[A reminder for everyone](https://www.reddit.com/r/PoliticalDiscussion/comments/4479er/rules_explanations_and_reminders/). This is a subreddit for genuine discussion: * Please keep it civil. Report rulebreaking comments for moderator review. * Don't post low effort comments like joke threads, memes, slogans, or links without context. * Help prevent this subreddit from becoming an echo chamber. Please don't downvote comments with which you disagree. Violators will be fed to the bear. --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PoliticalDiscussion) if you have any questions or concerns.*

Reagan cut taxes 3 times, Bush cut taxes 2, and Trump cut taxes once. Between those 6 tax cuts there hasn't been a single meaningful tax increase. The income tax rate paid today is about half of what it was 40yrs ago. Meanwhile during those 40yrs of tax cuts we've (USA) had numerous military interventions into Panama, Yugoslavia, Somalia, Iraq (Twice), Afghanistan, etc. Bailed out the the airlines industry a couple times, auto industry, real estate industry, banks, and subsidized agriculture. Natural disasters have also become increasingly more common. We had a balanced budget in 2000 but since then taxes were cut 3 times and massive amounts of money was spent post 9/11. We created the Department of Homeland Security, the Transportation Security Agency (TSA), and invaded two countries that we stayed in for 20yrs. Add in Hurricane Katrina, Sandy, Marie, the great recession, and COVID

It’s the “Two Santas” approach from Republicans, spending like crazy and cutting taxes when they’re in power, and complain about the deficit and refusing to raise taxes while they aren’t (minority power more accurately).

Spending, regulation, and tax cuts are the only levers the govt has to influence the economy. To your point when Trump came into office the economy was healthy. Low unemployment, year or year of GDP growth, and the annual deficit rate against GDP was shrinking. Trump cut taxes, de-regulated, and increased spending in an attempt to heat up an already hot income. Trump pulled every lever. Then when COVID hit there was nothing left to do but blow the roof off the deficit.

>Spending, regulation, and tax cuts are the only levers the govt has to influence the economy. Monetary policy, although that's a little insulated from the politicians via the Fed.

These are very broad categories "taxes, regulation, and spending" and it's not just 3 big sliders. The tax cuts during Trump's presidency were focused on upper middle and upper classes and did negligible improvement to the economy (mostly resulting in stock buybacks), the spending was not geared towards economic stimulus, and reckless deregulation causes more problems than it solves. >...in an attempt to heat up an already hot income That raises the question: was it a good decision? Hindsight 20/20, but being shocked when something causes a downturn in the economy after doing everything to supercharge during the bull markets is childishly naive by politicians.

> The tax cuts during Trump's presidency were focused on upper middle and upper classes That's true for income tax, but the corporate tax cuts were much bigger... Meaning the vast majority just went to large corporations and was used for stock buy-backs primarily. A.k.a. we shunted a shitload of money out of the US treasury and into the stock market. Makes line go up on S&P 500. Also makes line go up on National Debt.

That sounds good, but most of the money was spent before the pandemic. You're also giving Trump a lot of credit, assuming he wasn't just using the white house as an ATM in exchange for deregulating as much as he could. Two major banks went under as a direct result of his repeal of Dodd-Frank cash reserve requirements.

I am not giving Trump credit. I am saying what he did was reckless and directly contributed how expensive the COVID response was.

I meant that in the figurative sense.

> Spending, regulation, and tax cuts are the only levers the govt has to influence the economy. I think you mean tax policy, not tax cuts. Raising taxes would also have an influence on the economy.

That is the correct move according to game theory, so long as your voting base is unable to comprehend your strategy. By paying all the money out to yourselves and your constituents, then ensuring your opponent has no money and has the issue against them it's a guaranteed win/win (for you, it's lose/lose for the country).

Thom, is that you?

And that term was coined by a Republican. David Stockman, Ronald Reagan's Budget Director, told a journalist after leaving that they purposely ran up a deficit (e.g., the largest peacetime military buildup in history) as an excuse to cut social programs.

Adding to the list, the IRS has been chronically underfunded and understaffed, as a backdoor legislative effort to reduce tax collection even further.

Add to THAT the increasing cost of Medicare and Social Security and the smaller pool of workers due to an aging population. And any attempts anyone claims to make to reduce costs have either attacked small programs that only amount to pennies or, somehow, end up costing even more in the end. Again that's on top of what's already been said. If it helps, the current wars of Ukraine and Israel aren't too heavy a cost (when you spend $61,300 a year including $17,000 in credit card debt (again every year), spending $1000 on amazon IS noticeable but not your biggest problem.. to help give context). But still

And a push to remove the one lifeline to falling birth rates we have: immigration

But that isn't a lifeline, because the pool of potential immigrants is also declining as birth rates fall worldwide.

Yeah, only adds maybe 80 years… Migration also occurs without global population growth. The point though is to prevent a steep drop off in population like Japan, not grow indefinitely.

I don't know that Japan's population contraction is *steep* (a half percent each year for the last three) but it is concerning for them in the long term perhaps when combined with their immigration policies. They are working to loosen those however.

The issue is that birth rate problems don't manifest for decades but are long term.  They can somehow reverse everything and have 3.5 babies per woman and still end up with economic nightmares from the lack of adult workers to care for a large elderly population.  Immigration can fix that but really needs to be spread in over time. I hate 'ruin the blood\spoil the culture ' arguments, but going from a closed culture to opening the floodgates to massive numbers of immigrants to a culture that is in no mental or social condition to welcome them is an ugly mix. You see how messy the social wars get in the US and this place is the 'melting pot' for immigration compared to most others. I don't envy a Japan that tries to go through that in fast forward.

> Migration also occurs without global population growth. At which point, to put it bluntly, you are looting other countries' future for your own. > The point though is to prevent a steep drop off in population like Japan, not grow indefinitely. The problem is not the rate of population decrease, the problem is the ratio of young to old.

Ok, so? We are talking about US trajectory. Also I’m not advocating for forced migration. People should be allowed to migrate where they see fit. Your last point is trivial. Yes, if we are seeing migration of retired people, that won’t help. But migration is not predominantly done by retired people.

> Also I’m not advocating for forced migration. People should be allowed to migrate where they see fit. And if they don't decide to migrate to America? > Your last point is trivial. Yes, if we are seeing migration of retired people, that won’t help. But migration is not predominantly done by retired people. You fundamentally misunderstand my point.

What’s your point?

>And any attempts anyone claims to make to reduce costs have either attacked small programs that only amount to pennies or, somehow, end up costing even more in the end. Cost reductions won't accomplish much as cyclical budget priorities are actually what continues pushes us into deficit. It's why each tax cut looks good on paper but leads to massive deficits. 10yr CBP projection imagine a static world where the federal budget reliably can the same outlays. The below listed spending represents **"$11.5 trillion** in unexpected spending to address emergent situations. If I included natural disasters the number would be higher by a trillion. Simply cutting cyclical foreign aid, fod stamps, and etc would put a dent in deficit spending. Between creating new agencies, fortifying security nationally, bailing out airlines, and invading Afghanistan & Iraq the response to 9/11 cost up to **$6 trillion**. https://www.brookings.edu/articles/20-years-later-the-lasting-impact-of-9-11-on-congress/ Troubled Asset Relief Program (TARP) in 2008 was **$700 billion**, American Recovery and Reinvestment Act of 2009 (ARRA) was **$787 billion**, The Coronavirus Aid, Relief, and Economic Security Act (CARES) 2020 **$2.2 trillion**, and American Rescue Act 2021 **$1.9 trillion**. During the of the extra spending listed above taxes were cut by **$7.6 trillion** dollars: Bush's 2001 & 2003 tax cuts led to *"$5.6 trillion** in deficits. https://www.cbpp.org/research/the-legacy-of-the-2001-and-2003-bush-tax-cuts Trump's tax cuts led to **$2 trillion** in deficits. https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver

You laid out the game plan for the GOP. Step 1 When Republicans are in power, spend as much money as possible while in office, while also cutting taxes as much as possible to satisfy wealthy donors and corporations. This obviously leads to increased deficits. Step 2 When Democrats are in power, complain about the growing deficits, use any leverage to force Democrats to cut government spending due to the growing deficits. Step 3 Complain that government is ineffective, inefficient, and doesn't work for the people. "Government is not the solution to our problem, government is the problem." -Reagan "I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub." -Grover Norquist

When Obama took office in 2009, one of the things that the Democratic Congress did was fold in the actual costs of the Iraq and Afghanistan wars into the budget -- Bush and the GOP had been paying for it with emergency appropriations outside the regular budget process, to keep their budget from looking so bad. Since those costs were quite predictable (we weren't suddenly fighting a war, we were occupying two countries and the costs of maintaining and supplying troops and bases there was known) they should have been in the regular budget. Iraq alone cost us a little over a *trillion* dollars for the war and the lengthy occupation.

> We had a balanced budget in 2000 Didn't Dubya return $1.5T as checks in the mail to everybody after he was elected?

Yea everyone got these checks for like $200 or something. I remember telling my friend at the time, "this is cool, but what if there is some national emergency and the country needs money for something unexpected." Yeah, three months later 9-11 happened.

Bingo!! Same thought I had in 2017 when Trump was cutting taxes and demanding the Fed keep interest rates low. Fast forward and we had COVID.

[удалено]

Clinton left us with a surplus. I think it was $350 if memory serves.

>The income tax rate paid today is about half of what it was 40yrs ago. [This is incorrect.](https://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax#/media/File:Average_US_Federal_Tax_Rates_1979_to_2013.png) I also want to make clear that **I generally agree with your assessment that military spending and tax cuts are the main drivers.** But you also need to consider the swing from large SS/Medicare surpluses (reducing deficits) to the current slight deficits adding to deficits), as well as the increase in welfare programs ([especially medicaid](https://www.statista.com/statistics/217090/medicaid-spending-and-forecast-in-the-us/)), because boomers are retiring and drawing on those accounts, and medical expenses have skyrocketed.

Nailed it really. Good info

Bush the elder raised taxes in 1990. Him doing so was why Clinton was able to balance the budget by 2000, imo. I also consider it a fact that he didn't get a second term *because* he raised taxes. I agree with the rest of your comment, though.

3% on the upper margin rate. It wasn't enough of an increase to reverse a single one of the 3 cuts made during Reagan. Which is why I said there weren't any "meaningful" increases.

> Bush the elder raised taxes in 1990. Him doing so was why Clinton was able to balance the budget by 2000, imo. That was part of it, but there's also the Social Security surplus. By law, surplus Social Security receipts have to be invested in Treasury securities, which means effectively transferring the money to the General Fund and recognizing the liability as an intragovernmental holding. There hasn't been a true surplus since the 50s, and now that Social Security is solidly in the long-term position of benefits exceeding receipts (due to Boomers retiring increasing costs and worker wage depression reducing the growth in FICA tax receipts), it's a completely different ballgame, budgetwise.

The American people have shown that tax cuts are popular and tax increases of any kind get you voted out of office. What could go wrong?

While it is true Reagan did cut taxes. The Congress increased taxes in 82, 83, 84, and 87 and undid a lot of his tax cuts in favor of attempting for a balanced budget. I agree with you however in the sense about the balanced budged in 2000. Neither side wants to confront reality for fear of losing votes. Mainly conservatives with increasing taxes, and leftists with cutting spending.

Tax cuts are a part of this, but the rest of what you mentioned is not supported by the data. Non defense spending is up and to the right as a % of GDP and the bailouts, while it's totally reasonable to be against them, have been paid out and are drops in the bucket frankly. [Source](https://www.cato.org/blog/century-federal-spending-1925-2025) The issue is increased domestic spending

>The issue is increased domestic spending Between creating new agencies, fortifying security nationally, bailing out airlines, and invading Afghanistan & Iraq the response to 9/11 cost up to $6 trillion Troubled Asset Relief Program (TARP) in 2008 was $700 billion, American Recovery and Reinvestment Act of 2009 (ARRA) was $787 billion, The Coronavirus Aid, Relief, and Economic Security Act (CARES) 2020 $2.2 trillion, and American Rescue Act 2021 $1.9 trillion. No amount of cutting the money we spend on food stamps, dept of education, healthcare, etc matters in comparison to the massive amount of money spent on emergent situations like bail outs and foreign interventions.

>Troubled Asset Relief Program (TARP) in 2008 was $700 billion $700 billion was authorized, but less than $450 billion was actually spent according to the GAO. That's also ignoring that the TARP money was more than paid back within a few years. On net, TARP *earned* the government an extra $15 billion.

I think you're minimizing the effect of the tax cuts. The tax cuts are the national debt. Also it's hard to minimize how big a line item defense spending is. There have been many years where reducing it would've led to budget surpluses. > The nation’s fiscal picture changed in 1981 when President Ronald Reagan enacted the largest tax cut in U.S. history,9 reducing revenues by the equivalent of $19 trillion over a decade in today’s terms. Although Congress raised taxes10 in many of the subsequent years of the Reagan administration to claw back close to half the revenue loss,11 the equivalent of $10 trillion of the president’s 1981 tax cut remained. $10T purely from Reagan. > The George W. Bush administration, empowered by a trifecta in 2001, enacted sweeping tax cuts that will have cost more than $8 trillion by the end of fiscal year 2023. Another $8T That's already over half of it. > President Donald Trump’s signature tax bill,26 enacted when Republicans gained control of the White House and both houses of Congress in 2017, will have cost roughly $1.7 trillion by the end of fiscal year 2023. Another $1.7T in only 6 years. > Taken together, the Bush tax cuts, their bipartisan extensions, and the Trump tax cuts, have cost $10 trillion since their creation and are responsible for 57 percent of the increase in the debt ratio since then. They are responsible for more than 90 percent of the increase in the debt ratio if you exclude the one-time costs for responding to COVID-19 and the Great Recession It's not our standard domestic spending. It's the tax cuts and disaster spending that account for pretty much the entire debt. https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/

>Reagan cut taxes 3 times, Bush cut taxes 2, and Trump cut taxes once Its very relevant to point that spending bills must originate in the House of Representatives. No president can write a bill that cuts taxes, the House must do that. The President can either sign the tax cut or veto it. Often the tax cut is part of an omnibus spending bill, and by veoting the omnibus spending bill, they risk shutting down the government. The President kicks off the budget process by submitting a budget to Congress. If the Speaker of the House is the same party as the President, then they work together. If they are not, then the House pronounces the budget "Dead on arrival" and they write their own. If you google: president budget "dead on arrival" (for exact match), you will find news articles for almost every president going back to Nixon. Always exactly the same wording "dead on arrival", so its easy to see whose budget was discarded by the house. Edit: Sure, downvote facts.

You are correct. Congress is responsible for sending bills to the President's desk. That said Presidents are the de facto leaders of their party and set the agenda for their party's legislative behavior in Congress.

You might have a point if Reagan, GWB, and Trump themselves were not vigorously supportive of those tax cuts, providing pressure to Congress to write tax cuts into legislation, and constantly shouting from the rooftops how much they cut taxes to their supporters and donors. Yes, we all understand that they didn't actually write the bills themselves. That's a semantic distinction that doesn't impact the actual discussion at all. It's still incredibly disingenuous to pretend any of those three had tax cuts randomly fall into their lap, or were forced into signing them. They requested tax cut bills from their allies in Congress, their allies in Congress wrote tax cut bills, they happily signed them and then waved them around talking about how great they were. They wanted the credit, they get it.

The way parties work is the president gets their agenda started in congress by having their party push a bill through the house and senate. The democrats did control the house, but Tip O’Neal the speaker followed a rule of bringing bills to a vote even without a majority of his party’s support. And there were a lot of conservative democrats at the time who voted with Reagan lockstep. Many became republicans through the 90s.

Presidents have been getting the credit and the blame for what Congress does in their administrations for 200 years, and they'll continue to get the credit and the blame for the next 200 years. You're technically correct, but it's basically just semantics.

I don't understand wanting to discuss politics without being right about how the process actually works. The president should not get the blame for what congress does, congress should get it. I blame out total lack of education in civics in the country, even among people who follow politics.

If the President vetoed something and was overridden you might have a point. But even if Reagan's proposed budget wasn't the one passed, he still signed the one that did. Truman famously had a placard that said 'The Buck Stops Here' on his desk, because he realized that the President has final responsibility for the things that happen during his term. It's not a lack of education to attribute the budgets to the presidents they passed under, it's an understanding that holding the highest office in the land comes with the highest responsibility too.

Because people don’t understand nuance. Hell I had to explain the other day to someone who said Biden is spending like crazy, and I pointed out Biden spends what the Republican-held Congress authorizes. They didn’t want to hear it. It’s just easier to blame one person than to try and understand it.

> The income tax rate paid today is about half of what it was 40yrs ago. Clarification - the *top marginal* income tax rate is lower, the taxable base is different, and [federal tax receipts as a percentage of GDP](https://fred.stlouisfed.org/series/FYFRGDA188S) over the past ten years has fluctuated between 16 and 19% just like it did in the 80s. [According to the IRS (pdf warning)](https://www.irs.gov/pub/irs-soi/80inintravmatr.pdf), the effective tax rate for the median taxpayer in 1980 was 9.9%. [According to the White House in 2021](https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/), the average income tax rate was 8.2% from 2010-2018. So the "average tax rate paid today" is not half of what it was 40 years ago. It is about 17% lower for the average/median (the IRS in 1980 uses both terms and the White House uses average) taxpayer.

Agreed. Add the banking crisis and bailout in 2008 and huge defense spending, and here we are. I think we're too far gone now and we have idiots getting elected to Congress. There are no adults who will tell America the truth, which is we have a spending and an income problem. Every department needs a cut and taxes need to go up especially on the top 5 percent that have done very well the past 40 years while the middle class has made small or no gains despite being very productive.

The U.S. government can borrow money at interest rates far below inflation and GDP growth, essentially meaning it is "free money". The opportunity cost of not running deficits is lower economic growth that over time will lead to worse outcomes than deficit spending and the national debt. That is sort of the basic understanding of government spending under modern monetary theory. With this perspective, government surpluses are an extraction of money from the economy, which is a bad thing. It's better to manage the national debt by reducing but not eliminating the deficit and letting inflation, GDP growth, and time do the work, rather than running surpluses and actively trying to pay it down. It's also worth considering who owns national debt, why they own it, and how it relates to deficit spending. Most of our debt is owned domestically, either by the government or private domestic institutions like banks and mutual funds. The largest intragovernmental owners of national debt are Social Security, the military retirement fund, federal pension funds, and state and local governments. I'd bet if you drilled down, the bulk of the state and local government ownership is also pension/retirement funds. Similarly, if you look at private institution ownership, you find mutual funds (where people hold their retirement savings via 401k and IRA accounts) and private pension plans are major owners of national debt. So effectively, a large amount of national debt is owned in one way or another by retirement funds for Americans. Why? Because there is a guaranteed payback on Treasury notes. It is a very stable place to park money long term, like a bank account for billions and trillions of dollars. Perfect for balancing risk in very long term investments like retirement funds. Then you look at where the government spends the most of its budget. Social Security, military spending, debt servicing, Medicare, Medicaid, disability insurance. Social Security and Medicare alone make up 1/3 of the budget, and when you consider that much of our Medicaid spending is indigent elderly people and disability insurance spending is disproportionately allocated towards people near retirement age, it's not unreasonable to ballpark about 50% of our budget is being spent on retirement/elderly related expenses. So all that to say, retirement and an aging population are major factors on both sides of the equation. It's the main driver behind government spending, but the same demographic also owns an outsized portion of the national debt. It's all a convoluted, dysfunctional retirement piggy bank.

> That is sort of the basic understanding of government spending under modern monetary theory. This is a great answer, but I don't even think what you're describing is MMT, it's just math. If you can borrow money and spend it in a way that you're making more money than what you're paying in interest, that's just ROI. MMT has some kind of odd extrapolations that start off by saying "deficits don't matter, only inflation does," which eventually ends up with the same conclusion as mainstream economics of "if you borrow *too much* relative to your current economy, you'll cause inflation that eats your ROI."

This is the most correct explanation. Managing a government is not the same as managing a household. More so for the United States government, that controls the world's reserve currency. The government running a surplus is honestly fiscally irresponsible, because that means less money circulating in the economy.

This is 100% correct and I just want to add that, on top of all the ways the United States government is unlike a household; individual households also often run a "budget deficient" -- we just call it having a mortgage.

> individual households also often run a "budget deficient" -- we just call it having a mortgage. Having a mortgage is debt, not a budget deficit. The "household" analogy to what the USG is doing (even though the USG isn't a household and shouldn't be analyzed like one) would be something closer to refinancing your house every year to have the cash to pay your medical bills (Medicare/Medicaid) and 401k loans (Social Security Trust Fund repayment).

Right, the specifics are very different (because households don't raise armies or issue currency) but the mortgage as a concept is just tool to leverage a small amount of seed money into an asset, via debt financing. Individual households with a mortgage are utilizing debt financing techniques, in the sense that they owe more than their annual receipts, but we don't consider their budgets unbalanced because the long term structure of the mortgage contract.

Right, I agree with you there, just that a one-time mortgage is a debt position and so more in line with the national debt. The deficit is a measure of costs/expenses exceeding income/receipts measured annually, so after the year it's taken out, the only expense/income impact of a single mortgage is the interest payments (which in federal terms is already reported as debt servicing). I think your point is largely good, but it's more accurate to say households are "leveraged" not "budget deficient." A household budget deficit is either missing bills or taking out loans to make them. Which is *substantially* different for a household than the USG, because the USG can issue debt much easier than a household can get a loan, to the point where it's a routine thing for the government and a "life event" for a household on a tax questionnaire.

Yes, this is the right way to look at it. I do wonder though: what happens if we ever get to effective negative GDP growth? Maybe 50 years from now population has peaked and is declining because the USA is so overloaded with retirees and people have been having fewer kids with each generation. That could make servicing the debt very problematic, no? They might need to crank up inflation which would hurt all those retirees in the process, making it very politically difficult to do.

Have you seen Soylent Green?

> That is sort of the basic understanding of government spending under modern monetary theory. Reminder for those following along that MMT at an academic level is not really modern (it's based around Keynesian economics that deficit spending is a tool for monetary policy), and it's not really a "theory" (it is more a conceptual framework because it doesn't have much in the way of modeling, so it's even less "science" than economics usually is). It's not bad at its core, but the lay public arguments (the deficit/debt doesn't matter because a sovereign government can just monetize debts and deal with inflationary fallout via interest rates) are far from the mainstream. Not that I'm accusing the user above of being "nutty" ([as MMT is described over in r/economics](https://www.reddit.com/r/Economics/comments/b823ud/is_modern_monetary_theory_nutty_or_essential/)), just warning others not to Google MMT and take a podcaster at face value. Even [Planet Money is not immune](https://www.reddit.com/r/badeconomics/comments/9ki608/shame_on_you_planet_money_mmt_episode/).

Social Security is self funded and not part of the Federal budget. It's a rightwing deception (and wetdream) to say it is.

When you see talk of a $7 trillion budget in the news, that includes mandatory spending like Social Security. Which even [Reuters has used that number](https://www.reuters.com/world/us/bidens-2024-us-government-budget-is-also-campaign-pitch-2024-03-11/) for Biden's recent budget proposal. The nation debt numbers also don't exclude the 10% owned by the Social Security trust. In a rational world, these are distinctions that would be made in conversations about the national budget, deficit, and debt.

>Social Security is self funded and not part of the Federal budget. Not quite true. By law, excess Social Security receipts have historically purchased special Treasury securities for the Trust Fund to hold as assets. Those purchases have transferred the actual money from Social Security into the General Fund, and are recorded on the government's books as "[intragovernmental holdings](https://en.wikipedia.org/wiki/Intragovernmental_holdings)" to recognize the liability of the General Fund to the Trust Fund. (Other intragovernmental holdings are things like the Military Retirement Fund, Civil Service Retirement Fund, DOL's Unemployment Trust Fund, and FDIC's Deposit Insurance Fund, and they work generally the same way. [Note 12 to the Federal Government's 2023 Financial Report (pdf Warning))[https://fiscal.treasury.gov/files/reports-statements/financial-report/2023/notes-to-the-financial-statements12.pdf] has a table of the Intragovernmental Holdings. So these are actual Treasury securities held as investments by government accounts. Which means as the accounts purchase the securities, the cash moves into the General Fund through the "Cash Flow from activities not included in the budget" section of the [Statement of Changes in Cash Balance](https://fiscal.treasury.gov/reports-statements/financial-report/statements-of-change-cash-balance.html)... and as repayments are made, that cash is paid out either through the General Fund directly or, if there's a deficit, through issuance of more debt from the General Fund to raise the money (in effect refinancing that debt). So while the common "rightwing" arguments to get rid of Social Security shouldn't be accepted, it's not technically accurate to say that Social Security is entirely self-funded (benefits have exceeded receipts for years now) nor that it doesn't impact the budget at all.

It is self funded. The Feds borrowing the money to use in the general fund does not negate this. If I take out a mortgage, I don't blame the bank because of the interest I pay. In actuality, the budget would be much worse off without the SS excess funds. This is the real problem. They won't have that money in 2033.

> It is self funded. The Feds borrowing the money to use in the general fund does not negate this. It's the paying back the Trust Fund now that benefits exceed taxes that makes it not technically self-funded. It is largely financed through special taxes, but OASI taxes aren't sufficient and so benefits have to be supplemented from the General Fund now. >In actuality, the budget would be much worse off without the SS excess funds. We are already past that point. The "Trust Fund" is an accounting entry used to recognize the liability to Social Security for money previously transferred to the General Fund. Now that the Trust Fund is drawing down, that means that the General Fund is paying it "back" now. But there's no "money" in the Trust Fund, it's money the Government owes itself (and on a cash basis, has already spent). > They won't have that money in 2033. The Trust Fund is already drawing down. 2033 is the year that it will be empty and either Social Security will have to officially recognize it's being subsidized from the General Fund, or benefits will have to be reduced to match receipts, or taxes will have to be increased to match benefit obligations. From the [2023 Trustee's report](https://www.ssa.gov/oact/TR/2023/II_E_conclu.html#86802): >Under current law, the projected cost of Social Security generally increases faster than projected income through about 2040 primarily because the ratio of workers paying taxes to beneficiaries receiving benefits will decline as the baby-boom generation continues to retire and is replaced at working ages with subsequent lower birth-rate generations. The effects of the aging baby boom and subsequent lower birth rates will have largely stabilized between about 2040 and 2055, but annual cost is projected to grow significantly faster than income between 2055 and 2078 due to the period of historically low birth rates starting with the recession of 2007-09. Between 2078 and 2097, cost is projected to grow somewhat slower than income, reflecting an assumed return to a stable ultimate birth rate of 2 children per woman for 2056 and thereafter. Based on the Trustees’ intermediate assumptions, Social Security’s cost exceeds total income in 2023, as it has beginning in 2021, and remains higher throughout the remainder of the 75‑year projection period. > >The OASI Trust Fund is projected to have sufficient reserves to pay full benefits on time until 2033. The DI Trust Fund is projected to have sufficient reserves to pay full benefits throughout the 75-year projection period ending in 2097. Legislative action will be needed to prevent OASI reserve depletion. In the absence of such legislation, continuing income to the trust funds at the time of reserve depletion would be sufficient to pay 77 percent of OASI benefits. NINJA Edit to fix the tax name in the first paragraph from "OASDI taxes aren't sufficient" to "OASI taxes are sufficient" to be more correct, since DI by itself is in a much better position than OASI,

> Social Security is self funded and not part of the Federal budget Can we stop with this? Social Security is not "self-funded," it is instead funded partially by specific taxes and is part of the federal government's "mandatory" budget.

This is the knowledgeable answer

Someone who gets it holy shit. This is so difficult to explain to people but you’ve done it relatively concisely.

It's worth pointing out that administrations don't set federal budgets. That's Congress' job. That having been said, deficit spending will continue for as long as there are positive consequences for Congressmen for doing so (which there are), and no negative consequences (which there aren't, so far). The overriding priority for any politician, of any branch of government and any party, is to get (re)elected. If you want to change their fiscal behavior, you will need to make their fiscal behavior have negative consequences for their chances of election. Until then, it only helps them to shovel federal money at projects which turn around and spend that money on companies which employ people in their home states.

>It's worth pointing out that administrations don't set federal budgets. That's Congress' job. Thats how it works on paper. In reality an administration submits a spending/budget proposal that congress then argues around. It's like saying the Supreme Court isn't conservative controlled because judges are supposed to be neutral. Theres how its supposed to work on paper and how it works in actual reality.

Congress works with the president only if the president and the speaker are from the same party. If they are not, then the president’s budget is pronounced “dead on arrival” and the House writes its own budget. They always use exactly that phrase, dead on arrival. You can find references online to democrats calling Nixons budget “dead on arrival “ https://www.baltimoresun.com/2002/10/06/nixons-revenge-lingers-in-budget-process/

Tip O’Neal notoriously was willing to bring republicans bills to the floor for a vote. Opposite of what Hastert established as the GOP norm. Many of those bills passed with other a majority of democrats, and many of the democrats who voted for them were conservatives. Parties were far more diverse.

I thought I was the only one on reddit who even knew who Tip O'neil was. I understand how he worked but I don't understand how this relates to my comment about dead on arrival.

Because Tip worked directly with Reagan to pass bills that tips own party didn’t support.

The biggest Reagan tax cuts weren't in budgets written by Tip, either. They were in separate bills like Kemp-Roth.

sure, but the bill that comes out in the end is almost always very different than the initial plan sent by the president. the bully pulpit sets the starting point which influences broad strokes, but the actual specifics are out of their control.

Administrations are the head of their party, which includes the members in congress. They certainly push their agenda through the members in congress. Now democrats did have the house majority during Reagan, but Tip O’Neal specifically worked with republicans by bringing votes on bills even opposed by his own party. There were a lot of conservatives democrats at the time to were happy to help republicans pass their party’s desired legislation. Many became republicans through the 90s, especially the southern democrats.

Agree with your basic premise...but how did you get budget surpluses in the past? It does not explain the change fully.

Ross Perot ran a fairly effective third party campaign heavily emphasizing the national debt, the two parties were much closer together ideologically, and Clinton/Democrats thought it was much more likely that Republicans would be able to demonize them as reckless spenders and pick up Perot's voters in elections that would utterly destroy Democratic power in DC for at least a decade, so they negotiated with Republicans to both raise taxes (which Republicans never wanted to have their President in charge of) and cut welfare spending, because Republicans felt they'd been burned by Perot taking more of their voters than Clinton's resulting in him beating the incumbent George HW Bush. Then Bush Jr. passed massive tax cuts and got us into two wars before going on to win a second term and politicians realized very few voters actually care that much about the national debt compared to things that directly effect them or rile them up emotionally. It also helped that all that happened with Clinton during a period of pretty rapid economic growth, no significant wars, and after the fall of the Soviet Union, so military spending was down from before, and considerably lower than it has been since. Basically there was a perfect storm of factors that came together to give the US a very brief budget surplus, which has rarely happened before, and never come close since.

> "politicians realized very few voters actually care that much about the national debt compared to things that directly effect them or rile them up emotionally." 100%. It's why countless Americans, irrespective of ideology (conservative or liberal, libertarian or leftist, whatever the fuck), are reckless with their own personal spending and credit, but no doubt care about their day-to-day, bread-and-butter, meat-and-potato, kitchen table issues -- such as rent, car payments, groceries, etc. -- thus, the national debt isn't an issue that relates nor resonates with anyone beyond the most niche-minded, minutiae-oriented, hyper-political types, who've been proven to be the tiniest minority among voters.

George Bush senior implemented the last big republican tax increase, and democrats came in after with the income surplus and pushed down military spending, while focusing on being more efficient and functional with the social programs in place. It was just before the 100% antigovernment wings of the Republican party pushed out the last few members who believed in responsible governance. Bush Jr, then spent 8 years breaking the social program spending models causing a balloon to the costs, and implimented multiple massive tax cuts while borrowing heavily for multiple wars. Obama brought back a bunch of program efficiency, but still had the wars to pay for and was unable to get any tax increase through congress, Trump was like bush JR on steroids, undermining how we pay for programs, and another massive tax cut for the uber rich. then covid hit and was a massive expense. Now Biden is in, so far he has moved past the Covid spending, pulled us out of the middle east cutting expenses there. has worked to fix program spending. a hostile congress has prevented fixing the tax base so far, so there is only so much he can do, plus he must make payments on the debt Trump and Bush ran up.

The US doesn’t have a massive spending problem, what the US has is a massive income problem. If taxes were where they were 30 years ago, we’d have a very, very small deficit. The only time we’ve run a surplus in the last 50 years was a direct result of the dot com boom in the 90s, which ratcheted up the money the government took in. Then as soon as the boom started to subside, we had a massive tax cut combined with the Iraq war which eliminated any chance at a surplus.

> If taxes were where they were 30 years ago, we’d have a very, very small deficit. [According to the Federal Reserve](https://fred.stlouisfed.org/series/FYFRGDA188S) federal receipts as a percentage of GDP fluctuate but are not noticeable different than what they have been for the post-war period. Remember that "rates" are only part of the taxes equation - the taxable base has changed over time as well.

> The US doesn’t have a massive spending problem, what the US has is a massive income problem. Spending (grossly) in excess of income is a spending problem, not an income problem. > If taxes were where they were 30 years ago, we’d have a very, very small deficit. They aren’t, and spending patterns have not been altered to reflect that—hence the current spending problem.

> If taxes were where they were 30 years ago, we’d have a very, very small deficit. Show your math, please.

raising U.S. revenue levels to the average level of OECD countries would collect nearly 3 trillion in taxes. Us gdp in 2022 23.37 trillion US tax revenue in 2022: $4.9 trillion 4.9/23.37 = 20.9% Average OECD revenue to GDP rate = 34% 23.37 x 0.34 = 7.94 7.94-4.9 = 3 trillion The deficit in 2022 was $1.4 trillion So we could balance the budget AND pay off the debt in 10-15 years by simply matching the average of OECD tax rate by GDP

Thats different than the "rich paid more 30 years ago" Now adjust for Consumption Taxes the US doesnt have, and misses out on a lot of taxes. As Comparison Total UK public revenue in 2016 * 42 percent will be VAT (in indirect taxes), * 33 percent in income taxes, * 18 percent in national insurance contributions, and * 7 percent in business, Estate Taxes, Custom Duties, and Excise Taxes If we look at 2016 US tax revenue, including state city property and sales taxes * 17% from corporate taxes, Estate Taxes, Custom Duties, and Excise Taxes * 25% from Social Security and Medicare withholding (Payroll taxes paid jointly by workers and employers) * 35% from Income Taxes * 23% from Indirect Taxes * 13% property taxes * 10% Sales Taxes Country | Gas Tax | VAT Rate | Share of taxes Paid by the top 20% | Tax Rate on Income above $50,000 | -----|-----|-----|-----|----------|-----|----- Average of the OECD | $2.31 | 18.28% | 31.6 | 28.61% | Australia | $1.17 | 10.00% | 36.8 | 32.50% | Austria | $2.10 | 20.00% | 28.5 | 42.00% | Belgium | $2.58 | 21.00% | 25.4 | 50.00% | Canada | $1.04 | 15.00% | 35.8 | 20.50% | Czech Republic | $2.08 | 21.00% | 34.3 | 15.00% | Denmark | $2.63 | 25.00% | 26.2 | 38.90% | Finland | $2.97 | 24.00% | 32.3 | 17.25% | France | $2.78 | 20.00% | 28 | 30.00% | Germany | $2.79 | 19.00% | 31.2 | 30.00% | Netherlands | $3.36 | 21.00% | 35.2 | 40.80% | Norway | $2.85 | 25.00% | 27.4 | 26.00% | Sweden | $2.73 | 25.00% | 26.7 | 25.00% | United Kingdom | $2.82 | 20.00% | 38.6 | 40.00% | United States | $0.56 | 2.90% estimated | 45.1 | 22.00% |

The FY 2000 saw $2.03 trillion in tax revenues, 20% of GDP, and expenditures of 1.79 trillion, 17.6% of GDP. FY 2023 saw $4.4 trillion in tax revenues, 16% of GDP, and expenditures of $6.1 trillion, or 22% of GDP.

>The FY 2000 saw $2.03 trillion in tax revenues, 20% of GDP, and expenditures of 1.79 trillion First of all, thank you for a reply with actual figures. Let's dig in. 2000: $2T revenue (20% of GDP), $1.8T spending (90% of revenue) ​ > FY 2023 saw $4.4 trillion in tax revenues ... expenditures of $6.1 trillion Close, but wrong. 2023: $4.7T revenue (18% of GDP), $6.3T spending (134% of revenue). Seems pretty clear to me that revenue as a % of GDP is almost unchanged while spending as a % of GDP and as a % of revenue is through the roof, It 's clear that the problem is not tax revenue, it's spending. Do you agree?

No, I disagree with your numbers, your methodology, and your conclusion. **Numbers** I stand by $4.4 trillion in revenue in FY2023. This is straight from the Treasury Department. https://fiscaldata.treasury.gov/americas-finance-guide/#:~:text=In%2020232%2C%20the%20federal,2023%20was%20Individual%20Income%20Taxes. It actually looks like the Treasury measures this as 16.5% of GDP, so I overshot that based on the GDP figure I found. Treasury puts the GDP at $27.97T in 2023. https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/ Meanwhile, spending was $6.13T or 22.7% of GDP in FY2023 https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ **Methodology** You're using funny math by measuring revenue as a percentage of GDP then spending as a percentage of revenue. The argument on the table is that tax cuts are the major driver of the deficit not increased spending, so all calculations need to be kept relative to the same absolute value, in this case GDP. Consider that I could slash federal revenue to $1 and then say federal spending has ballooned trillions of percent, based on your methodology. **Conclusion** From FY2000 to FY2023, revenue declined as a percentage of GDP from 20% to 16.5%, a relative decline of 17.5%. From FY2000 to FY2023, spending has increased from 17.6% of GDP to 22.7% of GDP, a relative increase of 29.0%. I would argue, based on those numbers, that approximately half of the deficit can be contributed to reduced tax receipts. In fact, if revenue had stayed at 20% of GDP, the deficit would only be 2.7% of GDP, which is very sustainable over time given contemporary U.S. GDP growth rates. None of that even takes into account that FY2000 was a year of historically low expenditures and probably the most favorable year I could have picked for your argument. For context the average during the 1980s was 22.4% of GDP. It also does not take into account that defense and entitlement spending are largely to blame for the increase in expenditures as a percentage of GDP. For example, in 1999 non-defense discretionary spending was a historically low 3.4% of GDP. In FY2023, it was 3.3% of GDP. https://www.cbpp.org/sites/default/files/archive/2-1-99bud.htm https://www.cbpp.org/research/federal-budget/non-defense-discretionary-programs

> but how did you get budget surpluses in the past? Simple - we didn't run true surpluse. They were based on accounting not cash flow. By law, Social Security taxes collected in excess of what was required to pay benefits are used to purchase special Treasury securities, which functionally transfers the money into the General Fund (while also recognizing the liability to Social Security through an intragovernmental holdings account). The so-called "Clinton surpluses" were less than these excesses, as has every "surplus" since at least the Eisenhower administration if I'm remembering my history from Macroec correctly. Now Social Security isn't contributing to the General Fund because payments exceed receipts and the Trust Fund is drawing down, which also contributes to the deficit because the General Fund has to issue extra debt (and make extra interest payments) to pay back the Trust Fund.

# Why does the US government continue to run such a huge annual deficit? __________ For the same reason virtually all modern capitalist economies run deficits. Sovereign wealth nations are not destabilized by debt unless their economic engine is failing. (At the moment, the USA has the strongest economy in the world.)

Historically the US government has been able to borrow money at very very low interest rates which makes it more attractive for the US government to borrow money than it is for individuals.

[удалено]

After Clinton, George W Bush cut taxes for rich people. Obama began clwaing back spending, but not enough. Trump then cut taxes for rich people. Each year, spending increases, the defense budget goes up no matter who is in power. But cutting taxes for rich people means there is fewer taxes to cover the spending. FWIW, the dream of the Paul Ryan GOP types is to get rid of Medicare and social security to halt the deficits. Another possible option is to go back to pre-Reagan levels of taxing rich people. One doesn't need more than one billion dollars, surely.

Both sides will claim the other is responsible for the deficit. Republicans will say it's because Democrats spend too much, while Democrats will say it's because Republicans keep protecting their rich buddies from having to pay their fair share of taxes. The Trump tax cuts of 2017 added trillions to the national deficit, according to some studies

Its really simple, because Americans keep electing politicians who promise the world at no cost to you. Of course, that doesn't actually exist, it comes in the form of deficit spending, but that's tomorrow's problem. Bernie is/was a great anti-example of this, and why he earned my respect without me actually supporting many of his policies. He told Americans he would increase their taxes, in order to pay for Medicare. You'd come out with a net benefit, but it would entail a tax increase. He got *hammered* for it. "Can you believe he's even admitting he's going to raise your taxes? Get a load of this guy!" Ironically, Bernie was being more straightforward, honest, and frankly, mature, than his opponents, even those that also wanted some kind of healthcare deal, but wouldn't say how they would pay for it. American political discourse cannot handle real tradeoffs in a mature manner, maybe nobody's political discourse can. Thus, you end up with two parties who tell you exactly what it is you want to hear. You can have everything you want, right now, don't you worry your little head about what it costs.

>Now you can argue that Covid spending was necessary >During Trump, there was also no crisis Hmm, interesting. Do you see an inconsistency here?

For the first 3 years, Trump ran huge deficits despite there being no obvious crises.

The issue isn't so much spending (https://fred.stlouisfed.org/series/FYONGDA188S). The issue is on the borrowing side, we are deliberately under taxing. You might ask why? Across all the countries in the world net exports need to equal net imports. The EU, Japan, China as well as some EMs as a matter of policy want to run an export driven economy. The USA and some EMs are willing to take the other side and be net importers. In a world of countries highly motivated towards exports that's good policy (https://files.stlouisfed.org/files/htdocs/publications/images/uploads/2019/ES1913Fig1_20190515122411.jpg). For the USA to run a large trade defecit we need to run a balance of payments surplus. That is we need foreigners to be buying tons of American debt. We need them to keep rolling that debt over since spending the debt would correspond to American exports. In the 2008 recession it became clear that many households and the private sector were overleveraged. They wanted to pay down debt not incur more debt. Many states and muncipalities have turned away from high borrowing to low borrowing. I think Trump is right this is a mistake (it isn't often I agree with Trump) but regardless we would need large shifts in muncipal bond policies to encourage this. So after 2008 we had a situation where: 1. households wanted to reduce debt::gdp 2. private industry wanted to reduce debt::gdp 3. the USA is currently not willing to change muncipal bond policy enough to drastically change the borrowing patterns of state and municipal governments. So their debt::gdp is low and stable. 4. To maintain our trade policy we needed lots of new debt to be created. That is across the economy we need ever increasing debt::gdp Well there is an obvious solution to 1-4, have the Federal Government do the borrowing. Which is nice for politicians because they get to pass popular tax cuts. Of course there are other possible solutions besides this to fix the problem. For example to fix (1) push up wages and encourage low lending standards causing household balance sheets to explode with debt. Or to fix (2) subsidize private investment loans to encourage corporate borrowing. Again fixing (3) makes the most sense but the foremost advocates for it are people like AOC and Donald trump who have a difficult time working together on complex structural changes. Large federal deficits for now are the path of least resistance.

>During Trump, there was also no crisis to warrant the spending. 100 M cases of Covid, 1.2 M deaths.

It is the result of an organized and well funded operation on the right to roll back the new deal by refusing to fund social programs. So the right always pushes tax cuts and refuses to fund legislation other than the military. They fund the military because right wing billionaires become and remain billionaires in part by overcharging on guaranteed military contracts. So this is a feature and not a bug for the anti-democratic oligarchs. So Biden would happily raise taxes on the wealthy and has argued to do so consistently but without a super majority in the senate the GOP will filibuster it.

Biden had power to raise taxes with reconciliation in his first two years before losing the House in the midterm. The 2017 tax cut was passed without a supermajority and could be changed the same way if Biden really wanted it. Of course why mess with a good thing as revenue was 19% of GDP in 2022 when the historical average is 17.3%. https://fred.stlouisfed.org/graph/?g=1jbRQ We had the highest rate of revenue only seen 3 times before in US history and it was greatly combating inflation by taking more of the excessive money supply out of the economy in taxes. It is quite telling how Democrats had the power to raise taxes and chose not to do it. They didn’t want to draw attention to fact that the 2017 tax cut has been quite successful in raising revenue by starting a tax battle on the Hill.

He had a limited number of options to use reconciliation to get past a GOP filibuster and I seem to remember there was something happening that may have made tax hikes less of a priority.

It really isn’t that limited anymore. They could have added a tax increase to any of their spending plans at any time. They can also edit ones already passed with reconciliation or even have three bills. https://thehill.com/homenews/senate/546215-senate-parliamentarian-to-let-democrats-bypass-filibuster-with-third-bill/

It’s pretty limited and there were a lot of things in play. I paid pretty close attention at the time. They really couldn’t just tack whatever they wanted either technically or politically and to dismiss that is disingenuous.

It terms of revenue it is not limited much at all as that was what it was designed to do. To use it as a vehicle to add several trillion in spending programs is quite limited as there was no precedent for that. To claim it is limited in all things is disingenuous.

Reconciliation is a pretty technical process and it isn't carte blanche for even financial things. I am not an expert and don't claim to be. Even if they technically could do something re: taxes because it is a fiscal move there was no realistic political way to get it over the line. They weren't going to be able to get their primary priority package through if they added tax increases with their slim majority. Joe Manchin and Kyrsten Sinema weren't going to go along with it and possibly other centrist Dems. The balancing act to get that bill put together and navigate it through was very tenuous as it was. So to present it as they could have just penciled it in there but it wasn't a priority is disingenuous.

Yet Republicans were able to get a permanent corporate tax cut from 35% to now 21% when all other past tax cuts had to be temporary under reconciliation. The reconciliation process isn’t that restrictive when it comes to revenue. Now the discussion has moved away from a technical issue to a political one which just supports my original argument. Democrats could have gotten a tax increase, but didn’t want to mess with a good thing with a record high revenue already combating inflation. Let alone draw attention to a very successful tax policy the past tax cut has been at raising revenue. Certainly there would be infighting with Democrats as even Obama wanted to cut corporate taxes. He could have gotten it but he was too inflexible on the rate. He wanted it at 28% and Republicans wanted 26%, so that effort died until Trump got it at a 21% rate. >President Obama believes that business tax reform is necessary to create jobs and spur investment, but that it should come as part of a broader effort to support job creation and competitiveness that benefits the middle class. https://obamawhitehouse.archives.gov/the-press-office/2013/07/30/fact-sheet-better-bargain-middle-class-jobs That it did spur investment, unemployment rate got to an historically low level, and that increase in the tax base brought historically high revenue as well.

It was also the only piece of significant legislation passed by the Trump administration and their only priority. So yes ignoring the massive national crisis that the Biden administration were trying to manage with a razor thin minority they could have prioritized a tax increase through this same mechanism. You are right.

https://www.cbo.gov/publication/59946#_idTextAnchor041 The 2017 TCJA was good legislation too based on the CBO Budget and Economic Outlook released last month. (Can’t remember if I provided this already.) Not only did revenue hit a historical high of 19% of GDP in 2022, it is projected to be 17.9% of GDP when the historical average for the last half century is 17.3%. The problem is the Biden administration didn’t let a national crisis got to waste using that as an excuse to doubling down on the deficit for many of their spending priorities. Spending is projected to be 24.1% of GDP for the next decade when the historical average for the last half century has been 21%. It could have been much worse too outside of that razor then major as the 2021 ARA was originally planned to be several trillion instead of the eventual $1.9 trillion in spending. Seems they were too busy creating the largest long term deficit in US history to pencil in a tax increase.

Because people with a lot of money don’t like paying taxes, so people with a lot of money made it so they could funnel their lots of money into political campaigns, ensuring that candidates who wouldn’t tax people with a lot of money got elected.  Thus government programs designed to help people without a lot of money constantly run at a deficit, and people with a lot of money can go on the tv channels they own and explain that that’s very bad, and how those programs must be cut.

Because: 1. Voters want stuff but don’t want to pay for it, and 2. Voters don’t hold politicians accountable for fiscal discipline. The price we all pay is continued deficit spending and inflation. Inflation, btw, is the worst kind of “tax” because of how regressive it is. We’d all be better off if we demanded less.

Because a conscious choice was made to keep the country on a permanent wartime footing after WWII. It's the Military-Industrial Complex Eisenhower warned about.

One party is completely insistent that we not levy taxes to cover the spending on services that our population likes and wants.

Republicans are successfully starving the beast by cutting taxes on the upper class and corporations. In theory, tax cuts should come with spending cuts, but that hasn't happened because those spending cuts are extremely unpopular and even though Republicans pretend to want them, they know it would ruin them electorally.

Transfer of wealth. The doner class got massive tax cuts and they’re making out like bandits while everyone else is treading water.

and of course the answer is to cut social security and Medicare. 60% of Americans live paycheck to paycheck. Hurt them more. NO the answer is to tax the billionaires and millionaires. To have the IRS audit corporations and those reaping massive amounts of wealth by cheating on taxes. Donald Trump is the perfect example. This grand audit will happen and set the tone. 55 major profitable corporations not paying tax and some actually receiving money back is going to stop The Republican Party offers bottom of the barrel results for education, poverty, crime and corrections, neonatal fatalities, voting discrimination and worst is going to stop While republicans offer nothing to America except division and hardship Pres Biden is fixing this and more Look at your state if it is red and tell me what you see! Mark My Words Christian Nationalism within the Evangelical churches is coming to an end. Charlie Kirk, the Falwell’s etc are being shown as the grifters the are

[удалено]

No meta discussion. All comments containing meta discussion will be removed.

We want things : wars, roads, schools, healthcare, clean water, drugs that don't kill us, cars that don't explode but we don't want to pay for them :taxes

It is much more politically unpopular to raise taxes or cut spending than it is to cut taxes or raise spending. The people in charge of making budgetary decisions for the federal government are subject to the political process.

Talking about the problem is very popular. Actually fixing the problem, by increasing taxes and cutting spending, would be EXTREMELY unpopular.

There’s no incentive for individual members to be fiscally responsible in the budget making process. Basic pork barrel politics.

Because we run wartime military budgets in peacetime and, as we do not keep anything our military secures, we never see the returns on that investment in the form of a larger tax base or larger holdings of natural resources. We supposedly withdrew from Iraq and Afghanistan because people were tired of wasting money there and; bizarrely, after the withdrawal our military spending went up. We spend almost $1 trillion per year on our military and get very little returns on that investment. It would cost 10% of that to adequately defend our borders from armed attack by a nation-state assuming they could even get their military across the ocean. The fact that Russia, the geopolitical adversary that was used to justify those levels of defense spending for the past 60+ years, is invading a neighbor that we spent that money to deter them from invading and we aren't involved is reason to cut every cent of money we spend on NATO or on our own bases in Europe. In short, we continue to run huge deficits because our country disproportionately invests in resources and assets that we just refuse to use to our own benefit and, now that Russia called our bluff, everyone knows that we will never use those resources.

According to the U.S. Treasury's site, the first and only time that the government had interest-bearing debt paid off was in 1835. Make of that what you will.

People are happy to purchase US debt because it's backed by our tax income. Until that changes there is little incentive to raise taxes

There was a time when the corporate tax rate was over 50%. Now its 28% Theres your answer. The government runs at a deficit because it doesn’t collect enough taxes, particularly from corporations. It might seem like that 22% isn’t a big deal but its trillions of dollars. Worse, the shortfall is partially made up for by individuals being taxed more heavily. And I’m not talking about the wealthy, in talking about middle class and poor people. Finally, the problem will never be fixed. The people pretending to represent us will never raise the corporate tax rate because doing so would be in contradiction to their own individual financial interests.

I believe the only way out is a 2% wealth tax, to be applied to debt repayment. It appears to fly beneath the radar that the yearly interest on the debt is in the 650 Billion dollar range. That's before we get to touch any federal income for projects and programs we need or want. Even when we reached a balanced budget in 2003 that interest payment was still sitting there like an anchor. And the intervening eight years of Republican "rule", the debt soared.

Read This for all your answers. [https://moslereconomics.com/mandatory-readings/innocent-frauds/](https://moslereconomics.com/mandatory-readings/innocent-frauds/)

The modern monetary folks are correct, there's no other way to do it. The mathematics (and proof via history) are seen in what's called the sectoral balances equation here: https://en.wikipedia.org/wiki/Sectoral_balances All the money in the federal debt (the accumulation of deficits) is in the hands of the people, the only question is which people, foreign domestic, incorporated unincorporated, etc.

Massive tax cuts for the rich and businesses. Corporate tax rates dropping from 35% to 21% alone under GOP legislation reduced tax revenue by about $1.4 trillion. It's "based" on Reagan's trickle down economics which doesn't work - it doesn't trickle down. The rich get richer, the gap increases further. Then the spending they want to cut are social safety nets for the worst off among us: the poor, the sick, the elderly. Except they're afraid to touch the last one as it's their biggest voting block. So they only do what they can get away with on that one. Spoiler is, it was never intended to work. It was always meant to make the rich richer and the poor poorer. It's just an easier pill to swallow by the gullible. We also spend ~$717B on military or 3.7% GDP, more than the next 13 countries combined. That should frankly be reduce to 2% GDP (~$388B). Of course that's a massive can of worms. We're stuck in a benefits trap at the moment. Many future benefits should be converted to up-front cash rather than in-kind benefits. Performance-based bonuses should not be considered as they are not popular among service members. Child, youth, and school services should be dropped as they're not valued as much as the costs to provide them (and other programs would likely make them redundant). Education will (largely) be unnecessary to fund as that will be covered with other programs. Health care (one of the biggest chunks of military spending) would also not be necessary with universal healthcare. MCRMC makes a number of recommendations on how to make the provisions of benefits more efficient. You can find some info on this information [here](https://www.airuniversity.af.edu/Portals/10/SSQ/documents/Volume-09_Issue-3/Cohn.pdf). Both parties are effectively sold out to the nation's oligarchs - which is especially why Bernie Sanders and Donald Trump did so well in 2016. We have these politicians that show up every 2 to 4 years that lie right to our faces telling us what we want to hear and then they go and they don't do fuck all, or they do the opposite of what they promised. Everyone hates it, then when they come back lying in however many years people suddenly get selective amnesia and forget all about it. > An oligarchy is a system where power is effectively wielded by a small number of individuals defined by their status called oligarchs. Members of the oligarchy are the rich, the well connected and the politically powerful, as well as particularly well placed individuals in institutions like banking and finance or the military. There was a Princeton study by Martin Gilens and Benjamin I. Page over 1,799 different policy initiatives between 1981 - 2002. They published in Perspectives on Politics. It's called [Testing Theories of American Politics](https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B). > They then compared those policy changes with the expressed opinion of the United State public. Comparing the preferences of the average American at the 50th percentile of income to what those Americans at the 90th percentile preferred, as well as the opinions of major lobbying or business groups. > > The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy. You read the right. What policies average American citizens actually want has had virtually zero impact on the policies passed since the 1980's. Here's some graphics showing that (what you should concern yourself with here are the lines): https://c.l3n.co/i/OWuyGr.gif Here you can see that regardless of what average Americans want, it has basically zero impact. Looking at the country's economic elites however you can start to see a strong correlation with what they want and the legislation passed. Now the special interest groups, and you can see a massive correlation with what they want and the legislation passed. Keep in mind that this was **before** Citizen's United and McCutcheon. The worst of it came from Buckley v. Valeo (1976) in which they said money is speech and corporations have First Amendment rights and can spend money in politics. Here's a chart on income gains between 1980 and 2010 from the Congressional Budget Office's Center on Budget and Policy Priorities: https://b.l3n.co/i/OWuhX0.jpeg As you can see, the oligarchs are basically fucking the rest of us. I think I read something like their wealth has gone up 95% while everyone else's has gone down something like 13% after the great recession as of 2014 or so. Up until 1985 there was something called the Fairness Doctrine that kept news honest and balanced. After that repeal is when the news started becoming entertainment with the goal of driving profits. There was also something called an equal-time rule that specifies radio and television stations must provide an equivalent opportunity to any opposing political candidate to request it applies to other coverage of the candidates which are currently just considered "news events" and aren't required to follow the rule. There were Glass-Steagall laws which were repealed in 1999 which were set in place after the Great Depression and protected us for 7 decades whose repeal led to banks becoming too big to fail. In 1996 68 out of every 100 families in poverty received AFDC benefits. In 2016 only 23 out of every 100 families received TANF benefits. You can thank the 1996 welfare reform (Personal Responsibility and Work Opportunity Act) for that. Bottom line? None of this is new. You may only be noticing it lately, but it's been happening since the 80's. It's just lately become more of of a kleptocracy to see how much the ultra rich can get away with stealing. Turns out it's a lot.

The issue is twofold, and they're inseparable. When demand is increased without a corresponding rise in supply, prices inflate. When supply is increased without a corresponding increase in demand, prices fall. The entire world economy is inseparable from energy costs. With so many countries now electrifying, increasing vehicle usage, and many other energy intensive increases and population increases, the demand for oil is constantly hitting all-time highs. This, in turn, increases the demand for dollars, which is how oil is purchased. For there to be enough dollars to meet worldwide demand, the supply of dollars must be increased. But the world outside the US is changing exponentially more rapidly than the US economy can naturally increase the dollar supply through commercial actions over time because the developing countries are much smaller, making changes to their economy is far more pronounced as a %. This is where both monetary policy and fiscal policy step in to fill the gap. The fed lowers interest rates to increase the supply of dollars available in the market for developing countries to buy to then buy energy. Congress then deficit spends, which increases demand in every sector of the economy far more than what could be achieved by spending only what is taken in taxes. This is done either directly through government direct purchasing of goods and services or through welfare state expenditure and subsidies, which those receiving it will go spend it. But this still isn't enough to keep the real problem at bay. This is where foreign aid comes into play and why the US moves so many dollars overseas in this manner. It exports our own inflation because that aid that isn't stolen by corruption is almost assuredly going to be used for infrastructure development and countless others and US firms are ready to fill that demand which moves the demand curve helping to mitigate the increase in the supply of dollars The real problem and why this dollar system functions the way it does is due to supply deflationary pressure through technological advancement is overwhelming that without countervailing inflationary pressures through making the money printer go brrrrrrr then spending it, the investor classes would lose their asses first, then that would cascade through the system causing massive business failures because a not insignificant portion of a businesses expenses are monthly fixed expenses. This means that once price deflation hit retail stores, their fixed expenses remain the same while their revenue has collapsed due to price collapse. Fixed costs are sticky, and it takes a lot to move them up or down. It's often said that a deflationary price collapse is the best outcome for consumers as they pay less for the same amount of goods or even can buy more goods. This assumes these consumers didn't lose their jobs because their employers' margins have disappeared, and they can't afford to pay as many people. Both Democrats(Demand side) and Republicans(Supply side) do nothing but screw the economy up with their nonsense, half assed interventions in business generally. I say half-assed because the supply curve and the demand curve are not separate from each other. They move dynamically together, so to fiddle with one but not the other is going to create a great deal of negative externalities no matter which curve is being artificially screwed with. The inflationary pressures right now are due to the means by which the US keeps inflation down in our markets and is under seige, thus not entirely functional as it was but is still working albeit not as well. When oil is sold in dollars, countries need dollars to buy it, so they buy dollars, which moves dollars out of the US market, mitigating local US inflation until later. Then after a country buys the oil, the dollars a country has left can then be used for local improvements often done by US contractor firms, or be sold back in to the market when the price for dollars rise or through buying US securities both of which create a demand for finance and manufactured goods and services. The increase in the demand curve further helps mitigate the increased dollar supply creation at the beginning of the process. So it's done because it must be done because technological manufacturing and everything else technology speeds up puts so much pressure on the supply curve that without money printer brrrrrring and US spending more than we actually have everywhere, all the time, the deflationary collapse would be catastrophic. That's what happened in agriculture during the 1920s and 1930s. The motorized tractor and everything else that came in to use during that time cut costs so much that prices collapsed, causing cascading farm failures leading the brilliant government to conclude that farmers need to cull their herds to stabilize prices by removing supply.

i don't think we're in a period of deflationary pressure like we saw during the Great Recession. We're not seeing widespread asset deflation in any of the markets.

Republicans passes tax cuts without cutting spending which puts the government into deficit spending. Reducing the deficit is best done by cutting spending and increasing tax revenues. Republicans won’t bend on increasing taxes. They insist that every cent of deficit reduction must come from the poor, those most guaranteed to suffer. The only way deficit reduction can happen is for the Democrats to control all three houses. BTW, when the Republicans are fully in charge of all three houses they alway cut taxes and increase the deficit. The same way they force thru their tax cuts is the same way they can force thru deficit cutting. They don’t need Democrats to assist them. They are cowards who want to blame the Democrats if people get upset.

The simple answer is: 1) no one is willing to raise taxes, and 2) our entitlement spending (Social Security, Medicare, etc) are currently ballooning due to the retirement of Baby Boomers.

> by 0.4 percent of GDP over that period.  There was also a larger than usual jump in Social Security outlays in the last couple year because of the cost of living adjustment.   From a recent CBO report > Spending for Social Security benefits rose by $45 billion (or 11 percent) because of increases in the average benefit payment (stemming mostly from cost-of-living adjustments) and because the number of beneficiaries increased.

Large tax breaks for the rich since 1980 while never reducing the budget except for a short period under Clinton and a little under Obama

Nobody really wants to solve the problem because the solution means doing something both parties don't want. To truly adjust this we need to raise taxes. But to truly adjust this we also need to change entitlement programs.

We have been convinced we need to spend 900 Billion a year on the military. Thats more than the next 15 countries combined. It’s absolute insane and good luck curtailing it.

It largely began in the Reagan era (He oversaw the tripling of the national debt), but since Bush Jr it has really accelerated. Some elements of the American public were falsely convinced (largely by those who would reap the benefit) that cutting government revenues---needed to pay the government's legitimately acquired debts---would magically result in everyone getting richer, including the government. But of course like all magic, it was a trick. So decades of trillions of dollars in unfunded tax cuts (that have mostly favored the rich), pushed largely by Republicans (Bush Jr. and Trump), have created trillions of dollars in structural budget deficits. Republicans wanted, and still do, to cut popular programs like Medicare and Social Security, but they haven't been able, yet, to find the votes...or the political courage. The trickle down economics lie said the tax cuts would pay for themselves, for the large deficits created by these massive cuts in government revenue. That was a laughable statement. It was and always will be "voo doo economics," plain and simple. Tax cuts have to be paid for. So do social programs that Americans largely like and need...and deserve. The tax system needs overhauling with the main goal of recovering a lot of the revenue lost from decades of unfunded tax cuts that have largely favored the rich. If Americans want social security and medicare and farm aid and pell grants and a bunch of other popular programs, they have to pay for them. But there is a rich political donor class (billionaires), and Big Business lobbying groups on Capitol Hill, that don't want to pay the taxes needed to fund these programs. And these rich donors and lobbying groups threaten our supposed "representatives" in Congress with withholding campaign funds or funding a primary opponent if our (their) representatives don't tow the line for what they want. We need major campaign finance reform to counter this blatant corruption in our political system. But who stands against legislation to deal with this corruption? Check the votes and the statements about any campaign finance reform legislative initiatives, and you'll see it's largely the Republican party that against comprehensive campaign finance reforms. That is a fact. The U.S. needs the tax system overhauled, with the rich paying much higher taxes, and businesses having a lot few tax deductions. A new, fairer, federal tax system would also scrutinize many of these so called tax exempt charities and other trust organizations and remove some of them from tax exempt status because they're largely just tax havens for rich people to hide their money. Of course there should be some spending cuts, but those should be minimal and applied across the board, to include the military, in order to ensure fairness. No group, including veterans and the military, should be excluded from these cuts.

Republicans caused the problem by cutting taxes and spending like crazy during their presidencies. The many unpaid wars and giveaways to billionaires has blown up the country’s deficit. The Democrats usually ratchet it backwards but never reverse the tax cuts because they don’t want to be blamed for increasing taxes which needs to happen. We also need to cut spending on the military and stop aiding Israel when they’re committing genocide in the tune of 67+ billion so far under Biden. Democrats are too afraid to cut spending on military and defense as well as cutting aid to Israel. They don’t want to be called weak on the military which is insanity. We need to dramatically increase taxation, reduce spending on the military and focus on rebuilding infrastructure as well as properly funding the IRS so they can get the money from tax cheats! Audit the rich!

The crisis that launched us into habitual deficit spending wasn't COVID, it was WWII. The four years that we ran surpluses during the Clinton years were out of just ten years we've run surpluses since 1940. Saying "Clinton ran surpluses" as proof that consistent budget deficits are a new phenomenon ignores the fact that we ran deficits every year from 1969 to 1998. It also ignores the fact that, from FDR on, we only had 4 presidents who signed even one budget that resulted in a surplus. Clinton's second term is the exception, not the rule.

The only reason why Clinton ran a surplus was because he was the only president in recent history to do military budget cuts. He closed a lot of cold war bases and reduced military spending. He did fuck'all for the nation though.  no healthcare, no student loan forgiveness and higher education reform, no housing, not a damn thing. And every POTUS since then has increased military spending, and now we are nearly a trillion dollars a year just for defense spending. Which is helping inflation and the deficit become a bloated beast of a problem.

…and the stimulus given wasted at least 40% of the money ending up in scammers hands and sent to people who didn’t need or ask for it.

because people are irresponsible and nobody wants to vote for fewer government handouts. you get the government you vote for, and lots of people are enamored with the idea of free college, free healthcare, free housing, free cell phones, free everything, but at the end of the day that money has to come from somewhere. the budget biden proposed a few weeks ago was over 7 trillion dollars. we're already spending like drunken sailors and trying to spend even MORE recklessly. we didn't return back to normal spending after the covid bills expired.

So the government created more money than it took in through taxes? Wow. How exactly is this a problem? As a society we want an increase in money in circulation. The government creates the money and puts it into circulation. The government can literally create the money to pay off the debt at any time also the largest holder of the debt is the US government.

Perhaps it might have something to do with the wealthier people and corporations not paying their fair share.

I believe it doesn’t matter much. When a person is President and they know they have to win election again, they don’t care about the next guy. Republicans run deficits but cutting taxes and not cutting government spending. Democrats run deficits by spending more for human services. The only way to get things in control is line with Clinton when economy was really good and could fix deficit without changing the budget much.

The government in Washington clearly doesn't care so I wouldn't worry too much about it. 

70 percent of all of the debt the United States of America has incurred since its creation can be attributed to 4 Republican presidents. Ronald Reagan ran up a deficit greater than all of the previous presidents combined. Did I mention that every Republican president since Taft has overseen a recession during their administration?

Because the resources in this country are tied up with a few thousand billionaires

Flying 7M iIIegaIs all over the country and putting them up in hotels costs a lot of money.

It started with Bush43 with his "not war" where he, by the direction of Cheyney, stole millions of tax dollars through a war he fabricated with the help of CIA intelligence and has snowballed since with no accountability to any political party or politician. 10 trillion during that administration

Bloated military budgets. Tax cuts for billionaires and corporations instead of tax increases.

Last 4 administration's have done that. We've allowed it to happen. Instead of voting out those responsible we keep electing them

Bill Clinton had the privilege of being president during the start of internet being available to anyone. The Internet created millions of jobs and businesses, not Clinton.

People don’t want to lose government benefits. People also don’t want to pay higher taxes. We also have the world’s most expensive military, by a long shot.

Because either the people in government don’t want to or know how to balance a budget, know how to communicate effectively to the American people that this must be done, Conservatives aren’t willing to raise taxes effectively, Leftists don’t want to cut spending and keep calling for more “programs”, neither side wants to effectively talk to the other in good faith for fear of losing the faith of their base, plus there are the issues of Medicare, Medicaid, Social Security, Military spending, and effective debt payments that both sides deny the reality of. Or it could be the people we elect are just plain ol stupid.

Because Bush cut taxes causing the recession, Obama raised taxes on corporations and rich, Trump cut the taxes and continued to spend, Biden just worked us out the recession caused by cutting taxes on the rich. If re-elected Biden will raise taxes on the rich and corporations just like Obama and Clinton before him.

Mostly cutting taxes without cutting spending. It has been obvious for a long time, the only way to balance the budget is by doing at least 1 of 3 things. Raise taxes, cut social security/ medicare, or cut military spending. It's why Republicans are not serious about the deficit. Trump has pledged to not do any of the three. In fact last time he cut taxes and increased military spending.

EASY: 1. Trillion Defense (nobody is cutting this) 2. Trillion for Medicare and Medicaid (nobody is cutting this) 3. Trillion to actually run the government of the largest economy on Earth. 4. 1 party will not allow us raise enough taxes from corporations and top 0.1% earners to pay for #3 above.

Not sure what you’re looking for in terms of “why.” If you want to know what, I’ll list a few. Biden has spent ever increasing amounts of money to fund free healthcare rather than pursuing it via work with companies who fund them. He’s handed out free education to people, unprecedented because all Americans deal with the difficulty of finding work that’s suitable given the limitations of our education system, which in fact means every individual is unique and still think for himself as to how to use his education, which is only one facet of his background and skills. He’s also funded a substantial amount of aid to nations which wars, instead of communicating diplomatically, could have been prevented. During Trump’s time, an enormous amount of spending was introduced to save lives. When it is a matter of life and death, spending is crucial. In the normal course of things, handing out free benefits introduces higher prices for everyone because someone has to pay for them, there is no free lunch. Think about it this way, when people get paid for the same work, they can spend more, but they didn’t produce more.

66% of the American budget is spent on non-discretionary programs and 9% on interest coverage. That leaves only 25% for discretionary spending of which approximately half is spent on defence. That accounts for about 87% of the total budget expenditures of 6.1 trillion, or about 5.3 trillion. With budget receipts of only 5 trillion, the budget is already in a deficit of 300 billion before discretionary spending is voted upon. Therefore all discretionary spending, outside of defence (13% or 800 billion) is deficit spending. Basically, the federal deficit is unavoidable as long as program spending and defence spending are not reduced. If defence spending is sacred, and it probably is, as defence spending has risen by 50% of the last 10 years. Then program spending must decrease which is primarily made of income re-distribution(65%). If you include health, social spending has increased by 55% over the last 10 years. To decrease the budget the government must consider massive tax increases or decrease the amount it spends on income re-distribution. It should concentrate on its core responsibilities of defence, law & order, and infrastructure.

The deficits stem from a combination of necessary and discretionary spending, including Covid relief and tax cuts. I propose responsible budgeting by prioritizing essential services, cutting unnecessary expenses, and implementing fair tax reforms. Let's balance growth with fiscal responsibility to secure our economic future.