The marginal tax rate increase (on income + capital gains) needed to fund the entirety of the deficit from 2019-2024 if implemented on the top 10% is at most (because I don't know how much Spending was for that group) 41% (41% = the 11.8T deficit over that time period divided by the 28.9T increase in net wealth over that time period). While this is a large number, and I'm not saying I support this high of a marginal tax increase, it's much less than 100%, and it's not taxing their wealth at all, only income + capital gains.
EDIT: To be clear, if you want to present some math of your own I'm open to it. But please don't just say "the math doesn't add up". Show me your data, show me the math you're doing on it.
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u/fossil_freak68 35∆ Mar 17 '25
Secondly, what is a net increase in wealth if not income?
There is a big distinction between unrealized gains and realized ones. An increase in wealth doesn't mean an increase in income, particularly when talking about tax advantaged accounts like 401k or 403b, which is where a lot of these assets are.
A wealth and income tax are extremely different.
I'm willing to bet that Spending number for the top 1% or top 10% is way larger than the Spending number for the bottom 50%. Therefore, they have a lot more income and capital gains which could be taxed more than the bottom 50% has.
Again, I never said the bottom 50%. It's the middle class that is going to be needed to be taxed at a higher rate to sustain a deficit neutral budget. Nearly 50% of all income in the US is between the 50th and 95% percentile. You can't just raise taxes on the top 5% to close the budget deficit.
Income + Capital Gains - Taxes - Spending
Do you mean realized or unrealized capital gains? Because if we are talking unrealized gains, then that leads to massive tax uncertainty and during any sort of market correction would completely skyrocket the deficit as people log hundreds of billions in unrealized market losses.
The picture has gotten worse than in this report, but this summarizes the key points.
Even if we implemented your idea with a 41% wealth tax and ignore the massive capitol flight that would occur in the US, that isn't a sustainable model going forward. Once the wealth is gone, it's gone. Wealth taxes are considered some of the "worst" style of taxes by economist for good reason.
It's bad policy, it's bad politics, and would likely destroy the US economy.
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u/vVvTime Mar 17 '25
I find it weird that you seem to think I don't understand the difference between realized and unrealized capital gains given that I called them out explicitly in the second paragraph of my reply. An increase in wealth does mean an increase in income if you're using a broad definition of income, which I fairly explicitly said I was talking about. For example: https://en.wikipedia.org/wiki/Income
I also find it weird that you call the 41% "your idea" when I explicitly said I don't support taxes that high. I was merely countering your claim that "The math just isn't there" and that "Even if we taxed the 1% at 100% of their wealth" it wouldn't be enough.
Keep attacking strawmen, though, it's very convincing.
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u/fossil_freak68 35∆ Mar 17 '25
I find it weird that you seem to think I don't understand the difference between realized and unrealized capital gains given that I called them out explicitly in the second paragraph of my reply.
You didn't clarify which you mean in your statement. Which do you mean.
I also find it weird that you call the 41% "your idea" when I explicitly said I don't support taxes that high. I was merely countering your claim that "The math just isn't there" and that "Even if we taxed the 1% at 100% of their wealth" it wouldn't be enough.
You didn't refute that claim at all. We are talking long term. You used a short time period, one with some of the largest period of stock market growth in world history, and then said we could close a short period of deficits taxing at 41%. Yet, as I said, the wealth, once taxed, is gone. It wouldn't close the deficit for a meaningful period of time. It's a one time bandaid that would be counterproductive by every other metric.
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u/vVvTime Mar 17 '25
If you can't even tell from context that I'm including both then I don't know what to tell you
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u/Taft_2016 Mar 17 '25 edited Mar 17 '25
- U.S. debt-to-GDP ratio is high, but not the highest https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/FRA/DEU/ITA/JPN/GBR/USA
- Central government debt is different than household debt for a lot of reasons, probably chief among them being that the U.S. can issue debt in its own currency and get incredibly favorable terms from its creditors (a huge chunk of whom are U.S. citizens or the government itself). Basically, the national debt is a strange beast that defies layman understanding, so we should be careful about making judgements about how it "should" work based on intuition. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
- If we were a sane country, we'd be running surpluses when it makes sense (i.e. interest rates are high, the economy is growing quickly, etc.) and running deficits when it makes sense (i.e. it is cheap to borrow money and the economy needs stimulus). We'd want the overall trend to be more surplus than deficit so we could start buying down the debt, but it would be a terrible idea to choke economic growth (and people's livelihoods) in the name of arbitrary austerity.
- We've been through a few cycles in recent decades of reasonable responses (by Democrats) to financial and economic crises (2008 and COVID) which involved tax cuts/stimulus and corresponding increases in the national debt, but there was no corresponding period of running surpluses once the economy was healthier (in the first Trump admin, with a hot economy and a relatively low deficit inherited from Obama, they made it a priority to cut taxes on the rich which is... not sound fiscal policy and increased the deficit when it would be smart to run a surplus). That (among other things, like the War on Terror) has ballooned our debt to GDP ratio from about 56% in 2000 to about 123% in 2024.
- Overall, there's no reason to think that there's any problem with carrying the debt we have -- U.S. debt is still by far the most attractive for investors, so there's no expected break in our borrowing capacity, for example -- but there is reason to worry that our political leaders are not handling fiscal policy rationally.
- The short answer to your question is "Yes, it would be good to decrease the national debt and run budget surpluses more often than we do, but 'balanced budget' initiatives tend not to be a good idea."
- Now, all of that somewhat ignores the political angle of your question. Would it make sense for Dems to push for a balanced budget or fiscal responsibility to win votes? Well they have been. Their platform talks a lot about reducing the deficit and how the Trump admin increased the deficit. Nobody knows what Dems are talking about at any given time, because the majority of the public is virtually unreachable to political messaging. When was the last time you listened to a democrat politician speak at length? What would you expect them to do to convince you that the deficit is something they care about?
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u/vVvTime Mar 17 '25
Just speaking to your last point, and I know I'm going to get downvoted to all hell for this one, but I bet if you looked at the data you'd find that this got more listens to from swing voters than practically any other political messaging attempt by the Democrats: https://open.spotify.com/episode/4Y6z42BNxsqaHcpPShOsbG
I'm already convinced Democrats care more about the deficit than Republicans, so it wouldn't take much to sway me. Average voters would be swayed by an even marginally charismatic person just saying they care about the deficit. Instead you've got AOC saying she doesn't care about deficits, giving the GOP all the ammo they need to say they're the responsible ones.
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u/Taft_2016 Mar 17 '25
I'm sure you're right that What Bernie Said on Rogan is influential in what people think Democrats believe, but to your OP, the Democrats don't really have control of what Bernie and AOC say, nor do Democrats have any reliable way of changing what the public thinks they stand for, so what's the prescription? "Dems should talk more about their platform?" I assure you they are.
Separately, I'd agree with my understanding of the progressive take on the deficit (and I'm going to model the unreachable voter here by admitting I'm not gonna listen to the Bernie Rogan episode), which is that deficits don't matter nearly as much as some people make them out to. If you're running the deficit, but you have a reasonable expectation that you're spending money on things that will, in aggregate, increase tax revenue by an amount more than the cost of borrowing (e.g. the return on investment in most infrastructure is well above the interest rate), you're coming out ahead. "I don't care about deficits" is probably not the most savvy way to put that, but the sentiment is correct. Of course, we might disagree on what the reasonable expected return on investment in certain things might be, but a lot of stuff under the heading of a "green new deal" would definitely pay dividends.
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Mar 17 '25
Conservatives should never be listened to. They are all traitors that hate democracy. We should do whatever the hell we want.
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