5 ms·

How is it all funded by debt? OP says the IRS collected $4.7T in taxes. So the military budget is 17% of the collected taxes, and the aide to Israel/Ukraine is

How is it all funded by debt? OP says the IRS collected $4.7T in taxes. So the military budget is 17% of the collected taxes, and the aide to Israel/Ukraine is <2% of all the collected taxes. Why does debt matter?

qeternity 2y ago
In 2023 the US had a deficit of $1.7T which we borrowed to cover by issuing Treasury bonds. You could debate which part of the $6.4T was funded by debt, but it seems reasonable to say that foreign aid is not a mandatory expenditure. That also doesn't mean it's not worth borrowing for. There is a helluva lot of fat to cut in the budget. Ukraine aid should not be the first port of call.
- clarionbell 2y ago
  It is not mandatory by law. But if you want to keep being a superpower it very much is. Projecting your power and maintaining your commitments is a major part of that.
  - bhawks 2y ago
    The benefits of being a superpower are up for debate. Being a nuclear power is all that is needed for the security of US interests. There is significant need for investment locally.
    - qeternity 2y ago
      > The benefits of being a superpower are up for debate. What? Nobody debates this. American excellency is a real thing. No country even comes close right now. I say this as an American expat.
  - deleted 2y ago
    [deleted]
  - JumpCrisscross 2y ago
    > if you want to keep being a superpower Foreign aid is about avoiding war. The hope is the belligerents will end things themselves, or at the very least delay the point where we have to ship soldiers.
    - blitzar 2y ago
      Foreign aid is often direct (and somehow legal) bribery.
- crngefest 2y ago
  > it seems reasonable to say that foreign aid is not a mandatory expenditure. Is it reasonable to say though? How is staying on top of global power structures not mandatory for the US? It was in the last 80+ years or so the highest priority.
  - hobo_in_library 2y ago
    Why does the US need to be the world hedgemon though? Other countries do just fine without being that way Google “BRICS” to see how nations are trying a new way to work cooperatively instead of imposing their will on each other
- votepaunchy 2y ago
  It was even worse: “Removing the effects of announced student debt cancellation that the courts ruled illegal, the deficit totaled $2.0 trillion in FY 2023” https://www.crfb.org/blogs/2023-deficit-hit-17-trillion https://www.crfb.org/blogs/2023-deficit-hit-17-trillion
deleted 2y ago
[deleted]
pandaman 2y ago
The US pays over 1T in interest for its debt per quarter at this time [1]. Pretty much all collected income taxes go into debt servicing. Debt matters because if you keep doing this you run out of taxes to service the debt and then people will stop lending (buying your debt) while you still have to repay the debt you accumulated before so you will devalue your currency and have real inflation when nobody will hold cash at all. Other countries that went into this state got by with using USD instead of the national currency, the US won't have such an option. 1. https://fred.stlouisfed.org/series/A091RC1Q027SBEA https://fred.stlouisfed.org/series/A091RC1Q027SBEA
- 0xfaded 2y ago
  I think that chart is annualized debt payments plotted quarterly, i.e annual interest is ~1T.
  - pandaman 2y ago
    You are right, I stand corrected - it's only half of the federal income tax collected (which was ~2.2T in 2023).

qeternity 2y ago

In 2023 the US had a deficit of $1.7T which we borrowed to cover by issuing Treasury bonds. You could debate which part of the $6.4T was funded by debt, but it seems reasonable to say that foreign aid is not a mandatory expenditure. That also doesn't mean it's not worth borrowing for. There is a helluva lot of fat to cut in the budget. Ukraine aid should not be the first port of call.

clarionbell 2y ago
It is not mandatory by law. But if you want to keep being a superpower it very much is. Projecting your power and maintaining your commitments is a major part of that.
- bhawks 2y ago
  The benefits of being a superpower are up for debate. Being a nuclear power is all that is needed for the security of US interests. There is significant need for investment locally.
  - qeternity 2y ago
    > The benefits of being a superpower are up for debate. What? Nobody debates this. American excellency is a real thing. No country even comes close right now. I say this as an American expat.
- deleted 2y ago
  [deleted]
- JumpCrisscross 2y ago
  > if you want to keep being a superpower Foreign aid is about avoiding war. The hope is the belligerents will end things themselves, or at the very least delay the point where we have to ship soldiers.
  - blitzar 2y ago
    Foreign aid is often direct (and somehow legal) bribery.
crngefest 2y ago
> it seems reasonable to say that foreign aid is not a mandatory expenditure. Is it reasonable to say though? How is staying on top of global power structures not mandatory for the US? It was in the last 80+ years or so the highest priority.
- hobo_in_library 2y ago
  Why does the US need to be the world hedgemon though? Other countries do just fine without being that way Google “BRICS” to see how nations are trying a new way to work cooperatively instead of imposing their will on each other
votepaunchy 2y ago
It was even worse: “Removing the effects of announced student debt cancellation that the courts ruled illegal, the deficit totaled $2.0 trillion in FY 2023” https://www.crfb.org/blogs/2023-deficit-hit-17-trillion https://www.crfb.org/blogs/2023-deficit-hit-17-trillion

deleted 2y ago

[deleted]

pandaman 2y ago

The US pays over 1T in interest for its debt per quarter at this time [1]. Pretty much all collected income taxes go into debt servicing. Debt matters because if you keep doing this you run out of taxes to service the debt and then people will stop lending (buying your debt) while you still have to repay the debt you accumulated before so you will devalue your currency and have real inflation when nobody will hold cash at all. Other countries that went into this state got by with using USD instead of the national currency, the US won't have such an option. 1. https://fred.stlouisfed.org/series/A091RC1Q027SBEA https://fred.stlouisfed.org/series/A091RC1Q027SBEA

0xfaded 2y ago
I think that chart is annualized debt payments plotted quarterly, i.e annual interest is ~1T.
- pandaman 2y ago
  You are right, I stand corrected - it's only half of the federal income tax collected (which was ~2.2T in 2023).