Debt and Deficits

Debt Reckoning

After years of federal fiscal recklessness, is Washington's bill finally coming due? 


It's a difficult time to be a deficit hawk.

In March, Congress passed the CARES Act, named to show what lawmakers on both sides of the aisle wanted to be seen to be doing in the wake of the economic devastation caused by the outbreak of COVID-19. They cared to the tune of about $2.2 trillion, all of it billed to the deficit, making it the single biggest legislative care package in history by a wide margin. It was the first time Congress had ever passed a bill with a trillion-dollar price tag. As a point of comparison, the Affordable Care Act, the 2010 health law that would be known as Obamacare, which was viewed as unusually costly, had to be whittled down during the legislative process so as not to technically exceed the trillion-dollar mark. Its 10-year price tag, at the time of passage, came in around $940 billion.

But any real worries about those sky-high figures appear to have melted away in the face of the pandemic, which has exposed the underlying unseriousness of Washington's approach to budgeting. For nearly 40 years, federal lawmakers have been trying, or at least pretending to try, to reduce the deficit. But when asked to make tough budgetary choices, they consistently buckle under the pressure of partisan politics. This, in turn, has given rise to simplistic economic theories designed to justify whatever outcomes are most convenient.

The CARES Act followed a series of smaller relief bills and would be succeeded by a $310 billion top-up to the original bill's small business loan program, bringing Congress' total coronavirus relief spending to nearly $3 trillion. And that was just for starters. By summer's end, House Democrats and Senate Republicans were haggling over a new round of stimulus, with Democrats pushing a $3 trillion aid package and Republicans, representing the limited-government side of the argument, backing a mere $1 trillion in additional deficit spending.

When their bickering went as congressional bickering often does—nowhere—President Donald Trump eventually stepped in to impose extensions via executive fiat of some of the original CARES Act programs, including a boost to unemployment insurance that would cost tens of billions more. Did it matter that Trump's unilateral move raised questions about his constitutional authority to authorize such spending? Not really. There was money to spend, or maybe, given the state of the federal fisc, there wasn't, but either way, some politician, somewhere, somehow, was going to find a way to spend it. Trump even argued that his orders were designed to prod recalcitrant lawmakers into making a deal, which is to say, a deal to spend more.

Even before the virus wreaked havoc on the economy, projections showed that America's 2020 budget deficit—the gap between federal tax revenues and total spending—would surpass $1 trillion for the first time in nearly a decade, and would continue to do so for years to come. The Medicare and Social Security trust funds, meanwhile, faced insolvency.

In 2016, Trump had campaigned on eliminating the national debt in under a decade. Yet by June 2020, the federal budget deficit had reached $864 billion…for just the month. That was more than the entire budget gaps in either 2017 or 2018. By September, the nonpartisan Congressional Budget Office (CBO) was projecting a $3.3 trillion annual deficit in 2020. Federal debt levels, which equaled just 35 percent of the economy in 2007 and 79 percent of the economy in 2019, would reach 98 percent. The CBO had previously warned that persistently high debt and deficits would have consequences: slower economic growth, an ever-increasing share of the budget consumed by interest payments on the debt, and reduced capacity to act should a major crisis arise. 

And yet as the virus consumed the nation, even many deficit hawks were recommending more spending, at least in the short term. In April, the Committee for a Responsible Federal Budget (CRFB), perhaps the foremost organization devoted to advocating lower federal deficits, issued a statement saying "today's high deficits are needed to combat the current crisis" while also warning "they are by no means free."

"It is strange to be a deficit hawk advocating for higher deficits,"  CRFB Senior Vice President Marc Goldwein says, "until you realize why we are fiscal hawks in the first place: so you have fiscal space when you need it." That was the bigger problem: It wasn't just $3 trillion in new deficit spending; it was $3 trillion on top of the tens of trillions that had built up during so many decades past.

Deficits hawks have never had it easy. Although they were occasionally afforded a measure of superficial respect, the last two decades have seen them increasingly branded as scolds who want to raise taxes and force cuts to entitlements, domestic programs, and defense spending. Elected officials, who prefer to promise voters pretty much anything but that, tended to pay lip service to the idea of balanced budgets and paid-for legislation—and then tended to ignore the deficit, except to score points against their political opponents.

Even still, this time seemed different. COVID-19 wasn't just a novel virus. It was a novel economic problem, and the old guardrails suddenly seemed to vanish. While both parties had often used gimmicks and conveniently magical economic theories to justify shrugging at past pile-ups of debt, they had typically striven to maintain the pretense of fiscal responsibility. Now even that appears to have fallen away, another victim of the pandemic.

How will we pay for all this? As Congress debates trillions more in aid spending and Democrats prepare to erect a vast new infrastructure of federally funded programs should they win in November, it increasingly looks as if the answer is: Actually, we won't.

'A Bad Idea Whose Time Has Come'

The modern movement to control the deficit can be traced back to 1985 and the passage of the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act. President Ronald Reagan is often remembered as a hero to proponents of limited government, and it is certainly true that he spoke their language. But under his watch, federal spending grew. By the middle of the decade, deficits had more than doubled. In 1980, the gap was about $74 billion, equal to 2.6 percent of the overall economy. By 1983, it was about $208 billion, or 5.6 percent of the economy.

In theory, this was a bipartisan issue, with concerned legislators on both sides of the aisle wanting to be seen as fiscally responsible. The deficit had grown too large. Something had to be done. But what?

Looked at one way, the solution was straightforward, even obvious. Reagan had slashed tax rates while increasing federal spending, particularly on the military. With more federal spending and lower tax rates, the gap between outlays and revenues—that's the deficit—had grown. To reduce the size of the deficit, lawmakers had essentially two levers they could pull: increasing revenue via tax hikes, and cutting spending.

On the one hand, this was fairly simple. On the other hand, it was incredibly complicated, because those who make a living asking large numbers of people to vote for them tend to be wary of pulling either lever. Broadly speaking, voters like tax cuts and spending hikes, not the reverse. Looked at this way, the solution was not obvious at all.

Gramm-Rudman-Hollings was an attempt to solve both the deficit problem and the political problem it created. Its congressional namesakes were two Republicans, Sens. Phil Gramm of Texas and Warren Rudman of New Hampshire, and a Democrat, Sen. Ernest Hollings of South Carolina. What they realized was that the real problem wasn't pulling the two levers—it was being seen to pull them. Hence the insight that informed their solution: What if no one pulled them at all? What if, instead, they just magically pulled themselves?

Gramm-Rudman-Hollings was intended to put the United States on a path to a balanced budget in five years via a forcing mechanism: If Congress failed to hit certain deficit reduction targets each year, it would trigger a round of automatic spending cuts, reducing spending across every category by a certain percentage, via a process known as sequestration.

The idea that neither party's policy priorities should take precedence was one that would guide budget reform efforts for years to come: The deficit would be reduced through shared pain and shared responsibility.

In theory, lawmakers could avoid these across-the-board cuts by settling on other methods for hitting the targets. But if Congress could not agree on an alternative, the program's broad-based reductions would go into effect, whether anyone thought they were a good idea or not. Any automatic spending cuts would be calculated and carried out by the comptroller general, whom the president would nominate from a list of options provided by Congress. The important thing was that no one in Congress would be directly responsible.

The distribution of the spending reductions was also important, because among the problems facing Congress in pursuing deficit reduction was a basic disagreement over which programs to trim. Republicans favored reducing domestic spending and preserving spending on defense. Democrats preferred the opposite. If the automatic reductions kicked in, everyone's priorities would be affected.

Imagine a debate between doctors about which of an ailing patient's limbs to amputate: The Republican doctors say the patient needs arms to fend off attackers. The Democratic doctors say the patient needs legs to walk. The sequester would resolve this impasse by amputating all four hands and feet.

It was ugly by design, and no one thought this was a particularly good solution—not even Gramm, Rudman, or Hollings. Rudman famously referred to the legislation as "a bad idea whose time has come."

As it turned out, it was a bad idea that didn't work. In 1986, the Supreme Court found that the arrangement with the comptroller was unconstitutional. Under the Constitution's separation of powers, Congress has the power to pass laws but not to execute them. Since the comptroller would be fireable by Congress, he or she would be essentially an agent of the legislative branch. And just as Congress cannot play any role in the execution of laws, neither can it delegate that power to an agent.

After the Supreme Court issued its ruling, President Reagan concluded that "now Congress must make the difficult choices" and "act promptly" to control the deficit. Legislators, the Court had determined, would have to pull the levers themselves.

As if to demonstrate that Congress was the kind of organization that could really get things done, congressional lawmakers acted promptly to ensure that they would not have to.

Congress passed, and Reagan signed, the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987, which reaffirmed lawmakers' commitment to avoiding the sort of difficult budgetary choices they had been attempting to avoid from the beginning. Sequestration authority was moved to the Office of Management and Budget (OMB), a body inside the executive branch, in order to conform to the Constitution's separation of powers. Told to make hard choices, Congress had once again assigned someone else to make them.

Lawmakers also bought themselves time. The follow-up raised legally allowable debt limits and extended the original five-year deadline for balancing the budget by an additional two years.

This failed too. When the time came, instead of allowing the automatic cuts to go into place, Congress discovered workarounds. Because the deficit targets were based on budget projections—on expectations about spending and revenues over the next few years—those projections could be massaged to make it easier to hit the targets. Some outlays (for example, on anti-poverty programs) could be made exempt from the cuts. Other outlays could be moved from one fiscal year to another, at least on the ledger, providing the appearance of reduced spending. Even after relieving itself of direct responsibility, Congress found clever ways to keep the lever from being pulled.

There was another issue as well, at least among Republicans. In the early '80s, some lawmakers had come under the influence of a macroeconomic theory that would come to be known as "supply-side economics." This theory held that tax cuts could, in budget parlance, "pay for themselves" by boosting economic growth so much that the federal government would actually raise more revenue if it reduced rates.

There was some trivial truth to this. Imagine a world in which loaves of bread are taxed at 99 percent. This is a world in which not many loaves of bread are produced or sold and thus not much revenue is raised from the bread tax. Reduce the rate to, say, 50 percent, and you would probably see a marked increase in the production and sale of bread—and higher bread tax revenues as a result. Reduce the tax further, and the bread market would probably expand even more. Supply-side effects are real, but they typically offset only a small percentage of lost revenue.

Some Republicans took this to mean that tax cuts of just about any kind would often, and perhaps even always, result in higher federal revenues. At some point, however, lowering rates does in fact end up lowering revenues. A 0.001 percent tax on bread might unleash a powerful market in artisanal breadmaking. It would probably not produce higher total levels of tax revenue than a somewhat higher rate would.

In reality, this simplistic version of supply-side orthodoxy was not a macroeconomic theory so much as a convenient excuse for Republican lawmakers to give their voters what voters tend to want: tax cuts without spending reductions, i.e., a government they didn't have to pay full price for.

Not every Reagan-era Republican bought into this theory, and even its proponents did not always espouse the most simplistic version. But it guided the party's governance in spirit, if not always in strict practice or formal principle.

Reagan reduced income tax rates twice, spurring economic growth in the process, even as his Treasury Department foresaw a relative decrease in revenues. But revenues were only one side of the equation. Under Reagan's administration, total federal spending increased by an average of 9 percent annually, rising from about $678 billion at the end of 1981 to about $1.1 trillion in 1989. The national debt nearly tripled from just under $1 trillion to about $2.9 trillion.

Among the chief proponents of supply-side theory was economist Arthur Laffer, who served as an adviser to Reagan and other Republicans of the era. Laffer has not espoused the vulgar version of supply-side theory himself. "Does every tax cut pay for itself? No," he told National Review in 2010. Tellingly, however, he was opposed to Reagan-era deficit control measures such as sequestration.

In 1990, the Los Angeles Times published a forum on whether to keep Gramm-Rudman-Hollings on the books. Laffer was among the contributors. He blamed the law for crashing the stock market in 1987, warned that its budget cuts would be "deleterious," and called the law's effect on politics "catastrophic." Gramm-Rudman-Hollings, he wrote, "should be legislated out of existence." That very year, as the federal deficit hit $221 billion, it was. The deficit hawks had lost.

The Trouble With Diets

If there is a case to be made that Gramm-Rudman-Hollings was successful, it is not in its direct and immediate effects but in its aftermath. The law was succeeded by a pair of new deficit control measures, the Budget Enforcement Act (BEA) of 1990, which set caps on discretionary spending, and "pay-go," short for pay-as-you-go, a provision of the BEA that was initially applied to entitlement program spending. With these measures, Congress was essentially putting itself on a fiscal diet, except instead of limiting calories and offsetting extra cheeseburgers with exercise, it was limiting spending and offsetting new fiscal expansions with either cuts elsewhere or tax hikes.

As with many diets, it worked—for a time. Bill Clinton began his presidency by raising the top income tax rate from 28 percent to 36 percent—an increase, but still far lower than the top rate at the beginning of Reagan's presidency. And then, following the Republican takeover of Congress, Clinton negotiated with GOP lawmakers to lower projected federal spending—when politicians talk about spending "cuts" they are often referring to reductions of planned future spending—particularly on welfare assistance. Accordingly, the deficit dropped from $203 billion in 1994 to $22 billion in 1997.

Forced to work across the aisle, Clinton and the Republican Congress had done what their predecessors had failed to do: reduce the deficit. Federal spending dropped as a percentage of gross domestic product, which boomed under the first wave of internet-induced investments—the 1990s tech boom. The rapidly growing economy kept voters from revolting, and Clinton framed the budgetary contraction not as a reduction in government services but as an end to federal overreach.

"We know big government does not have all the answers," he said in his 1996 State of the Union address. "We know there's not a program for every problem. We have worked to give the American people a smaller, less bureaucratic government in Washington. And we have to give the American people one that lives within its means. The era of big government is over."

In Clinton's second term, the already shrunken deficit ceased to exist. By the year 2000, the federal government was running a $236 billion annual surplus. Finally, the deficit problem seemed to have been solved.

The trouble with diets is that even when they work, they're hard to stick to. That is especially true when the diet must be renegotiated among a rotating cast of 535 lawmakers and a new president every four to eight years.

And so, under President George W. Bush, deficits returned, pushing past $400 billion and then $500 billion annually. The pattern under Bush was much the same as it had been under Reagan. Eyeing Clinton's surplus, Bush promised and delivered a reduction in tax rates. But then—following the 9/11 attacks, a renewed conflict in Iraq, and the war on terror—Bush and Congress increased spending, especially on the military. Once again, reductions in tax rates plus spending increases were followed by a rapidly growing deficit.

Democrats regularly attacked Bush for fiscal profligacy; mismanagement of the federal budget was a regular talking point during Barack Obama's presidential run. "When President Bush came into office," Obama said in 2008, "we had a budget surplus, and the national debt was a little over $5 trillion. It has doubled over the last eight years. And we are now looking at a deficit of well over half a trillion dollars."

Once again, there were calls for deficit reduction. In 2005, writing in The Atlantic, Jonathan Rauch proposed a renewed version of Gramm-Rudman-Hollings, describing it as "a bad idea whose time has come again." Under Bush, the call would go unheeded. But eventually, the idea would return.

Federal deficits exceeded $1 trillion every year during Obama's first term. Much of this, at first, was a holdover from the Bush years and the fiscal effects of the recession. But Obama's first major legislative act was an $830 billion stimulus plan—entirely deficit-funded—and under his leadership, the emergency federal spending levels that Bush instituted during his final year in office became permanent.

This time, Republicans would be the ones to complain of profligacy and fiscal irresponsibility. Among the most outspoken of these critics was Rep. Paul Ryan (R–Wis.), who eventually became the party's vice presidential nominee and speaker of the House.

Obama's first response was the redoubt of many a blame-wary politician: a bipartisan committee. The National Commission on Fiscal Responsibility and Reform was formed in 2010. It was nicknamed after its two most prominent members, Alan Simpson and Erskine Bowles, a Republican senator and a former Democratic staffer in the Clinton White House, who served as figureheads of the bipartisan push to reduce the deficit.

Simpson-Bowles consisted of 18 people—a bipartisan mix of a dozen members of Congress and six private citizens—tasked with producing a set of recommendations for deficit reduction. There were difficult choices ahead. The committee's job was to suggest which ones should be made.

The commission was a classic Washington gambit in that, outwardly, it was an attempt to solve a policy problem, but in reality, it was a politically motivated attempt to avoid solving that very problem.

Nominally, the problem the committee was tasked with solving was how to reduce the deficit. But that wasn't the actual problem it was trying to solve, because since the 1980s the solution had remained fairly obvious: To reduce the gap between outlays (spending) and revenues (taxes), Congress would need to either increase tax revenue, reduce spending, or do some combination of the two. To be genuinely effective, the tax hikes probably would have to hit the middle class and the spending cuts probably would have to hit entitlements.

The actual problem the committee was intended to solve, then, was that, despite occasional protestations to the contrary, neither congressional lawmakers nor the president wanted to do any of this.

In the end, Simpson-Bowles recommended cutting spending and increasing taxes. In particular, it recommended cutting spending on entitlements and raising some taxes on the middle class in order to broaden the tax base.

The proposals were called "reforms" and were lightly disguised so as not to look too much like spending cuts or tax increases, but that's what they were: Although some tax rates would be lowered, the committee also proposed eliminating all but a handful of tax carve-outs, many of which benefit the middle class. Under the plan, payroll taxes intended to fund Social Security would be expanded to hit a larger share of the wage base, and the age of eligibility for full benefits would slowly increase from 66 to 69. Revenue would go up. Spending would go down. The deficit would shrink.

And so, of course, neither the president nor congressional lawmakers agreed to any of it.

Eventually, someone in Washington came up with a solution to this problem: another bipartisan committee. This one, technically named the Joint Select Committee on Deficit Reduction but more widely known as "the supercommittee," failed to produce any formal recommendation at all.  The committee members, all elected officials who relied on voters to keep their jobs, understood that in order to reduce the deficit, they would either need to increase tax revenue or cut spending, and they couldn't agree on how to do it.

What they could all agree on was that the other party was entirely to blame. In November 2011, after the supercommittee reported that it had not been able to reach an agreement, Obama delivered a somber speech from the White House podium pinning the failure on Republicans who "continue to insist on protecting $100 billion worth of tax cuts for the wealthiest 2 percent of Americans at any cost." Sen. Mitch McConnell (R–Ky.), then the minority leader, said the body failed "not because Republicans were unwilling to compromise, but because Democrats would not accept any proposal that did not expand the size and scope of government."

A year later, with the presidential race in high gear, the parties were still trading barbs over the failures of the two committees. "Obama created a bipartisan debt commission," groused Paul Ryan—by then the vice presidential nominee—at the Republican National Convention in 2012. "They came back with an urgent report. He thanked them, sent them on their way, and then did exactly nothing. Republicans stepped up with good-faith reforms and solutions equal to the problems. How did the president respond? By doing nothing—nothing except to dodge and demagogue the issue." What Ryan failed to mention was that he was on the Simpson-Bowles commission—and he'd voted against its recommendations.

Yet in the years that followed, something happened: The deficit, which ran more than $1 trillion every year between 2009 and 2012, began to shrink. Not to zero, or even close, but to levels that more closely resembled those of the Bush administration, and in a bigger economy. By 2015, the deficit was $442 billion, or about 2.4 percent of GDP. The deficit problem hadn't gone away. But its urgency had been reduced.

What had happened? In part, the major fiscal effects of emergency measures tied to the recession had shrunk. But even though the supercommittee had failed to issue a formal recommendation, its work had been tied to another budget process: sequestration, which put caps on federal spending and required Congress to cut $109 billion from the budget each year, equally divided between mandatory spending (which includes programs that run on autopilot, such as entitlements) and discretionary spending (which includes the military budget and a hodgepodge of other federal programs). Meanwhile, a bipartisan budget deal let temporary Bush-era tax cuts for high earners expire, while making them permanent for the middle class.

The bad idea's time had come again, and this time it had an effect. Sort of. For a little while.

'The Poor Deficit Hawk…Is Extinct'

The problem with Congress—OK, a problem with Congress—is that it can't tell itself what to do. Not for very long, anyway. The 112th Congress in 2012 has no power to bind the 113th Congress, which means that if Congress in 2013 does not like the instructions passed down from its forebearers, it can tell the 112th Congress to go get stuffed. Which is more or less what happened.

Immediately, Congress started making deals to undermine the sequester. Starting in 2013, Ryan and Sen. Patty Murray (D–Wash.), his Democratic counterpart in the upper chamber, agreed to increase overall spending caps. The deal called for $63 billion in what they referred to as "sequester relief," split between defense and domestic discretionary spending. More spending hikes followed. Sequestration wasn't completely ignored, but its effects were diluted.

At first, these divergences were small. But over time they added up—and the avoidance efforts became more brazen. By the time Trump became president, most pretense of spending restraint had been dropped.

In 2015–16, Trump, like most Republicans, had run against the federal debt. His promise to eliminate it completely in eight years was deeply unrealistic, backed by no specific plan, and predicated in part on Trump's confusion of the trade deficit (which measures inflows and outflows of goods between the United States and other countries) and the budget deficit (which measures how much more the federal government spends than it takes in). But it was, at least, a rhetorical concession to the Republican fiscal politics of the Obama years.

In early 2018, House Democrats negotiated a budget deal with Senate Republicans that suspended sequestration caps and authorized $300 billion in spending above previously allowed levels. The particulars were complex, as budget deals often are, but in broad strokes, the agreement was straightforward: Democrats got more funding for domestic spending, while Republicans got more funding for the military. Trump signed the bill, proclaiming, "We love and need our Military and gave them everything—and more." The bill, he tweeted, would also mean "JOBS, JOBS, JOBS."

For years, Democrats and Republicans had bickered over budget priorities. With the 2018 spending bill, they resolved their differences—by agreeing to spend more on everything.

That bill followed 2017 legislation, pushed through by Republicans, that lowered tax rates for both individuals and corporations. Some of those reductions—in particular, the bill's permanent lowering of the corporate income tax—had been favored in some form by tax policy experts for years. But the overall impact would be to reduce projected tax revenue by about $1 trillion over a decade, relative to where it would have been otherwise, and probably more, if the individual rate reductions, which were temporary, were eventually made permanent. Not only did Republicans not offset those reductions with spending cuts, they also negotiated a deal with congressional Democrats to increase federal outlays across the board.

Once again, Republicans insisted that the tax cuts would result in no loss of revenue at all. "I'll stick with my projections that the tax deal will pay for itself," said Treasury Secretary Steve Mnuchin. Asked about the deficit impact of the tax bill, Paul Ryan said, "We believe we're going to be fine on that," citing "economic growth that gives us more revenue."

Yet by 2019, the federal deficit had soared back to nearly $1 trillion. Even before anyone saw COVID-19 on the horizon, the CBO was projecting trillion-dollar shortfalls as far as the eye could see. The basic math, as always, was almost comically simple. Congress had reduced tax rates and increased spending. The gap between revenues and outlays had grown.

In a sense, there was a symmetry in this arrangement, with Democrats and Republicans each getting more spending for their priorities. Everyone should have been happy, as much as that's possible in politics. But Democrats weren't, because Republicans didn't just get more spending for the military. They also got a package of tax cuts that congressional Democrats had universally rejected, with not a single one crossing the aisle to vote for the plan. And they had done so under the absurd pretense that this wouldn't increase the deficit at all.

Democrats were angry. Shortly after the tax bill passed, Nancy Pelosi (D–Calif.), then the House minority leader, delivered a blistering attack on the bill and the Republican justifications for it.

"The GOP said [the tax bill] would pay for itself," she said. "Instead, it will explode the national debt." She attacked Ryan specifically and said that "every credible analysis" from both the right and the left found that "Republicans are exploding the debt." Republicans, she charged, knew their arguments were false but plowed ahead anyway in order to advance their political priorities. The GOP cared about deficits only when it was time to "invest in people"—which is to say, when Democratic priorities were at stake. Fiscal concerns were a political cudgel, she implied, not a good-faith policy disagreement. Republicans had gotten away with something by dishonest means. And that had changed the shape of the debate.

"The poor deficit hawk," Pelosi concluded, "is not just an endangered species. It is extinct."

Washington Finds Its Balance

in Washington, things tend eventually to balance out. Not fiscally, but politically and strategically, with the two major parties and their respective ideological movements copying and countering each other's moves. Conservative cable news networks launch in response to the perception that mainstream news has a liberal bias. A powerful think tank ecosystem on the right is replicated on the left. An escalation in tactical uses of the filibuster begets a push to eliminate its use. Republican Electoral College victories result in Democratic calls for a national popular vote. As in physics, every action has an opposite reaction, if not always an equal one.

Politics is a game of tit for tat, an eye for an eye, and when one side finds an advantage, the other side will eventually seek out a comparable advantage of its own. But that political balance, negotiated between rival elites, almost always comes at a cost—to individual freedoms, to norms of governance, to basic fiscal and budgetary responsibilities.

What Democrats saw not only in the 2017 tax bill but in the decadeslong deficit wars was that Republicans had found a political advantage in arguing that tax cuts paid for themselves. There was a clear pattern to federal budgeting: Under Republicans, tax rates would go down, spending would increase, and the deficit would rise. Under Democrats, tax rates would rise slightly, spending would hold more or less steady, and the annual deficit levels would decline. The GOP, which had long branded itself the party of limited government and fiscal responsibility, was the party of neither.

To the party's base, this didn't just mean that conservatives were hypocrites. It meant they could pursue their priorities without pressure to make concessions or tradeoffs. They had an argument, a rhetorical strategy—or, at the very least, a convenient and self-serving pretext—that insulated them from the understanding of shared pain and shared responsibility.

To rectify that political imbalance, the left—particularly the young, online left, which increasingly favored aggressive spending programs far more expansive than even many lifelong Democratic politicians would dare contemplate—would need a pretext of their own. And they would get it, in the form of Modern Monetary Theory (MMT).

Serious policy thinkers have always known you eventually have to pay for new spending with tax hikes and offset tax reductions with spending cuts. What MMT dares to suggest is: Maybe you don't?

As with supply-side economics, the central insight of MMT is both true and trivial: The U.S. budget is not, strictly speaking, like a household budget or a business budget, because unlike a household or business, the federal government can print its own money. From this single observation, MMT theorists have constructed an entire macroeconomic worldview, which says explicitly that deficits don't matter and, consequently, the government can and should print money to fund federal spending projects on a massive scale.

In this understanding of the economy, debt is not a constraint; nor are interest rates charged by bondholders. Debt can be paid down with a few congressionally authorized keystrokes on central bank computers generating new dollars. Bondholders will have little recourse but to accept these newly created dollars, because America's currency is the global reserve. 

The only real constraint MMT proponents recognize is inflation, which serves as a signal that there are too many dollars in the economy and that some should be recalled by the government. But inflation has been running low for years.

The upshot of all of this is a belief not only that current deficit levels are sustainable but that they are actually too low. Congress, MMT proponents argue, should be spending far, far more. Fears about accumulating a large national debt should disappear entirely.

Among the chief evangelists of MMT is Stony Brook University economist Stephanie Kelton. In her recent book, The Deficit Myth (PublicAffairs), Kelton preaches the gospel of MMT, spreading the good news that deficits simply don't matter.

"Congress has the power of the purse," she writes. "If it really wants to accomplish something, the money can always be made available." Therefore, "spending should never be constrained by arbitrary budget targets or a blind allegiance to so-called sound finance."

From late 2014 through early 2016, Kelton served as the chief economist for the Democratic minority staff of the Senate Budget Committee, a position she eventually left to become an economic policy adviser to Vermont Sen. Bernie Sanders' presidential campaign.

In her book, Kelton draws on this experience to observe that conservatives often selectively apply their deficit hawkery to big-ticket social programs—and makes the case for MMT's deficit defiance as a response. "Whenever the topic of Social Security comes up, or when someone in Congress wants to put more money into education or health care," she writes, "there's a lot of talk about how everything must be 'paid for' to avoid adding to the federal deficit. But have you noticed this never seems to be a problem when it comes to expanding the defense budget, bailing out banks, or giving huge tax breaks to the wealthiest Americans, even when these measures significantly raise the deficit?"

Again, the political logic is explicitly laid out: If Republicans can casually dismiss the deficit increases caused by war spending and tax reductions, why shouldn't Democrats do the same with their priorities?

The reaction was opposite—but not equal. GOP-backed reductions in tax rates had contributed to the deficit over the years, forgoing revenue if not always reducing it. (Revenues increased slightly after the Trump tax cuts, for example. But even with a fairly strong economy, they came in below pre–tax cut projections.)

The GOP tax bill had increased the deficit by about $1 trillion over a decade on paper and perhaps $2 trillion if the individual rate reductions are (as expected) eventually made permanent. Yet MMT, taken at face value, could plausibly justify programs, like Medicare for All, that would require tens of trillions in new federal spending over each decade. And the long-term rise in debt and deficits was already driven more by projected increases in spending, especially on entitlements, than by missing revenue.

This was political blowback. But it wasn't proportional.

MMT has other components as well. For example, Kelton wants to significantly reduce the influence of the Federal Reserve, which manages interest rates to nudge both inflation and job creation. Instead, Congress would manage inflation risks through spending. The CBO, which currently produces a "score" projecting how most legislation will affect the deficit, would be tasked with estimating a given law's effect on inflation instead. If inflation did increase, under this model, Congress would rein in the economy by pulling back on spending and increasing taxes to reduce the supply of currency in circulation.

As a matter of political economy, Kelton's expectations are fanciful at best and are often undermined by her own self-described experiences. She repeatedly complains about congressional mismanagement of the budget and lawmakers' misunderstanding of economics. Yet somehow she expects Congress to be able to manage the day-to-day of the economy via fiscal policy, with a jobs guarantee as a macroeconomic stabilizer. Her notion that politicians would work together to respond to an inflation crisis with contractionary fiscal policy—swift tax hikes and perhaps spending cuts—suggests an unfamiliarity with actual politicians. On a purely practical level, her ideas are either extremely cynical or extremely naive.

But what Kelton makes clear, perhaps inadvertently, is that MMT is best understood not as an economic system but as a political program, designed to solve a political problem. Although Kelton and her fellow MMT economists will readily admit that, at some point, there are limits on the productive resources that can be employed and thus limits on the power of Congress to spend new programs into existence, they rarely if ever recognize those limits in the real world. Instead, the focus is almost always on how political actors can spend more without consequence. "We can't use deficits to solve problems," she writes, "if we continue to think of the deficit itself as a problem."

Few Democratic politicians are explicit proponents of MMT. Rep. Alexandria Ocasio-Cortez (D–N.Y.) has said that the idea deserves a "larger part of the conversation," but even Kelton's former boss Sanders still pays lip service to the notion that "every American should be concerned" about federal debt and deficits.

Yet as the Democratic presidential primaries played out, it became clear that the party's leading lights were less concerned about fiscal restraint than ever. Sanders alone proposed more than $31 trillion in new spending, with just $16 trillion in offsets, according to the Committee for a Responsible Federal Budget. Biden's vice presidential pick, Sen. Kamala Harris (D–Calif.), proposed some $46 trillion, according to Manhattan Institute budget scholar Brian Riedl. Even Joe Biden, a comparative moderate, proposed roughly $10 trillion in new spending.

Some of Biden's proposed new spending was paired with offsets to keep the deficit impact down. Some was not. Some, like Massachusetts Sen. Elizabeth Warren's Medicare for All proposal, was technically offset, but in a manner so convoluted and politically unlikely that it might as well not have been.

The Democratic Party is not a bastion of MMT. But driven by its leftward flank, the party's desire for federal largesse has clearly grown, with plans like Medicare for All and the Green New Deal that would require trillions in new government spending making their way from the party's fringes toward its mainstream.

In August, an economic adviser to the Biden campaign warned that the party's agenda would be stymied by high deficits left over from the Trump era. He was swiftly criticized by Ocasio-Cortez: "To adopt GOP deficit-hawking now," she said, "when millions of lives are at stake, is utterly irresponsible."

As with Republicans and supply-side economics, it is the spirit of MMT, rather than the theoretical particulars, that guide its proponents in Congress. Which perhaps should not be a surprise, since the theories' origins are conjoined.

MMT has roots in notions that go back decades, if not all the way to Adam Smith's ideas about sovereign currency. But its modern-day godfather is hedge fund executive Warren Mosler, who Kelton says acted as a mentor, shaping her understanding of the economy.

In the late 1990s, as the deficit was briefly blooming into a surplus, Mosler became enamored of the idea that government's status as a currency issuer rendered deficit fears pointless. He began to search for allies, and, according to The New Yorker, eventually connected with Donald Rumsfeld, the former Republican congressman who would become President George W. Bush's defense secretary. Rumsfeld, in turn, introduced Mosler to someone who turned out to be "most helpful," according to the article: Arthur Laffer, who "helped Mosler workshop his ideas" and put him in touch with a group of sympathetic economists "who became MMT's founding thinkers."

Two decades later, MMT is gaining currency in progressive circles, especially online. While its proponents would almost certainly say that the deficit-financed relief spending in response to COVID-19 is still insufficient, it represents a substantial move in their direction and a further breakdown of the sense that somehow, government spending must be paid for.

MMT backers seem to believe the world is awakening to their ideas. In an August interview with Dissent, Kelton described how, in the wake of the coronavirus, Congress had begun to leave behind old debates about paying for spending. "We spent a year arguing about where the money would come from," she said, "and then suddenly the world opened to a new reality."

Supply-side economics, meanwhile, retains its beachhead within the Republican Party, whose leadership continues to prioritize tax reductions above nearly all else, regardless of the budgetary impact. Over the summer, Trump advocated a payroll tax cut, eventually imposing a deferral he has hinted he'd make permanent if reelected. The president also reportedly has been looking at ways to unilaterally cut capital gains taxes. As he pushed both measures, he reportedly consulted with Laffer.

Congress, for its part, spent the summer arguing about whether to spend an additional $1 trillion or an additional $3 trillion on coronavirus relief, following the nearly $3 trillion that had already been spent.

The supply-siders had triumphed on the right, and the MMTers were winning crucial battles on the left. The deficit had always been a bipartisan problem. At last, America's politicians had found a bipartisan solution. Lower taxes. Higher spending. And the biggest deficit ever. Finally, Washington had found its balance.

NEXT: Berkeley Bans So-Called Junk Food from Checkout Aisles

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  1. Massive inflation is just around the corner. I imagine many of these witchdoctors secretly think it’ll “fix” the problem.

    1. Massive inflation has been just around the corner since the Fed started quantitative easing in 2008 and the last Bush budget started the latest round of Who_Can_Spend_The_Most in Washington.

      Can someone explain why massive increase in the currency has not made for much higher prices?

      1. Good question! Maybe at least PART of the answer is, affordable products incoming from China, Vietnam, etc! Importation of affordable products has been on the rise, as third-word nations have moved towards becoming successful 1st-world nations! This has offset higher prices (inflation).

        Unfortunately, at the behest of voters with HUGE “punishment boners”, success must ALWAYS be punished! Successful (rich) people in the USA must be PUNISHED by high taxes, especially by “Team D”, and successful un-American foreign nations must be PUNISHED by taxing (tariffing) you and me, just to indirectly punish success overseas! (Thanks to “Team R”, which was pro-free-trade before Der TrumpfenFuhrer fucked it all up, with His YUUGE trade-war punishment boner).

        The chickens will come home to roost, soon! Our punishment boners will reward us with massive inflation!

        1. “Good question! Maybe at least PART of the answer is, affordable products incoming from China, Vietnam, etc! Importation of affordable products has been on the rise, as third-word nations have moved towards becoming successful 1st-world nations! This has offset higher prices (inflation).”

          This is certainly at least partly true. The inflation-adjusted median household income (MHI) in 1999 was $60,922. By 2016, though it went up an down a bit, MHI hit $56,078.22. This is, obviously, a substantial decrease. However, looking from my perch, it is without a doubt that life-styles improved over that same time period.

          Technology, meaning improved efficiency in manufacturing systems, etc, are the reason for that improvement — improving everything from cell phones to automobiles. Relatively inexpensive foreign imports, utilizing those improvements in manufacturing, have certainly had a substantial impact.

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          1. Think of the U.S. dollar as stock in a ponzi scheme. When the “faith and trust” of dollar holders evaporates, where will that money go? It’s like the music stopping in a game of musical chairs.

            1. The only reason the dollar holds out is because we’re still better than all the other countries out there, as they are more socialist than we are.

              To quote Jake Gittes, “In this town I’m the leper with the most fingers.”

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          3. You have to talk to yourself because no one else will racist.

          4. And the areas of the economy that have remained expensive/gotten more expensive are the ones that are “too important” for the government to leave to the free market: housing and health care. Not to mention the amount of money we are shoveling to police and prisons because of the drug war.

      2. I believe it is because the dollar is the currency of choice for international trade. Think of it this way all those excess dollars that would cause inflation goes overseas through the trade deficit and other countries buying up dollars to pay for goods and services from other countries.

        1. Once some other currency becomes the international standard then the deficit will matter. Just look at history, no currency has been the standard forever. When is the last time international debts were paid in ducats or pounds on a consistent basis. Even Euros have not become the international standard.

      3. QE has made for much higher prices — in stocks and real estate. Inflation hasn’t been widespread because the QE is countering a depression.

        1. Plus Internet commerce has reduced prices by trimming profit rates (and moving most of the profit to Amazon)

      4. I take it you don’t go shopping ever?

        1. I was about to post the same response to this clown. The price of food has increased dramatically in the period he’s talking about.

      5. In short, there hasn’t been a massive increase in currency over the last decade – there was a massive increase from the mid-70’s to 2007, however.

        This post was adapted from another post I wrote at the beginning of the year so the numbers used are different now; this post also ignores the velocity of money because as debts get paid off, the velocity of money decreases.

        In essence there are 3 kinds of money the public uses/could use in this system. There is Real Money (known as greenbacks), which is fiat money authorized and printed by the US government. As far as I know, the last time the U.S. government issued a greenback was in the 1800’s and there aren’t any in circulation anymore. As a result, we are in an exclusively debt-based monetary system where all debt is money and all money is debt.

        There is As-Good-As-Real-Money, which are US Treasuries (essentially the government saying that they aren’t going to print money, but if need be, they will print this much money.) Unless the Fed buys the Treasuries directly, all the government is doing is substituting Treasuries in place of Pseudo-Money[i.e. the total amount of money in the system would stay the same]. All of these Treasuries comprise the “national debt,” which is not a debt at all for the US government [about $17.2 trillion].

        Finally, there is Pseudo-Money [about $45-55 trillion in the US and trillions more created outside the US]. Pseudo-Money is the money created by the private sector through debt issuance. It affects and is factored into prices and wages just like Real Money and As-Good-As-Real-Money are, but unlike them, Pseudo-Money is not permanently in the system because only the US government has the authority to issue real US dollars, not the private sector. The amount of Pseudo-Money in the system can go down (when someone pays back a loan, if a loan is written down or if a loan is wiped out in bankruptcy) or it can go up (when someone takes out a new loan). If the total amount of money in the system goes down, then prices and wages will also go down.

        All quantitative easing is is the Federal Reserve buying debt, mostly US Treasuries, held by private sector banks and giving the banks more bank reserves. This acts to boost asset prices (a major handout to the wealthy and elderly), but it doesn’t create more money in the system unless banks lend more money against those bank reserves, something that has not happened. Little of this QE money finds its way into the real economy – you can give Bill Gates as much money as you want but he isn’t going to buy more stuff – so it stays mostly in the financial economy and encourages others to participate in the financial economy over the real economy.

        Thus far, all US dollar contracts are written with the expectation that the total amount of money in the system will increase (i.e. there is a positive interest rate). Unless the government pumps more Real Money or As-Good-As-Real-Money into the system, then the total amount of money in the system will increase only if the amount of Pseudo-Money in the system increases. People will take out loans faster than they are paying them off, thus increasing Pseudo-Money, only if they believe incomes will rise in the future. Incomes can rise only if money is invested. The total amount of income in a system is the GDP.

        An investment is not what most people think it is (putting X amount of money in and getting more money back; if that was the case, Ponzi schemes would be investments). An investment is using resources in an attempt to increase the efficiency of production (this can include research, education, job skills training, automating processes, infrastructure, etc.), developing new products/services or expanding production capacity (this can include encouraging people to have more children because they become future workers). An investment is only an investment if it is potentially viable (assuming it works out) while keeping the total amount of money in the system constant. An investment is not CONSUMPTION (ex. borrowing money to buy anything more than minimal housing), RENT-SEEKING AND OTHER ANTI-COMPETITIVE BEHAVIORS (This is the cause of most income inequality. Some examples include: doctors using licensing laws[through the million requirements just to take the tests, not the license per se] to create barriers to entry to practicing medicine, which in turn causes shortages of doctors, allowing doctors, hospitals and medical schools to charge very high rates, thus giving all of the people involved very high salaries relative to other professions; businesses consolidating, and either monopolizing markets or colluding, so as to gain control of both the prices of their products and the prices of their inputs. This leads to lower salaries to employees and higher salaries/returns for executives and shareholders.), SPECULATION (holding something in the off-chance that someone will pay you more for it later, ex. gold) or a PONZI SCHEME (some housing markets were and are Ponzi Schemes – increasing loan size and duration to increase house prices, then repeating by the recipient using the newly gained equity as a down payment on another home).

        If money is invested, then income/GDP will rise stably and steadily and the Total Debt/GDP ratio will at worse remain the same and, at best, decrease.

        The problem in the US is that from the mid-1970’s to 2008, much Pseudo-Money was created, but not enough was invested – plenty of it was used for Consumption, Rent-Seeking, Speculation or Ponzi Schemes. This led to a skyrocketing Total Debt/GDP ratio – from about 150% Debt/GDP in the mid-1970’s to 365% Debt/GDP in 2009 to about 340% Debt/GDP today (early 2020) – we transformed from a wealth creating, investment-focused economy into a rent-seeking economy. See graphs,

        Because private debt/Pseudo-Money increased so rapidly relative to incomes, people/businesses have become less able to service their debts. Starting in 2007-2008, there was an increase in people/businesses paying back their debts or declaring bankruptcy and fewer people taking on new debts. This led to prices and wages falling and consequent higher unemployment, which would have led to further bankruptcies (and a potential deflationary spiral with a depression and resetting of prices, as happened in the Great Depression) if the government did not act. It acted by increasing the amount of Treasuries/As-Good-As-Real-Money in the system (the US government spent more and taxed less), which countered the amount of Pseudo-Money that was needed but not being created. Unfortunately, much of the new money was used to pay off the Rent-Seekers and Speculators (at best, only about $800 billion was invested, which was done through the American Recovery and Reinvestment Act of 2009), and little was done to fundamentally change the system to encourage private investment and end private borrowing for Consumption, Rent-Seeking, Speculation and Ponzi Schemes.

        Additionally, the government’s actions, if they were going to create a stable system, were not strong enough – thus far, they have issued about $10 trillion in Treasuries to add stability to the system (with much more required), but it needed to INVEST trillions more money to boost wages and eliminate the private debt problem (in essence, the US government had to spend so much money that wasn’t taxed back that there was very little private debt left in the system, which was how the US ended the Great Depression). As such, we are still in a position where prices/debts are high relative to wages. This means that without further/constant support from the US government, prices/wages will want to collapse and people/businesses will not be able to pay back their loans. Because we are in this situation, banks do not want to lend as much money as is required, businesses do not want to borrow enough money to invest because they think their potential customers will not have the money to buy their products (and the lack of competition means they do not have to take as many risks), and people do not want to borrow enough money because they do not think their incomes will rise enough in the future. Hence, currency growth and inflation have been relatively low.

    2. Massive inflation is NOT around the corner and you moronic twits who don’t even know what money is are a major reason why there is never any alternative to the DeRp love of deficits and free lunches.

      For every dollar that is created by issuing a new debt, there is a schedule for that dollar to be destroyed when the debt is paid off (or rolled over). With some additional dollars diverted to the financial sector in the form of interest on a debt that was created out of thin air. That’s it.

      There is no hobgoblin of vague ‘massive inflation’ in the future that only serves to pretend there is no impact now – today. And those who believe in that hobgoblin are utterly useless in understand the TODAY impact – financial crises, the slow strangling of Main St at the expense of Wall St, the diversion of money into assets (held by the rich/old) at the expense of the young/poor.

      Yes – there may well be a point where that debt is overtly repudiated. Which will cause hyperinflation not inflation. But those two concepts have nothing to do with each other except some shared arrangement of letters. And that is also not understood by those who conflate ‘massive inflation’ with ‘inflation’ or ‘hyperinflation’.

      1. >Yes – there may well be a point where that debt is overtly repudiated. Which will cause hyperinflation not inflation.

        So in your mind, there’s no inflation or there’s hyperinflation, with nothing in between? I guess it’s possible it will play out that way, but there certainly could be some sort of transition period there.

        1. Hyperinflation is about a particular money failing as money. It ceases to be accepted in trade or as a unit of account or such. Prices of things expressed in that money are thus useless as a measure of anything. Other things can turn into money at that point – gold/silver, eggs, cigarettes, toilet paper, etc. But the phenomenon has nothing to do with inflation.

          There is no ‘in-between’. No more so than there is an ‘in-between’ between Beethoven and beets merely because they share a few letters in common.

          1. I tend to agree with JFree. I’ve read some of Mosler’s work on MMT as well as some other papers on the topic. I don’t think MMT offers much of a coherent explanation on how we’ll avoid harmful inflation – and while I get the difference between hyperinflation and 70’s era painful inflation, we may be facing something like 70’s era high inflation in the next few years. I don’t know. In the history of true hyperinflations (since 1900), it has never just been high government debt – there has ALWAYS been another severe, exogenous event – like losing a war, regime change, or ceding monetary sovereignty via a pegged currency. It’s interesting to me that Japan’s government debt relative to their GDP has been so high for so long. Many experts were sure Japan would experience hyperinflation years ago – but it hasn’t happened yet. It all comes down to living standards. If the world rejects our currency – loses confidence in our system’s ability to keep so many plates spinning – our living standards will deteriorate.

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  2. Reagan had slashed tax rates while increasing federal spending, particularly on the military. With more federal spending and lower tax rates, the gap between outlays and revenues—that’s the deficit—had grown.

    Oh, you’re going to get it now! Everybody knows that while Reagan cut tax rates, revenues actually went up, it was just that Congress increased spending even more than the increased revenues. Which means that A), you have to blame Congress for passing the spending bills and not Reagan for signing them while also crediting Reagan for Congress passing the tax cuts while he merely signed them, and 2) you’re defending Reagan by claiming he actually increased taxes.

    And none of this is going to matter when China, Russia, some of the petro states and who knows who else (probably the fucking French) succeed in displacing the US dollar as the world’s reserve currency. Since fiat money is essentially an IOU and the trillions of US dollars floating around the world as trade currency are essentially a free loan to the Treasury, if the dollar is no longer accepted as currency, those dollars are going to start finding their way back home and then we’re fucked.

    1. Further adding to the disquiet around the dollar continuing as the world currency is of course the uncertainty of the US continuing to serve as the world’s trading partner – if Trump had his way, the US wouldn’t import a goddamn thing, we’d be totally self-sufficient, and then who needs dollars? If China succeeds in becoming the world’s trading partner, the yuan is what you need, not the dollar.

    2. Furthermore, when W had a GOP Congress, the deficit went down substantially each year:

      FY2004: $413B
      FY2005: $318B
      FY2006: $248B
      FY2007: $161B

      Then the Democrats took over Congress and all hell broke loose:

      FY2008: $459B
      FY2009: $1413B

      That FY2009 budget? Can’t blame W for that one. It was passed 5 months late by a Democratic Congress and was signed in February 2009 by Barack Obama.

  3. “From this single observation, MMT theorists have constructed an entire macroeconomic worldview, which says explicitly that deficits don’t matter and, consequently, the government can and should print money to fund federal spending projects on a massive scale.”

    The problem is that ultimately people don’t want money; people want the stuff money can buy. And the government, even with more expansion of programs and people, can’t print stuff.

    1. Well, with 3-D printing, we CAN now “print stuff”!

      From thousands of years of experience by now, though, for almost all “services” except war-making, governments SUCK at doing just about EVERYTHING, compared to free markets! So I would like my 3-D printing done by free-choice-driven competing businesses, rather than coercive Government Almighty, if the voters and politicians will allow me that choice. Pretty please, voters and politicians?

      1. Not really. Can you print a smart phone (and service plan), a vacation trip, or a colonoscopy? Or even a pizza or hamburger you actually prefer to eat?

    2. When they ban 3d printers, because guns, only government and criminals will be able to print stuff

  4. What drives (deficit) spending?

    1. The size of government and programs. Good luck trying to reduced that, since polls have consistently shown that most people, across the political spectrum, want more government, even if only doing the “right” things with the “right” leaders. And most people have their pet programs, and want more spending for those. But in a democratic republic our representatives have every incentive to deliver the goods, and the horse trading in Congress usually means all programs get at least some funding. Reps never want to tell the people at home “no”.

    2. Like the cliches say, the purpose of big sprawling organizations is more growth and sprawl. Backed by political mandates, earnest staff, and just plain momentum, programs have many innate tendencies to expand and few to contract.

    3. Common perception is that spending, especially future expanded spending, is funded with other people’s money. Given that the total federal budget is about $15,000 per capita–and that very few people pay more than that in taxes–people are justified in that perception.

  5. Please stop laying the blame on the virus. It is the politicians and their lockdowns which are at fault in all these instances:

    “But any real worries about those sky-high figures appear to have melted away in the face of the pandemic”

    “Even before the virus wreaked havoc on the economy”

    “And yet as the virus consumed the nation”

    “COVID-19 wasn’t just a novel virus. It was a novel economic problem”

    “another victim of the pandemic”

    “Even before anyone saw COVID-19 on the horizon”

    “the deficit-financed relief spending in response to COVID-19 is still insufficient”

    “in the wake of the coronavirus”

    “$3 trillion on coronavirus relief”

    1. Exactly.

      For a disease to directly affect the economy, it would have to degrade the workforce to the point where business activity declined as workers still on the job fell ill and died, and could not be replaced.

      I suppose careless, common language might conflate the medical affects of COVID with the political and social policies that more directly changed human behavior, including business activity. But I would prefer deliberate, intelligent writing–or more honest writers.

      1. The writing is intelligent, and deliterate.
        The fascists are now completely honest about their intentions.
        They intend to take over every aspect of individual life, through regulatory control of massive corporations. The direct intention of prolonging the economic crisis caused by their political response to a new strain of a virus is to drive out of business as many independent small businesses as possible, so that citizens have only major corporations to supply their needs.
        With the federal government telling the corporations what to produce, where to sell it, how much to charge, and even how to create the product, what an individual can do will be indirectly controlled, but the blame can be placed on “evil” corporations (that owe their existence to the regulators).
        For an examples, refer to the health insurance markets and the health care providers.

  6. It’s just numbers on paper . Not real money.
    The rich need to pay their fair share.

    1. Well, they do have all the “real” money, in those rooms full of gold coins they like to wallow in.

  7. Don’t worry Suderman. I’m sure they can just print more money to cover the tab. :^)

  8. Since I turned 18 years of age in 1980, the National Debt, we’ve been told, was about to wreck the economy and cause a collapse of the US Dollar. Yet, the the US continues on and on and on. Higher inflation soon is likely, yes, but they economic system will endure because it must.

    1. Please note that inflation has never been higher than it was in 1980.

      1. OK, SINCE 1980; there was an issue around 1920.

      2. Yes, true enough, but did the economy or dollar collapse? No. Ultimately, fiat money is a symbol of a symbol of value, and thus, fiat “debt” is meaningless. Of course, all that is absurd yet the system carries on and on and on ….

    2. As Adam Smith wrote, “there is a great deal of ruin in a nation.” I believe that he meant that a rich country can follow ruinous policies for a long time before they destroy the country.

  9. Whenever you see Peter Suderman being critical of President Trump on spending, remember that President Trump pushed hard to pass a bill that would have cut $772 billion from Medicaid–a socialist entitlement program–and Peter Suderman opposed the bill.

    1. Suderman has been covering healthcare for this libertarian capitalist publication since before ObamaCare was passed.

      I defy anyone to find an example of Peter Suderman advocating cuts to Medicaid in all that time.

      1. People often misunderstand Medicaid. It is a state program which varies from one to the other. The federal government pays a hefty subsidy to each state. You can cut that but you are not going to help taxpayers because the states are going to need to make up for it somehow.

        How about something we can actually cut where the government buys stuff? The military budget. We have way more than we need for defense.

        1. “You can cut that but you are not going to help taxpayers because the states are going to need to make up for it somehow.”

          When I left the hospital reimbursement business, Medicaid was paying hospitals about 12.5 cents on the dollar.

          If you don’t understand the negative impact of that on the healthcare system and the insurance markets, read this:

          I’m not going through all that again. I went through it in comments. Just stare at the chart until you become enlightened. Everything you believe about Medicaid must account for those facts, and all of your beliefs that do not comport with those facts are wrong.

          1. A lot of my fellow libertarians have a hard time squaring their understanding of the government overpaying for things, especially when rent seeking and crony capitalism are involved, with the government forcing providers to price their services below the cost of providing those services. But they often go hand in hand.

            When Hugo Chavez nationalized grocery stores because they were charging market prices for food, that’s like Medicaid. Medicaid is reimbursing doctors for their services to a large extent–maybe even giving them more than their fair share as a form of crony capitalism and as a reward for their rent seeking.

            However, Medicaid is also not paying prices to hospitals that cover the cost of providing services to Medicaid patients. They’re forcing the hospitals to give away care at below cost prices to people on Medicaid–and expecting the hospitals to make up the difference by overcharging private insurers and patients paying out of pocket.

            In fact, the whole purpose of the individual mandate was to make young, healthy people who don’t need insurance, buy it and not use it anyway–to make up for all the money hospitals are gouging private insurers. They have to do that because the government pays for a fraction of the cost of treating Medicaid patients.

            The worst part of ObamaCare–in terms of its impact on the healthcare market–was the Medicaid expansion. Socialist wealth redistribution programs fail miserably at controlling costs and expanding the availability of services–who knew?! Well, libertarian capitalists knew. I don’t know why some of them pretend otherwise when it comes to Medicaid. It fails in the same way and for the same reason as all other socialist wealthy redistribution programs where prices are set by government bureaucrats instead of markets. Why wouldn’t it?

          2. I do not pay much attention to all that to be honest.

            Medicaid is a low paying subsidy. This is not anything new.

            I would be more interested in a better way to grade acute pulmonary embolism.

            The rest is commentary.

            1. It isn’t commentary. It’s the sources and uses analysis. It’s the fundamental source of the problem.

              Two-thirds of all inpatient hospital costs are charged to people on Medicare and Medicaid–46.9% of all inpatient costs are generated by Medicare patients and 19.4% of all inpatient costs are generated by Medicaid patients.


              Last I checked, Medicare was paying 25 cents on the dollar and Medicaid was paying 12.5 cents on the dollar.

              (.25)(.469) + (.125)(.194) = 11.725% + .0245% = Only 14.15% of the total costs in the system are paid by the programs that account for two thirds of the total costs.

              That means 85% of the costs are being paid by privately insured and out of pocket patients–who are only generating one-third of total costs. .85/.334 = privately insured and out of pocket patients are being forced to pay 2.5 times the amount of cost they generate–for inpatient stays.

              That is not commentary. That is the fundamental problem of our healthcare system, and it will never go away until we slash Medicaid and Medicare spending.

              Slashing spending on Medicare is probably politically impossible. Slashing Medicaid spending (and eligibility for Medicaid), on the other hand, isn’t politically impossible. The House passed a bill to restrict eligibility and cut Medicaid spending by more than $772 billion. Donald Trump twisted every arm in the Senate to get them to pass that bill so he could sign it–and came up a few senators short.

              Peter Suderman opposed that bill.

          3. Hmm…

            An expressly opt-in public insurance program is responsible for rising costs for private insurance because private insurance must cover the costs to providers they also contract with.

            And Medicaid is a huge government expense while simultaneously underpaying providers.

            How am I not shocked you worked in hospital reimbursement.

            1. An expressly opt-in public insurance program . . .

              Actually, a community hospitals’ licensing depends on having a Medicaid contract, and hospitals cannot refuse service based on the inability to pay–much less because a patient is on Medicaid (or Medicare).

              What’s opt-in about that?

              Meanwhile, I’m not sure you’re grokking the reality, here, that just because the government says you don’t owe any more for the services you received than whatever Medicaid says they owe, that doesn’t mean the cost of providing those services were actually covered. The primary purpose of price controls is to set them below market. In this case, they’re setting the price for Medicaid patients below the cost of providing care.

              This is why more than 70% of the hospitals in this country are non-profit, and this is why dozens have gone out of business in recent decades–especially in poorer areas where there aren’t enough private pay patients to make up for all the money they lose treating Medicaid patients.

              “The biggest factor, the professors said, is the mix of payers. Hospitals need enough commercially insured patients with private polices to offset the uninsured patients, because Medicaid and Medicare do not reimburse 100% of expenses.”

              “Keeping the Lights On: Why Are U.S. Hospitals Closing?”

              —-University of Pennsylvania, Wharton (from before the pandemic)


              If you believe that our healthcare problems have some other ultimate source, you are wrong. The problem is TNSTAAFL.

              1. So community hospitals, which by your own admission many of which are closing (and have been closing since the 2000s… good of you to omit consolidation from your analysis), are responsible for rising healthcare costs in Philadelphia because they are forced into Medicaid contracts in Danville. Nevermind hospitals only have an obligation to stabilize, not to treat.


                And you omit why Medicaid set their pricing to DRGs, which again, are strictly opt-in.

                I believe libertarian arguments should stand on their own without the need or use of selective facts, and that anyone claiming to have silver bullet pronouncements on something as multi-faceted as healthcare cost is probably selling you some porky pies.

                I noticed you cut-off the end of the quote:

                Some hospitals can capture the right mix, but Hahnemann likely could not because it competed with other for-profit hospitals for commercially insured patients in an “over-bedded market” with no public hospital.“What we’re seeing as a general trend is consolidation, and we’re seeing the rich get richer and the poor get poorer,” Field said.

                Healthcare consolidation improves integration of care and reduces duplication of clinical services. Hospital mergers can lead to operating cost reductions for acquired hospitals of 15%−30%.

                Reductions in hospital operating costs do not translate into price decreases. Research to date shows that hospital mergers increase the average price of hospital services by 6%−18%.

                For Medicare, hospital concentration increases costs by increasing the quantity of care rather than the price of care.

                Again, absolutely not surprised you worked in hospital reimbursement.

                1. You’re missing the forest for some . . . strange trees.


                  Two thirds of the costs for inpatient hospital stays go to caring for Medicare and Medicaid patients, and one third of those costs go to caring for private pay patients.


                  If about 15% of all inpatient costs are paid for by Medicare and Medicaid, and about 85% of all inpatient costs are paid for by private pay patients . . .


                  . . . then .85/.33 = private pay patients are paying for more than 2.5 times the costs they generate (on average).

                  In areas where the local population on Medicaid is higher than average, private pay patients are either shelling out more than 2.5 times the costs they generate or the local taxpayers are making up the difference to keep the hospital afloat, or the hospital is going out of business.

                  Are you claiming that private pay patients aren’t paying for more than the care they receive?

                  “As a top hospital system, Mayo stands to lose big on the spread between public and private insurance reimbursement from those sources, said Harold Miller, chief executive of the Center for Healthcare Quality and Payment Reform. Mayo told STAT that it lost $546 million in indigent care and in unpaid Medicaid portions in 2016 and $1.8 billion in unpaid Medicare portions.

                  The health system’s market power gives it the ability to charge more for its services and command high payments from commercial insurers, a clout it can’t wield with the federal government. So, Miller said, in prioritizing those commercially insured patients, it is following the money.


                  The Mayo Clinic lost more than $2.3 billion caring for Medicaid and Medicare patients that year, but they didn’t go bankrupt. You know what they did? Of course you do. They gouged private pay patients to make up for the difference . . . just like all the other hospitals are forced to do all over the country.

  10. I see a large part of the problem as a failure to tax appropriately for government services. If people paid taxes more in-line with the services government provided, they would understand the cost of the services and would be more amenable to discussions of service cuts. Conservatives understand this with regard to health care cost and argue for people to better understand costs. They will not apply the same principles to government service. Instead arguing for cutter services that people see as a bargain.

    1. tax appropriately for government services.

      what is the appropriate tax for a boot stomping on your face?

      1. M4E believes that tax can be paid in blood.

      2. hobnail excise tax?

    2. Fuck you cut spending

      1. Easy to say, much harder to do.

        1. That’s the thing though. After all these decades of approaching the issue with nuance, compromise, and comprehensive budget theory approaches, we’re worse off now than we were.

          FWIW, the “fuckyoucutspending” wasn’t meant as a personal attack against you. It’s more in the general, abrasive sense of “no excuses, cut spending.”

          Probably not going to happen, but unless voters focus heavily on reducing the size and scope (aka spending) of government, independent of other policies/issues, then Leviathan will continue to grow.

          With that in mind, I’ll continue to stand out on my hooligan-free lawn and yell at the clouds.

          1. Thank you. I don’t take any insults too personally. At my age there have been so many insults that it hard to even remember them.

            My point is not that I want higher taxes but rather a failure of the idea that if you cut government revenue there will be corresponding cuts in spending. I think that you have to tax appropriate to spending so people understand that government services, road, defense, healthcare, etc. all cost money, and more money that they think. There is no hard number but the average American pays at a 15% to 25% percent rate. Not really bad for all the things they get from the government. Certainly less than is paid by some European countries.

            1. We could do a lot better if we got less from the government. It would end up being more.

            2. Well, one way to get there is personnel attrition. Meaning, don’t replace bureaucrats in DC as they retire, resign, get fired. There is a lot of dead wood in the federal workforce.

            3. Fuck you. Nowhere in your little justification is there ever a thought given to what actually is appropriate for the govt to do for you, just concern that we don’t rob enough from the productive to pay for your ever increasing demands.

    3. The best, most direct message that average people could get would be a straight head tax, about $15,000 per person. Nothing else would provide as much motivation for people to question spending.

      1. Further, end the tax deduction. Make the bill payable in one lump sum.

        1. Like an HOA special assessment.

      2. Federal, state, and local governments spent (pre-lockdowns) $8-9T per year. Your $15K is federal only. All government spending is $27K per year per person.

        Not a chance in hell to be implemented, even aside from regressive tax worries. That’s why taxes are so spread out and hidden. Payroll tax 12+%. Sales tax, 9+%, and that’s not counting special taxes on booze, pot, gasoline, expensive cars, you name it. Corporate tax, income tax, all adds up.

    4. “…Conservatives understand this with regard to health care cost and argue for people to better understand costs. They will not apply the same principles to government service…”

      Your stupid ate your cite.

  11. Keep having fun with your game of musical chairs. Your funny money is no good.

  12. Suderman, you catch a lot of shit on these boards for being a cocktail sipping girly-man, but this is a good article. Much appreciated.

  13. I think the long-term solution is a constitutional amendment–and it can’t go through the route of the federal government. We need to add a balanced budget amendment to the constitution by way of the states.

    We need two-thirds of the states to agree to amend the constitution and three-fourths to pass the amendment, so we need 34 states to call a convention to introduce a balanced budget amendment, and the Republicans already have exclusive control of 29. That would mean we would only need five more states–presumably those with split legislatures–to get on board.

    If the Amendment were framed so that the budget wouldn’t need to be balanced for another 30 years (which is exactly the way it should be so as not to disrupt our debt and credit markets), there may be Democrat leaning states that would get on board with that.

    Because the people of Maine, Minnesota, and New Hampshire trend Democrat, that doesn’t mean they aren’t in favor of balancing the budget 30+ years from now. Hell, the people of Sweden are in favor of high taxation–but they’re also fiscally conservative.

    They didn’t have consistent budget surpluses for year after year before the pandemic for no reason. It’s because they were obligated by law to run a surplus over the course of a business cycle. Point being, it is not impossible to imagine socialists being both supportive of high spending and opposed to deficit spending.

    Once a balanced budget amendment is proposed, it becomes an election issue–at the state level. If balancing the budget 30 years from now becomes a popular cause, we may see Democrats embrace it at the state level. That’s how you get to the three-fourths of the states necessary to amend the Constitution. And if the effort fails, at least you’ve succeeded in making balancing the budget the central issue of the public policy debate. It would be like the Green New Deal is today–if people were arguing about poicy rather than the way Trump tweets.

    1. But what guarantees the significance of another Constitutional amendment when at least half the country, and most law makers, have abandoned the other principles?

      Before profound words about balancing the federal budget, maybe we need even more profound words–and allegiance–to core Constitutional values.

      1. To whatever extent the federal government has ignored various constitutional principles, those constitutional principles still make a difference. The reason our libel laws and gun ownership statistics are different from what they have in British commonwealth countries that don’t feature the First and Second Amendments is because we have the First and Second Amendments and they don’t. Surely, there’s a difference between amending the Constitution and not amending the Constitution–even if amendment in question doesn’t end all the pressure for the federal government to overspend in its entirety.

        Meanwhile, there isn’t anything peculiar about our country that means our government will be less impacted by a balanced budget amendment than other democracies that have successfully implemented them. Ideally, the ultimate check on spending in a democracy might be the trade off on taxation. The issue with deficit spending is that they can increase it without increasing taxation for a while. Take that away, and some politicians will call for far more taxation, but others will oppose spending on the basis that it will increase the need for taxation. And that is the way it should be. What we have now is set up to lead to the worst outcome from a fiscal perspective. And we can change that!

    2. The problem with the states jumping on that amendment is that as more programs get subsidized by the feds the local politicians don’t have to raise taxes and can take credit for getting federal grants and saving you money.

      1. One thing to remember is that state politicians may need to vote on this at a constitutional convention or just for the convention itself, but the people holding their feet to the fire are both state tax payers and federal taxpayers. I think this would be like the Tea Party people taking down Republicans and others who get in their way at the primary level. A lot of the Tea Party’s victims were politicians who couldn’t win the nomination again because the Tea Party shut them down and ran candidates of their own. Mitch McConnell probably wouldn’t have won against a Tea Party candidate in Kentucky if he hadn’t cut a deal with Rand Paul. At the state level, the locals have even more control–especially in the primaries. Either you support the balanced budget amendment, or we’ll find someone else you will.

        Meanwhile, the states may gain power by becoming a more important player in the absence of the federal government. If the federal government isn’t going to help us with this anymore, then we’ll just have to set up a state agency to do this ourselves! What state agency doesn’t want more power?

        Some states will use this an excuse to raise taxes. And, like I said above, that’s the way it should be–spending considerations should be offset by taxation. Right now, those two things are decoupled–at least in the minds of politicians and most voters. We can change that. Before we can get the kind of low taxation we want as libertarian capitalists, we may need to change that.

        P.S. Some states fought to opt out of the ObamaCare Medicaid expansion.

        More money from the federal government?

        No thanks.

        1. The problem I see is that a balanced budget requirement in of itself doesn’t always solve the problem. In many cases it leads to budgetary “tricks” like using an unrealistic rate of return on pension fund investments or stretching the lives of, say, highway repairs. It is why so many states are in trouble now with grossly underfunded pension plans.

          The problem is that politicians and voters still think it is the 1950’s when growth outstripped spending increases.

    3. Do we have to go through the process of repealing the amendment should some crisis like a world war happen? Or do we just wring our hands and apologize that we can’t save the world because the numbers don’t come out to zero at the bottom of the ledger?

      1. Are you genuinely concerned that we aren’t spending enough money our military, Tony?

        Suffice it to say that if balancing the budget required us to limit our foreign adventures in the future and concentrate on just defending our borders, that would be an argument in favor of balanced budget amendment in my book. If they wanted to launch a war beyond, why shouldn’t they take its cost to the taxpayers into consideration?

        1. I’m talking about actual economics instead of rightwing horseshit economics that no serious person thinks applies to reality.

          Being able to take on debt on occasion is a useful thing for individuals, businesses, and governments. You aren’t addressing any real economic issue, you’re peddling zealotry of the silliest kind.

        2. So I don’t go misunderstood, I’m saying that a balanced budget amendment is one of the few proposals both rightwing and leftwing economists think is a terrible idea. It’s a bit of populist marketing. In theory, I suppose, it could be a tool for destroying the modern welfare state by means other than democratic appeal.

          1. You’re an ignoramus.

  14. If MMT theory is correct, why do we need to collect any taxes at all?

    1. How else do we punish people and ideas we don’t like?

    2. It’s in the article. MMT is dependent upon taxation to soak up excess currency in circulation and control inflation, independent and regardless of deficit and debt. Even if one accepts that premise, the problem then becomes that we’re relying on Congress to pass unpopular tax legislation in order to “properly manage” the economy.

      In summary, MMT is horseshit… cut spending.

      1. Yes, Congress will have no will to raise taxes, but MMT has a fundamental knowledge problem, like most socialist schemes. How do you know how much to raise taxes?

        1. Agreed. That’s why I put the quotation marks around “properly manage.” MMT is a theory that depends on central planning.

          1. I think the proponents of MMT would claim it is reacting not planning.

            It is still the same fundamental knowledge problem.

    3. Private individuals should not be successful. The function of taxes is to punish success.

      1. Kids, this is what projection actually looks like. You think government policy is all about enacting emotionally driven jihad on people you don’t like, so you assume your opponents are doing the same.

        When they’ve been saying the whole time all they want to do is have more government programs and then pay for them.

        1. Fuck off, Tony.

          Why you think you should be shilling anocracy on a libertarian website is beyond me.

        2. Tony, make voting dependent on contributing to the public budget, and the appetite for government programs will wither away very quickly.

          1. By that logic there was no good reason to give slaves the right to vote. And oh look, we didn’t.

        3. Now do the Civil Rights act.

          1. I’m sure I would have been fine raising the taxes necessary to fund cops and courts to enforce it.

          2. The Civil Rights Act watered down the definition of private property, and muddled the distinction between it and public property. There would have been much more constructive ways to advance the plight of black Americans, than through destroying on of the foundations of Western Civilization.

            1. Eh, it has always been a spectrum anyway. No extant political philosophy conceives of property rights that extend to permitting lawbreaking on your property. You can’t steal from customers, and you can’t murder them, no matter how far in your inner sanctum they find themselves. Property used to sell food from can’t be used to poison customers wantonly. There are many ways in which private property is regulated to protect other people. We decided that the harm imposed on society by discrimination at vendors open to the public was another limit on property rights whose benefit outweighed the cost. Liberties sometimes compete, and sometimes those that are abused have to be tweaked in order to rectify a much greater imposition.

              1. You make a fair point, Tony. But murder on one’s property has nothing to do with the property itself – it is an initiation of aggression against another human being. Property rights give one the choice of how to use the property (without initiating aggression otherwise) – and this allows for excluding others from this property. If I make a widget, I should have the choice of passing ownership of it to whomever I wish (for whatever price I wish), and I shouldn’t have to justify my decision, rational or not, to a third party. Just like any potential customer has the right to refuse buying my widget for any reason whatsoever.

                1. it is an initiation of aggression against another human being.

                  Either by analogy or identity, the same could be said for discrimination. That is, I can define racial discrimination as an aggressive act. This is also why discrimination based on protected class can be distinguished from the discrimination that happens in the course of business. I’m affirmatively saying that such laws are an imposition on liberty to act in business. But beyond basic laws there are licenses and regulation and labor laws that all come from the same social compact as murder and theft laws.

                  People exist prior to commerce, so you aren’t permitted to engage in commerce without following the set of rules the people set up for it. Commerce in any meaningfully modern sense is not a “negative” right.

                  1. I don’t think refusing to part with one’s personal property (for whatever reason, including race-based discrimination) is considered initiation of aggression in most contexts, especially in libertarian circles.

  15. So it’s the Congress’ fault, wait it’s the President’s fault next year. Then next year it’s Clinton’s surplus in spite of a G.O.P. Congress. Petey forgot to mention who controlled both houses for 40 years prior to this yarn. And no mention of The Grace Commission or Congress’ reaction to it. Too young to remember elevator operators with job coaches in automatic elevators? Wet bar in Tip O’Neill’s office?


    Yesterday in Denver a Conservative was executed by Matt Dolloff

    @DenverPolice claim he has no connections to ANTIFA, but that’s not what the evidence says.

    This is a thread EXPOSING the truth behind the murder.

  17. I knew it, those bastards in Congress are to blame. Let’s reelect 90% of them.

  18. I blame Canada.

    1. They are not your friend, guy.

    2. You must’ve been talking to White Knight.

  19. OK schmucks. Got my ballot finally and marked it for Jorgensen. Yeah yeah. But I live in a state whose electoral votes are not in doubt in the slightest. So fuck them. The state and local votes went to Republicans. We’ll see my fellow citizens are stupid idiots who continue to vote for insane democrats. Later douchebags.

  20. “in the wake of the economic devastation caused by the outbreak of COVID-19. “

    I quit reading right there. The economic devastation was caused by government overreaction to the outbreak of COVID-19. If a writer can’t get something that simple right, what’s the point of continuing?

    1. Citation needed that safety precautions are more economically devastating than mass death.

      1. Citation needed for the “mass death” part.

        1. Anything we’d build a memorial to if it were caused by terrorists.

      2. It kills old sick people.

        1. Well, those aren’t people after all, because the president has an (R) after his name.

      3. Compared to the deaths that come with your prefered economics, covid casualties are miniscule.

        1. You’re not a clever person at all.

        2017 Total Deaths US: 2,813,503 (234,000/month)
        https: //
        2018 Total Deaths US: 2,839,205 (237,000/month)
        https: //
        2019 Total Deaths US: 2,855,000 (238,000/month)
        https: //
        2020 Total Deaths US (jan – week 9/26): 2,130,000 (236,000/month)
        https: //
        2,130,000 + (236,000/month x 3) [Oct, Nov, Dec] = 2,838,000 [assumption based on monthly avg]
        2020: 2,838,000 [3-month assumption insert]
        2019: 2,855,000
        2018: 2,839,000
        2017: 2,814,000

        Mass death? Citation needed…

        1. Looks more a scamdemic than a pandemic. Because that’s basically what it is.

      5. Per CDC (years are on separate webpages so I can’t include links).

        2017 Total Deaths US: 2,813,503 (234,000/month)
        2018 Total Deaths US: 2,839,205 (237,000/month)
        2019 Total Deaths US: 2,855,000 (238,000/month)
        2020 Total Deaths US (jan – week 9/26): 2,130,000 (236,000/month)
        2,130,000 + (236,000/month x 3) [Oct, Nov, Dec] = 2,838,000 [assumption based on monthly avg]
        2020: 2,838,000 [3-month assumption insert]
        2019: 2,855,000
        2018: 2,839,000
        2017: 2,814,000

        Mass death? Citation needed…

        1. Fake mass deaths. You can extrapolate these figures throughout the world and find the same results. There are no excess numbers of deaths caused by the fake pandemic. Once again, we have been hoaxed to death by government and the braindead experts.

    2. This is an interesting read.

  21. wait until the US starts to have its debt priced reasonably. put in other terms, why would any reasonable investor lend money to a debt ridden customer for 30 years at 2%?

  22. Trump inherited a $500 billion deficit and the 2020 deficit will surpass $3.1 trillion – over 6 times worse.

    That is all ye Peanuts need to know and you probably cannot process that simple math. Idiots like Rufus, Jesse, Sevo, John, and LovesTrumpsTinyMushroomDick1789 certainly are math inept.

  23. The first law of Thermodynamics always wins. Even in economics. Slowly, but eventually, the shit is going to hit the fan.

  24. MMT is bullshit. Money, or at least modern currency and bank cyphers, are just placeholders for actual money. Of course “money” can be printed, but it’s NOT money, it’s a coupon in place of money.

    You can’t spend more than you have. And a bookkeeping system (money) that allows you to do that is a fraud. Government creates nothing, it only has power (I won’t argue about authority at the moment) to grab some portion of what is created and redistribute it. If it redistributes more than it has, that amount has to be made up somehow (first law of Thermo). You can not get something for nothing. Never could, never will. Schluss!

    1. I spend money I don’t have all the time, mostly for the airline miles.

  25. We have only avoided a monetary crisis because we have been to offshore our inflation to China, the fact the dollar is still the reserve currency due to more corrupt govts, and the increased productivity in the fields of material science and computers.

    When interest on the debt starts to crowd out defense or SS or Medicare. Once you give the folks something for “free” they don’t have to pay..a politican can never take it back. market forces will force a solution…I just hope it isn’t statism/socialism…and then of liberty.

  26. After the Supreme Court decision, they could’ve just made it that the president appoints the comptroller and replace him. That way, it would no longer be a Congressional thing.

    And the amputation analogy is a bad one. There’s little disagreement among doctors about which limb to amputate; there’s great disagreement between Democrats and Republicans about what to cut, if anything.

    It was a good law that recognized the eternal political unpopularity of spending cuts, and found a way to push past that.

    1. Oh, I see. They tried something like that and failed.

  27. Yeah, both Republicans and Democrats are bad on the fiscal stuff. But let’s also be honest: the real problem is with the populace. If endless spending hikes weren’t so popular with Joe Schmoe, we wouldn’t be in this mess.

    The fact is, Joe Schmoe ALWAYS wants spending increases, on virtually everything. Doesn’t matter how much we’re already spending on it, the public still wants more. We spend more on education per capita than any other country on Earth, but that doesn’t matter: the majority of Americans still want spending increases on education (“invest in our children”). Likewise, a majority of the Republican base wants spending increases on defense, even though we’re spending more on it than any other time in history.

    To the public, if something is “good”, then we have to, “as a society”, throw more money on it. “Invest” in it. Education’s good? Throw more money on it! Who can say no to the children?! That’s average Joe’s approach to fiscal policy.

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  32. Debt bill coming due? The easy solution is to create more debt to pay it off. By 2030, the debt will be past $40 trillion and maybe close to $50 trillion…no problem. Congress will be spending like a drunken sailor without an ounce of remorse or responsibility attached.

    Uncle Joe and the Marxists expected spending party in $trillions:
    Infrastructure 4
    Pension bailouts 5
    state economic bailouts 4
    support WHO 1
    war with China or Russia 3
    new green disaster 12
    rebuild cities into gulags 5
    support UN 3
    Gates initiative 2
    private government army 2
    reparations 5
    misc 4
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    and they will just be getting started.

    1. >private government army 2
      Isn’t “private government” an oxymoron?

      >war with China or Russia 3
      If we go to war with China or Russia of all countries, we’ll be spending WAY more than a few % of our budget on it. (And does the “private government army” not fight in the war, which is why it’s separate?)

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