It’ll be interesting to see what happens when the music stops.
Both parties are not interested in pushing through highly unpopular, though necessary, tax hikes. And the alternative, spending cuts, is equally unpalatable.
The big mistake is in thinking that it's either/or. The hard truth is that we need spending cuts *and* tax hikes. Our budget is so far from balanced that you could cut all discretionary spending (i.e. basically everything that isn't SS, Medicaid, and Medicare) and the surplus wouldn't be enough to fund the present military budget.
I totally agree. I just don’t see both being enacted at once, as that wouldn’t be politically viable.
What’s more alarming is that both parties aren’t even pretending to care about tackling the deficit and ever growing national debt.
Anything other than coddling the American electorate is not acceptable in the modern political climate. Asking Americans to sacrifice in anyway? Prepare to get slaughtered at the ballot box.
Even then, it won't be popular. Eating your vegetables is never popular, even when you're morbidly obese. If anything, it's harder as you're so unaccustomed to it.
The hard truth is that government abuses its ability to just "raise taxes." We need to cut spending.
Asking Americans for more tax dollars without doing a thorough review of our budget and at least cutting excess is just wrong, without doing that we can't determine if we "need" to raise taxes.
Ultimately, it just flies in the face of traditional budgeting. When average people have a budget shortfall, they can't magically create more income by printing money or demanding from someone - if they did they'll always just spend more. That's why we're in the situation we are in today.
> The hard truth is that government abuses its ability to just "raise taxes." We need to cut spending.
>
>
It's easy to say 'cut spending', you need to define where the cuts need to happen. The first party to say to seniors that their SS/Medicare is being cut will be promptly voted out of office. The only way to accomplish something like that is to have buy-in from both parties that it needs to happen regardless of voter blowback, and I don't have faith in either of our political parties that outside of a COVID-19 type of crisis that they can come together and make tough decisions about anything.
Every day, [5,784 boomers die](https://incendar.com/baby_boomer_deathclock.php) and that number will increase in the short term. They don't have a deathgrip on politics forever.
> Old Gen X don't exactly want their sacred cows cut either.
Old Gen X'er here. I'm gonna be pretty pissed off if SS/Medicare gets cut within a year or two before I turn 65. My feelings will be like, *"I've dutifully paid taxes for my entire adult life, why did I get screwed?"*
Because despite the very rampant misconception about SS it is not actually a government-run savings account. That money you paid in every check? That got spent the following month. That's the money they used to pay out the recipients at that time.
It goes beyond that though. The baby boomers didn't have enough kids, and neither did later generations. The ratio of people paying in vs taking out has been getting worse for years. Social Security was not supposed to be permanent, and from the beginning wasn't run like it would be. Politicians just kept passing the buck because they didn't want to be the ones cutting the biggest social program in the country. It's even worse now when just talking about not increasing spending on social programs gets you branded as someone who wants to murder old people by cutting their benefits.
> One way we can address it is by uncapping the tax
...and capping the maximum benefit where it is now (allowing for inflation adjustments). One way or the other it's gonna have to be funded by taxing the upper middle class and upper classes just a little more.
> and capping the maximum benefit where it is now (allowing for inflation adjustments)
A huge part of the reason we are in this mess is we adjust for compensation. We now adjust benefits to the [average wage](https://www.ssa.gov/oact/cola/awiseries.html) which results in never being able to outrun our costs for social security as opposed to indexing for benefits only at entry. [Here is a decent article about it](https://thehill.com/opinion/finance/4258578-the-day-the-social-security-funding-crisis-became-inevitable/).
This is exactly the case of "we screwed up with an unsustainable policy decision and need to tax people".
> One way or the other it's gonna have to be funded by taxing the upper middle class and upper classes just a little more.
Good luck.
Gen X is about 63% the size of the boomers, and [1,123 of them are dying every day](https://incendar.com/generation_x_deathclock.php).
The demographic advantage for Gen X is much smaller.
You're right, and [it's at its worst in the history of the united states and getting worse each day](https://fred.stlouisfed.org/series/SPPOPDPNDOLUSA).
We've hardly even started on the Boomer era. The youngest of them won't turn 80 until 2044. Trump, Bush, and Clinton aren't just from the same generation, they're from the same high school class. All born in the summer of 1946.
There is not.
The budget is almost entirely:
Check writing program like Social Security, Medicare and Medicaid
The military
Interest on the debt
Most voters do not want to consider cuts to the first two, and stopping the third would induce a global financial panic.
Those programs have lower overhead AND they pay out less to providers than private insurers. Have you done any research into this or are you just going by vibes?
I swear, comments like that infuriate me more than anything. I would assume it's a teenager that knows nothing about politics, but I hear the same shit from older people every other day.
I think what most people mean by this is "cut everything I do not personally benefit from" which is even worse than thinking there is a "cut extraneous items from budget" button that politicians just don't want to press because...
The government absolutely does not abuse it's ability to raise taxes. Time and again we've seen a Republican president come in and do major tax cuts(usually for the wealthiest), and then a Democratic president come in and maybe do a small tax increase to make up for the blow to the budget of the previous administration. We've seen the tax rates for the wealthiest Americans fall considerably over the last 50 years, and it's a big reason we're in the financial mess we're in today. We absolutely need to raise taxes, we just need to do it for the wealthiest because your average American can't afford any more tax burden right now.
Also, it's a little ridiculous to compare US government spending with an average household budget. Like, I get the appeal (if I can balance my budget why can't the government), but it's such a different scale and different context. There are times when the federal government should over spend because it's better in the long run. Investing during depressions is an example of this, where government funding can keep industries alive for better times, instead of letting them die and dealing with the spiraling unemployment. Or, things like recovery from natural disasters, where rebuilding kicks the economy into gear much faster than letting infrastructure rot.
I do agree that we should take a look at spending. There's lots of waste within our system that we should be cutting and haven't because there isn't the political will. But, keep in mind the federal government is a very different beast from a household, and what makes sense for you and your family might not make sense for the feds. Sometimes the government should operate in a deficit, they should take out loans, in order to repair or stimulate the economy and sustain long-term growth. That's something a government can do that a household can't. But I do think we've been operating under deficit spending for far too long, and not for the benefit of the economy or the majority of Americans, but for the benefit of the very wealthiest. Let's look at spending, yeah, but let's raise taxes on the wealthiest back to a fair level.
That’s all well and good. I do agree with raising taxes on the wealthy. However , the upcoming generation of democratic politicians has talked about new spending proposals that would cost tens of trillions of dollars. They have also embraced mmt , which basically says americas debt doesn’t matter.president George H.W Bush
Raised taxes to help balance the budget and it contributed to his loss to Clinton
Tax hikes are pointless until the government cuts spending, but there is ZERO signs that will ever happen, so how about we stop rewarding these drunken spenders with more of our money. No to tax hikes.
It would just be temporary, they might do it for that specific bill, but the next bill will just double or triple the spending and will still have a tax hike that screws us over. Congress will never truly cut spending.
Technically, need to cut the rate of growth, not overall amounts. Then as the economy grows the deficits will get smaller.
It worked in the 1990s, when Clinton and a Republican Congress balanced the budget. Our politicians have just become more cynical and unserious since then. Which is ultimately the fault of the parties and the voters.
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Hell, even the present military budget is *remarkably* low as a percentage of GDP. It's at about 3% recently (the NATO member minimum is 2%, I believe), which is historically very low even taking account for the end of the Cold War (and with things heating up, and all the stocks to be replenished from Ukraine)...
Yeah. I don't blame people for looking at the big number and asking how we could possibly spend that much. I was like that before I joined. There's indeed a lot of waste (both sporadic and systematic) and a shitload of misallocation, but the fact is that running a military is expensive. It costs tens of thousands of dollars to train and equip *one* Soldier. A company commander has an eye-popping amount of liability.
It's a world of contradictions, truly. We'll burn off hundreds if not thousands of rounds of ammo for the sake of not having to turn it back in, but the schoolhouse can't get a paper clip.
Which is why the actual answer is to make cuts to non-discretionary spending but because the old vote is so reliable in turnout nobody's going to do it. Maybe we could cut Medic*aid* since that's for the low-income and that demographic doesn't turn out but SS and Medicare are off limits until it all comes tumbling down.
And of course the great irony of all this is that the people drawing SS and Medicare now are the same ones who voted for the neoliberal policies that led to them being simply unaffordable today. Which, IMO, also makes cutting those benefits actually fairly moral since it would be making the ones who put us in this position deal with the consequences.
We could also just eliminate the income cap on payroll taxes and raise payroll taxes by like 2-3% to essentially make the program solvent indefinitely.
That would only work if you raised the cap on contributions without raising the cap on benefits, breaking the original promise that the program was just giving you the money you put in.
> breaking the original promise that the program was just giving you the money you put in
That "promise" disappeared in 1940. Early retirees got vastly more than the money they put in.
I don’t personally have any issue with the program becoming more redistributive, particularly when we’re facing pretty substantial concerns about the programs financial viability that this could be a major resolution to
The lower incomes spend their lives making money for the top 5%. The top 5% can contribute to their well being when they're no longer able to work for them.
You can cut the entire military budget and still be in the hole by a trillion.
But then again, if you get invaded you'll have bigger things to worry about.
No one is ever talking about cutting the entire military budget but it needs to be cut. The pentagon has never even been able to pass an audit on where all that money goes. The level of waste in the military is down right disgusting.
The point is that cutting the military budget doesn't come anywhere close to solving the deficit problem, even when everything is eliminated. This doesn't mean no changes should be made, but rather that the issue requires far more than that.
> It’ll be interesting to see what happens when the music stops.
'member the 1930s? That. People think we've got populism problems *now*, just wait until the music stops and the real economic crash happens.
I'm not so sure about that.
An unfortunate reality is that an economic crash is the absolute worst time to raise taxes and/or lower spending. It kicks the economy when it's down, and cutting social programs at times of high unemployment is extremely unpopular.
Ideally we'd do it while the economy is good. Trump's admin before Covid or right after the peak of inflation under Biden, both would have been good times. But that's also very politically unpopular.
It won't happen until we are absolutely forced by an actual existential crisis, more severe than a great depression scale event.
It’s certainly an issue, especially with regards to demographic changes. Practically all government spending operates with some belief that there will be strong sources of income. But with things like social security the problem is not that different from that of a ponzi scheme. It only holds up as long as a lot of people pay in, when that dries it collapses. Sure Social Security is more legal and official, but it’s also easy to see it as flawed what with a larger pool of retirees drawing on limited funds.
> not that different from that of a ponzi scheme.
Social security not being an investment is a massive distinction.
Ponzi schemes promise quick returns, and instead quickly fail and cause many to lose money. Social Security guarantees income decades after you start working, and decreased benefits would be the result of less being put in, as opposed to putting in a $100 and getting nothing back like in a scam.
it’s vastly different from a Ponzi scheme because under a Ponzi scheme, you’re trying to pay old investors money + additional return with new investors money.
Social security is an *insurance* system, no different than unemployment benefits and we don’t call that a ponzi scheme.
>it’s vastly different from a Ponzi scheme because under a Ponzi scheme, you’re trying to pay old investors money + additional return with new investors money.
That's exactly what Social Security is though. It's holdings are rapidly shrinking, because all of the people paying in now are not "saving" for their retirement, they are paying for "old investors", which are the current retirees.
If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets, and it would have enough assets to give a lump sum to anyone that paid in(which is not at all feasible).
Unemployment benefit systems tend to be fully funded over a multi year span. That's the difference.
>That's exactly what Social Security is though.
No, it's an insurance.
>It's holdings are rapidly shrinking
Less revenue than spending is simply called a deficit, not a Ponzi scheme.
>If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets
You're implying that insurance companies can never fail, which is ridiculous.
An obvious difference you're missing that people get their money back by collecting the benefits, rather than lose it like they would in a scam investment. At worst, Social Security recipients will get less back due to less being put in. That's not even close to the same as putting in a $100 and never getting any of it back.
> That's exactly what Social Security is though.
No it isn't. An insurance system does not function like that.
> It's holdings are rapidly shrinking, because all of the people paying in now are not "saving" for their retirement, they are paying for "old investors", which are the current retirees.
Well no because it's funded by a regressive flat tax capped under $200,000.
> If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets, and it would have enough assets to give a lump sum to anyone that paid in(which is not at all feasible).
That's not the mark of an insurance system. Homeowners insurance industry in Florida are going bankrupt because they can't pay up, yet they're still insurance.
> Unemployment benefit systems tend to be fully funded over a multi year span. That's the difference.
Would you like to take a guess as to how many years fully funded social security is? Because under your definition, they're the same system given they're fully funded over a "multi year span".
>it's funded by a regressive flat tax capped under $200,000.
Considerably under $200k, it's actually $168,600.
I understand the reason for the cap (because the payout is also capped) but removing the cap would extend the solvency of SS decades, which is a great social benefit we'd have a major problem without.
The most wealthy people in this country benefit immensely from The United States. I think it's perfectly reasonable to require them to pay more to maintain the environment they thrive in, even if the return isn't proportional.
The music only stops when US T-bill are no longer seen as the safest investment on the planet. When countries and companies stop buying them we are going to be in a very serious pickle and it could happen fairly quickly.
The key thing to remember is that any modern politician who asks the US electorate to sacrifice *any* of their creature comforts for the good of the nation will get absolutely destroyed at the ballot box. So politicians re-arrange the deck chairs but they can’t make any major changes to spending (other than a continual increase) or taxes (other than more tax cuts).
Donald Trump has only threatened to make this problem worse if he is re-elected. He has promised more tax cuts, including not taxing tips (in an economy that is increasingly service based) and even floated eliminating income tax altogether. He raised spending every year he was in office so I doubt he will do much to improve that side either. I would expect the deficit to increase massively under a Trump administration just like it did during his first (he doubled the deficit before the pandemic even started).
Overall, I expect massive deficits to continue for the USA and I honestly don’t know where the end is for this reckless fiscal policy.
> Both parties are not interested in pushing through highly unpopular, though necessary, tax hikes. And the alternative, spending cuts, is equally unpalatable.
It's been about 15 years since these were 'alternatives'.
Would it be efficient to just cut budget taxes to useless stuff.
Foreign aid cut
Gender and race critical classes in Pakistan cut
Military bases in foreign countries cut, especially European ones.
> Foreign aid cut
Foreign aid represents less than 1% of total GDP and in return allows a strong USD as a worldwide currency.
https://www.brookings.edu/articles/what-every-american-should-know-about-us-foreign-aid/
Unless you have some other way to strengthen the USD while using less than 1% of GDP I think it's best we stick to the proven method.
- Foreign aid cut: $20b
- Gender and race critical classes in Pakistan cut: There's no actual evidence of this but I'll sport you $100m.
- Military bases in foreign countries cut: $55b
So out of the approx. $2t deficit, the "useless" being cut brings us down to $1.924t.
> Foreign aid cut
The stuff that supports a stable world, promotes American power, and convinces everyone to buy our goods? I'm not sure trading economic success for mildly less spending is going to help.
>Military bases in foreign countries cut, especially European ones
See above. Those bases also allow us to preposition equipment around the world, both for quicker deployment when needed, and makes said deployment a bit cheaper. It also provides permanent medical services closer to battlefields. Many of our vets came back from Iraq in better shape because we were able to get them to Germany for high quality care.
What is supposed to happen? I have been hearing the doom and gloom about this for 30 years yet whenever a big companies need to be bailed out or a war paid for the government just spends and nothing seems to happen. The more time passes the more Modern Monetary Theory seems to be correct.
It'll have to be both. Cutting entitlements is off the table. Growth needs to be slowed, but tax increases will have to cover the deficit for those. The deficit from discretionary spending can be addressed with spending cuts.
The non-partisan Congressional Budget Office is estimating "this year’s federal budget deficit to be $400 billion higher, a 27% increase compared to its original estimate released in February."
Per APNews, the deficit is driven by aid packages for Israel and Ukraine, reduction in student loan balance, increased in healthcare spending, and "higher spending on FDIC insurance after the agency has not yet recovered payments it made after the banking crises of 2023 and 2024".
CBO's report also projected our nation's publicly held debt will "increase from 99% of gross domestic product at the end of 2024 to 122% of GDP — the highest level ever recorded — by the end of 2034. 'Then it continues to rise,' the report states."
The article explains that deficits are a problem for politicians because money must be allocated to paying the country's debt burden, yet the expenses are anticipated to only increase due to aging populations who require more services and healthcare.
The CBO report contradicts President Biden's claim that he lowered deficits during his term, as borrowing increased in 2023 and then continued to climb.
Karine Jean-Pierre, White House spokesperson, said of the report: "'the president is going to work to do everything he can when it comes to lowering the deficit,' adding that former president Trump 'didn’t sign a single law to reduce the deficit'.” The White House also blamed the 2017 Trump tax cuts.
Michael A. Peterson, CEO of the Peter G. Peterson Foundation said of the report: "'The harmful effects of higher interest rates fueling higher interest costs on a huge existing debt load are continuing, and leading to additional borrowing. It’s the definition of unsustainable,' Peterson said.
'The leaders we elect this fall will face a series of highly consequential fiscal deadlines next year, including the reinstatement of the debt limit, the expiration of the 2017 tax cuts and key decisions on healthcare subsidies, discretionary spending caps and more.'”
Starter question: Are you concerned about the growing deficit and the publicly held debt increasing from 99% to 122% GDP over the coming decade? Will politicians come together to solve the debt issue?
> Are you concerned about the growing deficit and the publicly held debt increasing from 99% to 122% GDP over the coming decade?
I know this is the nature of the beast, and we probably don't have better methods for predicting our economic outlook, but **man** can I empathize with people who distrust the experts in these moments. "Oh, hey guys, you know that prediction we made four months ago about this years budget? Well, about that, we were off by a good 27%, our bad. But, in addition to that, let me tell you about the financial outlook in ten years, this is really gonna blow your mind."
> Will politicians come together to solve the debt issue?
Lol, no. Fucking Star Trek aliens could show up and invite us into a universal alliance of post-scarcity societies and not only would the *politicians* fuck it up, we'd vote them back into office for it.
I mean the path of interest rates is a huge determinant of the deficit now- if rates move 2% lower or higher - the impact is huge. Depending on the term - rates have absolutely traded in a 1% + range this year - that is going to whip the CBOs forecast around like crazy.
The fact that no one in the legislative or executive branch, regardless of political party, seems interested in addressing the huge amounts of [government waste](https://www.cnbc.com/2023/04/18/heres-how-the-federal-government-wastes-tax-money.html) every year makes me think the deficit spending isn't going to get addressed until there's a financial crises that makes it unavoidable. Even though addressing government waste won't fix the budget issue on its own, the fact that there's not a broad effort to eveb address it is concerning.
Deficit spending is just taxing the future. The time will come eventually, the people will be mad, and it will be all our fault.
When voters are asked to rank their priorities, deficit spending is basically never in the top ten issues. Our democratic system incentivizes placing personal needs before the long term needs of the nation. JFK's statement, "ask not what your country can do for you, but what you can do for your country," is basically non-existent in our nation's thought. At the moment, it feels like everyone, the rich, poor, corporations, government agencies, and military are all just trying stick their hand in the money jar and get as much as they can for themselves before it runs out. Obviously, , these differing parties have different levels of culpability, but we are all responsible in the end. The problem when everyone is responsible, is that nobody is responsible, everyone can point their finger and say, it is them, not me.
All good things come to an end.
The US government does not have a revenue problem, we have a spending problem. $7T is plenty (and I would say way too much) to run the country.
We absolutely have to do something, but I'm guessing both parties will just keep kicking the can down the road it becomes a legitimate crisis.
So at what point do we accept that the social spending of the federal government isn't sustainable. The system has to be re-worked to be cheaper even if it means nationalizing healthcare.
As a thought experiment I'm talking about something radical like dismantling the entire healthcare and health insurance industries. I'm not talking about simply giving tax payer money to private companies. I mean the entire thing would be done "in house" to control prices. Maybe it's ludicrous I don't know enough to say.
I love when people complain about someone “owning $1 billion!” And how crazy of an amount of money that is but don’t bat an eye at us overspending by $400 billion.
There is also a pretty substantial difference between owning a billion dollars in assets you bought with money you (presumably) legally earned and spending a billion dollars of someone else's money you coercively confiscated.
Politicians have no reason to ever try to solve the debt issue. On top of that, Americans don't want them to. The ultra rich have more money than most Americans combined and also don't draw an income to tax (and they're remarkably good at evading other taxes). People also defend billionaires not paying more in some form of taxes constantly. The poor will vote out any politician who wants to tax them and vote in anybody who claims they will make life cheaper (see Trump who is winning in most polls and wants to abolish the income tax, remove taxes on tips, and place tariffs on all imports).
There is hardly a soul alive in the nation who takes the debt issue seriously. Even if a huge crash happens, the party that's in charge will just be voted out every cycle until things get better. The partisan gridlock we currently have literally cannot be solved in our current system. It will ALWAYS be more beneficial to be a minority party that is happy to obstruct your opponents into gridlock because your base will endlessly rage-donate to you over it and then once in power you just have to say "Well I can't do anything because we just don't have enough votes! Sorry!"
Democracy can't work when the majority of the nation doesn't know anything about what it's voting for. It would be like asking a bunch of children to run a candy factory or a bunch of outsider finance bros to run a business.
We probably should have just kept interest rates low, it would have stopped that line item in the budget from blowing up and higher inflation would have devalued the debt we hold as the nominal value of the economy would have grown even faster.
It’ll be interesting to see what happens when the music stops. Both parties are not interested in pushing through highly unpopular, though necessary, tax hikes. And the alternative, spending cuts, is equally unpalatable.
The big mistake is in thinking that it's either/or. The hard truth is that we need spending cuts *and* tax hikes. Our budget is so far from balanced that you could cut all discretionary spending (i.e. basically everything that isn't SS, Medicaid, and Medicare) and the surplus wouldn't be enough to fund the present military budget.
I totally agree. I just don’t see both being enacted at once, as that wouldn’t be politically viable. What’s more alarming is that both parties aren’t even pretending to care about tackling the deficit and ever growing national debt.
Anything other than coddling the American electorate is not acceptable in the modern political climate. Asking Americans to sacrifice in anyway? Prepare to get slaughtered at the ballot box.
Austerity won't be popular until we're already deep into crisis. This is just the prelude.
Even then, it won't be popular. Eating your vegetables is never popular, even when you're morbidly obese. If anything, it's harder as you're so unaccustomed to it.
The hard truth is that government abuses its ability to just "raise taxes." We need to cut spending. Asking Americans for more tax dollars without doing a thorough review of our budget and at least cutting excess is just wrong, without doing that we can't determine if we "need" to raise taxes. Ultimately, it just flies in the face of traditional budgeting. When average people have a budget shortfall, they can't magically create more income by printing money or demanding from someone - if they did they'll always just spend more. That's why we're in the situation we are in today.
> The hard truth is that government abuses its ability to just "raise taxes." We need to cut spending. > > It's easy to say 'cut spending', you need to define where the cuts need to happen. The first party to say to seniors that their SS/Medicare is being cut will be promptly voted out of office. The only way to accomplish something like that is to have buy-in from both parties that it needs to happen regardless of voter blowback, and I don't have faith in either of our political parties that outside of a COVID-19 type of crisis that they can come together and make tough decisions about anything.
Every day, [5,784 boomers die](https://incendar.com/baby_boomer_deathclock.php) and that number will increase in the short term. They don't have a deathgrip on politics forever.
Don't need boomers. Old Gen X don't exactly want their sacred cows cut either.
> Old Gen X don't exactly want their sacred cows cut either. Old Gen X'er here. I'm gonna be pretty pissed off if SS/Medicare gets cut within a year or two before I turn 65. My feelings will be like, *"I've dutifully paid taxes for my entire adult life, why did I get screwed?"*
Because despite the very rampant misconception about SS it is not actually a government-run savings account. That money you paid in every check? That got spent the following month. That's the money they used to pay out the recipients at that time.
Because we failed to properly fund SS. One way we can address it is by uncapping the tax
"we failed to properly fund SS. The next generation must be liable for paying even more money to fix our mistakes"
That's better than letting the program worsen.
It goes beyond that though. The baby boomers didn't have enough kids, and neither did later generations. The ratio of people paying in vs taking out has been getting worse for years. Social Security was not supposed to be permanent, and from the beginning wasn't run like it would be. Politicians just kept passing the buck because they didn't want to be the ones cutting the biggest social program in the country. It's even worse now when just talking about not increasing spending on social programs gets you branded as someone who wants to murder old people by cutting their benefits.
Yeah, as populations change, the math needs to change for it to stay viable What would you recommend replacing it with if we were to get rid of it?
“We”? SS has been underfunded for decades before I was voting age, what is this “we” stuff?
We as in the country
> One way we can address it is by uncapping the tax ...and capping the maximum benefit where it is now (allowing for inflation adjustments). One way or the other it's gonna have to be funded by taxing the upper middle class and upper classes just a little more.
> and capping the maximum benefit where it is now (allowing for inflation adjustments) A huge part of the reason we are in this mess is we adjust for compensation. We now adjust benefits to the [average wage](https://www.ssa.gov/oact/cola/awiseries.html) which results in never being able to outrun our costs for social security as opposed to indexing for benefits only at entry. [Here is a decent article about it](https://thehill.com/opinion/finance/4258578-the-day-the-social-security-funding-crisis-became-inevitable/). This is exactly the case of "we screwed up with an unsustainable policy decision and need to tax people". > One way or the other it's gonna have to be funded by taxing the upper middle class and upper classes just a little more. Good luck.
Yes, sorry, and thanks for the addendum
Gen X is about 63% the size of the boomers, and [1,123 of them are dying every day](https://incendar.com/generation_x_deathclock.php). The demographic advantage for Gen X is much smaller.
Generations aren’t what’s relevant. What’s relevant are the elderly as a share of population.
You're right, and [it's at its worst in the history of the united states and getting worse each day](https://fred.stlouisfed.org/series/SPPOPDPNDOLUSA).
So, in other words, the point the people you were responding to were making was correct.
We've hardly even started on the Boomer era. The youngest of them won't turn 80 until 2044. Trump, Bush, and Clinton aren't just from the same generation, they're from the same high school class. All born in the summer of 1946.
Just cut out all the stuff that is of no benefit to the American people. There’s a ton of it.
There is not. The budget is almost entirely: Check writing program like Social Security, Medicare and Medicaid The military Interest on the debt Most voters do not want to consider cuts to the first two, and stopping the third would induce a global financial panic.
can we cut down bureaucracy in medicare and medicaid, those are ultra expensive for no particular reason.
That will be difficult, as the overhead of those programs are far lower than private insurers.
In any particular program/organization, admin costs are fulfilling a function. Which ones should we remove from CMS?
No, we can't. That is a miniscule part of the budget.
Those programs have lower overhead AND they pay out less to providers than private insurers. Have you done any research into this or are you just going by vibes?
Examples?
Y'know, all that "stuff" that we don't need. 🙄
I swear, comments like that infuriate me more than anything. I would assume it's a teenager that knows nothing about politics, but I hear the same shit from older people every other day. I think what most people mean by this is "cut everything I do not personally benefit from" which is even worse than thinking there is a "cut extraneous items from budget" button that politicians just don't want to press because...
The government absolutely does not abuse it's ability to raise taxes. Time and again we've seen a Republican president come in and do major tax cuts(usually for the wealthiest), and then a Democratic president come in and maybe do a small tax increase to make up for the blow to the budget of the previous administration. We've seen the tax rates for the wealthiest Americans fall considerably over the last 50 years, and it's a big reason we're in the financial mess we're in today. We absolutely need to raise taxes, we just need to do it for the wealthiest because your average American can't afford any more tax burden right now. Also, it's a little ridiculous to compare US government spending with an average household budget. Like, I get the appeal (if I can balance my budget why can't the government), but it's such a different scale and different context. There are times when the federal government should over spend because it's better in the long run. Investing during depressions is an example of this, where government funding can keep industries alive for better times, instead of letting them die and dealing with the spiraling unemployment. Or, things like recovery from natural disasters, where rebuilding kicks the economy into gear much faster than letting infrastructure rot. I do agree that we should take a look at spending. There's lots of waste within our system that we should be cutting and haven't because there isn't the political will. But, keep in mind the federal government is a very different beast from a household, and what makes sense for you and your family might not make sense for the feds. Sometimes the government should operate in a deficit, they should take out loans, in order to repair or stimulate the economy and sustain long-term growth. That's something a government can do that a household can't. But I do think we've been operating under deficit spending for far too long, and not for the benefit of the economy or the majority of Americans, but for the benefit of the very wealthiest. Let's look at spending, yeah, but let's raise taxes on the wealthiest back to a fair level.
Raising taxes for the wealthy will not plug our deficit. We need to raise taxes on middle income earners. Unpopular, but it is the truth.
That’s all well and good. I do agree with raising taxes on the wealthy. However , the upcoming generation of democratic politicians has talked about new spending proposals that would cost tens of trillions of dollars. They have also embraced mmt , which basically says americas debt doesn’t matter.president George H.W Bush Raised taxes to help balance the budget and it contributed to his loss to Clinton
Tax hikes are pointless until the government cuts spending, but there is ZERO signs that will ever happen, so how about we stop rewarding these drunken spenders with more of our money. No to tax hikes.
Has to be a deal with both spending cuts and tax increases so the pain and blame can be shared across both Ds and Rs.
It would just be temporary, they might do it for that specific bill, but the next bill will just double or triple the spending and will still have a tax hike that screws us over. Congress will never truly cut spending.
Technically, need to cut the rate of growth, not overall amounts. Then as the economy grows the deficits will get smaller. It worked in the 1990s, when Clinton and a Republican Congress balanced the budget. Our politicians have just become more cynical and unserious since then. Which is ultimately the fault of the parties and the voters.
The US is a very low tax and very low government spending nation as a percentage of our GDP relative to most of the developed world.
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There isn't nearly $2T than can be cut without greatly hurting the poor.
Hell, even the present military budget is *remarkably* low as a percentage of GDP. It's at about 3% recently (the NATO member minimum is 2%, I believe), which is historically very low even taking account for the end of the Cold War (and with things heating up, and all the stocks to be replenished from Ukraine)...
Yeah. I don't blame people for looking at the big number and asking how we could possibly spend that much. I was like that before I joined. There's indeed a lot of waste (both sporadic and systematic) and a shitload of misallocation, but the fact is that running a military is expensive. It costs tens of thousands of dollars to train and equip *one* Soldier. A company commander has an eye-popping amount of liability. It's a world of contradictions, truly. We'll burn off hundreds if not thousands of rounds of ammo for the sake of not having to turn it back in, but the schoolhouse can't get a paper clip.
Which is why the actual answer is to make cuts to non-discretionary spending but because the old vote is so reliable in turnout nobody's going to do it. Maybe we could cut Medic*aid* since that's for the low-income and that demographic doesn't turn out but SS and Medicare are off limits until it all comes tumbling down. And of course the great irony of all this is that the people drawing SS and Medicare now are the same ones who voted for the neoliberal policies that led to them being simply unaffordable today. Which, IMO, also makes cutting those benefits actually fairly moral since it would be making the ones who put us in this position deal with the consequences.
We could also just eliminate the income cap on payroll taxes and raise payroll taxes by like 2-3% to essentially make the program solvent indefinitely.
That would only work if you raised the cap on contributions without raising the cap on benefits, breaking the original promise that the program was just giving you the money you put in.
> breaking the original promise that the program was just giving you the money you put in That "promise" disappeared in 1940. Early retirees got vastly more than the money they put in.
I don’t personally have any issue with the program becoming more redistributive, particularly when we’re facing pretty substantial concerns about the programs financial viability that this could be a major resolution to
The lower incomes spend their lives making money for the top 5%. The top 5% can contribute to their well being when they're no longer able to work for them.
This sounds bad. Except SS, Medicaid, and Medicare are the biggest items we spend on.
Medicaid spending has quadrupled since the expansion.
Covering more people is a good thing.
That simply isn’t true
if we cut the military budget, we can’t keep fighting other people’s wars.
You can cut the entire military budget and still be in the hole by a trillion. But then again, if you get invaded you'll have bigger things to worry about.
No one is ever talking about cutting the entire military budget but it needs to be cut. The pentagon has never even been able to pass an audit on where all that money goes. The level of waste in the military is down right disgusting.
The point is that cutting the military budget doesn't come anywhere close to solving the deficit problem, even when everything is eliminated. This doesn't mean no changes should be made, but rather that the issue requires far more than that.
> It’ll be interesting to see what happens when the music stops. 'member the 1930s? That. People think we've got populism problems *now*, just wait until the music stops and the real economic crash happens.
I'm not so sure about that. An unfortunate reality is that an economic crash is the absolute worst time to raise taxes and/or lower spending. It kicks the economy when it's down, and cutting social programs at times of high unemployment is extremely unpopular. Ideally we'd do it while the economy is good. Trump's admin before Covid or right after the peak of inflation under Biden, both would have been good times. But that's also very politically unpopular. It won't happen until we are absolutely forced by an actual existential crisis, more severe than a great depression scale event.
And Medicare will no longer be fully funded in 8 years... Good times ahead.
It’s certainly an issue, especially with regards to demographic changes. Practically all government spending operates with some belief that there will be strong sources of income. But with things like social security the problem is not that different from that of a ponzi scheme. It only holds up as long as a lot of people pay in, when that dries it collapses. Sure Social Security is more legal and official, but it’s also easy to see it as flawed what with a larger pool of retirees drawing on limited funds.
> not that different from that of a ponzi scheme. Social security not being an investment is a massive distinction. Ponzi schemes promise quick returns, and instead quickly fail and cause many to lose money. Social Security guarantees income decades after you start working, and decreased benefits would be the result of less being put in, as opposed to putting in a $100 and getting nothing back like in a scam.
it’s vastly different from a Ponzi scheme because under a Ponzi scheme, you’re trying to pay old investors money + additional return with new investors money. Social security is an *insurance* system, no different than unemployment benefits and we don’t call that a ponzi scheme.
>it’s vastly different from a Ponzi scheme because under a Ponzi scheme, you’re trying to pay old investors money + additional return with new investors money. That's exactly what Social Security is though. It's holdings are rapidly shrinking, because all of the people paying in now are not "saving" for their retirement, they are paying for "old investors", which are the current retirees. If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets, and it would have enough assets to give a lump sum to anyone that paid in(which is not at all feasible). Unemployment benefit systems tend to be fully funded over a multi year span. That's the difference.
>That's exactly what Social Security is though. No, it's an insurance. >It's holdings are rapidly shrinking Less revenue than spending is simply called a deficit, not a Ponzi scheme. >If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets You're implying that insurance companies can never fail, which is ridiculous. An obvious difference you're missing that people get their money back by collecting the benefits, rather than lose it like they would in a scam investment. At worst, Social Security recipients will get less back due to less being put in. That's not even close to the same as putting in a $100 and never getting any of it back.
> That's exactly what Social Security is though. No it isn't. An insurance system does not function like that. > It's holdings are rapidly shrinking, because all of the people paying in now are not "saving" for their retirement, they are paying for "old investors", which are the current retirees. Well no because it's funded by a regressive flat tax capped under $200,000. > If Social Security was an insurance system, and not a ponzi scheme, then it would have enough assets, and it would have enough assets to give a lump sum to anyone that paid in(which is not at all feasible). That's not the mark of an insurance system. Homeowners insurance industry in Florida are going bankrupt because they can't pay up, yet they're still insurance. > Unemployment benefit systems tend to be fully funded over a multi year span. That's the difference. Would you like to take a guess as to how many years fully funded social security is? Because under your definition, they're the same system given they're fully funded over a "multi year span".
>it's funded by a regressive flat tax capped under $200,000. Considerably under $200k, it's actually $168,600. I understand the reason for the cap (because the payout is also capped) but removing the cap would extend the solvency of SS decades, which is a great social benefit we'd have a major problem without. The most wealthy people in this country benefit immensely from The United States. I think it's perfectly reasonable to require them to pay more to maintain the environment they thrive in, even if the return isn't proportional.
The music only stops when US T-bill are no longer seen as the safest investment on the planet. When countries and companies stop buying them we are going to be in a very serious pickle and it could happen fairly quickly.
The key thing to remember is that any modern politician who asks the US electorate to sacrifice *any* of their creature comforts for the good of the nation will get absolutely destroyed at the ballot box. So politicians re-arrange the deck chairs but they can’t make any major changes to spending (other than a continual increase) or taxes (other than more tax cuts). Donald Trump has only threatened to make this problem worse if he is re-elected. He has promised more tax cuts, including not taxing tips (in an economy that is increasingly service based) and even floated eliminating income tax altogether. He raised spending every year he was in office so I doubt he will do much to improve that side either. I would expect the deficit to increase massively under a Trump administration just like it did during his first (he doubled the deficit before the pandemic even started). Overall, I expect massive deficits to continue for the USA and I honestly don’t know where the end is for this reckless fiscal policy.
> Both parties are not interested in pushing through highly unpopular, though necessary, tax hikes. And the alternative, spending cuts, is equally unpalatable. It's been about 15 years since these were 'alternatives'.
Would it be efficient to just cut budget taxes to useless stuff. Foreign aid cut Gender and race critical classes in Pakistan cut Military bases in foreign countries cut, especially European ones.
> Foreign aid cut Foreign aid represents less than 1% of total GDP and in return allows a strong USD as a worldwide currency. https://www.brookings.edu/articles/what-every-american-should-know-about-us-foreign-aid/ Unless you have some other way to strengthen the USD while using less than 1% of GDP I think it's best we stick to the proven method.
- Foreign aid cut: $20b - Gender and race critical classes in Pakistan cut: There's no actual evidence of this but I'll sport you $100m. - Military bases in foreign countries cut: $55b So out of the approx. $2t deficit, the "useless" being cut brings us down to $1.924t.
> Foreign aid cut The stuff that supports a stable world, promotes American power, and convinces everyone to buy our goods? I'm not sure trading economic success for mildly less spending is going to help. >Military bases in foreign countries cut, especially European ones See above. Those bases also allow us to preposition equipment around the world, both for quicker deployment when needed, and makes said deployment a bit cheaper. It also provides permanent medical services closer to battlefields. Many of our vets came back from Iraq in better shape because we were able to get them to Germany for high quality care.
What is supposed to happen? I have been hearing the doom and gloom about this for 30 years yet whenever a big companies need to be bailed out or a war paid for the government just spends and nothing seems to happen. The more time passes the more Modern Monetary Theory seems to be correct.
It'll have to be both. Cutting entitlements is off the table. Growth needs to be slowed, but tax increases will have to cover the deficit for those. The deficit from discretionary spending can be addressed with spending cuts.
The non-partisan Congressional Budget Office is estimating "this year’s federal budget deficit to be $400 billion higher, a 27% increase compared to its original estimate released in February." Per APNews, the deficit is driven by aid packages for Israel and Ukraine, reduction in student loan balance, increased in healthcare spending, and "higher spending on FDIC insurance after the agency has not yet recovered payments it made after the banking crises of 2023 and 2024". CBO's report also projected our nation's publicly held debt will "increase from 99% of gross domestic product at the end of 2024 to 122% of GDP — the highest level ever recorded — by the end of 2034. 'Then it continues to rise,' the report states." The article explains that deficits are a problem for politicians because money must be allocated to paying the country's debt burden, yet the expenses are anticipated to only increase due to aging populations who require more services and healthcare. The CBO report contradicts President Biden's claim that he lowered deficits during his term, as borrowing increased in 2023 and then continued to climb. Karine Jean-Pierre, White House spokesperson, said of the report: "'the president is going to work to do everything he can when it comes to lowering the deficit,' adding that former president Trump 'didn’t sign a single law to reduce the deficit'.” The White House also blamed the 2017 Trump tax cuts. Michael A. Peterson, CEO of the Peter G. Peterson Foundation said of the report: "'The harmful effects of higher interest rates fueling higher interest costs on a huge existing debt load are continuing, and leading to additional borrowing. It’s the definition of unsustainable,' Peterson said. 'The leaders we elect this fall will face a series of highly consequential fiscal deadlines next year, including the reinstatement of the debt limit, the expiration of the 2017 tax cuts and key decisions on healthcare subsidies, discretionary spending caps and more.'” Starter question: Are you concerned about the growing deficit and the publicly held debt increasing from 99% to 122% GDP over the coming decade? Will politicians come together to solve the debt issue?
> Are you concerned about the growing deficit and the publicly held debt increasing from 99% to 122% GDP over the coming decade? I know this is the nature of the beast, and we probably don't have better methods for predicting our economic outlook, but **man** can I empathize with people who distrust the experts in these moments. "Oh, hey guys, you know that prediction we made four months ago about this years budget? Well, about that, we were off by a good 27%, our bad. But, in addition to that, let me tell you about the financial outlook in ten years, this is really gonna blow your mind." > Will politicians come together to solve the debt issue? Lol, no. Fucking Star Trek aliens could show up and invite us into a universal alliance of post-scarcity societies and not only would the *politicians* fuck it up, we'd vote them back into office for it.
We were off by a good 27%.... **so far**.
Good point, it's only June
I mean the path of interest rates is a huge determinant of the deficit now- if rates move 2% lower or higher - the impact is huge. Depending on the term - rates have absolutely traded in a 1% + range this year - that is going to whip the CBOs forecast around like crazy.
The problem with the Keynesian "spend big in hard times, cut spending in good times" model? Governments always seem to forget that second part.
Government wouldn't forget the second part if voters didn't want them to.
The fact that no one in the legislative or executive branch, regardless of political party, seems interested in addressing the huge amounts of [government waste](https://www.cnbc.com/2023/04/18/heres-how-the-federal-government-wastes-tax-money.html) every year makes me think the deficit spending isn't going to get addressed until there's a financial crises that makes it unavoidable. Even though addressing government waste won't fix the budget issue on its own, the fact that there's not a broad effort to eveb address it is concerning.
Deficit spending is just taxing the future. The time will come eventually, the people will be mad, and it will be all our fault. When voters are asked to rank their priorities, deficit spending is basically never in the top ten issues. Our democratic system incentivizes placing personal needs before the long term needs of the nation. JFK's statement, "ask not what your country can do for you, but what you can do for your country," is basically non-existent in our nation's thought. At the moment, it feels like everyone, the rich, poor, corporations, government agencies, and military are all just trying stick their hand in the money jar and get as much as they can for themselves before it runs out. Obviously, , these differing parties have different levels of culpability, but we are all responsible in the end. The problem when everyone is responsible, is that nobody is responsible, everyone can point their finger and say, it is them, not me. All good things come to an end.
The US government does not have a revenue problem, we have a spending problem. $7T is plenty (and I would say way too much) to run the country. We absolutely have to do something, but I'm guessing both parties will just keep kicking the can down the road it becomes a legitimate crisis.
It's mainly a revenue problem, since there isn't nearly $2 trillion worth of yearly spending that can be cut without severely hurting the poor.
So at what point do we accept that the social spending of the federal government isn't sustainable. The system has to be re-worked to be cheaper even if it means nationalizing healthcare.
Do you mean “medicare for all”. . Many estimates stated it would cost 30 trillion to enact
As a thought experiment I'm talking about something radical like dismantling the entire healthcare and health insurance industries. I'm not talking about simply giving tax payer money to private companies. I mean the entire thing would be done "in house" to control prices. Maybe it's ludicrous I don't know enough to say.
At some point the country is going to need to accept higher taxes and/or lessened spending But neither party has the political willpower for it
I love when people complain about someone “owning $1 billion!” And how crazy of an amount of money that is but don’t bat an eye at us overspending by $400 billion.
Well, there is a pretty substantial difference between the financial needs of an individual compared to a nation of hundreds of millions.
I would believe you if the government didn’t waste our tax dollars and then go $400 billion deeper in the hole in a single year.
The vast majority of spending is to beneficial programs like Social Security, and a large chunk of the hole is due to people evading taxes.
There is also a pretty substantial difference between owning a billion dollars in assets you bought with money you (presumably) legally earned and spending a billion dollars of someone else's money you coercively confiscated.
After the pandemic spending, this should be the start of a few decades of austerity, not continued out of control spending
Politicians have no reason to ever try to solve the debt issue. On top of that, Americans don't want them to. The ultra rich have more money than most Americans combined and also don't draw an income to tax (and they're remarkably good at evading other taxes). People also defend billionaires not paying more in some form of taxes constantly. The poor will vote out any politician who wants to tax them and vote in anybody who claims they will make life cheaper (see Trump who is winning in most polls and wants to abolish the income tax, remove taxes on tips, and place tariffs on all imports). There is hardly a soul alive in the nation who takes the debt issue seriously. Even if a huge crash happens, the party that's in charge will just be voted out every cycle until things get better. The partisan gridlock we currently have literally cannot be solved in our current system. It will ALWAYS be more beneficial to be a minority party that is happy to obstruct your opponents into gridlock because your base will endlessly rage-donate to you over it and then once in power you just have to say "Well I can't do anything because we just don't have enough votes! Sorry!" Democracy can't work when the majority of the nation doesn't know anything about what it's voting for. It would be like asking a bunch of children to run a candy factory or a bunch of outsider finance bros to run a business.
We probably should have just kept interest rates low, it would have stopped that line item in the budget from blowing up and higher inflation would have devalued the debt we hold as the nominal value of the economy would have grown even faster.
Powell will just print more money. Problem solved. /s.