Republican fiscal strategy seems like they're going to try and rollover the deficit like a high score in Pac-Man.

The funny-stupid bit is that Republicans discovered that this is a viable strategy and _therefore_ raise the debt as much as possible _so that_ when democrats try to do anything of long term value, they can scream about "the debt is too high!"

And don't forget the flipside. When a Democrat is in the office and a Republican raises red flags about the national debt, similar "no big deal" arguments are made ("you don't get it, a nation isn't running like a household, debt doesn't mean the same thing" / "oh yeah, well look how fast the national debt rose under <last Republican president>; checkmate!")

It's very tiring to watch this happen over and over.

Ah, I remember those days when Clinton was in office and no more deficit. He also did a DOGE type thing to modernize and make the government more efficient (though in a measured way, not putting children in control). Those were the days.

A lot of deficit spending accelerated with Reagan, when mortgage interest rates were 18%. Yeah, high interest rates will learn ‘em real good this time.

The deficit has far more closely followed tax cuts than anything else.

There's also a revenue side to the deficit.

Way too reductive. Look at the deficit growth numbers under democrats vs republicans. This comment is just another variant of lazy "both-siderism" that I have really come to loath

Why do people always assume every single issue is symmetrical both party issue regardless of what reality is?

Well.. not quite. Clinton actually did something about the deficit.

Could you tell us about any passably-comparable situations, where high interest rates actually taught a national government to grow up and behave?

We'll grow our way out whenever the mythical trickle down works

"I'm not bald, there's nothing special about 300 hairs, which I currently have, compared to 300,000, which I used to have making me suddenly bald"

Just because there's no magical boundary number doesn't mean a metric can't become increasingly more shitty, and suddenly turn into a bad outcome. Not every response is linear.

He's right, the number is temporary because of tariff refunds: as the refunds are issued, it will grow.

Grow our way out of that means hitting the $50 trillion number.

Maybe there is no magic about the absolute number. How about magic of the debt servicing costs that are paid by Joes and Janes

We will grow to $50T before you know it, and this headline will look silly.

"grow" == "inflate"

Well this is OK because money is worth half as much now.

We’re headed toward an economy like Japan’s. It’s not a place we’re going to want to be.

It does, but only for one of the parties.

US government bond yields are regarded as the rate of return on a risk-free asset. So, for someone to decide to lend you money or invest in your business, you need to offer them a higher rate of return. This extra return is the risk premium. So when interest rates are close to 0 per cent, mortgages are cheap and everyone is prepared to risk their money on a slide deck promising significant losses over the next three years. Because cash yields next to nothing, investors race to generate returns elsewhere, which artificially depresses the risk premium.

If US bonds are at 5 per cent, your banker will add their margin on top and your bank loan will be at least 7 per cent or higher if they fear a rise in interest rates and inflation. Investors will be much more discerning and demand higher risk premiums to move away from risk-free yields. As there are far fewer sectors capable of offering such returns, investment will concentrate on a very small number of sectors and companies (does AI ring a bell?).

It is therefore the bond yield that affects us directly, rather than the volume of debt alone. The volume of debt does have an effect, however, as the bulk of the interest is paid by issuing new bonds. If the government repays with cheaper bonds, it isn’t too serious; but if rates rise, the impact on budget deficits is exponential.

The thing is, the more debt and interest there is to pay, the more bonds need to be sold. To absorb this huge supply, the market demands higher yields to attract buyers, which in turn drives up borrowing costs for everyone.

International buyers will cool on the idea of holding US debt.

US policy will artificially lower the interest rate to stimulate the economy. Also, the spending of the federal government will continue to increase above the tax receipts.

This will result in inflation. Which is great if you owe money, since you are paying it back with cheaper money.

But, the interest rates being low will make it easier to borrow? The resulting divide by zero in the economy (meaning an exception that there is no solution to) will result in the US government repudiating it's prior debt and making the 'new dollar'.

This will cause a couple of years of chaos.

Anyone can speculate. If we fail to pay interest in a timely manner, then presumably fewer foreign entities will buy our debt, and we will have less money from debt sales to fund what debt funds. Whether that pain is spread equally or not is anyone's guess.

Scenario 1: It will be nothingburger right until the time it isn't. US can't default on its debt - so massive inflation and money printing until everything is rebalanced.

Scenario 2: AI and robotics deliver growth on par with semiconductors and internet. Couple of decades of the economy growing faster than the debt will put it in manageable ratio.

USA is really rich in resources, extremely well defended by geography, so I guess they will make do even in the worst scenarios.

Just stop. The debt has _not_ be accelerating with either party. Look at the deficit growth numbers under each administration

There are no adults left in the room.

Which is already slowly happening.

You’re right, they’re just numbers. Relative to other economies they can tell us the strength of US hegemony but, the numbers are not a reliable indicator of themselves - because the money isn’t “real”.

Yeah MMT is basically beads and blankets for the island of manhattan.

Assuming you meant 164 million taxpayers...

Your number is too low still. Half of those filers are not contributors, they receive refunds. The figure is more like ~65 million taking on this tax burden, so likely closer to 15k (rounding math)

I think this is a great solution. Raise some revenue. Tax the rich more. (not being sarcastic, we need more tax money coming in) I didn't say 'eat them', just reach into their pocket and extract more (double? sure...)

At the same time, pull back on the spending. Or maybe even pull back on the growth in spending. No need to go to a full Doge; rather just pull it back a bit.

Why we can't do this, I am flummoxed.

  > we just wanted healthcare and homes, 

>"something the average consumer has absolutely no control over and no ability to solve"

Of course they do. Grow a new fucking party and vote for it. Better than one half f the population hating the other half. Just what politicians of either branch enjoy.

I've seen extremely smart/well-educated people (not in politics or any skin in the game) argue the debt isn't really a problem. "It's not like your household debt" and all. This one probably isn't just about education.

Pretty much like the 3 Stooges, the best they have to offer is nyuk, nyuk, nyuk.

Bessent is especially moronic financially, if he actually had what it takes to perform adequately in his position, Trump would not stand for it.