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PaperclipPerfector  3mo ago (text post)   25350 thread views

Culture War Roundup for the week of February 26, 2024

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Until recently there wasn't a large difference in the U.S. either. In fact, Republicans (Reagan, Bush, Trump) seemed to be much more spendthrift than Democrats (Clinton, Obama).

That seemed to shift with the election of Biden who has spent beyond all restraint, racking up nearly record deficits during an economic boom.

While Australians are uniquely blessed with immense resources (such as coal and iron) and a tiny population, I wouldn't count your blessings just yet. Debt to GDP has risen from 10% in 2006 to 35% in 2023.

https://en.wikipedia.org/wiki/Australian_government_debt

I do hope that the lucky country will continue to be lucky. But the rot which spreads from Los Angeles and New York seems to reach fertile soil in Australia. Hard to believe that left-wing governments will resist extravagant spending.

What?

I don’t know how you can look at this graph and conclude Republicans are “spendthrift.” Edit: looks like I had the valence reversed! Spendthrift is a defensible description.

The last balanced U.S. budget was signed by Clinton. Bush flipped the other way by April 2001, even before the War on Terror.

What about the Tea Party? Responses to the 2008 crash were expensive enough to spawn a grassroots movement dedicated to dunking on Obama fiscal conservatism. Unfortunately, those Republicans have been near-completely subsumed by the Trump wing, which was profoundly uninterested in balancing the budget.

I think it’s ridiculous to insist that Biden is the only one without any mitigating circumstances. I’m saying that as someone uncomfortable with the direct payments, the rent distortions, and the education subsidies. If Republicans want a reputation for fiscal conservatism, they have to earn it.

We agree. Spendthrift means "given to spending money freely or foolishly : wasteful with money". It is an antonym of thrifty, not a synonym. Probably a common confusion.

Well, heck. I’ll edit accordingly.

Still think it’s a bit weird to describe Biden as particularly bad, given the state of the economy when he took office. Maybe you’re right; I certainly don’t understand where all that money is going.

I should probably avoid using the word "spendthrift" since it would appear to mean the opposite of what it does.

Still think it’s a bit weird to describe Biden as particularly bad, given the state of the economy when he took office.

Biden took office during the best economic conditions possibly ever. Nominal GDP increased by 14.5% in 2021 alone. https://fred.stlouisfed.org/series/NGDPNSAXDCUSQ

Biden's entire Presidency has been one debt-fueled spending bonanza, although I agree it's slightly unfair to pin it all on him as other people in his party want to go much further.

What examples come to mind of rot spreading down under?

American attitudes towards social justice seem to have taken root in Australia even more firmly than in America.

The recent effort to give Aboriginal Australians a veto over elected governments (which thankfully failed) is an example of this.

Cane toads.

The greatest budget deficit ever was under Trump, though Biden continued very large but smaller deficits.

Yes but that was the pandemic and Democrats wanted even more deficit spending.

Biden's deficits are truly remarkable given there is no crisis and in fact the economy is booming.

I'm very aware of our recent fiscal history. We fell into deficits during the GFC, and kept running them all the way until covid, and have only recently climbed out. Obviously that period of time is going to leave a significant amount of debt (though still a fraction of what the US is burdened with).

But it's also true that all that time we were running deficits, outside of the immediate emergencies of the GFC and covid, those deficits were controversial. Wayne Swan loudly and repeatedly promised to return us to surplus, and was roundly mocked when he failed. Joe Hockey loudly and repeatedly promised to return us to surplus, and was roundly mocked when he failed. Scott Morrison went a step further and brazenly claimed to have already returned us to surplus and produced commemorative coffee mugs celebrating the achievement... based on projections for 2020. Of course covid happened and he got mocked even more roundly than his predecessors.

It was the current left wing government that ended the deficits. I'm under no illusions that Labor sincerely cares about fiscal responsibility of course, and their cheerleaders in the media are constantly agitating for them to tax and spend more. But the party is very serious about winning elections and they know that normal Australians don't like deficits or taxes.

But the party is very serious about winning elections and they know that normal Australians don't like deficits or taxes.

This is partly an answer to your question in another comment: complaints about "deficits" and spending got coded in America as right-wing, and then tribal instincts took over. It doesn't help that the government is broadly understood as a left-wing institution, and therefore cutting it is a partisan act. (A lot of Democrats believe, at a basic level, that Republicans trying to shrink the government sre really trying to cripple it, for example.)

This year Debt concerns have been in the news a few times, as Congress repeatedly passes halfway stop-gap funding. Every time without fail NPR has had some economist on to explain how concerns about the debt are really unreasonable, because Modern Monetary Theory proves we don't have to worry about debt.

People nowadays will ask: "What about Trump? He presided over the greatest deficits?" So, quickly: Trump correctly perceived that this was not a winning political issue. Voters don't really care that much. If you balance the budget you habe to cut spending somewhere, and Americans like government funding more than they like balanced budgets. And there were things Trump wanted to spend money on. (If you wanted to be really cynical, we could discuss the different demographics of Australia and America -- some groups get out more than they pay in.)

Budget balancing really has more to do with Congress than the president. The President can lead well enough, but when an unbalanced budget passes Congress no one wants to torpedo the whole budget over something persnickity like debt.

Dubya was the turning point in GOP debt reduction good faith. Clinton--Gingrich ran a surplus the year before Dubya won the presidency. Dubya expanded DC massively, built whole new federal departments ((Biden may actually be the first president in decades not to introduce a whole new federal department)), started wars, all while endeavoring to cut taxes while raising spending.

After Dubya we have not seen any mathematically serious effort by the GOP to balance the budget. Paul Ryan came close, but without addressing increasing revenue it was ultimately unrealistic.

In terms of solutions, simplifying the tax code to eliminate deductions and improving collections is more important that increasing rates. The IRS should be abolished and replaced by private tax collection contracted out to financial institutions. They'll do a better job.

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