U.S. National Debt Tops $35T for First Time(nytimes.com)
nytimes.com
U.S. National Debt Tops $35T for First Time
https://www.nytimes.com/2024/07/29/us/politics/national-debt-35-trillion.html
19 comments
I would also add one more factor that drives the increasing debt.
- Changing U.S. presidential administrations and shifts in the political parties controlling Congress can negate any fiscal savings achieved. History suggests that even if the current administration reduces the national debt, subsequent administrations and Congresses tend to increase it again.
- Changing U.S. presidential administrations and shifts in the political parties controlling Congress can negate any fiscal savings achieved. History suggests that even if the current administration reduces the national debt, subsequent administrations and Congresses tend to increase it again.
Although you’ve gained my admiration for pointing to the lessons history proves, I’m inclined to disagree mainly because the changes you mentioned were in effect during all of American history, but the debt was not.
Less convincingly I also feel the potential stability of monarchy is negated by the evils of having centralized power. I am an American after all.
Less convincingly I also feel the potential stability of monarchy is negated by the evils of having centralized power. I am an American after all.
One more reason: loud minorities.
Almost everybody agrees that the federal government is too big, or at least too expensive. (Ask "do you want to pay for all that the government is doing?" You will get very few "yes" responses.)
The problem comes with what to cut. Do you want to cut, say, the merchant marine? Very few people care about it. But the ones who do are much more vehement that it must remain than others are that it should be cut. Their intensity wins even if their numbers say they should not.
And so it is with virtually every other line item in the federal budget. The result is that nothing can be cut.
Almost everybody agrees that the federal government is too big, or at least too expensive. (Ask "do you want to pay for all that the government is doing?" You will get very few "yes" responses.)
The problem comes with what to cut. Do you want to cut, say, the merchant marine? Very few people care about it. But the ones who do are much more vehement that it must remain than others are that it should be cut. Their intensity wins even if their numbers say they should not.
And so it is with virtually every other line item in the federal budget. The result is that nothing can be cut.
For those who don't know, the majority of debt comes from Social Security and Healthcare, both of which Republicans tried to fix in the past (2004 SS, 2017 Medicare) to make them somewhat viable, and are the only party even somewhat discussing these issues. The 2004 attempt in particular would have made everyone reading this substantially wealthier by allowing us to "invest" our SS, instead of pooling and distributing.
People who mention military spending don't understand we actually underspend given our GDP. As a percentage of GDP, we rank somewhere in the mid/high range of countries (this is the best way to measure, otherwise try comparing Vatican city budget vs Chinese military budget...).
Elon said Optimus robots, once fully integrated with the economy, will be a major deflationary factor and would allow for GDP growth to overcome the debt issue. Hopefully we don't need to rely on something like that and can actually fix this issue.
People who mention military spending don't understand we actually underspend given our GDP. As a percentage of GDP, we rank somewhere in the mid/high range of countries (this is the best way to measure, otherwise try comparing Vatican city budget vs Chinese military budget...).
Elon said Optimus robots, once fully integrated with the economy, will be a major deflationary factor and would allow for GDP growth to overcome the debt issue. Hopefully we don't need to rely on something like that and can actually fix this issue.
We don't borrow money to pay for social security, quite the opposite. Social Security has several trillion dollars invested in US Treasuries. It is running a 100-200 billion dollar deficit and over the next 10 years that investment will dwindle and become an actual negative on the federal budget, but that certainly isn't the case right now, nor has it ever been.
https://www.ssa.gov/policy/trust-funds-summary.html
https://www.ssa.gov/policy/trust-funds-summary.html
I remember the 2004 initiative, the ownership society etc.
1) If you diverted funds from the pay as you scheme and invested in it stocks etc, how would they make up shortfall? Why doesn’t the govt itself invest like an old school pension or annuity — it doesn’t have to restrict itself to US bonds?
2) isn’t that effectively turning SS into another 401k? Many workers feel the old school pensions were better than 401k, unless you ah e to be an investing wonderkind (which likely means you took a lot more risk).
3) if people start investing SS, and markets go down like 2007, isn’t the govt still going to be on the hook to provide for retirees just like currently?
1) If you diverted funds from the pay as you scheme and invested in it stocks etc, how would they make up shortfall? Why doesn’t the govt itself invest like an old school pension or annuity — it doesn’t have to restrict itself to US bonds?
2) isn’t that effectively turning SS into another 401k? Many workers feel the old school pensions were better than 401k, unless you ah e to be an investing wonderkind (which likely means you took a lot more risk).
3) if people start investing SS, and markets go down like 2007, isn’t the govt still going to be on the hook to provide for retirees just like currently?
1) Not sure what their plan was, but Bush said it was his major goal of the 2nd term.
2) Yes, if you want that. I'm sure there were options to invest in Bonds only or whatever else. Point was you had the choice and it wasn't just redistribution.
3) No, the whole point was to give choice. There's probably some stipulation where a certain % has to be in bonds as you near retirement age, but we're talking about a dead bill 20 years ago.
2) Yes, if you want that. I'm sure there were options to invest in Bonds only or whatever else. Point was you had the choice and it wasn't just redistribution.
3) No, the whole point was to give choice. There's probably some stipulation where a certain % has to be in bonds as you near retirement age, but we're talking about a dead bill 20 years ago.
The majority of outlays comes from entitlement programs.
Whether to sell new debt and to what extent is up to every respective administration.
https://www.consumeraffairs.com/finance/us-debt-by-president...
Whether to sell new debt and to what extent is up to every respective administration.
https://www.consumeraffairs.com/finance/us-debt-by-president...
Nothing stops this train.
The underlying problem seems to be similar all across the West.
Aging societies need more money for social security and healthcare of the elderly than the thinning 18-64 cohort can provide, and you can extract only so much taxes out of the working population before they revolt.
Against such massive secular trends, Sweden is as helpless as South Korea or the USA. You could probably expropriate the billionaires once, use the money for several months, then in a year be in the same pickle again.
No one can yet really run an economy when kids aren't born. A lack of humans is a fundamental shortage.
Aging societies need more money for social security and healthcare of the elderly than the thinning 18-64 cohort can provide, and you can extract only so much taxes out of the working population before they revolt.
Against such massive secular trends, Sweden is as helpless as South Korea or the USA. You could probably expropriate the billionaires once, use the money for several months, then in a year be in the same pickle again.
No one can yet really run an economy when kids aren't born. A lack of humans is a fundamental shortage.
I thought us had no public pension funds, only private ones ? Same goes for healthcare, etc.
I agree with your point when talking about europe, but i had the feeling US was much less dependant on population age to maintain its budget in check. No ?
I agree with your point when talking about europe, but i had the feeling US was much less dependant on population age to maintain its budget in check. No ?
AFAIK Medicare is already bigger than the military budget when it comes to federal finances. With an upward trend.
In general, the US federal finance is less dependent on population age than Europe, but this may be offset by the insane healthcare costs over the pond. European doctors make peanuts compared to American ones.
In general, the US federal finance is less dependent on population age than Europe, but this may be offset by the insane healthcare costs over the pond. European doctors make peanuts compared to American ones.
The US has Social Security which is government pension fund for everyone. Social Security had a trust fund of US securities which it is now liquidating to pay for the retirement of the boomers. This is effectively converting Social Security debt to real debt.
US has also Medicare and Medicaid which are healthcare for elderly and poor respectively.
US has also Medicare and Medicaid which are healthcare for elderly and poor respectively.
We did it!!!
Great work from both sides.
Good teamwork.
Great work from both sides.
Good teamwork.
Print more money, that'll fix it
- The number is so big it is now an imaginary, abstract concept. A trillion cannot be imagined or comprehended, even when explained by dividing into comprehensible numbers. No perceived reality means it doesn’t really exist.
- The lack of consequences (certainly immediate, but probably longer-term) means this is an abstract intellectual concept. Abstract-loving types will be intrigued, others will devote brain power to more practical matters throughout the day.
- The culture is generally okay with spending exceeding income at every level from household, to locally financed projects, to larger corporations, to the largest budgets of the government. Personally I think household economics should influence and does inform government spending, which is a controversial stance, but regardless if you agree with liking it or not, I hope you’ll agree the culture is generally comfortable with debt.
- Generational plans are typically an uphill battle against the needs of the moment. Not specifically an American item perhaps, and I will refrain from commenting on why this is so, but nevertheless another main factor, in my opinion.
Pointing out the problems is always easier than fixing them, so I apologize for stopping here without providing my personal utopian solutions.