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The only serious attempt I've seen to address US budget issues was the Simpson-Bowles Commission under Obama in 2010. It recommended a menu of tax increases an

The only serious attempt I've seen to address US budget issues was the Simpson-Bowles Commission under Obama in 2010. It recommended a menu of tax increases and benefit reductions. It was promptly ignored by Congress which was not surprising. As an exercise it was useful just to demonstrate what a serious proposal would have to look like and the nature of compromise that would be needed. Of course, in the 15 years since the fiscal situation has gotten worse, so any of the recommendations it made then would need to be more severe now. https://en.wikipedia.org/wiki/National_Commission_on_Fiscal_Responsibility_and_Reform https://en.wikipedia.org/wiki/National_Commission_on_Fiscal_...

BugsJustFindMe 1y ago
What are your thoughts on https://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993 https://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_... ?
voxl 1y ago
Any budget proposal that cuts Medicare or social security is dead in the water and it's ridiculous for any group to even consider it. Not only would it be political suicide but it would also literally kill people.
- mullingitover 1y ago
  Social security lives in a parallel universe to the budget, so they could cancel the program entirely and it wouldn't affect the deficit. Mixing it up with the regular budget is a way to confuse people into being open to killing it, a long-term goal of the cadre of financial geniuses who brought us The Great Depression. Medicare is another story, and until the US has a come to Jesus moment on single payer healthcare and confronting the regulatory capture in healthcare it will only get worse.
  - walkabout 1y ago
    > Social security lives in a parallel universe to the budget, so they could cancel the program entirely and it wouldn't affect the deficit. 100% true, if you're operating in sane-world where anything makes sense. Here in insane world, my pet theory is that, given another year (maybe two, they might wait until after the midterms, assuming they hold on to congress) we're going to see an attempt to nullify the government debt owned by Social Security by converting it into some convoluted scheme involving crypto-backed-by-the-stock-market or something. Ta-da, debt reduced, deficit reduced (by the amount of interest on the debt owned by the trust fund)! Plus sooooo many opportunities to steal. This'll kill the program stone-dead, but it'll take a little while. Kinda like how they already killed Obamacare by removing the individual mandate, and they're just waiting for the death-spiral to hit bottom so they can declare the program a failure and proof that we should never try to fix healthcare in any kind of actually-decent way again.
  - Herring 1y ago
    > come to Jesus moment Haha. Last time it took the great depression and intense economic pain for americans to snap out of it and actually build a slightly better world (New Deal). I wouldn't expect it to take anything less this time around. Europe required 2 world wars and over 100M dead.
  - drdec 1y ago
    > they could cancel the [social security] program entirely and it wouldn't affect the deficit I don't think this is true. During the surplus years the savings vehicle was US bonds. So social security lent the US government money. Now that we are not in a surplus situation, we are using money from those bonds to pay benefits (we are also using SS revenue of course, only part of the payouts come from the bonds). So if the program were cancelled, the bonds could revert back to the US government - in other words a bunch of debt would be forgiven and would not need to be paid out. Deficit (and debt) reduced.
    - mullingitover 1y ago
      > So if the program were cancelled, the bonds could revert back to the US government - in other words a bunch of debt would be forgiven That seems like a passive-voice way of saying "We could steal from millions of people, pocketing the retirement savings they worked for their entire lives." Also, there's nothing stopping Social Security from upping the cap and thus returning to surplus, aside from the group of people who would absolutely love to steal from the fund.
      - rileymat2 1y ago
        > That seems like a passive-voice way of saying "We could steal from millions of people, pocketing the retirement savings they worked for their entire lives." For a lot of younger people the view is they promised themselves something unsustainable and expect young people to cover it.
        mullingitover 1y ago
        Is it? Is that a thing that has been shown to motivate young voters? If anything I would believe that younger voters would be in favor of more social safety net. Many would be comfortable with the government outright nationalizing most industries.
        collingreen 1y ago
- nitwit005 1y ago
  Our health system already kills people, and people seem essentially okay with that. But, I agree about the political suicide. I unfortunately don't believe anyone is even going to attempt reform after how successful the Republican party's attacks on Obamacare were. People will just conclude there's no reward for trying.
- InTheArena 1y ago
  A couple of points: 1) The deficit applies to discretionary budget. Medicare and Social Security are not discretionary. 2) Really. You can't cut anything out of medicare and social security (both of which are the most expensive program of the kind compared to any other first world equivalent) without killing people? There is not a cent of waste in these programs?
xnx 1y ago
Might be before your time (1993): https://en.wikipedia.org/wiki/National_Partnership_for_Reinventing_Government https://en.wikipedia.org/wiki/National_Partnership_for_Reinv... > elimination of over 100 programs, the elimination of over 250,000 federal jobs, the consolidation of over 800 agencies Didn't solve all budget issues, but was a legitimate and meaningful effort to reduce waste. Polar opposite of DOGE.
- orwin 1y ago
  But it took 5 year, that's slow and inefficient! DOGE can't be slow and inefficient because it's lead by corporate america, not bureaucratic america.
- tim333 1y ago
  Yeah, and the results: >He had budget surpluses for fiscal years 1998–2001, the only such years from 1970 to 2023. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget I don't really understand why they can't do something like that which was carefully thought out and worked, rather than the present mess. I realise carefully thought out doesn't really go with the current president but I actually had hopes Musk might do something sane.
  - ndiddy 1y ago
    I think the demographic situation is one difference. The population was younger in 1998-2001 than today, so less of the population was on Social Security/Medicare than now. The article mentions that the increase in spending today is mainly due to Social Security, Medicare, and interest on the national debt. To illustrate my point, last year the budget was $6.75 trillion and the deficit was $1.83 trillion. Discretionary spending only made up $1.72 trillion of the budget. This means that if Congress decided the federal government shouldn't do anything and cut 100% of discretionary spending, we would still have a slight deficit. It's possible to increase taxes to counteract this, but last year the government only brought in $4.92 trillion so the increase would be significant (and therefore unpopular). If we wanted to continue the surplus, we'd also have to keep increasing taxes through the late 2040s as the proportion of the population on Social Security and Medicare continues to increase. Given that we haven't fixed things for the past 45 years when they would have been a lot easier to fix, I don't see the political will for both spending cuts and massive tax increases to materialize anytime soon.
silverquiet 1y ago
Keynes said something that has always stuck with me. > Anything we can actually do we can afford I find it increasingly paradoxical that supposedly, our collective economic capability routinely increases (implied by ever growing GDP), while our budget situation looks ever grimmer.
- bryanlarsen 1y ago
  This is such a profound quote, but most people need more context to understand it. I certainly did when I ran across it a few years ago. I believe our society would be much better if more people did. Here's a good explanation I found quickly via Google, I'm sure there are others: https://medium.com/mydex/we-can-afford-what-we-can-actually-do-1-efdca9835617 https://medium.com/mydex/we-can-afford-what-we-can-actually-...
  - departed 1y ago
    It's my first time reading this quote, and the context you provide definitely helped. Thanks.
  - roenxi 1y ago
    It is a good quote, but the article you link actually undermines it slightly. Keynes' words are relying on a non-expert in construction being confident that construction is easy despite the fact that the systems we use to measure cost-benefit indicating that it cannot or should not be done. No evidence is mentioned that there was enough available in the way of bricks, mortar, steel, cement or labour. The banker quite likely hadn't checked any statistics or made any estimates. There is no particular reason to consider his opinion even informed on the topic. Britain had just had suffered around a half-million war casualties drawn disproportionately from their able-bodied labourers and their factories for things like steel and cement had probably suffered a few hard blows and were likely being run ragged. They could have forcefully reallocated resources away from something people thought was more important towards building houses; but the issue that is being glossed over is if someone thought that there were higher priorities than building houses ... what if they were right? The thing about economics is prices aren't arbitrary, they encode a combination of how easy a good is to produce and how much demand there is for a good. They can't just be overridden expecting a good result without factoring in those things. If Britain had some magic ability to just build whatever they want and there were enough resources available to do whatever then the empire wouldn't have collapsed shortly afterwards. They were way over-extended in terms of what resources they needed vs what they had available.
commandlinefan 1y ago
How high can the debt go before it can't go any higher? What happens when the interest payments themselves are higher than annual revenue? What happens when the interest payments are higher than the entire GDP so that even a theoretical 100% tax rate still wouldn't pay it? I feel like this _has_ to crash at some point, but I would have thought we would have hit that point by now. I know what would happen if my own interest debt overtook my own income, but I'm not a government.
- churchill 1y ago
  Reminds me of this comment I saw under a YT video on the topic, 4mo back: The national debt won’t matter until it does…and then it’ll matter more than anything else.
- lossolo 1y ago
  It will not crash, they will just print more money, which will raise inflation and devalue debt. So elites and speculators will make money by pumping everything up with debt, and then they will tax (through inflation) the people who need paychecks to survive, while their assets will just go up with inflation. Then the cycle repeats.
  - ryoshoe 1y ago
    We may not live to see a crash but that doesn't mean it won't happen. It doesn't seem like this cycle is stable enough to continue indefinitely
    - Fade_Dance 1y ago
      The development of the Global financial system is an ongoing narrative though. It was never going to continue indefinitely. The modern euro dollar system is fairly new, spawned in the 70s. Before that you had a huge shift with the Sterling losing dominance. Then go back another 50 years and you have swarms of independent banks issuing their own currency. It's a mix of a constantly churning "history rhymes it doesn't repeat" cycles (ex: stablecoins being rehypothecated/used as base level collateral with which to generate leverage is somewhat of a modern version of the late 1800s bank currency cycle), combined with what may be best described as technological development as theories and tools and ecosystems develop. The zeitgeist is very much that it's about time for the Eurodollar (offshore dollars/Eurodollars bound by the 20 trillion dollar Eurodollar derivative market) to fade, but as of yet there haven't been any good alternatives. It's a big burden to export your monetary policy and backstop global economic fragility, because it becomes your responsibility. Ex: that doesn't work with a system like China because they don't like putting their own people last in a loud and public way, while in the US the average person regularly and obviously comes away worse off during big interventions. It's also a bit of a trap to step into this, because central banks have mandates to protect systemic stability, yet by unwinding this sort of arrangement, capital flows reverse en-masse which is a clear threat to bond markets (and asset markets in the US's case, since it is so hyper financialized). That's something that is often missed in this conversation. It's a service that has to be provided, and it has costs. Or perhaps we will attempt to give a system with no bank/regulator of last resort a go again. Probably a "history rhymes" style outcome, but you never know.
insane_dreamer 1y ago
> The only serious attempt I've seen to address US budget issues was the Simpson-Bowles Commission under Obama in 2010. Wasn't Clinton the last president to balance the budget?
- trevithick 1y ago
  People on HN are younger than you think.
focusedone 1y ago
Serious question - do cross-party things like this still happen? It feels like everything is done along party lines now with no room for compromise or working together.
- mrguyorama 1y ago
  No they do not, except for things that don't even seem to benefit anyone. Republicans have been openly bragging about preventing the government from doing anything for decades. Specifically about Obama, they vowed to make him a one term president by preventing him from doing anything. Since that time, the MAGA folk have taken over the party and edict #1 is to hate and obstruct and harm democrats, so anyone who has crossed the party line to get anything done, no matter how important, has been primaried out of the party.

BugsJustFindMe 1y ago

What are your thoughts on https://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993 https://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_... ?

voxl 1y ago

Any budget proposal that cuts Medicare or social security is dead in the water and it's ridiculous for any group to even consider it. Not only would it be political suicide but it would also literally kill people.

mullingitover 1y ago
Social security lives in a parallel universe to the budget, so they could cancel the program entirely and it wouldn't affect the deficit. Mixing it up with the regular budget is a way to confuse people into being open to killing it, a long-term goal of the cadre of financial geniuses who brought us The Great Depression. Medicare is another story, and until the US has a come to Jesus moment on single payer healthcare and confronting the regulatory capture in healthcare it will only get worse.
- walkabout 1y ago
  > Social security lives in a parallel universe to the budget, so they could cancel the program entirely and it wouldn't affect the deficit. 100% true, if you're operating in sane-world where anything makes sense. Here in insane world, my pet theory is that, given another year (maybe two, they might wait until after the midterms, assuming they hold on to congress) we're going to see an attempt to nullify the government debt owned by Social Security by converting it into some convoluted scheme involving crypto-backed-by-the-stock-market or something. Ta-da, debt reduced, deficit reduced (by the amount of interest on the debt owned by the trust fund)! Plus sooooo many opportunities to steal. This'll kill the program stone-dead, but it'll take a little while. Kinda like how they already killed Obamacare by removing the individual mandate, and they're just waiting for the death-spiral to hit bottom so they can declare the program a failure and proof that we should never try to fix healthcare in any kind of actually-decent way again.
- Herring 1y ago
  > come to Jesus moment Haha. Last time it took the great depression and intense economic pain for americans to snap out of it and actually build a slightly better world (New Deal). I wouldn't expect it to take anything less this time around. Europe required 2 world wars and over 100M dead.
- drdec 1y ago
  > they could cancel the [social security] program entirely and it wouldn't affect the deficit I don't think this is true. During the surplus years the savings vehicle was US bonds. So social security lent the US government money. Now that we are not in a surplus situation, we are using money from those bonds to pay benefits (we are also using SS revenue of course, only part of the payouts come from the bonds). So if the program were cancelled, the bonds could revert back to the US government - in other words a bunch of debt would be forgiven and would not need to be paid out. Deficit (and debt) reduced.
  - mullingitover 1y ago
    > So if the program were cancelled, the bonds could revert back to the US government - in other words a bunch of debt would be forgiven That seems like a passive-voice way of saying "We could steal from millions of people, pocketing the retirement savings they worked for their entire lives." Also, there's nothing stopping Social Security from upping the cap and thus returning to surplus, aside from the group of people who would absolutely love to steal from the fund.
    - rileymat2 1y ago
      > That seems like a passive-voice way of saying "We could steal from millions of people, pocketing the retirement savings they worked for their entire lives." For a lot of younger people the view is they promised themselves something unsustainable and expect young people to cover it.
      - mullingitover 1y ago
        Is it? Is that a thing that has been shown to motivate young voters? If anything I would believe that younger voters would be in favor of more social safety net. Many would be comfortable with the government outright nationalizing most industries.
        collingreen 1y ago
nitwit005 1y ago
Our health system already kills people, and people seem essentially okay with that. But, I agree about the political suicide. I unfortunately don't believe anyone is even going to attempt reform after how successful the Republican party's attacks on Obamacare were. People will just conclude there's no reward for trying.
InTheArena 1y ago
A couple of points: 1) The deficit applies to discretionary budget. Medicare and Social Security are not discretionary. 2) Really. You can't cut anything out of medicare and social security (both of which are the most expensive program of the kind compared to any other first world equivalent) without killing people? There is not a cent of waste in these programs?

xnx 1y ago

Might be before your time (1993): https://en.wikipedia.org/wiki/National_Partnership_for_Reinventing_Government https://en.wikipedia.org/wiki/National_Partnership_for_Reinv... > elimination of over 100 programs, the elimination of over 250,000 federal jobs, the consolidation of over 800 agencies Didn't solve all budget issues, but was a legitimate and meaningful effort to reduce waste. Polar opposite of DOGE.

orwin 1y ago
But it took 5 year, that's slow and inefficient! DOGE can't be slow and inefficient because it's lead by corporate america, not bureaucratic america.
tim333 1y ago
Yeah, and the results: >He had budget surpluses for fiscal years 1998–2001, the only such years from 1970 to 2023. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget I don't really understand why they can't do something like that which was carefully thought out and worked, rather than the present mess. I realise carefully thought out doesn't really go with the current president but I actually had hopes Musk might do something sane.
- ndiddy 1y ago
  I think the demographic situation is one difference. The population was younger in 1998-2001 than today, so less of the population was on Social Security/Medicare than now. The article mentions that the increase in spending today is mainly due to Social Security, Medicare, and interest on the national debt. To illustrate my point, last year the budget was $6.75 trillion and the deficit was $1.83 trillion. Discretionary spending only made up $1.72 trillion of the budget. This means that if Congress decided the federal government shouldn't do anything and cut 100% of discretionary spending, we would still have a slight deficit. It's possible to increase taxes to counteract this, but last year the government only brought in $4.92 trillion so the increase would be significant (and therefore unpopular). If we wanted to continue the surplus, we'd also have to keep increasing taxes through the late 2040s as the proportion of the population on Social Security and Medicare continues to increase. Given that we haven't fixed things for the past 45 years when they would have been a lot easier to fix, I don't see the political will for both spending cuts and massive tax increases to materialize anytime soon.

silverquiet 1y ago

Keynes said something that has always stuck with me. > Anything we can actually do we can afford I find it increasingly paradoxical that supposedly, our collective economic capability routinely increases (implied by ever growing GDP), while our budget situation looks ever grimmer.

bryanlarsen 1y ago
This is such a profound quote, but most people need more context to understand it. I certainly did when I ran across it a few years ago. I believe our society would be much better if more people did. Here's a good explanation I found quickly via Google, I'm sure there are others: https://medium.com/mydex/we-can-afford-what-we-can-actually-do-1-efdca9835617 https://medium.com/mydex/we-can-afford-what-we-can-actually-...
- departed 1y ago
  It's my first time reading this quote, and the context you provide definitely helped. Thanks.
- roenxi 1y ago
  It is a good quote, but the article you link actually undermines it slightly. Keynes' words are relying on a non-expert in construction being confident that construction is easy despite the fact that the systems we use to measure cost-benefit indicating that it cannot or should not be done. No evidence is mentioned that there was enough available in the way of bricks, mortar, steel, cement or labour. The banker quite likely hadn't checked any statistics or made any estimates. There is no particular reason to consider his opinion even informed on the topic. Britain had just had suffered around a half-million war casualties drawn disproportionately from their able-bodied labourers and their factories for things like steel and cement had probably suffered a few hard blows and were likely being run ragged. They could have forcefully reallocated resources away from something people thought was more important towards building houses; but the issue that is being glossed over is if someone thought that there were higher priorities than building houses ... what if they were right? The thing about economics is prices aren't arbitrary, they encode a combination of how easy a good is to produce and how much demand there is for a good. They can't just be overridden expecting a good result without factoring in those things. If Britain had some magic ability to just build whatever they want and there were enough resources available to do whatever then the empire wouldn't have collapsed shortly afterwards. They were way over-extended in terms of what resources they needed vs what they had available.

commandlinefan 1y ago

How high can the debt go before it can't go any higher? What happens when the interest payments themselves are higher than annual revenue? What happens when the interest payments are higher than the entire GDP so that even a theoretical 100% tax rate still wouldn't pay it? I feel like this _has_ to crash at some point, but I would have thought we would have hit that point by now. I know what would happen if my own interest debt overtook my own income, but I'm not a government.

churchill 1y ago
Reminds me of this comment I saw under a YT video on the topic, 4mo back: The national debt won’t matter until it does…and then it’ll matter more than anything else.
lossolo 1y ago
It will not crash, they will just print more money, which will raise inflation and devalue debt. So elites and speculators will make money by pumping everything up with debt, and then they will tax (through inflation) the people who need paychecks to survive, while their assets will just go up with inflation. Then the cycle repeats.
- ryoshoe 1y ago
  We may not live to see a crash but that doesn't mean it won't happen. It doesn't seem like this cycle is stable enough to continue indefinitely
  - Fade_Dance 1y ago
    The development of the Global financial system is an ongoing narrative though. It was never going to continue indefinitely. The modern euro dollar system is fairly new, spawned in the 70s. Before that you had a huge shift with the Sterling losing dominance. Then go back another 50 years and you have swarms of independent banks issuing their own currency. It's a mix of a constantly churning "history rhymes it doesn't repeat" cycles (ex: stablecoins being rehypothecated/used as base level collateral with which to generate leverage is somewhat of a modern version of the late 1800s bank currency cycle), combined with what may be best described as technological development as theories and tools and ecosystems develop. The zeitgeist is very much that it's about time for the Eurodollar (offshore dollars/Eurodollars bound by the 20 trillion dollar Eurodollar derivative market) to fade, but as of yet there haven't been any good alternatives. It's a big burden to export your monetary policy and backstop global economic fragility, because it becomes your responsibility. Ex: that doesn't work with a system like China because they don't like putting their own people last in a loud and public way, while in the US the average person regularly and obviously comes away worse off during big interventions. It's also a bit of a trap to step into this, because central banks have mandates to protect systemic stability, yet by unwinding this sort of arrangement, capital flows reverse en-masse which is a clear threat to bond markets (and asset markets in the US's case, since it is so hyper financialized). That's something that is often missed in this conversation. It's a service that has to be provided, and it has costs. Or perhaps we will attempt to give a system with no bank/regulator of last resort a go again. Probably a "history rhymes" style outcome, but you never know.

insane_dreamer 1y ago

> The only serious attempt I've seen to address US budget issues was the Simpson-Bowles Commission under Obama in 2010. Wasn't Clinton the last president to balance the budget?

trevithick 1y ago
People on HN are younger than you think.

focusedone 1y ago

Serious question - do cross-party things like this still happen? It feels like everything is done along party lines now with no room for compromise or working together.

mrguyorama 1y ago
No they do not, except for things that don't even seem to benefit anyone. Republicans have been openly bragging about preventing the government from doing anything for decades. Specifically about Obama, they vowed to make him a one term president by preventing him from doing anything. Since that time, the MAGA folk have taken over the party and edict #1 is to hate and obstruct and harm democrats, so anyone who has crossed the party line to get anything done, no matter how important, has been primaried out of the party.