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We could zero out the military budget and that still doesn't get us anywhere close to balanced. Even cutting 100% of discretionary spending barely does the job

We could zero out the military budget and that still doesn't get us anywhere close to balanced. Even cutting 100% of discretionary spending barely does the job. We either need massive cuts in mandatory spending (fundamental changes to social contract) or increased revenue (politically not viable). There's also near zero evidence we actually need a balanced budget for a healthy economy.

tokai 1y ago
>increased revenue (politically not viable) Is that really true? Seems like its just an issue of how you frame it.
- alistairSH 1y ago
  The party that controls all three branches of the federal government is pushing a budget that cuts taxes and increase the deficit. There has been zero talk from them about balancing the budget. And there likely won't be, because if they do, they won't be able to use it as a cudgel to beat the Democrats when party control eventually swings the other way.
- somenameforme 1y ago
  This [1] is a graph of government receipts (basically all income for the government) over time. It has not only increased exponentially, but basically never decreased except during major economic crises. Yet somehow in that graph, we ended up more than $36 trillion dollars in debt. It makes it clear that the fundamental issue is not government revenue, but government spending. Every single time you give the government $1 they find a reason to spend $1.05. Why would you expect this to change if you give them $1.05, instead of them now just finding a reason to spend $1.10? I think that democracies are probably just fundamentally incapable of caring about long-term problems like debt when acting irresponsibly has substantial short-term benefits. It's almost like some spin on a tragedy of the commons. [1] - https://fred.stlouisfed.org/series/FGRECPT https://fred.stlouisfed.org/series/FGRECPT
hackyhacky 1y ago
> There's also near zero evidence we actually need a balanced budget for a healthy economy. The alternative is to pay an ever increasing amount of interest on our ever increasing debt. The other alternative is to default on our debt obligations. Neither option is good.
- whatshisface 1y ago
  If you borrow at 3% to invest in an asset that yields 10%, you can increase your position forever and will be rewarded.
  - hackyhacky 1y ago
    Sure, but that is not what is happening. In reality, debt is increasing faster than GDP and interest represents a larger part of the budget. Do you think that's sustainable?
    - whatshisface 1y ago
      It'll be even less sustainable if we cut investment spending in science in favor of uncapitalized spending.
borvo 1y ago
There's some tipping point where it's too much. For example, when the interest on the debt >> defense spending. Agree it doesn't need to be fully balanced, debt is a useful tool.
somenameforme 1y ago
> There's also near zero evidence we actually need a balanced budget for a healthy economy. I don't think this is really supportable. Obviously one can appeal to the practically endless examples of countries that destroyed their own economies with debt. Of course the obvious argument to this is that this hasn't happened to the US. But there were extremely unique, and liminal, circumstances that explain this, that a search on "exporting inflation" [1] can largely explain. And those days are mostly behind us. We can see this playing out in practice. Current interest payments on the debt are now $1.1 trillion per year. They've grown exponentially, far faster than the debt has. [2] The reason for this is that we can't just handwave away inflation so easily anymore, so we're now experiencing more like what would happen to other countries that let their money printers get a bit too excited. The Fed is keeping rates high in hopes of bringing inflation down, but it's just not really working. What this means is that when the government sells treasuries (which is how they 'print money') they need to offer ever higher interest rates. Notably even 20 year treasuries right now are offering yields of about 5%, so it seems most are not enthusiastic about things getting much better. I think we're well on our way to becoming another of history's cautionary tales that the next great power will also certainly think doesn't apply to them, because if something hasn't exploded in 50 years, that must mean it'll never explode. --- [1] - https://search.brave.com/search?q=exporting+inflation https://search.brave.com/search?q=exporting+inflation [2] - https://fred.stlouisfed.org/series/A091RC1Q027SBEA https://fred.stlouisfed.org/series/A091RC1Q027SBEA
- alistairSH 1y ago
  That's fair. I should have been more precise... There's little evidence we need to have a totally balanced budget every year. Current spending levels are likely unsustainable. Either way, we still can't balance the budget by only cutting discretionary spending - any serious discussion of a balanced budget MUST include the revenue side, plus possible changes to the social contract (IE, all the programs that just about everybody wants to keep).
nathan_compton 1y ago
> politically not viable These three words are doing quite a lot of heavy lifting.

tokai 1y ago

>increased revenue (politically not viable) Is that really true? Seems like its just an issue of how you frame it.

alistairSH 1y ago
The party that controls all three branches of the federal government is pushing a budget that cuts taxes and increase the deficit. There has been zero talk from them about balancing the budget. And there likely won't be, because if they do, they won't be able to use it as a cudgel to beat the Democrats when party control eventually swings the other way.
somenameforme 1y ago
This [1] is a graph of government receipts (basically all income for the government) over time. It has not only increased exponentially, but basically never decreased except during major economic crises. Yet somehow in that graph, we ended up more than $36 trillion dollars in debt. It makes it clear that the fundamental issue is not government revenue, but government spending. Every single time you give the government $1 they find a reason to spend $1.05. Why would you expect this to change if you give them $1.05, instead of them now just finding a reason to spend $1.10? I think that democracies are probably just fundamentally incapable of caring about long-term problems like debt when acting irresponsibly has substantial short-term benefits. It's almost like some spin on a tragedy of the commons. [1] - https://fred.stlouisfed.org/series/FGRECPT https://fred.stlouisfed.org/series/FGRECPT

hackyhacky 1y ago

> There's also near zero evidence we actually need a balanced budget for a healthy economy. The alternative is to pay an ever increasing amount of interest on our ever increasing debt. The other alternative is to default on our debt obligations. Neither option is good.

whatshisface 1y ago
If you borrow at 3% to invest in an asset that yields 10%, you can increase your position forever and will be rewarded.
- hackyhacky 1y ago
  Sure, but that is not what is happening. In reality, debt is increasing faster than GDP and interest represents a larger part of the budget. Do you think that's sustainable?
  - whatshisface 1y ago
    It'll be even less sustainable if we cut investment spending in science in favor of uncapitalized spending.

borvo 1y ago

There's some tipping point where it's too much. For example, when the interest on the debt >> defense spending. Agree it doesn't need to be fully balanced, debt is a useful tool.

somenameforme 1y ago

> There's also near zero evidence we actually need a balanced budget for a healthy economy. I don't think this is really supportable. Obviously one can appeal to the practically endless examples of countries that destroyed their own economies with debt. Of course the obvious argument to this is that this hasn't happened to the US. But there were extremely unique, and liminal, circumstances that explain this, that a search on "exporting inflation" [1] can largely explain. And those days are mostly behind us. We can see this playing out in practice. Current interest payments on the debt are now $1.1 trillion per year. They've grown exponentially, far faster than the debt has. [2] The reason for this is that we can't just handwave away inflation so easily anymore, so we're now experiencing more like what would happen to other countries that let their money printers get a bit too excited. The Fed is keeping rates high in hopes of bringing inflation down, but it's just not really working. What this means is that when the government sells treasuries (which is how they 'print money') they need to offer ever higher interest rates. Notably even 20 year treasuries right now are offering yields of about 5%, so it seems most are not enthusiastic about things getting much better. I think we're well on our way to becoming another of history's cautionary tales that the next great power will also certainly think doesn't apply to them, because if something hasn't exploded in 50 years, that must mean it'll never explode. --- [1] - https://search.brave.com/search?q=exporting+inflation https://search.brave.com/search?q=exporting+inflation [2] - https://fred.stlouisfed.org/series/A091RC1Q027SBEA https://fred.stlouisfed.org/series/A091RC1Q027SBEA

alistairSH 1y ago
That's fair. I should have been more precise... There's little evidence we need to have a totally balanced budget every year. Current spending levels are likely unsustainable. Either way, we still can't balance the budget by only cutting discretionary spending - any serious discussion of a balanced budget MUST include the revenue side, plus possible changes to the social contract (IE, all the programs that just about everybody wants to keep).

nathan_compton 1y ago

> politically not viable These three words are doing quite a lot of heavy lifting.