The Problem With a $2 Trillion Deficit

Over a year, the federal deficit — the gap between what the U.S. government spends and what it earns — has doubled, to nearly $2 trillion.

That figure seems to validate the worries of congressional Republicans about government spending, which have been at the center of the messy fight over who should be House speaker.

Jim Tankersley, who covers economic policy at the White House for The Times, explains the Republicans’ concerns — and why their plans would not come close to solving the problem.

Background reading: 

[Ryanrobi]

As a young American who is a fiscal conservative I have been going crazy since both parties and most old voters and politicians just kept voting for spending my money on themselves and they insist on taking in far more than they pay in in entitlements and they will be gone by the time it has to be inflated away. Like the avg baby boomer will take in over $600k more in entitlements than they paid in and how in my area mostly older people who where lucky enough to own a home and refi at 2.5% seen their mortgage go down and saw their home value go up 250% since 2019 (in my area that's about $300, 000 in wealth transfer to home owners in 3 years). These are all the unintended consequences of running rouge dificets and have ZIRP policy, you get get winners and losers.

[Ryanrobi]

The math is simple here you need to cut 30-50% on old age entitlements. I would make one simple amendment that is it would only allow a person to take in the amount of entitlements as they have contributed in taxes. The whole problem stems from mostly old people paying in $600k plus less than they take out cuz the social security accounting was designed for someone that lived 10 years less and with much lower medical costs so it makes absolutely no sense that we keep that accounting. Older much wealthier people schould not be subsidized by younger much poorer people. All of the other spending including defense is pretty small potatoes compared to entitlements. Although pandemic stimulus was a big deal for a few years and really dug us deeper.

[jacobjorgenson]

Both scary and pretty exiting with the coming fall of America

[stoor]

Amazing that Fox News had a deficit clock playing non stop when Obama was president and then Trump wins and poof, deficit clock went away over night 😂😂

[ijerryhale]

"perhaps it could be used to build a bridge" - or, perhaps it could be used to begin to pay down the thirty-three trillion in debt which, by the way, is the "root cause" of why you're paying that interest cost to begin with.

[pcofranc]

19:25 higher taxes on the rich / corporations along with reduced government spending which is 30%? of our GDP will result in negative growth. Since the early to mid 1970's we've created the appearance of prosperity and growth through unsustainable debt. Tax receipts from the exchange of real goods and services is all that counts. Countries like Turkey, Venezuela, Greece, etc have never succeeded in printing their way to prosperity.

[freerovingbovine]

The 16th Amendment didn't work! We need a Universal Transaction Tax with pre-bates for subsistence consumption and challengeable rebates for costs of production. We should thank those who over consume for the taxes they pay.

[jacobjorgenson]

$670 BILLION a year just in intrest payments

[WBSummerlin]

Any context on why the emergency spending did not impact the deficit? that was kind of glossed over and it sounds interesting. Anyone have a reference for this?

[thomasdarlington]

Absent from this discussion is that Federal spending is a lot of American's income. I.e. if you reduce that, you reduce the taxes you collect from that income. Also, interest paid on the debt does just disappear into the either, it's paid to the bond holders, many of which are the retirement accounts of...wait for it....Americans.

[direwolf]

so what is a trillion ? .. 1 million seconds = 11.5 days .. 1 billion sec = 31.5 years .. 1 trillion sec = 31, 500 years .. 2 ice ages ago ...

[BrianSweeney]

No mention of TABS vs STAB. Does this not reframe the entire discussion or is the assumed premise that TABS is the applicable model?

[Ryanrobi]

The 90s balance budget can't happen again because we have too many old people The '90s was a Goldilocks zone where all the baby boomers weren't their peak productivity and their peak incomes now they're all retiring...

[enndubful]

Lol, deficits might not have been a big deal in the era of 0% interest rates, but soon our entire budget is going to go toward paying interest on the national debt.

[HOHLfmly]

It is more Important than ever to Fund the IRS to Collect money from the RICH Who have NOT paid their taxes!!!

[sanfordsanford]

Isn't social security paid for out of our wages?

[Eric-bo]

So way ? I cant buy house or heath in Susan's this country ? I never use my money yet to run my buisness?

[Eric-bo]

How money is run ur country seport u ?

[Eric-bo]

How is controlling my bonk use my money to build ther buisness ?

[Ryanrobi]

Massively racing taxes on large corporations in rich people never works because they are the people that are always able to get out of paying very high taxes That is just idiotic and not the real issue. High earners already pay the vast majority of taxes the very wealthy don't pay that much in taxes because they don't pay themselves very much in W-2 income in the invest most of their money back into companies and other investments that gets taxed on a much different rate as it should be. Fact is we would need to have much higher taxes on the middle class the middle class makes the vast majority of the income in this country For example the billionaires in the country only have the net worth of about 20 trillion American middle class on has a net worth of about 110 trillion mostly in real estate and retirement funds. This popularest idea that there's a few people that make all the money is complete nonsense when you look at the data It's the middle class that make all the money and pay all the taxes and if we're going to need a raise a lot more tax revenue it's going to come from the middle class just like it does in every other country that spends 50% of GDP via the government.