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The ability for the government to spend money it doesn’t have doesn’t cease to amaze. The deficit was $1.6T last year (over 5% of the GDP) but 2024 is starting

The ability for the government to spend money it doesn’t have doesn’t cease to amaze. The deficit was $1.6T last year (over 5% of the GDP) but 2024 is starting strong.

anon373839 2y ago
This is a different issue. This is a fix for the borrowers who were scammed by the Public Service Loan Forgiveness program, which although enshrined in law, was implemented as a massive fraud.
nameless912 2y ago
A not-insignificant part of that deficit though was programs and tax cuts from the previous administration. I agree, our government probably shouldn't be allowed to spend money it doesn't have, but the obvious solution (higher taxes, especially on the wealthy) isn't politically palatable, so every president is locked into the same pattern: start a bunch of spending, but back-load the actual expenses so the next administration has to deal with it. The deficit has gone down over the last few years, which means that we're getting more revenue and saving some money, but because deficit is an easier number to digest than change-in-deficit, we keep whinging about it rather than changing anything. And then the next administration comes in and points fingers at the previous while continuing the cycle of overspending. FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.
- willcipriano 2y ago
  The deficit is down from the highs of the pandemic spending. That's like saying the deficit is down post WW2 and taking credit for it.
  - piva00 2y ago
    Looking at the graphs for US Budget deficit since 1980 there's a clear pattern to it, Republican administrations tend to increase it (or maintain in percentage-to-GDP), Democrats tend to lower it: Carter: year|deficit|increase|deficit-to-GDP 1977 $54 $78 2.6% 1978 $59 $73 2.5% 1979 $41 $55 1.6% 1980 $74 $81 2.6% 1981 $79 $90 2.5% Reagan + Bush Sr.: 1981 $79 $90 2.5% 1982 $128 $144 3.8% 1983 $208 $235 5.7% 1984 $185 $195 4.6% 1985 $212 $251 4.9% 1986 $221 $302 4.8% 1987 $150 $225 3.1% 1988 $155 $252 3.0% 1989 $153 $255 2.7% 1990 $221 $376 3.7% 1991 $269 $432 4.4% 1992 $290 $399 4.5% Clinton: 1992 $290 $399 4.5% 1993 $255 $347 3.7% 1994 $203 $281 2.8% 1995 $164 $281 2.1% 1996 $107 $251 1.3% 1997 $22 $188 0.3% 1998 ($69) $113 (0.8%) 1999 ($126) $130 (1.3%) 2000 ($236) $18 (2.3%) Bush Jr.: 2000 ($236) $18 (2.3%) 2001 ($128) $133 (1.2%) 2002 $158 $421 1.4% 2003 $378 $555 3.3% 2004 $413 $596 3.4% 2005 $318 $554 2.4% 2006 $248 $574 1.8% 2007 $161 $501 1.1% 2008 $459 $1,017 3.1% 2009 $1,413 $1,885 9.8% Obama: 2009 $1,413 $1,885 9.8% 2010 $1,294 $1,652 8.6% 2011 $1,300 $1,229 8.3% 2012 $1,077 $1,276 6.6% 2013 $680 $672 4.0% 2014 $485 $1,086 2.8% 2015 $442 $327 2.4% 2016 $585 $1,423 3.1% Trump: 2017 $665 $671 3.4% 2018 $779 $1,271 3.8% 2019 $984 $1,203 4.6% 2020 $3,132 $4,226 15.0% 2021 $2,772 $1,484 12.1%
    - willcipriano 2y ago
      There was what? 5 years in the past 50 that there wasn't a deficit? Those 5 years were when the internet went mainstream and lifetime welfare was ended. The rest of the time is occupied by bipartisan wars that we couldn't afford and lost anyway.
      - IggleSniggle 2y ago
        I think when they made that comment they were talking about the rate of change, ie, whether % of GDP is trending upwards or downwards, not specifically looking at the Clinton administration.
        willcipriano 2y ago
- ihalip 2y ago
  How do tax changes from a few years back affect the current deficit? Shouldn't they be already "priced in" the budget?
silverquiet 2y ago
Amaze isn't the word I'd use, but Keynes did say something rather profound - "anything we can actually do we can afford". I think of the economy a bit like the power grid; it's really a just-in-time system that can only deliver productive capacity in real-time (though this analogy is changing with grid-scale power storage). In some sense, money is just an abstraction on top of that. Or I have no idea what I'm talking about, but also I don't think economists really have that good of a handle on things either.
- thelastparadise 2y ago
  > it's really a just-in-time system that can only deliver productive capacity in real-time It's a sophisticated game of monopoly where select few players can coopt the productive capacity of the labor class.
- js8 2y ago
  I think the best analogy for money is blood. From the perspective of a household (a cell), or a company (an organ), money (blood) are a limited resource, which constraints what you can do. If you don't have that resource, you will die. But from the perspective of the state (the organism) or the government (CNS), money (blood) is just an accounting and distribution mechanism for real resources, which are things like energy, raw materials and labor (oxygen, minerals and sugar). From this perspective, amount of money/blood can be adapted to conditions (for example in emergency, money/blood can be redirected to vital industries/organs), and it is created or destroyed internally, in any amount required. So the amount of money (blood) is not a constraint, resources (oxygen, food) are.
skhunted 2y ago
The government isn’t spending money it doesn’t have. It does spend money it borrows from lenders. The lenders think it is a relatively safe investment since they keep lending money to the U.S. government. I’ve been hearing doom and gloom about the deficit for 50 years. It primarily occurs when a Democrat is President and subsides when a Republican is President. This not a reference to OP. I state this to try to give some perspective to those who read this.
- thelastparadise 2y ago
  Debt to GDP over 100% and growing exponentially is new (outside WWII).
  - skhunted 2y ago
    The debt to gdp ratio in Japan has been well over 100% for decades. In fact it is over 200%. What matters is the ability to service the debt. Those buying U.S. government securities are not as alarmed as you. Do you have reason to believe that they are lacking in knowledge/understanding of the situation and are wrong? They could be making huge mistakes with their willingness to lend but I don’t know enough about this stuff to decide if that is the case. https://en.wikipedia.org/wiki/National_debt_of_Japan https://en.wikipedia.org/wiki/National_debt_of_Japan
    - thelastparadise 2y ago
      Yes and Japan's economy has been extremely stagnant in that time.
- TimMeade 2y ago
  The government is borrowing the majority of the funds from the FED. From itself. They are printing it and loaning it to themselves.
  - skhunted 2y ago
    You don’t understand how these things work. The FED conducts auctions for securities that entities purchase. Without entities buying the securities there would be no money for the government to borrow.
vmfunction 2y ago
As long as $ is the global reserve currency, these number are pretty much meaningless. Not to say it will be this way forever. We already can see other countries are doing everything they can to trade commodities in their own respective currencies (Russia, India, Japan, etc). It is actually a great effort to forgive student loans. In US it is one of most debilitating factor for people who went to college (especially the private ones). Why not do this earlier but wait for an election year? This just looks like a election campaign stunt to me.
- trust_bt_verify 2y ago
  Your final point feels poorly researched. I believe this administration has consistently focused on the student loan crisis outside of election years also.
bryanlarsen 2y ago
Even crazier is that Biden's spending is more fiscally balanced than Trump's proposals. Trump proposes to increase the deficit by $5.3 trillion. https://twitter.com/BrianCDeese/status/1768337427570061737 https://twitter.com/BrianCDeese/status/1768337427570061737
deleted 2y ago
[deleted]

The ability for the government to spend money it doesn’t have doesn’t cease to amaze. The deficit was $1.6T last year (over 5% of the GDP) but 2024 is starting strong.

anon373839 2y ago

This is a different issue. This is a fix for the borrowers who were scammed by the Public Service Loan Forgiveness program, which although enshrined in law, was implemented as a massive fraud.

nameless912 2y ago

A not-insignificant part of that deficit though was programs and tax cuts from the previous administration. I agree, our government probably shouldn't be allowed to spend money it doesn't have, but the obvious solution (higher taxes, especially on the wealthy) isn't politically palatable, so every president is locked into the same pattern: start a bunch of spending, but back-load the actual expenses so the next administration has to deal with it. The deficit has gone down over the last few years, which means that we're getting more revenue and saving some money, but because deficit is an easier number to digest than change-in-deficit, we keep whinging about it rather than changing anything. And then the next administration comes in and points fingers at the previous while continuing the cycle of overspending. FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.

willcipriano 2y ago
The deficit is down from the highs of the pandemic spending. That's like saying the deficit is down post WW2 and taking credit for it.
- piva00 2y ago
  Looking at the graphs for US Budget deficit since 1980 there's a clear pattern to it, Republican administrations tend to increase it (or maintain in percentage-to-GDP), Democrats tend to lower it: Carter: year|deficit|increase|deficit-to-GDP 1977 $54 $78 2.6% 1978 $59 $73 2.5% 1979 $41 $55 1.6% 1980 $74 $81 2.6% 1981 $79 $90 2.5% Reagan + Bush Sr.: 1981 $79 $90 2.5% 1982 $128 $144 3.8% 1983 $208 $235 5.7% 1984 $185 $195 4.6% 1985 $212 $251 4.9% 1986 $221 $302 4.8% 1987 $150 $225 3.1% 1988 $155 $252 3.0% 1989 $153 $255 2.7% 1990 $221 $376 3.7% 1991 $269 $432 4.4% 1992 $290 $399 4.5% Clinton: 1992 $290 $399 4.5% 1993 $255 $347 3.7% 1994 $203 $281 2.8% 1995 $164 $281 2.1% 1996 $107 $251 1.3% 1997 $22 $188 0.3% 1998 ($69) $113 (0.8%) 1999 ($126) $130 (1.3%) 2000 ($236) $18 (2.3%) Bush Jr.: 2000 ($236) $18 (2.3%) 2001 ($128) $133 (1.2%) 2002 $158 $421 1.4% 2003 $378 $555 3.3% 2004 $413 $596 3.4% 2005 $318 $554 2.4% 2006 $248 $574 1.8% 2007 $161 $501 1.1% 2008 $459 $1,017 3.1% 2009 $1,413 $1,885 9.8% Obama: 2009 $1,413 $1,885 9.8% 2010 $1,294 $1,652 8.6% 2011 $1,300 $1,229 8.3% 2012 $1,077 $1,276 6.6% 2013 $680 $672 4.0% 2014 $485 $1,086 2.8% 2015 $442 $327 2.4% 2016 $585 $1,423 3.1% Trump: 2017 $665 $671 3.4% 2018 $779 $1,271 3.8% 2019 $984 $1,203 4.6% 2020 $3,132 $4,226 15.0% 2021 $2,772 $1,484 12.1%
  - willcipriano 2y ago
    There was what? 5 years in the past 50 that there wasn't a deficit? Those 5 years were when the internet went mainstream and lifetime welfare was ended. The rest of the time is occupied by bipartisan wars that we couldn't afford and lost anyway.
    - IggleSniggle 2y ago
      I think when they made that comment they were talking about the rate of change, ie, whether % of GDP is trending upwards or downwards, not specifically looking at the Clinton administration.
      - willcipriano 2y ago
ihalip 2y ago
How do tax changes from a few years back affect the current deficit? Shouldn't they be already "priced in" the budget?

silverquiet 2y ago

Amaze isn't the word I'd use, but Keynes did say something rather profound - "anything we can actually do we can afford". I think of the economy a bit like the power grid; it's really a just-in-time system that can only deliver productive capacity in real-time (though this analogy is changing with grid-scale power storage). In some sense, money is just an abstraction on top of that. Or I have no idea what I'm talking about, but also I don't think economists really have that good of a handle on things either.

thelastparadise 2y ago
> it's really a just-in-time system that can only deliver productive capacity in real-time It's a sophisticated game of monopoly where select few players can coopt the productive capacity of the labor class.
js8 2y ago
I think the best analogy for money is blood. From the perspective of a household (a cell), or a company (an organ), money (blood) are a limited resource, which constraints what you can do. If you don't have that resource, you will die. But from the perspective of the state (the organism) or the government (CNS), money (blood) is just an accounting and distribution mechanism for real resources, which are things like energy, raw materials and labor (oxygen, minerals and sugar). From this perspective, amount of money/blood can be adapted to conditions (for example in emergency, money/blood can be redirected to vital industries/organs), and it is created or destroyed internally, in any amount required. So the amount of money (blood) is not a constraint, resources (oxygen, food) are.

skhunted 2y ago

The government isn’t spending money it doesn’t have. It does spend money it borrows from lenders. The lenders think it is a relatively safe investment since they keep lending money to the U.S. government. I’ve been hearing doom and gloom about the deficit for 50 years. It primarily occurs when a Democrat is President and subsides when a Republican is President. This not a reference to OP. I state this to try to give some perspective to those who read this.

thelastparadise 2y ago
Debt to GDP over 100% and growing exponentially is new (outside WWII).
- skhunted 2y ago
  The debt to gdp ratio in Japan has been well over 100% for decades. In fact it is over 200%. What matters is the ability to service the debt. Those buying U.S. government securities are not as alarmed as you. Do you have reason to believe that they are lacking in knowledge/understanding of the situation and are wrong? They could be making huge mistakes with their willingness to lend but I don’t know enough about this stuff to decide if that is the case. https://en.wikipedia.org/wiki/National_debt_of_Japan https://en.wikipedia.org/wiki/National_debt_of_Japan
  - thelastparadise 2y ago
    Yes and Japan's economy has been extremely stagnant in that time.
TimMeade 2y ago
The government is borrowing the majority of the funds from the FED. From itself. They are printing it and loaning it to themselves.
- skhunted 2y ago
  You don’t understand how these things work. The FED conducts auctions for securities that entities purchase. Without entities buying the securities there would be no money for the government to borrow.

vmfunction 2y ago

As long as $ is the global reserve currency, these number are pretty much meaningless. Not to say it will be this way forever. We already can see other countries are doing everything they can to trade commodities in their own respective currencies (Russia, India, Japan, etc). It is actually a great effort to forgive student loans. In US it is one of most debilitating factor for people who went to college (especially the private ones). Why not do this earlier but wait for an election year? This just looks like a election campaign stunt to me.

trust_bt_verify 2y ago
Your final point feels poorly researched. I believe this administration has consistently focused on the student loan crisis outside of election years also.

bryanlarsen 2y ago

Even crazier is that Biden's spending is more fiscally balanced than Trump's proposals. Trump proposes to increase the deficit by $5.3 trillion. https://twitter.com/BrianCDeese/status/1768337427570061737 https://twitter.com/BrianCDeese/status/1768337427570061737

deleted 2y ago

[deleted]