It used to be more relevant to national spending. In 1992, Bill Clinton won in part due to the high deficit and national debt. Unlike Republicans, he had a real plan to successfully manage it:...
When rates go up and inflation is up, nations spend an increasing amount of their budget just on debt payments (paying back bonds). The modern monetary theorists have been eating their hats for awhile now because recent inflation was partially caused by government stimulus during COVID. Unlike 2008, many countries are now in an economic situation where it does actually make sense to pay down the debt. Even writers on the left are starting to pick up on this: https://www.theatlantic.com/ideas/archive/2023/07/national-debt-fiscal-trajectory/674665/
And he did. Congress did away with that budget surplus pretty quick though, and Bush 2 insured it'll never happen again. MMT people aren't eating their hats, because part of 'the plan' is also to...
And he did. Congress did away with that budget surplus pretty quick though, and Bush 2 insured it'll never happen again.
MMT people aren't eating their hats, because part of 'the plan' is also to tax the money back into the void. This is the part that politicians keep shirking on.
Covid relief should have been paired with rolling back a metric ton of tax cuts.
Even then, I'm fairly certain the COVID relief was a drop in the bucket compared to millions of 401k accounts activating (from people in their 60's that decided to retire instead of dealing with COVID in the workplace), alongside bonkers-low interest rates.
Alan Rappeport America’s gross national debt exceeded $33 trillion for the first time on Monday, providing a stark reminder of the country’s shaky fiscal trajectory at a moment when Washington...
Alan Rappeport
America’s gross national debt exceeded $33 trillion for the first time on Monday, providing a stark reminder of the country’s shaky fiscal trajectory at a moment when Washington faces the prospect of a government shutdown this month amid another fight over federal spending.
tap to know more...
The debate over the debt has grown louder this year, punctuated by an extended standoff over raising the nation’s borrowing cap.
That fight ended with a bipartisan agreement to suspend the debt limit for two years and cut federal spending by $1.5 trillion over a decade by essentially freezing some funding that had been projected to increase next year and then limiting spending to 1 percent growth in 2025.
But the debt is on track to top $50 trillion by the end of the decade, even after newly passed spending cuts are taken into account, as interest on the debt mounts and the cost of the nation’s social safety net programs keeps growing.
The Inflation Reduction Act of 2022 was previously estimated to cost about $400 billion over a decade, but according to estimates by the University of Pennsylvania’s Penn Wharton Budget Model it could cost more than $1 trillion thanks to strong demand for the law’s generous clean energy tax credits.
Pandemic-era relief programs are still costing the federal government money. The Internal Revenue Service said last week that claims for the Employee Retention Credit, a tax benefit that was originally projected to cost about $55 billion, have so far cost the federal government $230 billion. The I.R.S. is freezing the program because of fears about fraud and abuse.
The pushback against efforts to raise revenue and cut spending has heightened the sense of alarm among budget watchdog groups that fear that a fiscal crisis is approaching.
“As we have seen with recent growth in inflation and interest rates, the cost of debt can mount suddenly and rapidly,” said Michael A. Peterson, the chief executive of the Peter G. Peterson Foundation, which promotes fiscal restraint. “With more than $10 trillion of interest costs over the next decade, this compounding fiscal cycle will only continue to do damage to our kids and grandkids.”
“This town is addicted to spending other people’s money,” Representative Eli Crane, Republican of Arizona, said on X, formerly Twitter. “Enough is enough.” But the White House blamed Republicans on Monday for the bulging debt burden.
“The increase in debt over the last 20 years was overwhelmingly driven by the trillions spent on Republican tax cuts skewed to the wealthy and big corporations,” said Michael Kikukawa, a White House spokesman. “Congressional Republicans want to double down on trickle-down by extending President Trump’s tax cuts and repealing President Biden’s corporate tax reforms.”
A Treasury Department report last week showed that the deficit — the gap between what the United States spends and what it collects through taxes and other revenue — was $1.5 trillion for the first 11 months of the fiscal year, a 61 percent increase from the same period a year ago.
In an interview with CNBC on Monday, Treasury Secretary Janet L. Yellen said she was comfortable with the nation’s fiscal course because interest costs as a share of the economy remained manageable. However, she suggested that it was important to be mindful of future spending.
“The president has proposed a series of measures that would reduce our deficits over time while investing in the economy,” Ms. Yellen said, “and this is something we need to do going forward.”
Ah yes, that number we never hear about when someone with an R next to their name is president.
It used to be more relevant to national spending. In 1992, Bill Clinton won in part due to the high deficit and national debt. Unlike Republicans, he had a real plan to successfully manage it: https://en.wikipedia.org/wiki/Economic_policy_of_the_Bill_Clinton_administration
When rates go up and inflation is up, nations spend an increasing amount of their budget just on debt payments (paying back bonds). The modern monetary theorists have been eating their hats for awhile now because recent inflation was partially caused by government stimulus during COVID. Unlike 2008, many countries are now in an economic situation where it does actually make sense to pay down the debt. Even writers on the left are starting to pick up on this: https://www.theatlantic.com/ideas/archive/2023/07/national-debt-fiscal-trajectory/674665/
And he did. Congress did away with that budget surplus pretty quick though, and Bush 2 insured it'll never happen again.
MMT people aren't eating their hats, because part of 'the plan' is also to tax the money back into the void. This is the part that politicians keep shirking on.
Covid relief should have been paired with rolling back a metric ton of tax cuts.
Even then, I'm fairly certain the COVID relief was a drop in the bucket compared to millions of 401k accounts activating (from people in their 60's that decided to retire instead of dealing with COVID in the workplace), alongside bonkers-low interest rates.
Alan Rappeport
America’s gross national debt exceeded $33 trillion for the first time on Monday, providing a stark reminder of the country’s shaky fiscal trajectory at a moment when Washington faces the prospect of a government shutdown this month amid another fight over federal spending.
tap to know more...
Link to the archived version