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PaperclipPerfector  5d ago (text post)   22595 thread views

Culture War Roundup for the week of June 2, 2025

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you could easily reduce spending by 10% and not to pay this interest payment and be in the same situation

What?

What?

See above.

I believe he means that if the USA just exercises some fiscal responsibility for a few years they can eliminate the debt and stop paying interest on it.

Yes. When I hear “fiscally responsible” on news I have no idea what it means. I just tried to offer a better phrasing that could resonate with people. If something wasn't clear, now I have provided interpretation above: https://www.themotte.org/post/2015/culture-war-roundup-for-the-week/332917?context=8#context

Mandatory spending (mostly social security, medicare, pensions, and welfare), plus interest, now exceeds total federal revenues. We could eliminate every discretionary budget item, shut down everything from NASA to the Army, and we'd still see the debt continue to increase.

The debt is about to hit $37 trillion. If we cut all spending in half, everything down to Grandma's social security check, that would give us a $1 trillion surplus, and it would still take half a lifetime to pay everything back.

If we eliminated all spending, including collecting social security taxes but paying no more benefits, it would still take around 9 years to pay off the debt, not just a few.

You probably are better with numbers and can provide better estimates. Tyler Cowen has analytical blog post about this issue: https://marginalrevolution.com/marginalrevolution/2025/06/claims-about-debt-and-productivity-growth.html

My understanding is that it is a time to become “fiscally responsible”, i.e., try to cut expenses. The current growth is not enough to stop interest payments to skyrocket.

The time to become fiscally responsible by just cutting expenses was 30 years ago. Today we'd need to become fiscally responsible by cutting expenses and raising taxes. We won't voluntarily do that now either, so barring a miracle we'll eventually be forced to do it later (when lenders no longer imagine getting paid back for US treasuries and stop covering our deficits), and we'll grossly inflate away the US dollar too.

Not true. There have been times when printing money was correct policy, for example, after big crises of 2008.

And that's also assuming that cutting spending so drastically wouldn't have negative second and third order effects on the overall economy that lowered tax revenues in the process.

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