At this rate, the debt ceiling’s going to need its own space program!
Thank you, Mr. T, and to all those before you who let avoidable crises happen, handed out tax cuts to your richest friends, and slapped it all on the national credit card.
The people of this country will be feeling your “generosity” and recklessness for decades to come.
PS: I'd invite everyone to examine how US Debt/GDP grew unbounded.
The biggest culprits seem to be i) financial crisis and ii) covid. I consider both of them avoidable, man-made. When you have reckless leaders who have no interest in protecting the nation from man-made and natural catastrophies this is what you get. And obviously, you have massive tax cuts added on top, which have been completely uncalled for, given our ginormous debt.
As a follow-up, maybe briefly ask yourself: What additional tail risks are actively being ignored today? Whose job is it to minimize those?
Then think about the wholesale dismantling of the US government (under Doge), eliminating the post-crisis financial regulation, actively contributing to climate change...
'As a follow-up, maybe briefly ask yourself: What additional tail risks are actively being ignored today? Whose job is it to minimize those?'
Louder for those in the back.. CLIMATE CHANGE
The next major "avoidable, man-made" crisis is the slow-motion implosion of the property insurance market due to climate risk.
We're already seeing insurers flee entire states like California and Florida. The domino effect is simple: no insurance means no mortgage, and no mortgage means the underlying asset is functionally worthless to anyone but a cash buyer. This isn't just a problem for individual homeowners; it's a systemic threat. Trillions of dollars in real estate collateralizing mortgage-backed securities are sitting in these increasingly uninsurable zones. It's the 2008 playbook, but the risk isn't a bad loan—it's the physical asset itself.
This is also due to the manmade real estate crisis, housing should be cheap, not the “main” investment, we should have a normal rebuilding effort like in Japan.
Land tax fixes this
Please vote next election and every election for politicians that will reduce the debt and deficit. It is important.
Which ones are those again? Because both parties are doing the opposite
One party has done considerably better at reducing the deficit in recent history.
Ridiculous claim. Both parties are exactly the same on this issue. It's politics and nothing more. No one has any idea what to do about it.
Well, mathematicians do, but nobody listens to us.
Not only does the data show this to be false, it's mathematically inprobable for both major parties to be "exactly the same". That is the only ridiculous claim in this thread.
I guarantee both parties know how to balance the budget but one requires a pledge to never raise taxes and the other knows they will lose if they propose it.
If they're the same, then why does the deficit direction look very different for each of them?
https://ic.pics.livejournal.com/dbroussa/553166/241096/origi...
What does that graph look like in the last decade? Surely Covid times show a big blue spike?
You're kidding right? Do you know who passed an unfunded corporate tax cut in the run up to covid and then the PPP in 2020?
Reality has a liberal bias and cannot be trusted.
Constantly posting "both sides!!" lacks nuance and is unhelpful. The last budget surplus was under Bill Clinton, a Democrat. Generally, Democrats have to fix the fallout of Republican fiscal policy and get blamed for it since the effects can start to show years later (like Trumps tax cuts)
Chris Hitchens used to like to remind people that Clinton was actually a conservative whose political success was due largely to the longevity of the appeal of the “southern democrat” to certain segments of society. His granting of MFN trade status to China is relevant to “his” budget surplus, as is the fact that the internet happened and the unipolar moment began while he was president. Clinton didn’t invent the internet himself; Al Gore did. He didn’t bring down the Berlin Wall either.
What did Clinton do? Clinton did save us all from “Welfare Queens”, which also seems very relevant here: https://en.m.wikipedia.org/wiki/Personal_Responsibility_and_...
When an argument is defeated by facts switch to attacking individuals!
Not sure if you’re joking. The parent mentioned Clinton’s surplus so I referenced Clinton’s famous welfare queen reforms.
If I wanted to attack the character of William Jefferson Clinton, I would have plenty of facts to draw from there as well, like sexually assaulting an intern in the Oval Office and lying to us with “it depends on what your definition of is is”[0], which I’d note our non-biased hard-hitting media elites collectively shrugged off. Or I might allude to Jennifer Flowers, or Epstein, or a really long list of other ghoulish Clintonian acts.
[0] One can easily see this as the approximate moment the executive became unaccountable, a trend that’s continued (slippery slopes are real) and which many are now fallatiosly calling factism. It’s not, it’s just unaccountability in the same vein as Clinton’s sexusl assault.
I mean, he's kinda right, historically in the US, only one party ever balanced the budget, and left his successor a surplus said successor immediately used to cut taxes on wealth, right before starting the two most expensive wars US has been part of since WW2.
That the man who did it was a sex pest and should be in prison is unrelated to his success on that particular policy.
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Its been ~8 months in office now. Can we please stop with this whataboutism? Pray do tell what is this guy's plan to reduce the national debt? The BBB seems to be increasing the national debt to unmanageable level.
Did you catch the part where Trump repeatedly claimed to reduce the debt once in office and has since done the opposite (despite the smoke and mirrors called DOGE).
So you're saying that if we want something we should vote for the opposite?
No, they're saying you shouldn't vote for the proven insurrectionist and known con artist.
You've been conned. I would feel bad, if this wasn't, like, con number 401.
If you don't like it campaign for meaningful opposition. Trump was elected after the Republicans were critiqued by the right.
I don't understand this comment.
No, start considering the source. If a mental patient tells you that a stock is a good investment, do you buy? No, so why listen to a man who lies with every word he speaks?
If Kamala had been elected president the debt would've grown, but at a lower rate than under Trump, and her policies would've benefited regular folk, not just gazillionaires.
Kamala also isn't in the Epstein files and doesn't have a history of sexual assault, and certainly wouldn't have moved that absolute demon Ghislaine Maxwell to a minimum security club fed because she was willing to provide testimony to deflect from Kamala's crimes (of which there are none).
Shall I go on?
You chose one of the most incompetent, nonsensical, unethical, greedy, lecherous humans on this planet, who also has an absolute lack of morals or empathy, because he said he'd reduce the deficit / debt? What did you think was going to happen?
I hope you take this misstep as an opportunity for self reflection.
Well, _previously_ ol' mini-hands ran on decreasing the deficit, and then massively increased it with tax cuts. In the words of another expert on increasing deficits, "Fool me once shame on you, fool me - You can't get fooled again".
Had Kamala instead campaigned on curing cancer and making all Americans billionaires, you would have voted for her instead?
Well you certainly shouldn't vote for the con artist with a proven track record of blatantly lying. Especially when he keeps mentioning the subject, salivating at the prospect of having another turn at the trough.
One campaigned on reducing the deficit; one did not. It seems reasonable to expect a smaller deficit from the one who campaigned on that, doesn't it?
Unless he has a track record of promising things and not delivering. Perhaps even on this specific issue.
Woah, all the replies are misreading me in the same way.
Yes, Trump seems to lie even more than a normal politician. In that sense, sure, you shouldn't expect that he's going to do anything about the deficit. You knew (or should have known) that when you voted.
But what I meant was, because he ran on the issue, we have grounds to judge him for not doing what he said, in a way that we would not have been able to judge Harris had she won.
You're aware that he served a first term where you could've looked at his track record with deficit spending, correct? Before COVID, while the economy was doing good, Trump was still spending government money like crazy.
See: https://www.crfb.org/papers/trump-and-biden-national-debt
Trump is a lifelong pathological liar (among other things). There is no meaning in anything he promises. He has no loyalty to anyone or anything but himself. He is a lecherous, repulsive menace.
Folks, folks, please: If you keep focusing on figuring out what the facts are, and on using government data to do it, two things are going to happen. First, this post will be flagged into oblivion. And second, if the Administration doesn't succeed in firing everyone at the St. Louis Fed and installing others who will report data it likes better, it will enter an executive order to take over Hacker News.
Reported. It'll be amended soon after the statisticians get fired and yes-men get put in.
Current treasury head is Scott Bessent, previously of Soros Fund Management and Key Square Group. He's far too qualified to be part of this administration. Expect him gone soon.
He's said on Fox Business today that on the basis of whatever agreements have been made in Alaska the US now considers the public and private holdings of its European allies + Japan to be part of an American sovereign wealth fund that can be expropriated whenever some cash is needed.
Either he's lying about that or he has guaranteed a position as Trump's number one favourite after Lighthizer.
I expect most other countries are making vague long-term promises, hoping that:
1. The issue will become moot in a few years.
2. Trump is motivated to misinterpret promises--especially if they involve big numbers--since he's an idiot, and eager for "wins" to brag about.
3. After Trump's emotionally invested into his New Clothes, none of his advisors will want to tell him they aren't there.
>public and private holdings of its European allies + Japan to be part of an American sovereign wealth fund
That's like striking a deal with a mr.Beast and consider the public and private holdings of YouTube part of your own net worth.
I mean I would love EU to be in such a position to be able to do such deals even if I don't support such a deal but that's not the case. Maybe Poland can send money I don't know but in Europe overall there's no other consolidated pro-USA power.
Maybe Bessent talks to provoke a reaction or induce something in their electoral base?
I do not know why you are being downvoted as this is something I heard too and is quite serious.
> Other countries, in essence, are providing us with a sovereign wealth fund,” he told commentator Larry Kudlow, himself a top economic adviser in the first Trump term. “We have these agreements in place where the Japanese, the Koreans and to some extent the Europeans will invest in companies and industries that we direct them, largely at the president’s discretion.”
Yeah, but this is just nonsense, though. Like, this isn't how any of this works.
> the Europeans will invest in companies and industries that we direct them, largely at the president’s discretion.
The only significant general-purpose sovereign wealth funds in the EU are a French one worth 30bn and an Irish one worth $16bn. And the EU, which is the entity which makes trade deals, has no control over those. The EU has no significant money of its own (~200bn budget/year) and has no ability to control what member states spend their money on, and member states in general are uninterested in sovereign wealth funds, nevermind ones which invest specifically in American assets.
As far as I can see, what the 'deal' actually says is that private companies will invest an extra $600bn in the US by 2028, with the EU admitting it has no actual control over this, because of course it doesn't. But this is, y'know, not out of line with the level of FDI that you'd expect anyway, so really that bit of the trade deal boils down to _nothing_, an acknowledgement of what will probably happen in the normal course of events, a completely meaningless promise given for PR reasons.
In general, most of the non-tariff component of these ‘deals’ is of that form; stuff which the government obviously can’t control but which the private sector might reasonably be expected to do anyway.
Yeah, the core becomes the new periphery. Unless a significant rebellion in Europe, freight supply chain collapse or war with China happens, the existing payment infrastructure will eventually become colonial clearinghouses and governors-general will be appointed over the territories. If nothing interrupts it it'll probably take up to ten years for a full implementation of new policing structures.
Freedom-minded technology orgs like Wikimedia Foundation, Packet Clearing House, Internet Archive, ISOC, the EFF and the Free Software Foundation will not have anywhere to go to escape the net.
So Putin and Trump to agree in Alaska to loot public and private holdings of US European allies + Japan?
And what would Putin get?
Besides the land and a return to the unjust peace Russia previously enjoyed it's obviously in the Kremlin's interest to have further relegitimation of the notion of spheres of influence and a hedge against China.
From his bio on wikipedia he was most successful betting against currencies at Soros but had little to no success with his own ventures.
> He's far too qualified to be part of this administration
Is he using his qualifications, though, or, for real, does he have any? I thought he'd be the sane and reasonable voice in this otherwise incompetent administration. But, he's just another yes-man.
Have you listened to his Senate hearing? He couldn't give any concrete response. Well, he wrote a wallstreet journal article to kiss T's as* and openly admire Tariffs and tax cuts to get his job. While earlier tax cuts and the big ugly bill collectively added $8T to the national debt.
Taking bets?
He's been in place since January so that suggests he's sticking about.
During that time he's been actively campaigning for policies that are questionable but highly aligned with this administration: BBB, crypto, interest rate cuts.
So qualified or not I can't see your prediction coming true.
Money men on the inside of this administration are only going to make money, why make waves even if it makes normal Americans poorer. That's been happening since Reagan.
> He's been in place since January so that suggests he's sticking about.
Since January there have been 4 Acting Commissioners of the IRS, then Billy Long was confirmed, but was kicked out after ~2 months, and now Scott Bessent (also Treasury Secretary) is Acting head:
* https://en.wikipedia.org/wiki/Commissioner_of_Internal_Reven...
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See? It was Soros's fault all along! </s>
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For the visually-inclined, a graph of debt as a proportion of GDP [0]: https://fred.stlouisfed.org/series/GFDGDPA188S
Of course, this doesn't show projections for what the future debt will become after the Republican's "BBB" package from a few months ago.
[0] Yes, I know GDP is a flawed measure, but as long as its flaws are consistent over the years it is useful for scaling.
> Yes, I know GDP is a flawed measure, but as long as its flaws are consistent over the years it is useful for scaling.
I don't think they can be considered consistent over the years. 20% of our GDP is healthcare and that's only going to grow as the population ages. I don't know what percent of the GDP is financial services but that'll probably also grow until we get something akin to 2008 again.
Including healthcare and financial services in GDP figures feels out of place and unproductive but I'm not an economist so I don't know what I'm talking about.
Then you have the services sector which makes you reconsider what the point of calculating a country's GDP is to begin with?
> Including healthcare and financial services in GDP figures feels out of place and unproductive
You reminded me of something: a nurse in San Diego sleeping through her entire shift is more productive than half a dozen nurses in many third world countries working hard, because the way economists measure productivity is the $/hour output. People doing nothing in America are much more productive than people doing a lot in most of the world because that is how we define productivity, and how the term is discussed in articles and papers.
Doesn't matter, the same articles and papers will bring up that US enjoys higher productivity due to better technologies, etc, but since all of that makes it very hard to be really measured, it's always a mixture of some heterogeneous ideas together.
> Doesn't matter, the same articles and papers will bring up that US enjoys higher productivity due to better technologies, etc, but since all of that makes it very hard to be really measured, it's always a mixture of some heterogeneous ideas together.
It's actually worse than that, because in lots of EU/western countries health is provided by states which gets booked against GDP at cost. In the US, because it's more private it gets booked higher because of the margins. It's actually responsible for a bunch of the US's "productivity" growth since the financial crisis.
Taxi driver in USA is 5 times more productive than taxi driver in Indonesia!
Unironically. His passengers will produce more money working and/or spend more money buying. The taxi driver is a direct enabler of all of this.
In practice third world countries are very unproductive, and it's immediately visible to the naked eye. Many shops and restaurants have half a dozen people (or more!) taking the order and handling the check, there are entire extended families manning market stalls that barely sell anything, cabbies just hang out all day waiting for a ride, etc. You might be theoretically right, but I think that's not actually how it works out in reality.
I have made a very specific example, you extrapolated some other data from it.
If you want a clearer comparison take Japan and tell me their average driver, nurse, teacher, policeman, factory worker, carpenter, painter, car mechanic, shop assistant, barista, bank clerk, etc does "less" or "less efficiently" than his american counter part.
Because there is a huge difference in measured productivity between them.
There might be, at times, some added productivity in US due to having more capital at disposal to adopt some technology, there might be some other benefits from being more risk prone in US? Sure. But that amounts for smallish differences and sure not for the immense gap measured by economic measures, which, at the end of the day, as explained with the initial sleeping nurse example is still $/hour.
It reminds me of the early days of the russian invasion when everyone was mocking russia for having the same gdp as spain. As it turns out having a small gdp doesn't mean much as long aas you have industries and resources.
France includes illegal drug traffic and illegal prostitution in its gdp too
Most countries include criminal enterprises when determining economic statistics. It's important, because economic crises can begin in shadow industries.
Having small GDP per capita means people are poor. Having poor people is even better to the war. Russia is economically weak, but can continue this war for 5 years or even more, paying immense price for it, sacrificing their feature.
It looks like it was under control for a while following World War II, but then from the early 1980s, it's hard for me not correlate the first derivative of the slope of that graph with presidential party.
> it's hard for me not correlate the first derivative of the slope of that graph
Many years ago I recall seeing a chart that annotated-out the party had the Presidency or majorities in either house of Congress along the "time" axis, but I'm not having any luck finding one. Sort of like this [0] except including a line for deficit/surplus by GDP. [1]
There are a lot of charts out there where the Presidency is shown, but IMO that plays in to a false narrative about who really has power over budgeting and how-much.
[0] https://www.pewresearch.org/short-reads/2021/02/03/single-pa...
> It looks like it was under control for a while following World War II, but then from the early 1980
Democrats had a near solid lock on Congress from World War II until the early 1980s (only 2 two year sessions where they didn't control both chambers) and Congress hadn't abdicated its power of the purse.
Republicans spend a lot of time branding themselves as the "party of fiscal responsibility", but ask yourself in what situations a group needs heavy branding by way of incessant self messaging. By every major objective measure, Republican control of government has been worse for the economy.
And to be clear, none of this reply is meant as a defense of the current Democratic party which is currently (at the national level) leaderless and in shambles and is far too captured by its donor class of special interests to protect the interests of the American working and middle classes and who will be unable to regain real power until they address that.
What do you specifically see? I see two big increases in debt, both due to shocks (the 08 financial crisis, and the pandemic; one under Obama, and one under Trump.). Pre 2008, it does look like moderate increases under Reagan/Bush1 and Bush 2, and flat to decrease under Clinton, is that what you mean?
Yes, that's roughly what I see. The bottom of the Y axis on this graph is 30% which can be a little deceptive. It looks to me like Clinton and Obama had a terrible challenge in bringing this under control following the early 1980s and the 2008 financial crises and they did what they could, and then there is also Reaganomics. It just looks so hopeless because this figure is as high as it was following the war. Now Biff Tannen's in the White House, and he'll be knocking down walls. I don't think the system was meant to handle human greed on this scale.
> I don't think the system was meant to handle human greed on this scale.
It was held together by decorum. There is none left.
> I see two big increases in debt
I recommend the surplus/deficit by GDP graph, which is easier than manually eyeballing slopes: https://fred.stlouisfed.org/series/FYFSGDA188S
The 2008 crisis happened under Bush, not Obama. Obama was inaugurated on January 20th, 2009.
Not only was Obama not inaugurated until 2009, but the Great Recession began in 2007, so tying it to Obama because it is popularly associated with 2008 and Obama was elected towards the end of that year is...doubly wrong.
I'm also certain some folks believe Biden was President during the start of COVID-19 in the US too. (Jan 2020.)
It seems to be a pattern, where a disturbingly-large minority of people remember nothing but the year-number of an election (e.g. "2008") and never account for how voting was at the end of that year and the voting-result only takes effect the next (odd-numbered) year.
Oh, there's also a general "I want it to be true so I remember it that way" aspect, but I think that's contributory rather than the main cause.
> What do you specifically see?
1942-1945: Big increase to pay for fighting/winning a World War
1946-2007: More or less fiscally responsible
2008-present: War-like level of debt increase to counteract a down business cycle?
This graph[0] is also pretty interesting.
The important difference [0] is:
1. "Gross federal debt" includes the money which Congress borrowed from (future) Social Security recipients in order to pay for (current) tax-cuts and middle-east invasions and whatnot.
2. "Held by the public" excludes that portion, focusing on money borrowed from individuals/companies/other-countries that voluntarily lent their money to the US government.
So we should make our decisions based on the first one, unless someone is plotting to screw millions of American taxpayers out of the money they already paid as insurance-premiums. :p
[0] https://www.crfb.org/papers/qa-gross-debt-versus-debt-held-p...
The real scary thing ought to be how tapped out the GDP is now vs when the graph was low. In the 1970s and 80s there was plenty of room for growth. These days the women are all in the workforce and everything is financialized already. There's no "easy gains" in 2020whatevver.
>Of course, this doesn't show projections for what the future debt will become after the Republican's "BBB" package from a few months ago.
https://www.economist.com/content-assets/images/20250705_FBC...
With interest rates that have to remain high to control inflation.
the biggest spikes seems to have been
1.) 2008 financial crisis, 67% -> 82%
2.) covid, 105% -> 125%
so basically, a one time war injury upon America's finance and health.
What a cool graph.
Interesting to see the issues that get the ire of the current administration like food stamps and education and foreign aid are minuscule line items on that visualization.
Bill Clinton: the GOAT.
The end of the Cold War (allowing reduced defense spending), along with a massive asset bubble (with accompanying capital gains tax revenue increases) did wonders for the budget.
And reducing taxes made the deficit bigger
AKA "peace dividend"
Back when the Congress was still semi-functional.
I'm mildly surprised they were allowed to report this.
This administration isn’t known for being proactive.
Do you mind explaining what you mean? I believe some smart HN commenters here stated that this administration would be the most transparent one ever, so I'm not entirely sure where the surprise would come from!
It doesn't look like that chart was updated to show the 2T savings from DOGE. /s
On my reading list: Principles For Navigating Big Debt Crises by Ray Dalio
I bought the Audible version! All those numbers got pretty hard to track early on
It's fine. As long as the US dollar is the global currency, we can run the money printer as long as we want.
Once that ends, well... =(
The BRICS are de-dollarizing. It's going to suck when this check comes due because we won't be able to raise debt to pay this down. It's in our interest for the world to prosper and rely on us because that's basically how we keep our lifestyle financed.
Brazil and India just said fuck off with the tariffs to Trump, and China and Russia are in a cold war with us. Some president absolutely needs to rehabilitate this soon, at least with a few of the BRICS.
How do you guys see this ending? I don't see this ending well but I can't imagine what happens. Seems unsustainable but nobody wants to deal with it.
2 years ago, Wharton predicted that the U.S. debt would be defaulted on in twenty years [0].
> Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies.
My prediction is that the deficit will continue to increase, and so the default will come by then or sooner.
[0]: https://budgetmodel.wharton.upenn.edu/issues/2023/10/6/when-...
Why would a currency issuer make the decision to default on bonds it's issued, when it can always issue new bonds and roll them over, or if it wanted to the Fed can always just buy the bonds back?
Don't think of the US (or any monetarily sovereign Government) as having the constraints of a household or business... It's fundamentally different and we make major errors (like the crazy idea the US would default) when we think of it in the wrong way...
I question if it is possible to always roll over the debt. At some point too many think that it is better to buy any other asset. Ofc, with Fed and printing money you can enter to hyperinflationary circle. Which then makes rolling over debt even harder... Or getting any in future.
He answered your question:
> defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).
The real constraint isn’t solvency, it’s inflation and currency value. If deficits are monetized well beyond the economy’s capacity, inflation will rise and long term yields will climb, unless the central bank caps them, which then shifts the pressure to prices and the currency.
Didn't NYC have a crisis in 1975 where the banks didn't want to buy their bonds anymore?
On a long enough timeline we're all dead. In the near term, expect a lot of stupid decisions and huffing and puffing based on an ideological framing of what the national debt is.
I am not an economist or finance guy, but I have noticed a lot of debt hysteria from people who don't seem to understand basic accounting. That is, one party's asset is another party's liability. You cannot have buying without selling, and so on. Your mortgage is a liability for you, but an asset for your bank. Your checking account is an asset for you, but a liability for your bank.
I'm not saying the debt can grow infinitely, but clearly if some of that debt is held as assets by the non-government (most of the world including you and me) then paying off that debt means a wealth transfer from the non-government back to the government.
This isn't necessarily in my interests. If the government has to claw those dollars back from somewhere, I'd rather them start with the richest people. But that doesn't happen for obvious reasons.
> That is, one party's asset is another party's liability...
The people who don't understand accounting actually seem to be pretty consistent on that point, because one of their other major complaints is inequality, ie, the people doing the lending have too many assets.
I don't understand.
> I have noticed a lot of debt hysteria from people who don't seem to understand basic accounting. That is, one party's asset is another party's liability.
This is correct, but... let me ask you, would it concern you, if my asset is your liability? I mean, would it concern you if you had to pay for my house? How about everything it is I do? How would this not be a concern? If it is not, then why don't you publicly disclose your credit card?
I'm not an expert but I often fear that the whole S&P500 success is tied to govt spending.
It's tied to everyone's retirement being automatically invested into it. I wonder what it would take for a bunch of white collar workers to cash out their 401k early.
It's tied to GPUs. Nvidia accounts for ~8% of the S&P 500 as of this comment.
AI is propping up the US economy - https://news.ycombinator.com/item?id=44802916 - August 2025 (439 comments)
They're definitely fueling a bubble but the S&P500 was already bonkers before the AI craze.
if the debt ever causes actual problems, e.g. we can't sell our treasury bonds, then our politicians will suddenly remember how to tax rich people.
In the mean time the impossible, unsustainable, terrifying national debt will be used to justify benefit cuts (like the upcoming privatization/cut of social security when the trust fund runs out in 7 years)
The possibility of taxing rich people would likely be factored in to the market for bonds. There's not really any alpha to "they could tax rich people".
If we genuinely can't sell treasury bonds, even at elevated payouts, we're probably at a point where we will either have to default in the near future. Or maybe intentionally inflating our currency until the debt is serviceable; no idea which is preferable, but would be curious to hear which and why.
I think even in that situation, politicians will try and play ball with the rich since the majority of them are on that same side. But having to implement emergency austerity measures in this scenario would just outright blow up the US economy.
If the wealthy donors and corporate interests were smart they'd take a haircut on their wealth to try and stave off this issue but it seems we're mostly in a loot-and-raze craze. Realistically I would sooner expect an American-style French Revolution before we see the rich grow a sense of self-preservation.
The revolution wont be like the French revolution, itll be like the Handmaids Tale.
A massive return to conservatism that manages to create a capitalist first theocracy loosely following American Calvinist principles (you have money because you are gods chosen, you are poor because you deserve it, for the poor here is this underclass to blame your problems on so that you dont aim your murder at the rich).
Well, US has more guns than people… I don’t think US will succumb to “you are poor because you deserve it “ without some violent conflicts.
I don't think it'll work out like that, simply because my fellow Americans are still too used to being towards the top of the economic food chain. When the poor can no longer afford the bare minimum necessities and the middle class can no longer prop up their lifestyle I think people will get really, really mad. Like what happened with the healthcare CEO but on a much larger scale.
They've already been trying to sell some of the Calvanist dogma by trying to soften the blow of tariffs which by all indicators has been a massive failure of a messaging avenue, which is why they've moved towards trying to just ignore it instead.
> I think people will get really, really mad.
Many of them will get really mad at whoever the person to blame points the finger at, regardless how plausible. But what good does getting really, really mad do, against a government with a functioning panopticon and an effective monopoly on force?
Until now, there has never been a time in human history when an oppressive government had the technical means to effectively surveil and control the population en masse in an automated fashion. It doesn't help that they have a monopoly on advanced weapons, lethal drones, and armed goons. As George Orwell put it: "If you want a picture of the future, imagine a boot stamping on a human face — forever".
At some point there will be a need for austerity measures and rising taxes, and whoever will do that will be very unpopular.
Austerity measures do not decrease national debt. What they do is depress GDP so that you have no chance to repay the debt.
DOGE already started the austerity measures, and tariffs are taxes, so it's already in play. Popularity may be moot depending upon how things play out in the next couple years.
DOGE achieved little to nothing, tariffs don't compensate at all the raise in spending.
Except neither of those do anything and they're actively counteracted 100 to 1 by the rest of the new fiscal policy introduced.
So weve lost a bunch of shit and gained... let me check here... oh, -2 trillion dollars. Okay.
But at least some poor sick people will lose Medicaid. Glad to see we're burning our money and then spending more on running the AC full blast so we don't boil.
If it makes you feel better, the owners of US treasury securities also do not want a debt-fueled collapse of the government. They are our assets as much as they are our liabilities.
Owners of US treasuries are: Japanese government, a whole bunch of rich Arab Middle East governments, Social Security, Federal reserve, and the Chinese government. With the exception of the last one, the other holders are political captives.
Incidentally, Chinese government stopped buying US Treasury instruments 2015.
All these to say that arguments that depend on freedom of choice ( like this is a free market, or for every seller is a buyer, or US treasury holders want this and that) do not apply to this situation. Which makes this situation so hard to predict.
I think between 5-10 years US will run into a deficit spiral: US will not be able to control its deficit. When that time comes make sure you will not need any additional credit and you have enough savings for 6 months to a year of expenses.
In the shorter term I predict that next summer Trump will replace Jerome Powell with someone else who will bring short term interest rates to close to 0%. This will allow the US admin to decrease the interest expense on its debt, and use these savings to further increase the deficit. The problem thus magnified will then be dumped onto the next US admin-which will be mocked by MAGA as incompetent (something along the lines of “we gave these guys a perfect economy and they wrecked it”)
Pardon my ignorance, but wouldn't there be negative follow-on effects from the Fed deciding to reduce interest rates to zero because they can? If not, then wouldn't they have done that already or, better, simply kept it at zero?
Oh, there will be bad effects from that -like inflation spike. The reason the interest rates are not zero is because the Fed still has some political independence. This independence will go away next summer when Trump will replace Powell with same tool of his liking.
Turkey tried doing it for years. The result was high growth but utterly insane inflation - we're talking well over 100% per year, so that everything becomes unaffordable.
I’ve always said America is the richest third world country on the planet. Just like tinpot dictatorships accumulating IMF debt, the orange dictator in the Whitehouse will keep taking on debt for completely selfish political points and zero consideration of “the people” or the future. He’s 79 years old. What future?
In the coming decades the USA will end up just like every other failed state.
Women will have their reproductive rights taken away so they can be men’s property and fulfil their traditional roles and responsibilities.
Intellectual institutions will be defunded or outright abolished, because they oppose the regime’s messaging.
The minority in charge will scapegoat some already powerless minority to distract the general populace. In the end, their own propaganda will force their hand and they’ll have to enact some sort of dire measure, a “final solution” like concentration camps.
Despite the dire state of the economy, military spending will paradoxically increase and the armed forces will be increasingly used against citizens.
…oh.
Too late, I guess.
Badly and abruptly.
As long as the US maintains the western worlds largest military, I don't see the government being pressured to do much of anything remotely close to dealing with the problem in a long term (and likely painful) way.
If that power ever gets displaced, it'll tank the US quickly. As soon as the US loses its privileged status (something Trump is rapidly deteriorating) this becomes a serious burden that will require some serious policy decisions, of which most will be unpopular. It'll likely be cuts before tax increases, because even when facing the worst economic situation, neither party wants to pass meaningful tax increases.
I think we have at least a few more decades, but if we aren't the western worlds de facto military there's significantly less reason to let this house of cards go on.
We'd be better off dealing with it while we are still in a relatively privileged position, but no economic class wants the tax increases it will take just to get the debt into a manageable state.
As for no party wanting to deal with it, that is partly true. I think some Democrats actually want to deal with it, because they're much more comfortable proposing tax increases, but they don't have sway in the current leadership of the party.
Are there any other nations building a similarly capable military?
"Nobody wants to deal with it" except one of the two major parties which enjoys the support of the majority of the voters, who consistently deal with it when in power.
I'm sure there were a lot of naive people who voted for the Republican party for their first time because something from Trump's word salad resonated with them, and they are now finding out what that Party is actually about. Surprise! All that whining about the debt was total kayfabe. Don't say we didn't try to warn you.
The political discourse globally has turned into a giant "us vs them". I'm Polish/Italian and in my countries it's similar to USA, we've just voted a populist troll as a president not because we like him but "because he's not one of those we despise".
Marketing, data scientists and strategist have effectively manipulated public opinion into further polarization.
This entire thread is a good example of the kind of rhetoric that led us there.
My assuming that people were taken in by Trump dishonestly speaking to their real and earnest frustrations is a most charitable interpretation compared to the other possible alternatives.
>they are now finding out
I hope so ... I dunno.
Doesn't kayfabe require that they not be naive to his lies?
No? People used to get mad when someone said wrestling was fake. It wasn't because they were in on it and pretending to be mad, but rather because they wanted to believe. A very similar dynamic to Trumpism, come to think of it.
Huh. My understanding of the definition is that both parties realize it is fiction and agree to pretend it is not.
Both parties (the actors) that are in on it, yes. But not the audience, at least traditionally. Maybe the audience now, at least somewhat? These things aren't discrete states in fragmented post-reality. That dynamic was starting to show back then (hence people getting angry from the compression of cognitive dissonance), but it's one of the main dynamics these days.
I think they're on board with crashing the country, as long as their enemies suffer more.
Man the debt was actually going DOWN after 2020?
Bill Clinton was probably the last fiscally conservative president we've had or will have for a long time.
Al Gore's National Partnership for Reinventing Government (NPR) is the exact opposite of DOGE: thoughtful, methodical, effective, and lasting.
https://en.wikipedia.org/wiki/National_Partnership_for_Reinv...
Debt as % GDP, not debt per se. Stimulus provided lots of growth.
Only as a percentage of GDP. Pandemic recovery was not cheap. However, yes, Biden and/or his economic advisors did a pretty good job of managing the economy.
Yep, GDP ballooned from inflation, not because the debt actually fell.
Just in time for captain genius, leader of the financially responsible party to decide that his primary goal is to make sure corporations and billionaires pay less tax. I’m sure that will go just fine.
Maybe billionaires pay less tax, but companies seem to be taking it in the shorts from tariffs. Unless, of course, they push them onto consumers.
With less companies to compete you can expect it.
When Donald put tariff in dishwashers even the ones made in US rose it's prices.
In what period of history have companies not pushed taxes onto consumers?
Wait until companies realize that they will have to pay on the double for education soon, because nobody's gonna be able to hire unqualified people from within the US.
The amount of snarky comments here is truly insane. Flippant stuff used to be downvoted/shadowed immediately on HN, now it seems to be the median in some political threads. This started changing around 2019 but it's really accelerated lately.
It's a bit disappointing. This is HN, and this is actually important and interesting. It's a shame this thread is just a group therapy session of people blaming Trump for everything bad that's ever happened.
I think they're blaming Trump for stuff that he actually directly did, and then bragged about.
The reality is if you actual listen to Trump, which none of his supporters ever do, but if you did, you'd know his platform is "make everything more shit for everyone, and we'll save some money... maybe"
Well, he did thing 1. But the saving money part? How much are we saving now, like, -2 Trillion?
And, in exchange, more poor people on Medicaid will lose coverage, everything is more expensive, and we've gutted just about every social service we can.
Its like paying 200 dollars for a burger and then instead of giving you a burger they actually reach down your throat and rip out your small intestine.
This is just a bad deal. Or, in Trump language, "I told them - this is the worst deal ever. That's what I told them. Yeah. And everyone agreed with me. Yeah yeah. The biggest, most garbage deal ever"
I thought Trump was going to fix that? Oh right his bill made the debt INCREASE. I guess all that talk about saving money was just a front to defund social programs conservatives hate and increase spending on things they like.
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It would be nice if the whole NY stock exchange is used to pay up the national debt bill. It would bring US financial status back to its glorious beginnings and continue from there. A restart is needed...
