I find this graph truly incredible. It appears that the federal debt was driven by the last two major crises: the financial crisis of 2008 and covid. Honestly doubt you will be able to do this again with the next crisis.
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Massive tax cuts on top of spending increases didn’t help matters either.
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We just need one more round of tax cuts and everything will be paid for!
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This is why we need the DOGE!!!
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A scarier graph is projecting this one 10 years into the future.
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IF DOGE and Trump stick to the promises from the campaign, I don’t see it helping matters. The promises:
No cuts to SS
No cuts to Medicare
Bigger military spending
Massive tax cut
Massive tariffs
I don’t see the deficit improving in that case. Cutting the DOE or meals on wheels is a drop in the bucket.
We’ll see. I imagine what will happen: some federal departments and jobs will be eliminated and “privatized”, enriching the insiders making these decisions with no meaningful improvement in overall spending. They backtrack on promises wrt SS, and make cuts there.
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Entitlement spending has to be cut. Everyone with any economic sense knows that.
SS, Medicare, and Medicaid are on clearly unsustainable paths.
We are also still waiting for the president with the kahunas to implement a vat tax
Thank you for confirming that Trump has no economic sense
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VAT is a highly regressive tax. Much like sales tax it hammers those who spend a higher portion of their income. Not sure I’m a big fan.
I just confirmed that, right now, very few politicians are willing to tell the, in general, economically ignorant and selfish population something they don’t want to hear.
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We have 20% in the UK.
In Norway and Denmark its 25%.
You can have exemptions for food and other necessities.
But I think its likely coming to the US given that the Rs want to cut income taxes in favour of consumption taxes.
So rather than shore up funding with small tweeks you’d like gut the top programs than alleviate elder poverty. Interesting.
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Worse fear is that Trump pays off the debt using DOGE. That is effectively a massive increase in the Money Supply. We all know what happens after that.
I could easily be missing something, but I’m under the impression that using any crypto to “pay off the debt” will put the assets of the U.S. in the hands of whoever issued those crypto assets. It also results in a never-ending income stream to those people, and the current holders of those assets get “rewarded” with crypto that instantly becomes worthless.
It’s right out of the Eastern Europe dictator playbook from the 1970s.
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I don’t follow.
I hate it when peeps act like a sovereign nation’s finances are likened to a business or an indidual. But I’ll turn it around to probe your reasoning.
Imagine a friend of yours had an opportunity to purchase a home. But it would require taking on a mortgage. A mortgagee that was 125% of his income. Would you scold him/her for being foolish?
It’s just not that big a debt load. May turn out to be inflationary for the nations currency, but that depends on the money supply and demand.
I’ll remind you that the Fed debt is about 1/2 the private debt. Total US debt is crazy high…crossed $$100 tr this year. Now that private debt is a risk…that paper can go poof, where as the fed debt can be devalued, but bankruptcy is not quite the threat.
So what worries you here?
It is as regressive as any corporate tax. The only difference is that companies can easily avoid paying corporate tax (See: Amazon, Apple) while a vat tax is harder to avoid.
We can also eliminate the capital gains tax rate once we are at it.
I have been wondering what the Trump govt expects will happen because if aggregate consumption falls because of the budget cuts and tariffs also depress consumption it will be an interesting period.
If they were not coupling it with tax cuts you would expect they would maybe pay down the debt and maintain demand but it’s not really clear what they expect will happen.
Here’s where you put Adam Neumann in charge of the govt. You see, he was able to drive WeWork into the ground and yet he was able to raise money again despite everyone knowing what he did. So we can use his charismatic personality to declare bankruptcy on the national debt and then start borrowing money again because he’s so visionary.
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The deficit has gotten so large, and people are dependent on so many government handouts, that I don’t see any way to actually balance the budget. The amount of cuts that would be necessary, along with the tax increases needed, would alienate both sides, so the politicians would never vote for it.
The US is in a downward spiral, and it’s a matter of time until it just goes broke.
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This is part of why Trump is so gung-ho on tariffs. It’s a tax increase that doesn’t require sign-off by anyone other than the President.
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