The ability for the government to spend money it doesn’t have doesn’t cease to amaze. The deficit was $1.6T last year (over 5% of the GDP) but 2024 is starting strong.
A not-insignificant part of that deficit though was programs and tax cuts from the previous administration. I agree, our government probably shouldn't be allowed to spend money it doesn't have, but the obvious solution (higher taxes, especially on the wealthy) isn't politically palatable, so every president is locked into the same pattern: start a bunch of spending, but back-load the actual expenses so the next administration has to deal with it. The deficit has gone down over the last few years, which means that we're getting more revenue and saving some money, but because deficit is an easier number to digest than change-in-deficit, we keep whinging about it rather than changing anything. And then the next administration comes in and points fingers at the previous while continuing the cycle of overspending.
FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.
Looking at the graphs for US Budget deficit since 1980 there's a clear pattern to it, Republican administrations tend to increase it (or maintain in percentage-to-GDP), Democrats tend to lower it:
> The rest of the time is occupied by bipartisan wars that we couldn't afford and lost anyway.
Started by Bush I and Bush II.
> There was what? 5 years in the past 50 that there wasn't a deficit?
My observation was in the rate of change of the deficit, generally since the 80s Democrats seem to work for lowering the budget deficit while Republicans increase it. Which is quite absurd given the demagogy coming from the GOP about public spending, "welfare queens", austerity and so on, they are mostly the ones responsible for pushing future administrations (and generations) the burdens of their overspending.
Bush started Syria, Libya, Yemen, Somalia and Pakistan?
And, better yet, then kept the wars up, for decades, despite several democratic majorities and no longer being in power himself?
Let me guess he also made them abandon the Bagram air base without any planning as well? Bush made them leave the humvees for the Taliban to use.
> GOP about public spending, "welfare queens", austerity and so on,
The only time the Democrats balanced the budget was the time they ended welfare queens and were tough on illegal immigration. Clinton from the 90's would be considered conservative today.
I think when they made that comment they were talking about the rate of change, ie, whether % of GDP is trending upwards or downwards, not specifically looking at the Clinton administration.
If you want to dig further into it GDP is adjusted by the GDP deflator and that is lower than CPI.
Due to (intentional) methodological flaws like hedonic quality adjustment, owner imputed rent and a basket of good arrived at by a team of economists rather than surveys of what households are actually buying, CPI is lower than what a household needs to increase its budget by in order to stay afloat, it's lower than inflation.
Therefore if the government engaged in deficit spending and that spending resulted inflation that would result in a better percentage of GDP than expected as a lot of the "growth" is just dollars becoming less valuable.
This is a different issue. This is a fix for the borrowers who were scammed by the Public Service Loan Forgiveness program, which although enshrined in law, was implemented as a massive fraud.
Amaze isn't the word I'd use, but Keynes did say something rather profound - "anything we can actually do we can afford". I think of the economy a bit like the power grid; it's really a just-in-time system that can only deliver productive capacity in real-time (though this analogy is changing with grid-scale power storage). In some sense, money is just an abstraction on top of that. Or I have no idea what I'm talking about, but also I don't think economists really have that good of a handle on things either.
From the perspective of a household (a cell), or a company (an organ), money (blood) are a limited resource, which constraints what you can do. If you don't have that resource, you will die.
But from the perspective of the state (the organism) or the government (CNS), money (blood) is just an accounting and distribution mechanism for real resources, which are things like energy, raw materials and labor (oxygen, minerals and sugar). From this perspective, amount of money/blood can be adapted to conditions (for example in emergency, money/blood can be redirected to vital industries/organs), and it is created or destroyed internally, in any amount required. So the amount of money (blood) is not a constraint, resources (oxygen, food) are.
As long as $ is the global reserve currency, these number are pretty much meaningless. Not to say it will be this way forever. We already can see other countries are doing everything they can to trade commodities in their own respective currencies (Russia, India, Japan, etc).
It is actually a great effort to forgive student loans. In US it is one of most debilitating factor for people who went to college (especially the private ones).
Why not do this earlier but wait for an election year? This just looks like a election campaign stunt to me.
Your final point feels poorly researched. I believe this administration has consistently focused on the student loan crisis outside of election years also.
The government isn’t spending money it doesn’t have. It does spend money it borrows from lenders. The lenders think it is a relatively safe investment since they keep lending money to the U.S. government.
I’ve been hearing doom and gloom about the deficit for 50 years. It primarily occurs when a Democrat is President and subsides when a Republican is President. This not a reference to OP. I state this to try to give some perspective to those who read this.
The debt to gdp ratio in Japan has been well over 100% for decades. In fact it is over 200%. What matters is the ability to service the debt. Those buying U.S. government securities are not as alarmed as you. Do you have reason to believe that they are lacking in knowledge/understanding of the situation and are wrong? They could be making huge mistakes with their willingness to lend but I don’t know enough about this stuff to decide if that is the case.
You don’t understand how these things work. The FED conducts auctions for securities that entities purchase. Without entities buying the securities there would be no money for the government to borrow.
Biggest single buyer. It’s an investment that SS makes. They could instead buy securities of other governments but U.S. securities have been the safest to purchase. Without SS do you think the U.S. would not be able to borrow as much as it does?
FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.