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Is the U.S. primary deficit really all that much more than GDP growth? Seems like if we could make it a decade or so without deficit-financed tax cuts (TCJA), n

Is the U.S. primary deficit really all that much more than GDP growth? Seems like if we could make it a decade or so without deficit-financed tax cuts (TCJA), new entitlements (Medicare Part D) or some catastrophe requiring massive fiscal stimulus (GFC, Covid), the debt situation should look quite a bit more manageable just on the basis of economic growth. Admittedly “if” is doing a lot of work in that sentence, though.

jackcosgrove 3y ago
Demographics present an intractable problem that no amount of fiscal rectitude can fix. The old age dependency ratios we're going to see in the future guarantee deficits. The bickering over the discretionary budget is a sideshow compared to what's happening with Medicare/Medicaid and to a lesser extent Social Security.
- nocoiner 3y ago
  Health care spending has been basically flat in terms of GDP for the past decade. The doom and gloom of the early part of this century is, so far, not coming to pass, and so it’s not clear at all right now that Medicare/Medicaid is a crisis. The solution to Social Security solvency is pretty straightforward forward - when the trust fund runs out around 2035-2040, either cut benefits by 25% or raise taxes by ~1% of GDP, and it’s solvent for the next century. At that point, it’s merely a political question as to which option is more palatable to the politicians. Of course the most painless way to solve the issue would be to do something about it today, but, well, you know.
  - medvezhenok 3y ago
    The oldest boomers (born 1945) have not turned 80 yet. The medical problems still lie ahead. Majority of healthcare spend is in the last 5-10 years of life.
mempko 3y ago
You have it backwards. GDP growth is a function of government spending. Observe when they accelerated spending as covid stimulus, we had a large amount of GDP growth. As soon as spending growth slows down, so will the GDP.

jackcosgrove 3y ago

Demographics present an intractable problem that no amount of fiscal rectitude can fix. The old age dependency ratios we're going to see in the future guarantee deficits. The bickering over the discretionary budget is a sideshow compared to what's happening with Medicare/Medicaid and to a lesser extent Social Security.

nocoiner 3y ago
Health care spending has been basically flat in terms of GDP for the past decade. The doom and gloom of the early part of this century is, so far, not coming to pass, and so it’s not clear at all right now that Medicare/Medicaid is a crisis. The solution to Social Security solvency is pretty straightforward forward - when the trust fund runs out around 2035-2040, either cut benefits by 25% or raise taxes by ~1% of GDP, and it’s solvent for the next century. At that point, it’s merely a political question as to which option is more palatable to the politicians. Of course the most painless way to solve the issue would be to do something about it today, but, well, you know.
- medvezhenok 3y ago
  The oldest boomers (born 1945) have not turned 80 yet. The medical problems still lie ahead. Majority of healthcare spend is in the last 5-10 years of life.

mempko 3y ago

You have it backwards. GDP growth is a function of government spending. Observe when they accelerated spending as covid stimulus, we had a large amount of GDP growth. As soon as spending growth slows down, so will the GDP.