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There is a ton of low-hanging fruit that could lower the debt that would result in little to no austerity. Carried interest/corporate tax avoidance, means-test
by siliconc0w 1y ago
There is a ton of low-hanging fruit that could lower the debt that would result in little to no austerity. Carried interest/corporate tax avoidance, means-test social security, remove needless subsidies for fossil fuels or corn/sugar that add to health costs, or eliminate PBM formularies and enable medicare drug negotiation and fraud reduction. Maybe a few hundred billion right there.
Long term reforms to make education and healthcare outcomes focused, punishing administrative overhead and rewarding performance. Similarly defense could be massively downsized IMO to just expendable drones and submarine based nuclear deterrence, we don't need a 'triad' - one ballistic sub can basically end the world. Replace defense contracts with guaranteed purchase orders and let the private markets figure out how to do hypersonics or missile defense.
- ajross 1y agoReally no. As much as deficit nuts want to grasp at this as a confirmation of priors, this is absolutely 100% not at all about "The Debt". (In point of fact outstanding[1] debt as a fraction of GDP isn't even all that large, historically; it was much higher in the 80's and literally every one of those bonds is now paid off!) We could magically pay it off right now and the US would still look like a credit risk. It's all about trade policy right now, and the general existential risk that we blow it all up. The treasury rate spike in April (likely but inconclusively due to strategic dumping) continues to have everyone spooked, and fiscal restraint, tax policy, austerity, etc... don't speak to that concern at all. [1] Corrected: service cost of the debt
- scoofy 1y ago>In point of fact outstanding debt as a fraction of GDP isn't even all that large, historically; it was much higher in the 80's and literally every one of those bonds is now paid off I think you are very much mistaken: https://fred.stlouisfed.org/series/gfdegdq188S https://fred.stlouisfed.org/series/gfdegdq188S
- ajross 1y agoI did indeed say that wrong, the nominal debt was lower but the cost to service it was much higher (borrowing in the 80's was done at interest rates into the double digits!): https://fred.stlouisfed.org/graph/?g=iEiV https://fred.stlouisfed.org/graph/?g=iEiV Again, if the debtpocalypse didn't happen then it's clearly not happening now. This is simply not about fiscal policy. Period. It's about institutional trust in the government's ability to manage payments.
- scoofy 1y agoThe double digit rates were because of the inflation following the dollar being de-pegged from gold in 1971. It was easy to pay the massive interest rates because the point of the high rates was to bring inflation down. The idea was that people did not want to hold US debt exactly because the inflation was a de facto partial default.
- ajross 1y agoI don't follow that economics. How does interest rates being high make bonds easier to pay? And how to I get some of that action, that sounds pretty magic to me. :) (No, that's not correct. Borrowing in the 80's was more expensive. Period.)
- jack_h 1y ago> In point of fact outstanding debt as a fraction of GDP isn't even all that large, historically; it was much higher in the 80's and literally every one of those bonds is now paid off! This[1] shows in the 80s the total debt to GDP ratio started at 31% and ended at 51%. We are currently at about 122% according to the same chart. I'm not sure what numbers you're referring to, could you provide a source? In terms of the bonds being paid off that's true, but they were paid off by selling even more bonds to cover new spending and old, i.e. total debt grew even if individual bonds matured. [1] https://fred.stlouisfed.org/series/gfdegdq188S https://fred.stlouisfed.org/series/gfdegdq188S
- SllX 1y agoI like where your head is at on a lot of this and there's a ton of waste to cut within the military itself, but we don't want to scale it down that far. It's still good to be able to effectively put boots on the ground in other parts of the world and back them with the most effective logistics infrastructure in the world, not to mention we want deterrence options other than a nuclear holocaust.
- tzs 1y agoHow would you propose to means-test Social Security?
- ivewonyoung 1y agoBy adding even more bureaucracy, current SSA administration overhead is already close to $15 billion year.
- boroboro4 1y agoWhich is, checks notes, 1% of the social security budget. While not nothing it’s quite competitive given the scale and impact.
- fkfyshroglk 1y agoSocial security is self-funded. It has literally no impact on the deficit or our ability to pay off debt. By statute. Edit: i am flabbergasted at how low literacy is about how our government works.
- JumpCrisscross 1y ago> Social security is self-funded. It has literally no impact on the deficit or our ability to pay off debt Technically, yes. Practically, it’s a pair of income and expense streams. Slashing social security payouts to pay for some nonsense is tempting.
- fkfyshroglk 1y agoSure, practically I can also rob people at gunpoint.
- JumpCrisscross 1y agoMaterial difference when we’re discussing what a legislative body would and would not do! My guess is we’ll stick it to Gen X.
- fkfyshroglk 1y agoMaybe you're right. But then I'll be telling anyone who will listen that they're being sold up the river to finance the military and the wealthy against all reason.
- JumpCrisscross 1y ago> I'll be telling anyone who will listen that they're being sold up the river to finance the military and the wealthy against all reason. My cat's incredibly convinced of a global scheme against his caviar budget, that doesn't really cause any consequence.
- standardUser 1y ago[flagged]
- JumpCrisscross 1y ago> the actual impact of debt over these last 60-80 years has been proven to be minimal This time will be different.
- gruez 1y ago> Maybe a few hundred billion right there. Source that such reforms add up to this much? What do the reforms look like in concrete terms?
- bayarearefugee 1y agoIt makes much more sense to just raise the social security tax cap than to means-test it. Means testing social programs tends to just add needless bureaucracy to them while also weakening support for them by adding an us vs them line of who benefits. Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. You don't even have to raise the cap by very much to fix every foreseeable funding issue Social Security has
- don_neufeld 1y agoYup. Means testing is one of this things that fools people - it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. Beyond the bureaucracy dimension - means testing puts up a barrier, not at the top, but everywhere. Adding “one more thing” to people who are already struggling can be disproportionally difficult for them to meet, and therefore cause them to miss out on benefits they are completely entitled to. Additionally, it can create incentives for behavior you would otherwise be completely pathological, such as divorcing your sick spouse because as a couple you don’t qualify for support, but individually they do.
- zimpenfish 1y ago> it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. The UK's DWP is a good example (and I'd suggest they crossed the border a long time ago into evil.) * https://www.bbc.co.uk/news/uk-england-merseyside-68727007 https://www.bbc.co.uk/news/uk-england-merseyside-68727007 * https://www.bbc.co.uk/news/articles/c20nrv02vz1o https://www.bbc.co.uk/news/articles/c20nrv02vz1o * https://www.bbc.co.uk/news/uk-england-leicestershire-67704644 https://www.bbc.co.uk/news/uk-england-leicestershire-6770464... * https://www.bbc.co.uk/news/uk-england-nottinghamshire-52500385 https://www.bbc.co.uk/news/uk-england-nottinghamshire-525003... * https://www.bbc.co.uk/news/business-51756783 https://www.bbc.co.uk/news/business-51756783 That's just a simple BBC search - going through Private Eye, for example, would bring up a lot more.
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- 9283409232 1y agoThis is the biggest argument I have against DOGE. There are easy wins you could make when it comes to government spending and efficiency and they are doing none of it.
- ethbr1 1y agoI have yet to hear a convincing argument that DOGE is anything less than a poorly camouflaged data grab. Hopefully everyone involved goes to jail, once the government changes and starts charging people who break the law again.
- blitzar 1y agoDOGE is a poorly camouflaged ideological purge. It takes a super special type of incompetence to fail to find any provable fraud, waste or abuse in US government spending.
- watwut 1y agoThe idea is that if you repeat "fraud, waste or abuse" it wont matter whether it is teue or not. And to be fair, the tactic of repeating lie worked of conservatives wery well in the long term.
- orwin 1y agoI do not know about the US, but have have worked for a state admin. To be honest, there is a lot of inefficiencies, but the large majority of those exist to _prevent_ fraud. I could once again describe why, but the details aren't really important: i swear all waste and inefficiencies i've seen not caused by out-of-date software are in place to avoid fraud from low to mid-level employees. From that you have a choice: either you allow low level government employees to partake in the corruption and remove a lot of rules, or you leave those rules which makes running the admin cost more. I think the second solution is better even if it were to cost more (i'm not sure it does, corruption is expensive), because once government low level employees start to accept bribes, your country is fucked.
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- csense 1y agoThe problem with means-testing Social Security is that the government's promised some people "Social Security will be there for you" when they were in their 20's and 30's, and now you're taking it away in their 50's or 60's, when they can't go back and adjust life / retirement plans that were made taking into account "SS will be there for you." In my humble opinion, this kind of broken promise borders on "the government defrauding the people". It would be more legitimate to say "SS won't be there for you if you make too much" to those in their teens and 20's just entering the workforce -- but that won't have a major effect on cash outflow needed to satisfy SS obligations for 40-ish years (except for the small fraction of rich unfortunates who get SS because they become unable to work at a young age.) You might also argue that the level of prying into people's finances implied by "means testing" is a form of illegitimate government overreach. If you believe this, in theory you should, for consistency, also believe that individual income tax ought to be eliminated (which many people consider a radical proposition).
- FireBeyond 1y agoAnd presumably they’d take away my social security tax, too, right? If I was not going to get it? Right, right?
- margalabargala 1y agoYou don't see the problem with funding things like social security or food stamps purely from the people relying most on those services?
- Spivak 1y agoBut SS isn't a tax like the rest of our general taxes. I pay a specific SS tax on my payroll so that when I retire I'm entitled to a payout. If you take away the payout you need to take away the tax. Once you means test SS it becomes more like a welfare program for seniors and ought to be paid for out of the general tax pool like other welfare programs.
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- rayiner 1y agoOur deficit is $1.8 trillion last year. Closing the carried interest loophole would only save $1-2 billion annually. https://taxpolicycenter.org/fiscal-facts/tax-treatment-carried-interest https://taxpolicycenter.org/fiscal-facts/tax-treatment-carri... Explicit fuel subsidies are only $3 billion: https://www.eesi.org/papers/view/fact-sheet-proposals-to-reduce-fossil-fuel-subsidies-january-2024 https://www.eesi.org/papers/view/fact-sheet-proposals-to-red.... (Implicit subsidies are arguably much more, but anything that would make energy more expensive is an economy killer and would tank revenue.) What’s lost to corporate tax havens?
- rurp 1y agoI think you're directionally correct that military spending could be much lower and more effective but the notion of relying on a single sub as a deterrent is far too extreme. In that scenario an enemy only needs to compromise a single sub and your entire deterrent is gone. That's not a stable equilibrium. The whole principle of a triad is based on the expectation that an adversary could compromise your retaliatory ability to a high degree so you need to mantain robust options.
- rufus_foreman 1y ago>> means-test social security Why would you means-test insurance? A means-test is for something like welfare, not insurance.
- wbl 1y agoWhyy means test when you can use income tax to claw it back? Instead we have politicians giving away benefits to people who opted out.
- adverbly 1y ago> that could lower the debt that would result in little to no austerity. I like your ideas, but I'm not sure this is possible without austerity or major tax reform. The deficit is massive. If I was King, I'd choose tax reform and go with a land value tax. It's what economists agree is the least bad tax.
- someothherguyy 1y ago> It's what economists agree is the least bad tax. 9/10 of economists agree!
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- whimsicalism 1y agoagreed on the means testing social security. nothing else you mentioned would make a dent.