[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/

[rayiner]

> If your implication is that this is a private vs public spending problem, that's not it.

No, my point is that we couldn't achieve UK costs by doing "single payer." Our publicly funded systems, like schools and transit, are also cost-inefficient (public schools somewhat less so, public transmit somewhat more so).

[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?

[win311fwg]

> making the general population poorer by reducing their buying power

Exactly. Also known as a tax. You can make someone poorer by taking their money and destroying it, or you can make someone poorer by letting them keep their money and devalue it by creating more. Same coin no matter which side you want to look at it. There is no such thing as a free lunch. The taxes are always going to get paid in the end. The only choice is in exactly how you want to pay it. Each method has its own set of tradeoffs, so, like with everything, different groups understandably believe in different methods. In practice, both methods will be used. Nobody, apart from the previous commenter, is ever completely hardline "money must only be destroyed" or "money must only be created", but groups will still debate over what is the optimal ratio.

[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.