Debt and Deficits

Deficit Politics May Have Gone Away, but Debt and Deficits Are Worse Than Ever

The federal budget situation used to be an emergency. What happened?

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For most of the Obama era, the federal deficit—and, by extension, the debt—was a crisis.

This was a bipartisan belief, held, or at least paid respectful lip service, by the Tea Party radicals and top administration aides as well as by President Obama himself. Hence the battles over the debt limit; the imposition of sequestration cuts that, fully implemented, were intended to reduce spending by more than $1 trillion over a decade; the concurrent increase in tax rates on high earners; the creation of the National Commission on Fiscal Responsibility and Reform, better known as the Supercommittee; and the Simpson-Bowles debt-reduction proposal to which it led.

In the end, that plan was rejected by party leaders on both sides. But the idea, that trillion dollar deficits and the pile-up of debt they incur represented a problem, remained alive and powerful to the end. Even President Trump campaigned on (fanciful and mostly incoherent) promises to eliminate the federal debt. The federal budget was an emergency or at least a looming threat. Something had to be done.

But two and a half years into the Trump administration, neither party acts as if there's a crisis.

On the Republican side, the party's most notable legislative accomplishment was a deficit-increasing tax-cut bill that reduced revenues without offsetting spending cuts. At least for a while, Trump appeared to be under the false impression that federal debt could be paid down with tariff revenue. Trump's all-purpose acting henchman, the one-time fiscal hawk Mick Mulvaney, has argued in favor of new deficits.

Amongst Democrats, the GOP's abandonment of deficit politics has freed the party's progressives to propose massive spending increases, while elevating economic theories that excuse, or even encourage, a deficits-forever approach to budgeting.

The budget process itself is deeply broken, leading to last minute, quasi-temporary spending deals that come together only because Republicans want to secure more funding for the military while Democrats obtain more funding for domestic programs. Medicare and Social Security remain the largest long-term drivers of the debt, yet the project of entitlement reform looks effectively dead.

The 2020 presidential campaign is in full swing, yet debt and deficits have barely been mentioned. Relatedly, public concern about the issue has dwindled since 2013. In just a few years, American politics has been overtaken by a free-spending sense that debt and deficits just. Don't. Matter.

And yet the underlying fiscal situation hasn't changed. If anything, it has become worse. The budget is now on a trajectory toward trillion dollar deficits, and the total federal debt has soared past $21 trillion. And old-age entitlements are rapidly nearing the point of fiscal failure.

Consider Social Security. Earlier this year, the program's trustees projected that it would be insolvent—unable to pay all of its bills—in just 16 years. Starting next year, the program will begin tapping its trust fund assets in order to pay its full benefits. Eventually, that fund, which itself is a kind of accounting fiction, will be gone, and the program will only be able to pay out a portion of its benefits.

Medicare's finances are, in some ways, in even more dire shape: Although Social Security's shortfall is larger, Medicare's main trust fund is expected to reach insolvency in 2026, at which point it will be able to pay just 89 percent of its bills. That's just two presidential elections away, and yet nearly all of the current discussion about Medicare is about whether and how to expand it.

This is the new free-lunchism, and it is driven almost entirely by the politics of convenience and short-term thinking: Voters want more benefits and more spending but not the broad middle-class tax hikes that other countries rely on to pay for those benefits, and politicians across the aisle have responded by offering them exactly the combination they want, with predictable results. There is a prevailing sense amongst both voters and lawmakers that there is little cost to doing so, at least for now. After all, the debt-driven calamities warned about during the Obama era never came to pass. So why worry now?

In part, this is a misunderstanding of how debt crises work. Typically they don't announce themselves years in advance and provide the public and the political class time to prepare. By the time a crisis arrives, it is, almost definitionally, already too late.

And to the extent debt crises do announce themselves, it's unlikely to be through anything dramatic. Instead, the early warnings are likely to come through boring and somewhat uncertain projections from actuaries and government economic offices, think tanks that seem to always warn of an impending debt crisis, and deficit-hawk politicians who gripe that no one ever listens to them. The signs and portents, in other words, would look something like what we're already seeing now.

The current lack of concern about deficits is also partially a result of a re-thinking by some economists, especially on the left and center-left, about the relative importance of deficits; maybe deficits will matter at some point, this line of thinking goes, but not as much as previously thought, and certainly not at present.

Intentionally or not, this line of thinking has given the political class, which rarely considers economic ideas with much nuance, a license to make ever-more extravagant and expensive promises. It has resulted in a calculation, probably correct, that offering voters more—and more and more and more—without the pain of tax hikes, is a path to easy victory with few consequences. Which by all appearances, it is, and will be…right up until it isn't.

It is possible, I suppose, that this cavalier approach to public finance will work out, more or less, that we'll muddle through, as we usually have, and that the recklessness of the political class will prove merely irresponsible in the usual way, rather than fully calamitous.

And yet. To believe that we should simply respond to the current fiscal situation with a collective shrug requires a belief not only that current levels of debt and deficits don't matter, but that the inevitable future expansion of the fiscal gap won't matter either. 

Because one thing you can be certain of is that if today's fiscal frivolity does not produce immediate dire consequences, then the next generation of politicians, Republican and Democrat alike, will push the envelope just a little bit further, and a little bit further after that, and so on and so forth, rather than settling in some comfortable stopping point where the country's finances are messy but mostly hang together.

Sustaining this casual attitude toward fiscal looseness thus requires believing that there is essentially no limit, no meaningful upper bound, to the amount of debt that the federal budget can sustain, an idea that even many of today's more sophisticated debt-doesn't-matter boosters don't subscribe to. Alternatively, it requires a high degree of confidence that our nation's political class will more or less responsibly take our national ledger right up to the brink but no further, finding the precise last moment in which to exercise fiscal restrain. If you believe this, I would gently suggest you acquaint yourself with some politicians.

Otherwise, you have to worry, at least a little, that today's trajectory is toward crisis, if not now, if not at current debt levels, then at some future date we'll only discover when it's too late to prevent, when the consequences can't be avoided. And that worry should be increased a little more by the possibility that today's free-lunchism is not only increasing the likelihood of an eventual crisis, but making it harder to solve, if and when it does arrive, by seeding amongst voters the idea that hard choices won't ever be necessary. It is making the already challenging project of achieving public consensus harder still. 

So yes, the predicted crisis may not have arrived quite yet. It may even hold off for a while longer. But the nature of politics means it draws ever closer, and ignoring the issue, as we are now, only makes it worse. 

NEXT: New Balance Planned To Open a New Sneaker Factory in America. Trump's Tariffs Might Prevent That From Happening.

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  1. Worrying about fiscal issues and the deficit is for soyboy cuck losers. The culture war is the only thing that matters. Owning the progs is how we make America great again and save our culture from the march of history!

    1. You really have just given up haven’t you?

      1. I will never give up on you, John. I have faith there is still some plasticity left in that calcified noggin of yours. There has got to be more going on inside there than that a donkey lying under a tree with a fly buzzing around its head.

        1. The DEBT is not the DEFICIT. And the DEFICIT is not the DEBT. They are separate problems.

          Government BORROWING drives up the debt, not government SPENDING.

          The solution to our debt problem is simple: STOP ISSUING DEBT-BASED MONEY! Begin issuing pure “unbacked” fiat money to fund the deficit, rather than going further into debt. The inflationary impact of unbacked dollars is no worse than the inflationary impact of the same amount of debt-backed dollars. Issuing unbacked dollars will halt the increase in the national debt and its crushing $479 billion in annual interest. Paying off part of the maturing debt each year and rolling over the rest will eventually bring the national debt (and its taxpayer-financed interest payments) down to zero. See http://www.fixourmoney.com .

          1. The DEBT is not the DEFICIT. And the DEFICIT is not the DEBT. They are separate problems.

            The debt is all the annual deficits combined. They are the same, over different time periods.

            Trump is the first President to increase the deficit by over 45% … EVER .. in a single year .. in a booming economy,

            Government BORROWING drives up the debt, not government SPENDING.

            Deficits are what cause the borrowing. Deficits are spending more than tax revenue, which means they can be eliminated by cutting spending or increasing tax revenue or some mix of both. Higher revenue can come from either more economic growth or a tax increase.

            On a debt basis, Trump’s tax cuts are what destroyed his record. The bounce will be temporary, since he failed to address the majority of tax issues that shattered our industrial base.

            1. Continue to the last paragraph of my post, and you’ll see what I’m trying to say.

              1. Friedman is MUCH better on currency. GUARANTEED zero inflation/deflation. He was the first to state the obvious, but had to prove it. The price of money, like all other prices, is determined by supply and demand. Thus … have the supply of money increase EXACTLY with the demand for money. This is attacked and lied about by libertarians suckered into the gold standard and Austrian economics, which Friedman demolished with a simple question, “Do we want a stable money supply or stable prices.” It’s impossible go do both, because of Supply and Demand, which is why old FAILED to provide stable prices, once the Industrial Revolution drove demand MUCH faster than supply — for non-stop DEflation. The failure is proven when silver had to be added, byt still failed.

                Anyone can eliminate the deficit with words. The currency is NOT debt based, and that theory was debunked decades ago,.

                1. What I’m saying is that, in a fiat system, government should issue money without issuing interest-paying bonds (i.e., debt), and Milton Friedman AGREED with this idea. He said, “Under the proposal, government expenditures would be financed entirely by either tax revenues or the creation of money, that is, the issue of non-interest-bearing securities. Government would not issue interest-bearing securities to the public; the Federal Reserve System would not operate in the open market. . . Deficits or surpluses in the government budget would be reflected dollar for dollar in changes in the quantity of money; and, conversely, the quantity of money would change only as a consequence of deficits or surpluses. A deficit means an increase in the quantity of money; a surplus, a decrease.”

                  See https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/AEA-AER_06_01_1948.pdf

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    2. I love the culture war. Can we make sure you lose that? The alternative is catastrophic.

      -Signed, a Reagan conservative with libertarian instincts

      1. HIYA! Do you know Reagan and Goldwater were defending gays in the 1970’s … two decades before Clinton shamelessly signed both DOMA and DADT and three decades before Obama “evolved.”

        This one hits your concern directly. Just before annpuncing his winning, 1980 campaign, he was apporoached by the Log Cabib Republicans — the largest organization defending LGBT rights. Ther knew Reagan would help gays … perhaps not as dramatically as he did.

        The Briggs Initiative, in California, would have banned gay school teachers. It was leading by a large margin in the polls … until Reagan killed it.

        He wrote a very feisty op-ed, and held a press conference. the say and stayed to answer every question.

        He, single-handedly destroyed the extreme socons, NATIONWIDE, , with his famed ridicule. (Paraphrasing from memory) “Gay teachers are no threat to our school children, because homosexuality is not contagious, like measles.” KAPOW

        That was the first loss for the nationwide Anita Bryant Crusade, which collapsed soon after. Brought down by Reagan.

        His advisers told him not to defend gays, for purely poliotica

        1. Part 2

          … Reagan’s advisers warned him not to get involved, because it would destroy his Presidential campaign. He did it anyway.

          I don’t know where your libertarian instincts are, but Reagan was profoundly and publicly religious, wore it it on his sleeve, as they say, but he refused their legal agenda. THAT is libertarian. The Falwell/Robertson crowd tried to kill his renomination for 1984, saying was “all talk and no action.”

          I prefer, “All prayer and no jack boots.”

          In a Reason interview, Reagan said that libertarianism was at the core of (his) conservatism.. Both are now voiceless, that conservatism and that libertarianism..

    3. Worrying about deficits is stupid when we’re all going to die from global warming anyway. And here I thought you had your priorities straight.

  2. Time for Ken Shultz to remind everyone once again that you’re the asshole who was Reason’s most outspoken opponent of one of the biggest proposed spending cuts in history back a couple of years ago.

    You’re one of the most shameless, dishonest dickheads who ever lived.

    1. Let’s not forget that Sudderman’s sollution to the deficits is to take more money from the public despite the government collecting more money today than at any time in its history. Sudderman actually claims that tax cuts are irresponsible and the cause of the deficit not spending, despite the government collecting nearly 20% of every dollar earned in this country.

      Fuck him.

      1. That 20% is much higher if you count state taxes and fees.

      2. How many Trumptards sneer at the debt … an unvoted tax increase on their own children and grand children … other than John The Looter?

        “It’s just letting me keep more of my own money.”

        If a bank robber said that of his haul, would he be laughed off the planet?

        Democrats borrow trillions to pay for free stuff.
        Republicans borrow trillions to pay for free tax cuts.
        Both slurping the teat massively worse than Welfare Queens.
        Minnie the Mooch ain’t the only one.

        Left – Right = Zero

      3. Sudderman actually claims that tax cuts are irresponsible and the cause of the deficit not spending,

        Elementary school math.
        If we’re at a deficit and cut taxes. Nothing else change. No spending cuts. Will the deficit increase?

        despite the government collecting nearly 20% of every dollar earned in this country.

        But spending more!

        Would there be deficits if government was taking 75%.
        and spending 80%?

        Yes, Suderman would take more money. But you would take it from your own children and grandchildren, with an tax increase they never voted for and cannot escape. .

        Is that what’s called “family values?”

    2. Coming from Mikey, that’s a declaration of a deeply repressed crush.

  3. No one cares about the deficit because it doesn’t affect them and there is nothing they can do about it even if it does.

    There is one way you could do something about the deficit. And that would be to present a no kidding across the board reduction in government. Do that and people might be willing to make some sacrifices for the future. But without that, there is no reason to people to do so. Why should I agree to having my social security cut if I know the money is just going to be spent on some other person’s priority? I only agree to do it if I know it will go to cut the deficit. And without a comprehensive proprosal, I don’t know that. So, nothing ever gets done.

    1. I’ve long believed that the only solution to deficits is to pass a constitutional balanced budget amendment. No “outs” for emergencies or wars, which will just be exploited. If the government wants to expand itself, convince a majority to raise taxes to fund it. Period.

      Absent that, we’ll continue to have politicians on both sides pay lip service to spending up until the point that they regain power. That, or until the dollar crashes.

      1. That, combined with some sort of constitutional federal spending cap.

        1. While I would certainly like that, I don’t think it’s necessary. What would be better, IMO is to have some sort of Constitutional guarantee of everyone paying their fair share. A flat tax (for instance) and the shared pain of not being able to just take everyone else’s money would be far more effective.

          If you want government to provide some additional service, then put your money where your mouth is.

      2. How about you convince your political cohort to stop being terrible at fiscal responsibility instead of trying to impose strict babysitting rules that will make this country ungovernable and unlivable?

        1. Who is my political cohort? Adam Kokesh and John McAfee?

          1. You’re a die-hard conservative Republican. Didn’t you know?

            1. Tony seem to think I’m a Republican. John seems to think I’m a liberal. LC1789 seems to think I’m an anarchist.

              All this on a libertarian website. I suspect that tells us more about these three individuals than it does me? But what do I know, I’m a leftist, Republican anarchist.

              1. Technically speaking, there’s no inherent contradiction in being a liberal Republican anarchist. You’d be a minority in the party, sure, but it’s not the weirdest thing in the world.

      3. As a gambit, this might be a good idea, but there’s no way this is happening under 2, 4 & 6 year election cycles. Who gets into politics to be a martyr? I would love to hear a candidate express a mandated, sustainable level of debt, but I’m not holding my breath.

      4. Balanced Budget amendment would never work. It can’t pass, and should not pass, without an emergency exception. Both parties will again make massive new spending commitments during a boom. Then blame the next downturn for the needed emergency debt.

        Washington State has the answer. In their Constitution, a strict limit on spending increases. A formula allows spending increases only to offset both inflation and higher population. They spend no more than the same fixes dollars, per resident., in constant dollars. Allowing for both inflation and population is what makes it easy to adopt.

        When revenues create a surplus year, the money MUST be set aside into a “rainy day fund” — to avoid tax increases and/or spending cuts in the next downturn.

        When I lived there, I was stunned by how strongly both parties defend the limit. There was no way of knowing, in advance, which party would be forced to increase taxes or cut spending in a future downturn.

        It’s actually a very old idea, surpluses in good years, to help get through the bad years. It’s what was actually proposed by …. John Maynard Keynes. But politicians … you know.

        1. Yet WA spends more per capita than the average state. It doesn’t seem that the cap is very limiting.

          I would certainly agree though, that there needs to be restraint somewhere codified into the Constitution. Either through capping debt, deficits, or spending. Any option would be a tough pill to swallow especially when roughly half of Americans are net takers from the system. Most of the spending problems stem from the fact that people don’t directly feel the pain of debts and deficits.

          1. Only on state and local combined,
            105% of average on spending
            107% of average on personal income

            On state-level only, they’re essentially average, only $58 higher, person. That’s 101% average on spending vs the same 107% on income

            At all levels, except perhaps local, they are below average, as a percent on income. And a progressive state All these are per 2017.
            Source: state level

            Thtat;s for a
            I’ll suggest a constitutional cap on spending is the most likely to pass, and much better to manage. Simplest and fairest., I doubt another method would have both parties fighting to defend it! And occasionally even compete on who was best protecting it.

            1. Part 2

              That’s for a progressive state with
              1) No income tax.
              2) ZERO spending growth per capita. (The so-called Great Depression triggered the emergency override, well after other states faced shortfalls. I was gone by then, so don’t know how they resolved it, but I doubt tax increases in so severe a recession!)

      5. The only solution to deficits/debt at this point is for angry young folks to kill everyone over 50 or so.

    2. We can all move to New Hampshire and defect

    3. Will that elect a Congress and President.?

  4. Wait what? Fiscal responsibility was a BIPARTISAN issue in the Obama years? Could have fooled me because while republicans were dutifully screaming about deficits from 2009 to 2016 democrats were in full spend mode. Before that, from 2000 to 2008 the shoe was on the other foot. Democrats screamed about war spending and republicans couldn’t say no to anything with “national security” in the title.

    The only thing that’s different now is that no one pretends to care about spending, not that they ever did but the charade has finally collapsed. You can call Trump a shitty president but the more I think on it, this is the most transparent government has been about shitty it is in a long time. Its more a total lack of shame than any inclination towards honesty but I guess you have to take what you can get.

    1. It takes someone as monumentally dishonest as Sudderman to claim with a straight face there was “bipartisan concern about fiscal responsibility” during the Obama years.

      1. Simpson-Bowles wasn’t bipartisan? The sequestration deal wasn’t bipartisan? Obviously, the republicans were screaming about it more than the democrats given they weren’t in power, but there were some individuals on the other side that at least gave it lip service and had some ideas or were at least willing to work with the republicans to craft something.

        On a side note, I actually agree with your assessment that it is going to have to be an across the board (actual) spending cut in order to get anything done. I just don’t see this getting done if you cut from one area and not the other one. All you are going to get in that scenario is people screaming over what to cut and what not to cut (spoiler: in the end none of it will actually get cut). On the other hand, based on the public tenor currently, I’m assuming an across the board spending cut will just have everyone screaming at whoever proposed it.

        I just don’t see any way out of this because I agree with Suderman’s fundamental point. People want all the “stuff” without paying for any of it.

        1. Simpson-Bowles was bipartisan but only locked in high levels of spending. That “draconian” measure limited federal government spending to 24% of GDP, which, with the exception of a year or two during the Great Recession is more than we spent during any year after World War II.

      2. Both paid lip service to deficits back then, they don’t now. What do you think “bipartisan concern” means?

        If you think that’s “monumentally dishonest”, it would be fascinating to know what you think of people who bow and scrape for Trump just because he’s not Hillary.

    2. Wait what?Fiscal responsibility was a BIPARTISAN issue in the Obama years?

      You’re spot on that they both lie. But …

      Obama inherited the 2nd worst recession since the 1930s.
      Trump inherited the longest recovery ever for an incoming President … but has already added more 8-year debt than Obama did after 8 years. (CBO 2024 forecast)

      This is the most transparent government has been …

      Which is why everyone knows that Trump is also the first President to EVER increase the deficit by over 40% … in a strong economy.

      And we’re all okay that he cut his own taxes by ONLY 20% … when he had campaigned on a 37.5% tax cut for himself and ONLY other rich dudes who own the same business structure as him.

      Thank GOD everyone knows this!
      (/sarc)

      1. You know, at one time they defined “recovery” from a recession as the economy popping back to where it would have been if the recession hadn’t happened.

        Now they define it as growth resuming.

        Why? Because some time after the 80’s we stopped actually recovering from recessions by the old definition.

        Instead of “longest recovery ever” try, “slowest recovery ever.” Maybe he should have spent some of that stimulus money on stimulus, instead of paying off cronies and making sure banks didn’t suffer a haircut?

        1. You know, at one time they defined “recovery” from a recession as the economy popping back to where it would have been if the recession hadn’t happened.

          Not in the last 165 years!

          Here are the official dates for our business cycle, dating to 1854. There are two columns, Peak and Trough, https://www.nber.org/cycles.html

          A recession begins when the economy Peaks. When it troughs, the recovery begins. That’s why the announcement takes so long,
          They wait and watch to make sure it’s really the top and bottom. Plus they need reports on GDP and several other measures.

          Now they define it as growth resuming.

          If you say so. I have no idea how they did in before 1854.

          Why? Because some time after the 80’s we stopped actually recovering from recessions by the old definition.

          That would have to have been the 1880s.
          Might that be part of the Deep State conspiracy,

          Instead of “longest recovery ever” try, “slowest recovery ever.”Irrelevant in this context, since Obama started with the 2nd worst recession … and added LESS -year debt trhan Trump, even counting the debt committed at the end of Dubya’s term.

          making sure banks didn’t suffer a haircut?

          TARP was October, 2008. Before Obama was elected!! The auto bailout was also under Dubya, Dec. 2008

          Partisan haters and conspiracy nuts blame Obama for both of those. But I’m sure you were merely misinformed by the same psychos who pushed the Kenyan lie.

          Anything else?

  5. Can’t blame it on Russians, so it means nothing.

  6. Michael Savage has turned on Trump for this and other reasons. He wonders why he should waste his life getting on the radio doing nothing but talking about how great Trump is. He wonders why Trump’s supporters are so blindly uncritical.

    I say Trump is a symptom rather than a cause. The Republican party has been spending like shitfaced sailors on completely pointless or tragically destructive things since the day I was born. Putting it all on Trump absolves all the other Republicans for their role in turning this into a shithole country.

    John, say something negative about Trump. And not “I wish he wouldn’t tweet so much.”

    1. John, say something negative about Trump.

      I don’t think you’re going to be much more successful than anyone was trying to get you to say something negative about Obama. Besides criticizing his “mom jeans.”

      1. *Blows whistle* Whataboutism. False equivalence. Ten yard penalty.

        Obama is the best president of my lifetime. That said, he spent like six years thinking so highly of himself that he actually thought he could get Mitch McConnell and other Republicans to become good-faith stewards of America by sheer force of his personal charm. That was idiotic of Obama. So there.

        1. ha, I bet you’re also the dude that, when asked to say one negative thing about himself in a job interview, you go with “I sometimes try too much. And, I often expect too much out of my coworkers.”

        2. *Blows whistle* Whataboutism. False equivalence. Ten yard penalty.

          Pointing out that you are as much of a knee-jerk partisan as anyone is not “false equivalence” – it’s true equivalence.

          And that your example of being able to see Obama’s flaws is that he thought too highly of Republicans only proves my point.

          1. Partisan, yes. Knee-jerk, no. My partisanship is the result of years of serious consideration about how abjectly, unbelievably terrible Republicans have been for the better part of a century. It’s not like I wanted it that way.

            Given the ridiculous orange crapmonster in office now, anyone, let alone me, would have some nerve criticizing Obama for anything.

    2. You’re seriously only blaming Republicans for the debt? Seriously?

      1. It’s all there in black and white.

        1. Yes, it is. $22TT spent on the War on Poverty is not so coincidentally the amount of our debt. But wait, there’s more! The unfunded liabilities for your failed welfare state are at least 5 times that and possibly 10.

          I know counting is hard for you, but that’s a really big number.

          1. I know counting is hard for you, but that’s a really big number.

            That’s almost as bad as your other one here!
            https://reason.com/2019/06/18/deficit-politics-may-have-gone-away-but-debt-and-deficits-are-worse-than-ever/#comment-7822623

      2. some guy
        You’re seriously only blaming Republicans for the debt? Seriously?

        BLATANTLY! CBO forecasts show Trump has already added more 8-year debt than Obama did AFTER 8 years … and a chunk of Obama’s dent was created by Bush — TARP and Medicare Prescriptions which NEVER paid for … so now a MASSIVE subsidy from the income tax, to pay nearly half of all Medicare spending, instead of the General Fund, which would have been bankrupt years ago,

        So Bush and Trump were the worst of the last four Presidents on debt. Plus, the “Bush tax cuts for the rich” were actually a MASSIVE middle-class subsidy! 85% of the dollars went to incomes below $200,000, who were paying only 45% of the tax … wealth redistribution GOP style!

        So … Bush’s GOP borrowed trillions of dollars to buy middle class votes … only to see a Democrat House, Senate and White House!

        AND THEY’RE DOING IT AGAIN (on debt)

  7. Don’t worry, all debt will be forgiven after the “Revolution and Great Culling” that is coming. When it’s over we’ll issue a new currency.

  8. Well, debt kind of doesn’t matter – as long as there are other people still willing to loan you money. Debt and deficits only become a problem when they stop.

    Yes, the US approach to spending is unsustainable and poor public policy. But look at the alternatives. Europe is worse and nobody else is even in the running. Bad as we are, we’re still the best car in the junkyard.

    The real problem, which the article above buries in the middle, is not that debt is bad in its own right but that it becomes bad really, really suddenly when you cross that subtle unmarked line from best car in the junkyard to only second best.

    1. As long as the USD is the preferred reserve currency of the world, you’re right. The day of reckoning is if/when it stops being that. Who knows what would happen if that ever occurred, but that paper we export is our biggest natural resource. Wars have been fought over far smaller things.

      1. Who knows what would happen if that ever occurred […]

        We’ll probably bomb someone until it reverts.

        1. You want to take our paper, see. Otherwise, Donny here gets angry. You wouldn’t want to make Donny angry now would ya?

          1. That, but without the references to President Trump. This is a non-partisan prediction.

        2. We might try it but that hasn’t worked for any other world power that lost its status as the economic leader.

  9. What happened was the inevitable transition from, “Not urgent yet” to, “Too late to do anything.”

    And I do mean inevitable. Once running routine deficits is on the table, politicians who are willing to borrow to buy votes will ALWAYS outbid politicians who try to buy votes on a cash and carry basis. ALWAYS.

    Once you allow deficits to be run outside of emergencies, it is perfectly inevitable that spending will balloon, borrowing will balloon faster, and that eventually, the balloon will pop. The only question at this point is whether we’re going to totally waste the last of our borrowing power before the crash, or get something lasting out of it.

    I’m happy that Trump is attempting to make the country more self-sufficient in international trade. That will serve us well once nobody is willing to take our money. Just another indication that electing a President familiar with taking large institutions through bankruptcy and out the other side still running was a smart move.

    1. You shouldn’t even be able to run deficits in emergencies. Any exceptions will be exploited. Also, considering how long it takes the government to spend money, there is plenty of time to raise that money as you go if an actual emergency comes up. It would also encourage carrying a small surplus. There should be a balanced budget amendment with no exceptions.

    2. Is this a full throated endorsement of “juche” as an economic philosophy?

      1. No, it’s pointing out that international trade can make you wealthier if you haven’t burned your economic bridges by borrowing trillions and then defaulting, but if you’re going to do that latter, some degree of independence is probably a good idea for dealing with the decades when nobody is interested in selling you stuff.

  10. The federal budget situation used to be an emergency. What happened?

    What happened is that you let yourself be conned into believing anyone ever thought it was an “emergency”.

    But fear-not. Once Democrats win the presidency again, you can expect Republicans to suddenly start pretending to care again, and you can go right back to excusing their inability to actually do anything on the Democrats. And then when Republicans win the presidency after that, you’ll be able to repost this same article with new dates.

    1. Good thing we expanded the welfare state for you.

      1. There’s a lot to unpack in such a short line.

        First-up, is this even in the right spot? I don’t see what relevance it has to my comment.

        Second-up, “we”? Just who are you claiming association with here? I’d be genuinely surprised if you claimed you were a Democrat, but Republicans haven’t expanded the welfare state since Bush Jr. with Medicare Part D, and Libertarians have never been in a position to do, well, anything. So who is this “we” you are claiming to be a part of?

        Third-up, it’s funny that, because I can accurately point out long-term trends in partisan bickering, you think I must be on welfare. Is, in your mind, pattern recognition something that only folks on welfare can do? I assure you, it’s a skill spread throughout humanity.

        1. ^^Astute.

          Remember, everyone who does not ADORE Trump is a Hillary-loving Democrat, slurping at the welfare trough, but they’re slurping Trump’s tiny dick — as he programs their minds with today’s new whoppers (half pf which contradict yesterday’s)

  11. I’m sort of the Reaganesque ilk that our nation can outgrow deficits, but I’m not so sure under the current leadership.

  12. When I was younger, I would have sagely stroked my beard and quoted Herb Stein: “Anything that can’t go on forever stops.”

    But that assumes this can’t go on forever. What if it can? An increasing share of our economy is just 0s and 1s in the ether. And when the Fed creates trillions out of thin air to buy bonds, the people involved are mostly people trading 0s and 1s in the ether that never actually cash them in in the real world for real goods and services, at least not on meaningful scale, relatively speaking. There’s not enough stuff to spend it on. So if you sell a bond representing money the Fed made up out of thin air and use it to pay hundreds of dollars for a share of Facebook that wouldn’t be worth a good steak if the economy truly tilted, what difference does it make? Deficit spending would only matter if we were spending real money for a government we really expected to serve the people. As long as it’s just a game, we can play this game forever.

  13. Republicans no longer care because this is already the worst administration on debt EVER. Trump has already added more 8-year debt than Obama did after 8 years (CBO 2024 forecast) and he promises more!

    Even crazier, he’s the first President to increase the deficit by over 40% in a single year, during a “booming” economy! After he inherited the longest recovery ever for an incoming President .. from Obama, who inherited the second worst economy since the Great Depression. Worse than Obama’s entire Presidency, in just two years.

    For this we need Republicans?

    Trump is lucky, in a way. He’s always known, and always counted on, the now near-certain fact, that he could shoot someone to death in broad daylight, with witnesses, and not lose a single supporter!

    Even worse, when the Democrat nominees have been determined, a growing number of his supporters, 10.6 million so far, want Trump to … shoot them both!

    The debt is a tax increase on our children and grandchildren … that they never voted for. If those kids complain, well … TDS.

    1. Christ, you still don’t understand causality or time, do you?

      Obama produced the worst recovery in US post-war history. He was only exceeded in that by his role model, FDR, who prolonged the Depression for years and sadled us with the nucleus of the welfare state.

  14. Christ, you still don’t understand causality or time, do you?

    Wait for it ….

    Obama produced the worst recovery in US post-war history.

    1) He inherited it. From Dubya It began Dec. 2007, Only Dubya and Eisenhower had two recessions
    2) Reagan inherited MUCH MUCH MUCH worse,

    He was only exceeded in that by his role model, FDR, who prolonged the Depression for years

    The Depression was over when he took office.

    (FDR was MUCH worse than you know! And Trump has already added more 8-year debt than Obama did after 8 years, per CBO forecast)

    Anything else?

    1. No, he inherited the recession. The worst recovery since the Great Depression was on him.

      And, let’s be real: The Great Depression really lasted into WWII.

      1. And, let’s be real: The Great Depression really lasted into WWII.

        It ended in March, 1933, the month FDR took office, before a dime of New Deal stimulus. The second recession was 1937-1938. Pearl Harbor was 1941. Why would you want to deny that it was over when he took office?

        I’ve posted a link to the official business cycles in another comment, which corrected other misinformations

        https://reason.com/2019/06/18/deficit-politics-may-have-gone-away-but-debt-and-deficits-are-worse-than-ever/#comment-7822820

        Nothing else relates to a word I said

  15. I see a lot of tribal screaming at Suderman, about bipartisan budget concern in the Obama years. So I’ll correct them all here, just once,

    TARP and the auto bailout were both under Bush, but spent by Obama. So both parties owned it. And knew it. Until the bullshit.

    Dubya was a shitty President, but with more class than Trump. He discussed the auto bailout with Obama, who was still President-elect. Dubya (rightly or wrongly) thought it was an emergency requiring immediate action … but also concerned that Obama would inherit the spending, debt and managing it all … .with likely false assaults and lies from low-levels in his own party.

    Dubya’s concern was later justified by one of the most shameful partisan assaults in memory. Blaming Obama for the bailout … and even TARP, by many (passed months before the election).

    Keep in mind. Much of Obama’s debt was created under Bush.
    Whereas Trump has added more new 8-year debt than Obama’s (including the Bush share), per CBO.

    So it’s actually worse by today’s GOP than Suderman opined.

    ,

    1. Dubya’s concern was later justified by one of the most shameful partisan assaults in memory. Blaming Obama for the bailout … and even TARP, by many (passed months before the election).

      If Obama voted for the bailout and the TARP, then he is to blame.

  16. Why did the media focus on Russian Collusion®™ fairy tales instead of the deficit?

    1. It wasn’t the media. It was the FBI and Special Counsel,
      And there was mountains of evidence that Russia influenced an election that Trump won by a tiny 39,voters. I’d list some, but your bias is quite evident.

      Would you prefer the media report Trump’s colossal failure on the debt? CBO’s 2024 forecasts show that Trump has already added more new 8-year debt then Obama added after 8 years. And Obama’s debt wa

      1. Part 2

        … And Obama’s debt was inflated by the auto bailout and TARP near the end of Dubya’s term.

        Trump is also the worst ever on one-year deficits, which he increased by 45% … in a growing economy! No President has gone on a borrowing spree like that, starting from the longest recovery of any President.

        Don’t forget, Trump inherited the longest recovery ever for an incoming President … handed to him by Obama, who inherited the 2nd worst recession since the Great Depression.

        You and I agree, Trump is getting a free ride on the worst debt in US history.

    2. Well, folks actually care about “Russian Collusion”, and don’t actually care about deficit or debt.

      The “media” gives folks what they want, not what they need.

      1. So does every business in the known universe.
        No conspiracy in that.

  17. Real simple- Rs got power. They’ll spend as well as any drunken sailor so long as they’re the ones controlling the purse.

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  19. We’re doomed. Buy real assets that hold their value. Real estate, maybe a bit of gold and silver, possibly stocks in super stable businesses. Whenever the USD goes tits up assets with real value will stuff have at least SOME real value after the dust settles.

  20. […] “Deficit Politics May Have Gone Away, but Debt and Deficits Are Worse Than Ever,” by Peter Suderman […]

  21. […] we cannot continue to spend ourselves into ruin,” O’Rourke said in 2012, and he’s right. Though I wish the 2019 version shared his predecessor’s willingness to, you know, actually […]

  22. […] we cannot continue to spend ourselves into ruin,” O’Rourke said in 2012, and he’s right. Though I wish the 2019 version shared his predecessor’s willingness to, you know, actually […]

  23. […] we cannot continue to spend ourselves into ruin,” O’Rourke said in 2012, and he’s right. Though I wish the 2019 version shared his predecessor’s willingness to, you know, actually […]

  24. […] we cannot continue to spend ourselves into ruin,” O’Rourke said in 2012, and he’s right. Though I wish the 2019 version shared his predecessor’s willingness to, you know, actually […]

  25. […] States—although you wouldn’t know it by surveying the current political climate, which is almost completely devoid of deficit hawks. Republicans seemingly stopped caring about the size of the national debt as soon as President […]

  26. […] you wouldn’t know it by surveying the current political climate, which is almost completely devoid of deficit hawks. Republicans seemingly stopped caring about the size of the national debt as soon as President […]

  27. […] States—although you wouldn’t know it by surveying the current political climate, which is almost completely devoid of deficit hawks. Republicans seemingly stopped caring about the size of the national debt as soon as President […]

  28. […] you wouldn’t know it by surveying the current political climate, which is almost completely devoid of deficit hawks. Republicans seemingly stopped caring about the size of the national debt as soon as President […]

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