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Two points that are often missed: 1. Perfectly tracking every dollar is more expensive than having some slack in the system. There's an optimal amount, at leas
by MisterKent 2y ago
Two points that are often missed:
1. Perfectly tracking every dollar is more expensive than having some slack in the system. There's an optimal amount, at least from an overall value perspective.
2. We spend too much, and both sides of the aisle repeatedly blocked attempts to curb spending for literal decades while our debt got higher. That's how someone doing something coming in with a hatchet and no plan to build gets cheered instead of booed by a large percentage of the populace.
The problem Americans have with the political system has roots on Webers concept of politics as a vocation.
- JeremyNT 2y ago2) is questionable. Most of the budget is spent maintaining global hegemony through military dominance. Whatever inefficiencies that exist on the civil side are nearly irrelevant.
- MisterKent 2y agoI think many who are okay with our civil spend may take issue with our military spend. I have rarely encountered anyone who thinks the government isn't overspending. And nobody ever agrees on how we should be spending the money. I realize the comment above paints me as a conservative, I assure you I am not. However, I guess I can at least sympathize with how we got here (DOGE being acceptable). And from that I blame almost everyone in politics and every person tangentially related to those in politics.
- jfengel 2y agoA lot of people think they government isn't overspending. They're the bond buyers, who loan the US government money at remarkably low interest rates. That's a true market signal, regardless of what people tell pollsters. Everyone would love to spend less money on other people's priorities. But as a whole, the bond market thinks the spending is ok, even if no individual will say so.
- Fade_Dance 2y agoOf course it's worth noting that the bond market has massively sold off since inflation hit. The counterpoint is that it's arguably just going back to the mean, but nonetheless, it's a fairly historic move. US yields at the long end (the part of the curve that is sensitive to long-term stagflation and inflation) don't necessarily indicate that participants believe that the spending isn't a problem either. Once yield started to rise, the U.S. massively twisted issuance back to T-Bills, which are short duration and essentially risk-free. Fragility on the long end is being carefully managed. To some extent, you are seeing some financial repression, ie the shape of the yield curve is being actively managed. This expectation is built into the bond prices as well. If the long end starts to break down, nobody expects the treasury to start issuing even more long bonds. They naturally would expect them to pull back and start issuing more T-Bills and only term out the debt once the market/liquidity can handle it. There is some conversation right now about leverage limits in the banking system/SLR being expanded, so there is more capacity to warehouse the debt on the banking side. That's pushing in the direction of financial repression (where the banks are "incentivized" to shape the curve in a desired way). 0% interest rates were leveraged against the Fed Put, and it's arguable that there is a Treasury Issuance Put that is currently baked in. I think that the issue is broader than this though. It's about much more than just the inflationary effects of spending. It's an ideological battle as well. As for bonds, there's also the fact that US bonds are a "there is no alternative" asset to some degree. Remember that bond investors got their faces ripped off in the initial rate hike cycle. There's a good parallel to commodity futures prices here, in that prices of commodity futures are terrible indicators of the actual price in the future. There is a distinction between where a market clears and a bet on future prices. It is a somewhat subtle distinction, but it is grossly underappreciated. That said, of course you can isolate the inflation expectation aspect of the bond market and you are probably correct that this indicator does not red flag inflation driven by excess spending. Of course, growth expectations are also fairly healthy. So it's hard to say what it would look like if inflation expectations stayed high and growth expectations started to fall. Then the bond market might look quite a bit different. We haven't seen a true stagflationary market in 50 years.
- largbae 2y agoI think you're on a reasonable track, but this isn't the whole picture. Most international treasury demand is the direct result of trade deficits in dollars. If you are a bank (or in aggregate a country full of banks) that takes in a bunch of $USD from your business customers selling products internationally in that currency, then you will receive a bunch of dollar deposits. These deposits can't be magically converted into the local currency, they have to be used as dollars somewhere else or traded with someone else who has a currency or commodity that you want for them. Long-term if there is a net surplus(from the other country point of view) of exports to imports, there will be a net surplus of USD as well. So what to do with those USD? Make some more! Whatever the going rate for T-bills is is likely better than nothing. Treasury bonds are considered a "risk free rate" in the sense that they are approximately as safe as cash under the mattress. Inflation is a more accurate measure than treasury sales of the reducing trust in our fiscal future. And that signal is lit.
- rayiner 2y agoWithout looking it up, what do you think is the military budget in comparison to the whole budget.
- sroussey 2y agoEurope has a problem trying to spend a minimum 2% of GDP. We easily to 10x that.
- pclmulqdq 2y agoYou should look at the CBO's reports on this. Most of the budget is spent maintaining Medicare/Medicaid and Social Security. The sleight of hand involved in the idea that the military budget is "most" of the spending is by calling large parts of the government's spending (but none of its military spending) "mandatory," and then slicing up the "discretionary" portion only, most of which is the military. However, the discretionary part of the budget is less than half the size of the mandatory part of the budget. If the entire discretionary budget were cut to $0, between mandatory spending and interest, there would still be a government deficit. That sleight-of-hand is how $900 billion of military spending becomes "most of the budget" when the full budget is $4.4 trillion.
- rayiner 2y agoThe full budget is $6.9 trillion, not $4.4 trillion.
- pclmulqdq 2y agoI am bad at addition, but I was going from 2023's numbers, which were indeed close to $6.4 trillion, not $4.4 trillion. Mandatory spending alone was $3.8 trillion.
- dboreham 2y agoBecause people have been gasslit into believing that social security and medicare are funded by the same-named payroll withholding contributions.
- insane_dreamer 2y agoThat's because the SS/Medicare are not discretionary which means that those are basically predetermined and not set by Congress every year. So when we talk about the "budget", what really matters as far as politicians are concerned, is the discretionary part, which they can control (and which in theory voters have some control over through their election of congressmen), and defense takes up at least half of that.
- jhp123 2y agoif you take a dollar from government spending, then 60 or 70 cents of that is coming from the bank accounts of retirees, disabled people, and the poor. If you return that dollar as tax cuts, as Trump has proposed, then something like 80 cents go into the bank accounts of the rich. The discourse of "wasteful government spending" is a smokescreen. It mystifies the basic operation of taking a dollar from a worker, retiree or poor person and giving it to a rich person.
- EasyMark 2y ago1. I can't agree with this. We have AI to raise flags and we have computers to make payment and bookkeeping trivial. 2. we may or may not spend enough. what we don't do is collect enough taxes to pay for it, that is the failure.
- rstat1 2y ago>We have AI to raise flags That it would like get wrong more often than not. No thanks.
- rayiner 2y ago[flagged]
- varelse 2y ago[dead]
- brookst 2y ago“Democrat policies” being things like vaccination, education, and consumer protections.
- rayiner 2y agoI’m pretty sure it was incorporating race consciousness and racial preferences and academic ideas about gender and sexuality into everything: https://www.washingtontimes.com/news/2024/jan/30/biden-administration-tells-supreme-court-use-race-/ https://www.washingtontimes.com/news/2024/jan/30/biden-admin... Also opening up the border when a majority of Americans have never supported increasing immigration: https://news.gallup.com/poll/647123/sharply-americans-curb-immigration.aspx https://news.gallup.com/poll/647123/sharply-americans-curb-i.... (The number peaked at 34%.) Those are examples of official Biden policies, and it was his prerogative to pursue them of course. But Trump has the prerogative to pursue the opposite of those policies with equal vigor, and the federal workforce should be working just as hard to implement Trump’s policies.
- djur 2y agoBiden didn't open the border. This is simply a lie. As furious progressives will tell you, Biden deported more people than Trump and tried to get Congress to pass a broadly restrictive immigration reform bill.
- munchler 2y ago"We spend too much" is a political opinion, rather than a statement of fact. Only Congress can change the amount of money spent by the government, so the executive branch's actions are unconstitutional, no matter how large the crowd cheering it on. This is exactly the sort of mob rule that the Founders wanted to prevent.
- johnnyanmac 2y agoDepends on the lens. Depending on your tolerance for debt, we can argue that we objectively spend too much. Another lens can be that we don't collect enough taxes and therefore we don't have enough to spend. Now of course, since the lens isn't objective, we can't say it's an objective statement. And no, we can say that we spend too much and also think Trump is doing illegal stuff.
- rayiner 2y agoIt’s quite debatable what the founders intended here. Congress has the power to appropriate funds, it’s not clear as a constitutional matter it has the power to compel the executive to use all the appropriated funds. Even as a legal matter, the impoundment act only requires rescission notification once it’s clear that the executive won’t use all the money appropriated for a “program.” When Congress is appropriating say $3 billion in a line item for USAID, DOGE can cancel a lot of individual contracts before it needs to invoke recession saying USAID won’t use all $3 billion.
- munchler 2y agoForget the Impoundment Act -- this is a Constitutional issue. The Supreme Court ruled in 1975 that the President is required to carry out the full objectives or scope of programs for which budget authority is provided by the United States Congress. Shuttering USAID, as Trump and Musk have done, goes way beyond mere line item impoundments. https://en.wikipedia.org/wiki/Train_v._City_of_New_York https://en.wikipedia.org/wiki/Train_v._City_of_New_York
- zdragnar 2y ago
- sbochins 2y agoThis is a silly charade. To actually cut the debt, it requires congress. Not just saving a couple millions dollars and posting on twitter about it. We’ll need to cut Medicare, Medicaid, social security, the military, etc. All the popular stuff that was never easy and will never be easy to cut. We’re not spending 2 trillion per year on condoms.
- bamboozled 2y agoWon’t wiping all this stuff just lead us into a Great Depression anyway ? I’m not an expert on the topic but my basic understanding was that we (government) just decided we didn’t have any money, so everything just stopped. Like shutting all this stuff down or radically cutting it back will surely have some dire economic impacts?
- TylerE 2y agoYes. These cuts will set our nation back by decades. Institutions are being destroyed, and with them cultural and institutional knowledge that will never come back.
- throw16180339 2y agoFiring this many government employees, canceling grants, and imposing tariffs guarantees at least a recession.
- intended 2y agoYup. I’ve seen 2 grand disasters like this each worse than the last. Demonitization in India, Brexit, and now this. None of those other events had the same depth of damage going on here. America is dead, and doesn’t know it yet. The only reason people aren’t saying this everywhere, is because this is unbelievable.
- sroussey 2y agoThe government can just print money. So much so that inflation goes crazy and the national debt is pennies. Same with your savings. We have a lot of savers that are old. Wait until they are gone.
- softwaredoug 2y agoDo we spend too much? Or do we not take in sufficient revenue? All these things BTW do have some limited ability to be controlled by the executive (Clinton did layoffs in the 90s, but kept supporting the same federal services). But ultimately most of this stuff is the mandate of congress and can’t just be canceled by executive order.
- rawgabbit 2y agoIt is more we believe in magic. We hand out tax breaks like they are candy, cripple the government, and believe some DOGE waving a chainsaw will fix the budget. Extending the Trump tax cuts is estimated to cost $4.6 trillion over ten years. https://www.cbsnews.com/news/trump-tax-cuts-extension-republican-salt-deduction-student-loans https://www.cbsnews.com/news/trump-tax-cuts-extension-republ...
- istjohn 2y agoThat's one way to frame it. Alternatively, one could argue we don't tax enough, and that's due to large tax cuts, first under Bush and then under Trump. Now Trump wants more tax cuts.
- matthewdgreen 2y agoThe people coming in with a hatchet are not planning to reduce spending. They’re planning to use any money saved to fund an enormous tax cut that will primarily benefit the very rich. https://www.courant.com/2025/02/12/congress-budget-tax-cuts/ https://www.courant.com/2025/02/12/congress-budget-tax-cuts/
- oezi 2y agoThey didn't need to cut so aggressively the first time around when they did the previous tax cuts, didn't they?
- James_K 2y ago2 is not a fact in the slightest. The American government is guilty of under-investment in perhaps every area outside of military. The notion of bipartisan climbing public debt is also false. Bill Clinton brought the government into running and Democrats have had consistently better budget responsibility than Republicans, though the reason for this is more that the Dems fund government through taxes where the Republicans fund government through debt to give out tax cuts. The actual levels of spending are not so much changed because it turns out that most of the money spent by government is quite important and you can't just get rid of it.
- oezi 2y agoSo why are the Republicans now trying to reign-in the spending? It worked well for them in the past to rely on debt. Why should they care now? Is it about funneling this money into their tax cut? Why not just run up more debt?
- chgs 2y agoThey aren’t
- James_K 2y agoThere are practical limits to the amount of debt a government can take on. Additionally, the government usually collects debt from the wealthy, who then make money back through interest payments. The "fiscal responsibility" of the Democrats is how private individuals actually extract value out of the government. Republicans issue debt, Dems use tax money to pay the interest. I think the wealthy have become more sceptical about the ability of of government to pay back these loans. There are reasons why both parties allowed the system to remain as it was. I find it's increasingly true that new politicians don't understand the value of the systems they are meant to control. They see Chesterton's Fence and tear it down with abandon. Someone like Trump has no clue why politicians act the way they do. He lies and bullshits and does whatever he wants, and it works in the short term, but the long term effect is disastrous. These people are taking a private equity approach to government. Buy it cheap and load it up with debt, then sell as much as you can and let it crash to zero. This is more looting than governing.
- shadowgovt 2y agoThe booing will start when Americans realize what a delicate web of interconnects they live in. It hasn't really sunk in yet, but these "waste" jobs tend to be there for a reason, and this whole project is the ultimate exercise in flattening Chesterton's Fences and seeing what happens. (I'm reminded of the Golgafrinchans from Hitchhiker's Guide to the Galaxy. They sent their "useless" third of society into space... The folks who did jobs like telephone cleaner or insurance salesman. The remaining two-thirds of the population died from a plague sourced from a dirty telephone.)
- whoitwas 2y agoGOP has made it it's mission to ensure the federal government doesn't function my entire adult life. They've been working to destroy the middle class since long before I was born. They continue with this mission now and have really turned up the heat. They're currently working to cut taxes for those who make >$360k/year and also eliminate medicaid while INCREASING the deficit by $4.3 trillion.
- turtlesdown11 2y agoStrong points in the face of this inaccurate, politically biased ledger that has revealed zero fraud, corruption or waste.
- MisterKent 2y agoI am maybe cynical, but I sincerely doubt there's no fraud or corruption in the government spend. Among trillions of dollars of money being spent by people who can easily siphon some off, etc. Intuitively, there _must_ be some corruption. I have zero faith that Musk is interested in finding real corruption. He seems to be more interested in changing budget allocations and calling the removed regulations / "woke" things corrupt. I also think that corruption was within my acceptance tolerance of wastage. _Think_ is doing a lot of work in that sentence, but maybe that's all that really matters when it comes to something like this.
- rincebrain 2y agoIt's also a very hard line to draw, in some cases, since you can have the right things happening for the wrong reasons. If a bill contains funding to help fix a main street in a city that was destroyed by a natural disaster, is that corruption? What if there's 500 other destroyed main streets and that one got picked? What if it was destroyed by decades of the local gov't neglecting it? What if it was included because you directly bribed the person writing the bill? What if it was included because you did some horse trading and gave them something they wanted in another bill you wrote? The intent there is not to argue that defining corruption is impossible or futile, but that some people might reasonably argue different sides of whether something was corruption without either side obviously being morally bankrupt.
- leereeves 2y ago[flagged]
- shepherdjerred 2y agoThis is absolutely bizarre. It sounds like something out of Portal
- biophysboy 2y agoThe estimate should at least be within an order of magnitude; otherwise, the estimate is pointless. Also, I am booing them because all of the doge line items on their website are in the millions, and our debt is trillions.
- almosthere 2y ago[flagged]
- gloflo 2y agoA trillion is a million millions. A million to a trillion is like a tenth of a cent to a thousand.
- crabmusket 2y agoThat's not true in common English usage https://en.wikipedia.org/wiki/Trillion https://en.wikipedia.org/wiki/Trillion
- hiharryhere 2y agoYou might want to reread that page. “1,000,000,000,000, i.e. one million million, or 1012 (ten to the twelfth power), as defined on the short scale. This is now the meaning in both American and British English.”
- crabmusket 2y agoYou're very right. I was confusing trillion and billion.
- brookst 2y agoAssuming your general lifestyle when employed is around $100k of expense, the US saving $10m against a $6.9T budget would be the equivalent of you saving $0.14. Even in the straits you’re in (and I sincerely hope the very best for you), how much effort would you put into saving $0.14? It just doesn’t seem like the best use of effort?
- deleted 2y ago[deleted]
- mandmandam 2y agoAmericans cheered for the gutting of USAID because they thought that spending 25% of the federal budget was too much, and should be around 10% instead. The actual spend on foreign aid? Under 1%. Americans are systemically and catastrophically disinformed. Expecting us to be able to assess the real impact of the DOGE team's fuckups is a violation of GIGO.
- TomK32 2y agoIt'd be fantastic if surveys would allow those surveyed to do a minute or two of research before answering or correcting their answer.
- jfengel 2y agoThey are voting based on their opinions without doing additional research. Getting at that opinion via a poll is informative, and letting them research it would actually be counterproductive.
- MisterKent 2y agoPeople are not just cheering for that. They're cheering because of the stated causes that money was going to were "woke" and "not America first" The general public's understanding of soft power, a global economy, and maintaining an economic hegemony is just not there. We have a democratic Republic because our founding fathers were smart enough to realize the general public is not smart enough (or, doesn't have the time to) rule on every issue.
- mandmandam 2y ago> We have a democratic Republic because our founding fathers were smart enough to realize the general public is not smart enough (or, doesn't have the time to) rule on every issue. Maybe - maybe - a merry band of lily-white slave-owners born hundreds of years before solar power and social media don't know how best to run a modern government. And maybe we'd be smarter if our government didn't treat schools as a pipeline to factory work, or as a means to make billions from crippling and predatory student loans. "I love the uneducated", etc.