[juujian]

Upsetting how we are reaching these lows while the administration is accusing everyone else of wasting taxpayer money except for themselves. At least under previous administrations you would get something for your money, like science funding and healthcare for the needy, not just bombing runs and posturing.

[_DeadFred_]

The Republicans have ran on 'starve the beast' and intentional breaking of our government/programs/etc in order to meet their philosophical aims for 40 years. Republicans actively try to damage our country and do bad fiscal policy because they put their agenda over the the health of the nation.

It's not surprising they don't care because they literally have policy to do damage like this and their explicit goal has been this exact outcome.

[joinjune]

Both can be true. The previous administration bailed out the unfunded pension funds of cities and state employees when they did Covid-19 bailouts despite it having nothing to do with Covid-19 and without requiring these local governments to properly fund these pensions moving forward. They bailed these pension programs out many times more than their financial support for restaurants they forced closed. Basically, America has an economy that is buoyed by AI development and infrastructure spending right now but is poised to pop and the national debt has been ballooned by two to three generations of political leadership failing to properly address underlying issues and instead printing money.

[notfromhere]

The problem is that half the political system thinks you can cut taxes and grow revenues.

Which is an intentional strategy to repeal social programs that they’d never get the votes to do so via legislation

[citrin_ru]

It's a difficult tradeoff. By taxing more and more it's easy to send the economy into the death spiral so to grow the revenue without killing the economy you need economic growth. Cutting taxes will not give the growth aromatically but carefully designed tax system with low taxes where it helps should be a part of the strategy.

In practice though tax cuts usually make rich richer without helping the economy to grow (because of lobbying/corruption).

[hvb2]

> In practice though tax cuts usually make rich richer without helping the economy to grow (because of lobbying/corruption).

This is being generous. It's much simpler.

The poor don't pay any federal taxes at all so you can't give them a tax cut because they don't pay any. You can give them a credit at best.

Edit:

Some data

> Another 60.3 million returns showed AGIs of less than $30,000. The average effective tax rate for those taxpayers was 1.5%, even before refundable tax credits were applied.

From: https://www.pewresearch.org/short-reads/2023/04/18/who-pays-...

[citrin_ru]

> The poor don't pay any federal taxes at all so you can't give them a tax cut

Even if we exclude poor there are many options how to split taxes between different income brackets, how to tax salaries vs capital gain, how to split taxes between individuals and businesses, how to avoid loopholes e. t. c. (e. g. in the UK I see small business struggling because of rising taxes while multinationals pay little taxes by moving profits offshore and reporting no profits in the UK).

[SlightlyLeftPad]

37% of personal returns below the standard deduction is way more than I would have expected.

[rayiner]

> The problem is that half the political system thinks you can cut taxes and grow revenues.

And the other half thinks you can pay for a European-style welfare state without European-style middle class taxes. Americans are Disney adults.

[bhelkey]

The US spends $2 Trillion dollars on Medicare + Medicaid a year [1][2].

Given that the US has a population of 342.7 million people [3], those two trillion dollars divides out to $5800 per resident per year.

The UK's universal healthcare system costs ~$4700 per person per year (~£3,500)[4].

If we could spend healthcare dollars as efficiently as the UK, the current government spending in the US is enough to support a single payer healthcare system covering every resident without raising taxes.

[1] https://www.cms.gov/data-research/statistics-trends-and-repo...

[2] https://www.kff.org/medicaid/medicaid-financing-the-basics/#...

[3] https://www.census.gov/popclock/

[4] https://www.bbc.com/news/articles/cwy7zvp5xrqo

[rayiner]

> Given that the US has a population of 342.7 million people [3], we could have single payer healthcare for every resident without raising taxes if it cost less than $5800 per person per year. The UK's universal healthcare system costs ~$4700 per person per year (~£3,500)[4].

Except we couldn't. For the same reason our public schools can't get Finland's test scores while spending $3,000 less per student pear year than the U.S. For the same reason our public transit systems can't build subways for $100 million per km, like Spain.

[bhelkey]

If your implication is that this is a private vs public spending problem, that's not it. Healthcare in the US (both private and public) costs dramatically more than in other developed countries.

Why that is is a bit complicated and doesn't have a single root cause. It's also a bit tricky because every major component blames the other components for the total cost.

Part of the problem (roughly 10% by one estimation I read) is drug prices. Drug prices in the US are >2x the price as compared to other developed countries [1].

[1] https://www.ncbi.nlm.nih.gov/books/NBK611301/

[UncleMeat]

Can you explain this reason in detail?!

[_DeadFred_]

They do not think this. They pretend to still believe this in order to continue their 'starve the beast' strategy, but their actual goal is to damage the government/run up debt, not the pretend 'trickle down economics' they claim.

[ModernMech]

Right they (the politicians) don't actually think that, they just say that to get cooked projections. Once those revenue projections turn out to be false, it doesn't matter because they already have their tax cuts baked in. Then everyone can blame the other side for deficits and campaign on fixing it. Rinse and repeat.

[thenewnewguy]

Let's be clear and not do this both sides thing - by "they" we mean Republicans. You may not agree with their policies or what they want to spend money on, but Democrats (at least in aggregate) live in the real world where they acknowledge for the government to spend money they will have to raise taxes.

Republicans are the only party that in the 21st century acts as though we can simultaneously cut taxes and increase spending and everything will be fine.

[ghastmaster]

As far as I have seen, in federal politics, the majority(left and right) spends, while taxes in general have not been significantly increased or decreased(percentage). What you are talking about is their rhetoric, which may be rhetorical itself.

What does change(and is more important) is Debt/Revenue:

https://fred.stlouisfed.org/graph/?g=TZfm

The ratio is looking like it is trending in the right direction. If GDP decreases while nominal tax receipts increase, GDP does not change the debt, while the debt/Revenue ratio looks good for paying bills, while not boding well for economic health.

What is this "real world" you are referring to? There has to be a balance between current and future expenditures and economic health to facilitate these. Nothing exists in a vacuum.

[win311fwg]

There are two ways to tax the people: By destroying money or by creating money.

Republicans may generally prefer creating money over destroying money, but that doesn't mean they aren't applying taxation. "Tax cuts" in normal speak just means a reduction in how much money is being destroyed. It does not refer to a reduction in your tax burden.

[SlightlyLeftPad]

I’m not an economist but when trillions of dollars are created doesn’t that create an illusion of sorts of economic growth (revenue growth) in the form of inflation while also having the effect of making the general population poorer by reducing their buying power?

[rayiner]

Democrats absolutely do not "live in the real world" regarding taxes: https://www.washingtonpost.com/opinions/2026/07/19/medicare-...

"Taxing billionaires" is the left's version of "cut Medicaid fraud." It's a message for low-information voters who have a gut feeling that free stuff will require more taxes, but get confused converting from billions to trillions: https://www.washingtonpost.com/opinions/2020/03/06/msnbc-sug...

That's why Democrats say "we're the only developed western country without universal healthcare," but never "we're the only developed western country without a 15%+ VAT."

[jhickok]

It's likely not politically feasible for a genuine attempt at right-sizing our budget, although we have had attempts (short-lived) in the past. Blaming a political party for this is pointless, although there is a party that has postured as the fiscal adult in the room.

It could be a very messy bubble if/when it collapses, and I think our way out at this point would have to be AI-driven productivity gains. Hopefully Altman's little wish-granting machine ends up being accurate.

[toomuchtodo]

Bailing out workers is okay. They are, by definition, the people who have done the work. Bailing out the wealthy, or tax cuts for them is not. Unless you are very wealthy, you are a worker, and unless you experience a lottery winning type event, will never be very wealthy.

> Basically, America has an economy that is buoyed by AI development and infrastructure spending right now but is poised to pop and the national debt has been ballooned by two to three generations of political leadership failing to properly address underlying issues and instead printing money.

Maybe we shouldn't have spent five decades giving the wealthy tax break after tax break while hollowing out the middle class and suppressing wages with union busting and globalization. Productivity is up ~90% over this time frame, and most of the gains have gone to the top 1%. But here we are. The bill has come due for strip mining the country economically, and taxes will go up to pay down this debt (because only the top ~40% of income earners have enough income to have a federal tax liability). We will fix this eventually through demographic compression (economic growth comes, broadly speaking, from population growth and the US has reached peak population; forward growth will be substantially lower than the past when the population was growing rapidly), politics, and the bond market forcing the US government to raise taxes (“bond vigilantes”).

[chasd00]

> forcing the US government to raise taxes.

it won't be the wealthy or cash-under-the-table classes paying these taxes, the increases will be in the income brackets. Which means paycheck receiving working stiffs ( middle and upper-middle class ) and retierees drawing from a 401k/IRA are the ones who will pay just like always.

[quickthrowman]

> Bailing out workers is okay. Bailing out the wealthy, or tax cuts for them is not.

Hell, between PPP and the OBBB tax cuts, rich people are getting $2T over from the YS Governemnt from 2020-2030. It’ll keep happening too, this country is an oligarchy now. Wish it wouldn’t but I don’t see a sea change coming, just further concentration of wealth and power.

[throwaway894345]

There are more than two numbers, so we don't have to force this weird "it's either 0% waste or 100% waste" dichotomy. No one is claiming the Biden admin didn't waste a cent, the claim is that the Trump administration is wasting _orders of magnitude_ more money than the Biden administration.

[jmpman]

As much as people may dislike Regan, his goal for reducing taxes on the wealthy was based upon the laffer curve. https://en.wikipedia.org/wiki/Laffer_curve

The hypothesis is that lowering taxes rates will actually increase government revenues.

The Trump cuts don't feel like they're laffer optimal. Instead they feel like political capture by the wealthy class. A cumulative of left of laffer optimal tax strategies over the past years have resulted in a deficit growing at rates which now exceed what a laffer peak rate would now support.

- the rich got their tax breaks, and have contributed to deficits for decades. Now they complain that social security entitlements must be cut to keep within our means.

[ElevenLathe]

It's really more that the (narrow, academic, theoretical) Laffer curve provided cover for the Reagan admin to cut taxes in the ways their backers wanted, but this is admittedly unproven AFAIK. But then there's the observable fact that the Reagan cuts weren't Laffer-optimal either (revenues went down, not up). It's not clear that there is a Laffer-optimal tax cut that can currently be made, but instead of making a case for that it has just become "centrist" dogma that lower taxes always increase growth and revenues, and are always optimal no matter the actual fiscal or economic situation.

[rayiner]

I think the more interesting observation is that neither Clinton, nor Obama, nor Biden made any effort to roll back the biggest part of Reagan's tax cuts: reducing taxes on the middle class. That's quite remarkable, because that's the area where the U.S. diverges the most in tax policy from other western countries.

[Hikikomori]

>As much as people may dislike Regan, his goal for reducing taxes on the wealthy was based upon the laffer curve.

That changes everything, doesn't matter that it didn't work at all.

[tstrimple]

> As much as people may dislike Regan, his goal for reducing taxes on the wealthy was based upon the laffer curve.

If this were the case, revenue would have gone up after the tax cuts. They didn't. Receipts as share of GDP fell and the deficit tripled. The debt went from 25% of GDP to 40% of GDP during Reagan. We've never meaningfully been on the wrong side of the Laffer curve. It's basically just conservative propaganda at this point.

As the other post mentioned, the strategy is and was Starve the Beast. We know this because that's what Reagan actually campaigned on.

> "John Anderson tells us that first we've got to reduce spending before we can reduce taxes. Well, if you've got a kid that's extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker."

[joquarky]

> Now they complain that social security entitlements must be cut to keep within our means.

That's the Starve the Beast strategy.

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

[rayiner]

I don't want to waste money bombing Iran either, but the total cost of the operation has been $37.5 billion. Meanwhile, Medicare, Medicaid, and Social Security each grew around $100 billion in the last year.

[toomuchtodo]

Direct costs are ~$113B as of June 16th, 2026 (per the Pentagon's briefing to Congress, counter stopped on that date):

https://iran-cost-ticker.com/

Iran War Cost Tracker - https://news.ycombinator.com/item?id=47237080 - March 2026 (446 comments)

Pentagon Tells Congress First Week of Iran War Cost More Than $11.3 Billion - https://www.nytimes.com/2026/03/11/world/middleeast/iran-war... | https://archive.today/Q4oDX - March 11th, 2026

Consumer energy excess cost burden is ~$76B as of this comment (indirect regressive consumer tax):

https://iranwarcost.watson.brown.edu/

> Meanwhile, Medicare, Medicaid, and Social Security each grew around $100 billion in the last year.

While we should be efficient with these programs, that's what government is for, and what I pay US federal taxes for: to take care of my fellow citizens. Not to bomb innocent people with overpriced military industrial complex hardware on the other side of the world for illegitimate reasons (F-35 program costs now exceed $2T, for example).

https://usafacts.org/government-spending/

Pentagon Fails Eighth Audit, Eyes 2028 Turnaround - https://www.military.com/feature/2025/12/24/pentagon-fails-e... - December 24th, 2025

Annual net interest on debt is ~$900B/year, as of this comment; we could replace Medicare and Medicaid with Medicare for All for ~$2T/year, which would contribute to constraining healthcare spending increases: https://news.ycombinator.com/item?id=48666290. It is an active choice to continue to operate the entire system inefficiently; we could make other, better choices. The inefficiency and debt growth is a result of operating the system for entrenched interests to profit off of the dysfunction.

[halJordan]

A common conceit in these arguments is that you have sole ownership to "what a government is for." Which implicitly denies the opposite argument without addressing it, and attempts to legitimize your own. But social service outlays are absolutely, incontrovertibly a huge & increasing reason for the deficit. All the doge/ Trump/project 2025 cuts have paled in the face of the absolute juggernaut that is domestic spending. And then you realize that state govts spend as much money as the federal govt, while having absolutely no defense budget at all.

For you to deny that social spending is problem (especially for what it does buy) totally denigrates you and your position.

[Jcowell]

What does it buy

[rayiner]

Much less for the money than in western europe--even when limiting the analysis to systems like schools and transit that are publicly operated in both places.

[cherry_tree]

So you support a move to make American tax and social services policies more like Western Europe?

[rayiner]

I don't have a basis for evaluating that calculation. I'll point out that their methodology seems to rely on taking various estimates of per-day costs then multiplying things out. It also relies on per-campaign costs from prior conflicts and turns them into per-day costs. I don't think you can do that in an intermittent war that has no boots on the ground.

Regardless, the federal government's job is, in fact, to bomb hostile countries that threaten shipping lanes. That's the federal government's actual job, not social welfare. I agree that we mistakenly precipitated the situation that now threatens the shipping lanes, but we are where we are. And it's not like that dry firewood wasn't already there.

I also don't understand the emotionalism of "fellow citizens." "American" is a label for a group of consumers living within a defined border, who want to get their oil and foreign goods shipped to that location. It's even more clear today that keeping shipping lanes open is the federal government's core responsibility than it was in 1789.

[itsdesmond]

They uh… they were open. They were open before we started bombing. We bomb because we bombed. As a consequence of us murdering we are murdering.

> "American" is a label for a group of consumers living within a defined border, who want to get their oil and foreign goods shipped to that location.

Holy shit.

[TimorousBestie]

[RETRACTED]

[rayiner]

You have me confused with someone else. This was me 3 months ago: https://news.ycombinator.com/item?id=47986799

> If American foreign policy was rational, we wouldn’t have been involved in Korea, Vietnam, Iraq, and now Iran. Not to mention Somalia, Kosovo, and Libya, and countless minor skirmishes. We’ve been throwing kids into the meat grinder for 75 years, and lighting dollars on fire, for no good reason. There’s no reason for us to light money on fire having bases all over the world, when we have two huge oceans to protect us.

[TimorousBestie]

Fair enough, I retract my earlier comment. That's not an inconsistent position to hold. My apologies.

[rayiner]

Thank you.

[malvim]

Except these programs keep your people alive and healthy and able to work and consume and live. The other money just kills people. And it’s also not just about this “operation” (aggression war). It’s about the whole military budget. Come on, now.

[rayiner]

> It’s about the whole military budget.

I also thought that the military budget was too big... in 1998. But in 2026, Europe is raising defense spending targets to 3.5% of GDP, which is more than what the U.S. spends: https://www.bbc.com/news/articles/clyz4nq91wpo

It turns out that, if the U.S. isn't willing to guarantee your security, you have to spend 3-5% of GDP on defense (just like Europe used to do before 1990). As the U.S. loses hegemony and we move to a multi-polar world, everyone's military budgets will go up.