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The US reduced debt following World War II and what it would take to do so again

23 points by hhs 11mo ago

jleyank 11mo ago
They reduced the debt under Clinton. It’s a question of political will not physics. US taxes are low compared to their counterparts and they could choose to raise these taxes for various activities.
- dh2022 11mo ago
  And then came GWB and Dick Cheney with "Reagan proved deficits do not matter". Right away they slashed dividend income taxes, capital gains taxes, phased out estate tax, took away Medicare's ability to negotiate lower drug prices or re-import them cheaper from Canada [0], and started two long expensive wars (Afghanistan and Iraq). (It is my personal opinion that the current US Financial situation is due to GWB's presidency. He started this country on this road.) [0] https://pmc.ncbi.nlm.nih.gov/articles/PMC1126891/ https://pmc.ncbi.nlm.nih.gov/articles/PMC1126891/
- jameslk 11mo ago
  The surplus and debt servicing near the end of the 90s didn’t have much effect to the debt: https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN Social security and Medicare liabilities mostly wiped out any gains What surplus there was came from both tax increases and reductions in spending. Along with a strong economy and low employment for tax revenue in the dotcom heyday Any realistic change to pay down the debt would require substantial structural changes at this point. There’s no political incentive to do anything about that until runaway inflation and the US credit ratings start to really mess things up, and by that point it’s pretty much too late
  - jaredhallen 11mo ago
    And an aging population isn't helping the situation.
- mannyv 11mo ago
  Not retiring the debt was a choice. The practical reason for not retiring the debt was that the world needs a zero risk benchmark. The did retire the long bond, though.
beefnugs 11mo ago
Hate to have to say it... but killing all the people you owe money to. Its not like reputation means anything to this prez
- potato3732842 11mo ago
  Nah, way too complicated and expensive. When you're the global reserve currency you can just inflate the currency and kill anyone who tries to use something else. Cheaper that way because you gotta kill less people. (joking, but also sadly not joking).
- SlightlyLeftPad 11mo ago
  Also bail the people who owe you money out of jail. That’s important too.
RyanShook 11mo ago
One overlooked factor that helped the US after WWII is that we were the manufacturing base for most of the world for decades after the end of the war. Over 50% of manufactured goods were made in the US in the decade after WWII.
- MithrilTuxedo 11mo ago
  Fossil fuels were cheaper too, and dilution was the solution to pollution.
  - JumpCrisscross 11mo ago
    > dilution was the solution to pollution Why past tense? Dilution remains a good solution to most pollutants, carbon included. That it stops working after a point doesn't make it useless per se.
- itopaloglu83 11mo ago
  When the entire Europe is in ruins, you can sell pretty much anything from textiles to crops to machinery, anything. Another strange thing I learned recently is that in 1930s there was another tariff frenzy as well that lasted until the WW2. https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...
- dehrmann 11mo ago
  Manufacuring might have been a viable path out of debt after WWII, but it isn't right now. If you look at Germany, its manufacturing sector is in decline, and this is the country's strength. China's outcompeting it. Not only is China no longer just producing cheap knockoffs, it has a better manufacturing ecosystem, and it has surplus manufacturing capacity.
  - CapricornNoble 11mo ago
    >If you look at Germany, its manufacturing sector is in decline, and this is the country's strength. German manufacturing is in decline because it relied on dirt-cheap Russian energy. It's not cost competitive otherwise. https://www.energyconnects.com/news/gas-lng/2025/february/german-industry-begins-calling-for-return-to-russian-gas/ https://www.energyconnects.com/news/gas-lng/2025/february/ge... Europe has spent three painful years weaning itself off gas from the east with the biggest impact felt in Germany, the region’s biggest economy. German industry was built on cheap Russian gas and rising energy prices have already trammeled growth and forced some manufacturers to move production abroad.
JohnnyLarue 11mo ago
The debt is owed to themselves. They printed more money and issued more bonds. It's not a mystery.
polski-g 11mo ago
After WW2, we had a lot of young people working. Now we have a lot of old people not working and out-voting the young to take their money to propagate Boomer Luxury Communism.
expedition32 11mo ago
My own country used to care a lot about not spending more then comes in. But when other countries are spending billions on their creditcard this becomes increasingly difficult so we're releasing the floodgates! And you can borrow A LOT with a triple A credit score.
ballpug 11mo ago
Tracking Altera's FPGA chips for field programmable and gate arrays. Fourth-generational warfare following semiconductors and cyrogenic propellant. [1]: https://arstechnica.com/space/2025/09/a-software-glitch-not-an-engine-failure-delayed-a-critical-iss-cargo-delivery/ https://arstechnica.com/space/2025/09/a-software-glitch-not-...

23 points by hhs 11mo ago

They reduced the debt under Clinton. It’s a question of political will not physics. US taxes are low compared to their counterparts and they could choose to raise these taxes for various activities.

dh2022 11mo ago
And then came GWB and Dick Cheney with "Reagan proved deficits do not matter". Right away they slashed dividend income taxes, capital gains taxes, phased out estate tax, took away Medicare's ability to negotiate lower drug prices or re-import them cheaper from Canada [0], and started two long expensive wars (Afghanistan and Iraq). (It is my personal opinion that the current US Financial situation is due to GWB's presidency. He started this country on this road.) [0] https://pmc.ncbi.nlm.nih.gov/articles/PMC1126891/ https://pmc.ncbi.nlm.nih.gov/articles/PMC1126891/
jameslk 11mo ago
The surplus and debt servicing near the end of the 90s didn’t have much effect to the debt: https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN Social security and Medicare liabilities mostly wiped out any gains What surplus there was came from both tax increases and reductions in spending. Along with a strong economy and low employment for tax revenue in the dotcom heyday Any realistic change to pay down the debt would require substantial structural changes at this point. There’s no political incentive to do anything about that until runaway inflation and the US credit ratings start to really mess things up, and by that point it’s pretty much too late
- jaredhallen 11mo ago
  And an aging population isn't helping the situation.
mannyv 11mo ago
Not retiring the debt was a choice. The practical reason for not retiring the debt was that the world needs a zero risk benchmark. The did retire the long bond, though.

beefnugs 11mo ago

Hate to have to say it... but killing all the people you owe money to. Its not like reputation means anything to this prez

potato3732842 11mo ago
Nah, way too complicated and expensive. When you're the global reserve currency you can just inflate the currency and kill anyone who tries to use something else. Cheaper that way because you gotta kill less people. (joking, but also sadly not joking).
SlightlyLeftPad 11mo ago
Also bail the people who owe you money out of jail. That’s important too.

RyanShook 11mo ago

One overlooked factor that helped the US after WWII is that we were the manufacturing base for most of the world for decades after the end of the war. Over 50% of manufactured goods were made in the US in the decade after WWII.

MithrilTuxedo 11mo ago
Fossil fuels were cheaper too, and dilution was the solution to pollution.
- JumpCrisscross 11mo ago
  > dilution was the solution to pollution Why past tense? Dilution remains a good solution to most pollutants, carbon included. That it stops working after a point doesn't make it useless per se.
itopaloglu83 11mo ago
When the entire Europe is in ruins, you can sell pretty much anything from textiles to crops to machinery, anything. Another strange thing I learned recently is that in 1930s there was another tariff frenzy as well that lasted until the WW2. https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...
dehrmann 11mo ago
Manufacuring might have been a viable path out of debt after WWII, but it isn't right now. If you look at Germany, its manufacturing sector is in decline, and this is the country's strength. China's outcompeting it. Not only is China no longer just producing cheap knockoffs, it has a better manufacturing ecosystem, and it has surplus manufacturing capacity.
- CapricornNoble 11mo ago
  >If you look at Germany, its manufacturing sector is in decline, and this is the country's strength. German manufacturing is in decline because it relied on dirt-cheap Russian energy. It's not cost competitive otherwise. https://www.energyconnects.com/news/gas-lng/2025/february/german-industry-begins-calling-for-return-to-russian-gas/ https://www.energyconnects.com/news/gas-lng/2025/february/ge... Europe has spent three painful years weaning itself off gas from the east with the biggest impact felt in Germany, the region’s biggest economy. German industry was built on cheap Russian gas and rising energy prices have already trammeled growth and forced some manufacturers to move production abroad.

JohnnyLarue 11mo ago

The debt is owed to themselves. They printed more money and issued more bonds. It's not a mystery.

polski-g 11mo ago

After WW2, we had a lot of young people working. Now we have a lot of old people not working and out-voting the young to take their money to propagate Boomer Luxury Communism.

expedition32 11mo ago

My own country used to care a lot about not spending more then comes in. But when other countries are spending billions on their creditcard this becomes increasingly difficult so we're releasing the floodgates! And you can borrow A LOT with a triple A credit score.

ballpug 11mo ago

Tracking Altera's FPGA chips for field programmable and gate arrays. Fourth-generational warfare following semiconductors and cyrogenic propellant. [1]: https://arstechnica.com/space/2025/09/a-software-glitch-not-an-engine-failure-delayed-a-critical-iss-cargo-delivery/ https://arstechnica.com/space/2025/09/a-software-glitch-not-...