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US debt has hit $40tn - Will that be a wake-up call?
- Alien1Being 2mo agoThe financial illiteracy of Warsh, Bessent and Trump is the goddess's gift to China .
- fuzzfactor 2mo agoPretty much like the 3 Stooges, the best they have to offer is nyuk, nyuk, nyuk. Bessent is especially moronic financially, if he actually had what it takes to perform adequately in his position, Trump would not stand for it.
- cpursley 2mo agoAs if Biden didn’t also explode the debt while in office. This is a bi-partisan issue.
- drcongo 2mo agoPaging Ian Betteridge.
- bourbonjuggler 2mo ago"No"
- Yossarrian22 2mo agoNo
- swozey 2mo agoIf we had a government that educated people, potentially, but we don't, so it wont
- dataflow 2mo agoI've seen extremely smart/well-educated people (not in politics or any skin in the game) argue the debt isn't really a problem. "It's not like your household debt" and all. This one probably isn't just about education.
- GlibMonkeyDeath 2mo agoThat's because the US national debt is indeed not like household debt. As a household, I can't choose to print more GlibMonkeyDeathBucks and hand them out to service my debts. I also don't have my own standing army to defend from creditors who might try to seize my hard assets. Yes, printing money is inflationary.
- tastyfreeze 2mo agoThat is the Fed educated position. The Keynsian view of economics sees the good economic times as normal and bad economic times as the aberration. Thus, from that view you go into debt to hold the economy over until the good times return. I've always seen that as an excuse to spend more that you have. Its a trap that is difficult to get out. It is the same as taking more personal debt that you can service. But in the case of the government the bank never says no.
- budman1 2mo agoIn small amounts, say <3 trillion dollars, the smart people are right. If the government needs to run a deficit to fight a war, or get the population through a pandemic, it is not a problem. The problem is it is forever, and it is growing. Fantasy that you can do this for 50 years.
- dataflow 2mo agoTo be clear, these folks very specifically refer to the giant amounts, not merely the small ones.
- matheusmoreira 2mo agoNo. Will only change if debt prevents reelection.
- wombat-man 2mo agoIt does, but only for one of the parties.
- AnimalMuppet 2mo agoCould you be more specific?
- jerf 2mo agoIt is "the party the President is in", typically. Today that happens to be "R" but the President has taken the brunt of the blame for good or bad economies for a long time now, regardless of how correct that blame assignment may be. I expect various emergency measures to try to keep things afloat until the election. By "afloat" I mean, specifically keep the numbers everyone is looking at looking "good", mostly, the stock market indices, the various US Treasury rates, and the US Dollar Index. After that, who knows. And the fact that I expect them to try doesn't guarantee they will succeed. There's plenty of motivation for forces who want them to fail at that task to take measures to strike while the iron is hot.
- tyleo 2mo agoDemocrats tend to get railed for it even though Republican presidents raise the debt more. It gives the impression that only Democrats are trying to fix it and Republicans give it more lip service but often make it worse.
- dvduval 2mo agoParty with power spends money. Party not in power complains too much money is being spent. Broken system. Those high interest rates ought to teach them pretty soon.
- bell-cot 2mo agoCould you tell us about any passably-comparable situations, where high interest rates actually taught a national government to grow up and behave?
- mikestew 2mo agoA lot of deficit spending accelerated with Reagan, when mortgage interest rates were 18%. Yeah, high interest rates will learn ‘em real good this time.
- boxed 2mo agoWell.. not quite. Clinton actually did something about the deficit.
- jeswin 2mo agoWell, Clinton took over when the Soviet Union had just dissolved. Of all US Presidents, he had the least to worry about on the defense front. Reagan's spending was a reason why the Soviet Union collapsed when it did. So it's not that black-and-white.
- boxed 2mo agoThe Soviet Union was collapsed for a long time though :P
- fridder 2mo agoWay too reductive. Look at the deficit growth numbers under democrats vs republicans. This comment is just another variant of lazy "both-siderism" that I have really come to loath
- taeric 2mo ago
- CamelCaseName 2mo ago"There’s nothing magic about the $40 trillion number, and we can grow our way out of that" - Bessent He also claims the number is temporary because of tariff refunds, and that they will reduce the debt with more tariffs.
- mlnj 2mo agoGrow our way out of that means hitting the $50 trillion number.
- coldtea 2mo ago"I'm not bald, there's nothing special about 300 hairs, which I currently have, compared to 300,000, which I used to have making me suddenly bald" Just because there's no magical boundary number doesn't mean a metric can't become increasingly more shitty, and suddenly turn into a bad outcome. Not every response is linear.
- jerf 2mo agoThe best lies contain truth in them. Yes, there's nothing magical about $40 trillion. It's true, nominally. But if the conveniently-round number, in dollars (an arbitrary unit) and base-10 (an arbitrary base) prompts some people to poke their heads up and start asking questions, that's a good thing. Mind you $10 trillion might have been a better time, but, $40 trillion is a better time than $100 trillion.
- GlibMonkeyDeath 2mo ago"grow" == "inflate"
- FpUser 2mo agoMaybe there is no magic about the absolute number. How about magic of the debt servicing costs that are paid by Joes and Janes
- fridder 2mo agoWe'll grow our way out whenever the mythical trickle down works
- dzonga 2mo agothe rate of growth is the worrying trend. then that the debt has been accelerating with either party in power - means this is a problem that won't be solved politically by the current actors i.e both parties.
- GiorgioG 2mo agoThere are no adults left in the room.
- fridder 2mo agoJust stop. The debt has _not_ be accelerating with either party. Look at the deficit growth numbers under each administration
- TrueSlacker0 2mo agoHuh? Every recent president has seen the debt grow under their term. Deficit and debt are not the same. https://govtransparencyproject.org/national-debt-by-president/ https://govtransparencyproject.org/national-debt-by-presiden...
- jghn 2mo agoMy sources say no
- r721 2mo agoPrevious discussions: https://news.ycombinator.com/item?id=49366743 https://news.ycombinator.com/item?id=49366743 https://news.ycombinator.com/item?id=49378560 https://news.ycombinator.com/item?id=49378560
- deleted 2mo ago[deleted]
- Jeremy1026 2mo agoI put together a quick flow chart to determine if we need to worry about the national debt. Is a democrat in office? | | | | Yes No | | | | Spending must________No big stop immediately_______deal
- xienze 2mo ago[flagged]
- jerf 2mo agoYes, the minority party complains about spending, the majority party spends. "D" and "R" doesn't enter into it. You'll note even the minority party rarely does much about it, like, proposing concrete spending cuts or anything. Not quite never, but rarely. Or pushing actual cuts through a branch they control even if it will be shot down by another. Proposing a concrete cut would open them up to criticism. They just complain vaguely about the spending.
- watwut 2mo agoThere is no flipside and attitudes toward debt are not symmetrical. And outcomes are not symmetrical either - most of the debt is caused by republicans.
- dionian 2mo ago
- ramraj07 2mo agoCan someone speculate on how this will actually play out in the coming decades?
- lr4444lr 2mo agoAnyone can speculate. If we fail to pay interest in a timely manner, then presumably fewer foreign entities will buy our debt, and we will have less money from debt sales to fund what debt funds. Whether that pain is spread equally or not is anyone's guess.
- fridder 2mo agoIf we fail to pay interest in a timely manner is potentially catastrophic. US Bonds are considered a safe haven because we have never defaulted on our debt
- engineer_22 2mo agoUS bonds are a safe haven because the world’s oil supply is locked up by US warships.
- verzali 2mo agoBut it isn't. US warships proved incapable of keeping the Strait of Hormuz open. Oil is not flowing.
- engineer_22 2mo agohave you considered that closing the straight may be one of the primary objectives of the war?
- budman1 2mo agoThe interest is only part of it ! How about paying back the principle when the bond comes due?
- timkpaine 2mo agoIt will certainly be the "number one" issue, just as soon as democrats take control of the legislative or executive branch of government.
- wombat-man 2mo agoIt's very tiring to watch this happen over and over.
- sroussey 2mo agoAh, I remember those days when Clinton was in office and no more deficit. He also did a DOGE type thing to modernize and make the government more efficient (though in a measured way, not putting children in control). Those were the days.
- timkpaine 2mo agoline-item veto remains incredibly overpowered where permitted, e.g. Wisconsin
- ck2 2mo agoat least half of that $40 trillion is from the nationwide militarization of the United States post 9/11 * https://ips-dc.org/report-state-of-insecurity-cost-militarization-since-9-11/ https://ips-dc.org/report-state-of-insecurity-cost-militariz... that level of military spending is never going down and will only increase by design something the average consumer has absolutely no control over and no ability to solve we just wanted healthcare and homes, instead we got endless wars and bombing civilians with tomahawks
- FpUser 2mo ago>"something the average consumer has absolutely no control over and no ability to solve" Of course they do. Grow a new fucking party and vote for it. Better than one half f the population hating the other half. Just what politicians of either branch enjoy.
- atmavatar 2mo agoUnfortunately, it will take a lot more than that. One of the bigger issues facing us is that you have the billionaire-owned right-wing media telling the lower classes to hate one another, and you have the billionaire-owned "left-wing" media sane-washing most of what the ruling class does while feigning mild outrage from time to time so they can still be perceived as opposition. Unless you find a way to address that, you're unlikely to break the current two-party stranglehold.
- FpUser 2mo agoOne can not play the game indefinitely. As life gets worse and worse unwashed masses may actually start thinking or at least have some thinkers develop.
- exceptione 2mo ago> we just wanted healthcare and homes, You would be surprised how many would forego that option when presented the alternative option of 'taking revenge on perceived enemies within'.
- deleted 2mo ago[deleted]
- gsky 2mo agoNot gonna happen until dollar looses reserved currency status
- bdhdhduuyd 2mo agoWhich is already slowly happening.
- slicktux 2mo agoI recall back in 2016 when the debt was $19 trillion dollars. Here we are 10 years later at double that. “we must not let our rulers load us with perpetual debt… place economy among the first and most important republican virtues” -Thomas Jefferson
- bethekidyouwant 2mo agoWell this is OK because money is worth half as much now.
- dionian 2mo agoYeah and inflation was transitory, so don't worry ;)
- coldtea 2mo agoNo.
- david927 2mo agoThe news we read is optimized for edge-event cases. Here it's about a particular number being hit. What's more interesting is the long, overarching news stories that span decades, e.g. BRICS, and the demise of the petro-dollar
- expedition32 2mo agoI read a newspaper article about this. Apparently according to Dutch economists the US only has to raise taxes by a few percent and the deficit is fixed. Not that they'll ever do that ofcourse.
- budman1 2mo agoI think this is a great solution. Raise some revenue. Tax the rich more. (not being sarcastic, we need more tax money coming in) I didn't say 'eat them', just reach into their pocket and extract more (double? sure...) At the same time, pull back on the spending. Or maybe even pull back on the growth in spending. No need to go to a full Doge; rather just pull it back a bit. Why we can't do this, I am flummoxed.
- exceptione 2mo ago> Why we can't do this Because 'we' = the electorate, not the selectorate. <https://en.wikipedia.org/wiki/Selectorate_theory https://en.wikipedia.org/wiki/Selectorate_theory>.
- krapp 2mo agoBecause Americans have been conditioned to view taxation as theft and Communism and they'll defend the right of the wealthy to keep every penny they have.
- Acrobatic_Road 2mo agoIt would require the largest tax increase in American history - and it wouldn't fix the situation, just stabilize it.
- WarmWash 2mo agoInterest rates are still within "normal" range, so the market is signalling that's it isn't that big of a deal. Countries have a debt crisis when their debt is huge and their interest rate is off the wall. Pretty much the market deciding that they are cooked. Wake me up when GDP is stagnant and interest rates are climbing over 15%. The US is still the global leader on multiple fronts with a well diversified economy.
- etchalon 2mo agoI look forward to hearing how we have to let more children starve so Trump can build more ugly monuments and we can drop more bombs on school girls in foreign lands.
- greesil 2mo agoDon't forget that the debt to geo ratio is only 120%. Japan was able to get up to 200% in a low interest the rate environment.
- SlightlyLeftPad 2mo agoWe’re headed toward an economy like Japan’s. It’s not a place we’re going to want to be.
- engineer_22 2mo agoYes demographic shift and bubble economics, this much is true. But Japan is hampered by constitutional restraint of their armed forces, the United States economy (infamously) enjoys much broader support from intelligence and military. Japan also historically rejects mass immigration, which the United States has adopted as a means to replenish low skill workforce and 2nd generation child->skilled worker pipeline. If political power can successfully be wrested from the boomers, the USA can abandon their entitlements and rebound quickly. If boomers hang on to political power: a period of sticky inflation and slow growth.
- BLKNSLVR 2mo agoBoomers? Sigh. Please articulate better. You can't refer to an entire generation as 'at fault'. It's dumb, greedy, selfish politicians, and they come from all generations, including yours and mine, and in the future they'll come from generations not yet old enough to run. Boomers is a stupid term used by people who only understand easy answers.
- engineer_22 2mo ago1) I didn't say it was anyone's "fault" 2) Politicians are behest to the same biophysical limitations we all are. An aging cohort that is done producing but not done consuming is a recipe for sticky inflation. Your reply does not address the point... 3) Maybe boomers is a stupid term, but it is clear and succinct. Your pet sensitivities reveal more about you than they do about me.
- jermaustin1 2mo agoI've often wondered if US Debt has ever actually mattered for the US. They were complaining when Bush took Clinton's surplus and wasted it on wars, and grew the deficit to $10T (some was Great Recession bailout related). The complained about Obama when he added another $10T over his terms. Then a little when Trump did almost $10T in his first term (some of that was COVID related). Then a LOT when Biden did the same thing. And now Trump second term he's "only" added a couple trillion. Don't get me wrong, these are giant numbers and we shouldn't be spending like this. But We have been spending way more than we bring in since 2003, and it hasn't been an issue.
- engineer_22 2mo agoYou’re right, they’re just numbers. Relative to other economies they can tell us the strength of US hegemony but, the numbers are not a reliable indicator of themselves - because the money isn’t “real”.
- heyitsmedotjayb 2mo agoI thought the fiscal conservatives were in charge?
- teekert 2mo agoAh, I used to say that US debt in dollars is about the same as the amount of cells we have in our bodies. But "they" really took a big leap these past years!
- testing22321 2mo agoInterest payments on the debt will be $1.2 Trillion this year. There are about 164,000 individual taxpayers in the US. So each taxpayer is paying around $7,300 each just for interest on the debt. Which is more than Canadians pay in taxes for universal healthcare.
- TSUTiger 2mo agoAssuming you meant 164 million taxpayers... Your number is too low still. Half of those filers are not contributors, they receive refunds. The figure is more like ~65 million taking on this tax burden, so likely closer to 15k (rounding math)
- verzali 2mo agoThey pay negative taxes? Really?
- hmokiguess 2mo agoman I have no idea how these things work at this scale, nothing makes sense to me, money is just the most alien thing we ever invented
- engineer_22 2mo agoYeah MMT is basically beads and blankets for the island of manhattan.
- exceptione 2mo agoCrash the system -> Blame the others, exploit the crisis, topple the institutions -> Retvrn to the gilded age. This is horrific for 98% of the people, but a dream for power-hungry people who detest the idea that powerful people are being kept in check by the rule of law and the interests of the average Joe. Also this is the only path for 'white christian nationalists' to enforce their vision of a submissive, religious, ethnically clean society. The heavy damage done to the USA by means of self-sabotage is not unintentional. Public discourse/media is over-focused on Trump. Although he is over his ears in corruption scandals, he isn't the genius behind it. The ideologues behind Project 2025 are the real interesting figures, but we barely hear about them. Instead of root case analysis, we have daily drama and performances from publicity actors. The average Joe is distracted with all kinds of nonsense while the Overton window moves. The real shit will begin when the financial world will factor in the chance of a successful self-coup. Hoping for the best, but it will take more than a decade for a constructive movement in power to limit the damage, and it will take a generation of cultural and institutional reforms to make the state more resistant against anti-democratic coups.
- deleted 2mo ago[deleted]
- nekusar 2mo agoWho do we owe it TO?
- scottydelta 2mo agoI am surprised no one has mentioned the The Two Santa Claus Theory[0] in play here. [0] https://www.commondreams.org/views/2009/01/26/two-santa-clauses-or-how-republican-party-has-conned-america-thirty-years https://www.commondreams.org/views/2009/01/26/two-santa-clau...
- card_zero 2mo agoI didn't read to the end but I assume from the tone that it concludes "tax and spend is the one true Santa Claus and brings happiness" rather than "there ain't no Santa Claus".
- scottydelta 2mo agoIt's better explained in this blog article: How the GOP Used a Two Santa Clauses Tactic to Con America for Nearly 40 Years by Thom Hartmann[0] > First, when Republicans control the federal government, and particularly the White House, spend money like a drunken sailor and run up the US debt as far and as fast as possible. This produces three results - it stimulates the economy thus making people think that the GOP can produce a good economy, it raises the debt dramatically, and it makes people think that Republicans are the "tax-cut Santa Claus." > Second, when a Democrat is in the White House, scream about the national debt as loudly and frantically as possible, freaking out about how "our children will have to pay for it!" and "we have to cut spending to solve the crisis!" This will force the Democrats in power to cut their own social safety net programs, thus shooting their welfare-of-the-American-people Santa Claus. [0] https://www.thomhartmann.com/blog/2018/02/how-gop-used-two-santa-clauses-tactic-con-america-nearly-40-years https://www.thomhartmann.com/blog/2018/02/how-gop-used-two-s...
- vaadu 2mo agoThe way to fix it is Congress critters can't run for reelection if the budget has a deficit. balance budget amendment that also mandates a clean budget every year term limits push services off to the states. Not everything is a federal responsibility.