Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD, with the looters fleeing to hard assets and foreign/crypto currency, and the plebs' currency crisis then serving as the justification for naked fascism red in tooth and claw? With the narrative then shifting to the usual "Democrats did this! And we tried to stop it but we were too late!" nonsense, backed up by an army of "AI" spambots.
The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.
Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014
The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s.
Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers:
> This present issue has been caused by decades of bad fiscal policy by both parties
So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it.
"National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax.
You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity.
The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead.
What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
This is basically a modern money theory view (correct me if I’m wrong)?
It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives.
Perhaps, from the bits I've read? I have arrived at it coming from an Austrian/conservative economics perspective. It's clear that we have had profligate monetary creation for decades without corresponding high across-the-board price inflation. My older self is also willing to accept the orthodox response to Gresham's law whereby a deflationary currency would be quickly replaced with a different inflating one. So then the question becomes what are we spending the new money on? Presently that is mostly subsidized low-interest loans.
If your concern is discipline, then it's easy enough to imagine a department similar to the Fed that comes up with a figure of how much new money to create for the right amount of average price inflation, with much discretionary spending by Congress being set in terms of that figure. That would surely be more responsible than the current system where one political team talks in terms of a pretend "fiscal responsibility" that only hamstrings Congress but doesn't actually affect monetary inflation.
Clinton balanced the budget back in the 90’s. Biden and Obama’s terms were almost entirely defined by picking up economic disasters the previous administration caused. (2009 marked the beginning of the housing crisis, bank defaults due to deregulation and occupy wall street. 2021 was mid pandemic, after Trump spent years printing money with his zero interest rate stuff and tax cuts. He also fired the US funded team that China relied on for early pandemic detection and response.)
So, claiming this problem is bipartisan is nonsense. I’ll blame the dems for lots of stuff, but wildly inflationary fiscal policies and intentionally destructive economic policies aren’t on the list.
Clinton came into office. At the start of his first term, he presented his plan to "balance the budget", which was to make small cuts for the next eight years, then large cuts thereafter - after his second term ended!
Then came 1994, and the "Contract With America". Republicans took over Congress. Their next budget made significant cuts then, not after Clinton was out of office. That's how "Clinton balanced the budget" - by a Republican Congress forcing him to live up to his words.
Lest you think this is a partisan statement, let me note that Republican Congresses never balance the budget when a Republican is President. But the historical record is that it wasn't just Clinton's achievement - a Republican Congress had to make him do what he wanted to make the next president do.
That was an annual joke back then. Every year they'd present a budget that had spending increases in the first couple years, "balanced" by cuts in the "out years" 5-10 years in the future. Of course, the next year there would be a new budget that invalidated all the future cuts but kept the increases that had already taken effect.
Then at some point they just stopped pretending to balance it at all, and no one seemed to care much.
How did you come to the conclusion that Clinton balanced the budget?
When have any of these presidents successfully pushed for reducing the federal deficit during their tenures? Any actual reductions to the debt you’ve seen?
What’s causing you to focus on presidents rather than congressional actions?
How do you think fiscal policy keeps getting passed through congress when there’s largely two parties that have to agree to get it done?
The deficit was gone in Clinton’s last term, and there was a surplus for four years. Cheney then said “surpluses are evil” and that was that. Sustained surpluses over time would wipe out debt obviously, but we’ve only been able to do that for one term.
A surplus in the billions for a few years did not meaningfully change a federal debt that’s in the trillions. Further, the surplus that paid down public debt was completely wiped out by social security and Medicare liabilities during that time
Better than nothing you might say, but not the structural change needed to get the US out of the hole
You asked about balancing the budget. Why pivot to complaining about the debt?
This seems to be a pattern on the part of dishonest economic criticism - you don’t get to just co flare literally any measures you come up with and pretend they’re all equivalent, and you certainly don’t get to “both sides” something that OP showed one administration had reversed and the next immediately and drastically in-reversed.
I’ve been consistently discussing the federal debt through this whole thread. Your accusations seem trollish, disregarding my larger point about fiscal policy/debt and the context of the article (the debt), so I won’t be responding further. Good day, sir
> How did you come to the conclusion that Clinton balanced the budget?
Having a surplus means your budget is balanced and then some.
> When have any of these presidents successfully pushed for reducing the federal deficit during their tenures? Any actual reductions to the debt you’ve seen?
You specifically mention deficits, and a surplus leads to an actual reduction in debt.
> What’s causing you to focus on presidents rather than congressional actions?
The same congress that was in charge during surplus was more than happy to put us in high deficit again.
> How do you think fiscal policy keeps getting passed through congress when there’s largely two parties that have to agree to get it done?
Gridlock is a great way of not spending money. More to the point: Clinton was ok with cutting spending as much as he was with raising taxes. He treated the deficit as if it were actually important unlike Bush, Obama, Trump, Biden.
If the budget is balanced and there is a surplus, then you will eventually have zero debt. Eventually. That means you have to stick to it, and not get sabotaged by low-effort conservative fiscal policy.
The story of US policies since the 70s is the republicans fuck some shit up, democrats almost fix it or rarely sometimes actually fix it, then people say the democrats are bad with money because reasons, and then the republicans come back in and fuck it up even more.
I mean, after the con that we call Reaganomics how are we still entertaining this bullshit? Do we truly never learn?
I should also add: Trump 2 inherited a stable economy with massive investments in US manufacturing.
Early indications suggest he has already ruined it with tariffs, erratic jailing of skilled laborers and gutting of the government programs and agencies that were supporting the investment in the first place. The dollar has dropped 10% since inauguration day, inflation is way up and the deficit is ballooning.
ss/Medicare are still owed by general budget, so they are still technically in surplus. But yet, eventually they will be in deficit (well, at least social security, Medicare isn’t capped on income so is more stable). SS could be fixed quickly by uncapping the limit on income that it is applied to.
Social Security is a trust fund and is set up so that it cannot lose money.
Congress has been stealing money from the fund for years, but that’s not Social Security’s fault. Claiming it needs reform is like blaming account holders after the president of the bank embezzles their deposits.
It’s kind of logical right? The dollar was misused over 50 years. What’s the best way to get rid of your debt? Make the usd worthless. Various methods, but one: have another reserve currency in the world but make sure you have enough of that to stay powerful.
He even gave the advice not to sell that one.
It’s a good but toxic strategy. Give freely printed dollars in exchange for resources over 50years, and then make it worthless.
But how is it in our interest to make it worthless? There seems to be this continued rhetorical touchstone framing "the debt" as some looming problem that will need to be reckoned with, as if people are thinking of it as household needing to pay off a credit card bill. But in reality, if the United States's debt went away then there would no longer be such thing as a greenback - our currency IS ENTIRELY government debt. I'll repeat that again - the government's debt is our money supply. And despite the continual monetary inflation, it still has been holding its value decently well. So where exactly is this desire to destroy the government debt (aka destroy our currency) really coming from, then?
They make a lot of sense if you consider that the man up top is an actual stupid person and he is surrounded by sycophants. He has suggested for decades that he understands trade deficits to be identical to subsidies. He prefers mob-boss dynamics as opposed to mutual alliances. He legitimately thinks he can engineer a market economy's prices with his closed-door meetings with CEO buddies.
It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
>Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD
Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
It's a bit of a stretch to call this juxtaposition of topics, with absolutely zero analysis of how they're connected, honest:
> we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits.
Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity.
The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example:
> in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense
Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.
SMH, the mental contortions people will go through to rationalize and whitewash the actions of this administration. You're either honest or you're not. There's no such thing as honest if people just read every third sentence and invent their own meanings for the rest. That's called dishonest.
But even accepting your point for the sake of discussion, he is "honestly" doing what? Begging? How is that a good thing?
I don't think this is a matter of like or disliking someone. While I can appreciate his candor in what he's trying to do - just because he's "honest" doesn't mean I agree with his policy.
What he is effectively saying is that large swaths of the American populace need to accept lower economic strength in order to decouple our reliance on our trading partners. And his reason for doing so is so that we can wage war on them. It's a completely nonsensical approach to maintain American hegemony. Why would any prefer strength through violence rather than maintaining the current system of American hegemony through trade?
While reserve currency status has it's warts, especially like he points out, the absolute immense amount of demand for US debt which fuels an uncontrolled spending crisis domestically I believe that is 1000% preferable to my daughters working in factories, and my sons dying in the Taiwan strait? For what? So that maybe the US can forcibly bomb China back into a nation of poor farmers and claim ideological victory over the communist project? It's completely inane.
You need to go one step further and ask yourself why he's proposing this. Instead of reexamining our relationship with China and asking ourselves how can we win in a multi-polar future, Miran and Trump have taken the view that China must remain a global adversary and we must maintain some sort of leverage on them.
And they would have lost a record increase in U.S. assets across the board, including the US dollar, which should have gone down if the problem was money printing.
It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits.
The recent rising yields have little to do with money printing from 4-5 years ago.
The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.