National Debt And Stuff

[Swammerdami]

From here:

In October 2013, the Federal Reserve simulated the effects of a binding debt ceiling that lasted one month—from mid-October to mid-November 2013—during which time Treasury would continue to make all interest payments. See this report. The Fed economists estimated that such an impasse would lead to an 80 basis point increase in 10-year Treasury yields, a 30% decline in stock prices, a 10% drop in the value of the dollar, and a hit to household and business confidence, with these effects waning over a two-year period. According to their analysis, this deterioration in financial conditions would result in a mild two-quarter recession, leading to an increase in the unemployment rate of 1.25 percentage points and 1.7 percentage points over the following two years. Such an increase in the unemployment rate today would mean the loss of 2 million jobs in 2022 and 2.7 million jobs in 2023.

Macroeconomic Advisers conducted a similar exercise in 2013. It assessed the economic costs of two scenarios—one in which the impasse lasted just a short time and another in which it persisted for two months. Even in the scenario in which the impasse was resolved quickly, the economic consequences were substantial—a mild recession and a loss of 2.5 million jobs that returned only very slowly. For the two-month impasse, which included a deep cut to federal spending in one quarter, offset by a surge in spending in the next quarter, the effects were larger and longer lasting. In the analysis, such a scenario would lead to the near-term loss of up to 3.1 million jobs. Even two years after the crisis, there would be 2.5 million fewer jobs than there otherwise would have been.

In 2021, when an impasse among policymakers once again threatened Treasury’s ability to pay its obligations, Moody’s Analytics concluded that the costs to the U.S. economy of allowing the debt limit to bind then would be severe. In Moody’s simulation, if the impasse lasted several months in the fall of 2021, employment would decline by 5 million and real GDP would decline almost 4% in the near term before recovering over the next few quarters.

The debt ceiling has never before gone "binding" in all of history, but Secretary Yellen estimates that the bind will occur in ten weeks, if Lauren Boebert, Matt Gaetz and other dominant Republicans do not relent. Rather than prioritization (triage), Treasury is expected to order across-the-board check-writing holidays as needed, but with bondholders' interest payments exempted. Debt will be rolled-over, though perhaps with 5% coupons if the rate would otherwise be 4%.

@Lumpenproletariat -- If Boebert et al have their way, bind the ceiling and cause a recession, will they get your political support? Will you blame Biden et al for not privatizing SocSec or whatever the blackmailers require?

The GOP DOES have a plan for cutting spending -- Cancel all spending on "wokeness." OMB estimates this will save $19 million annually. (Yes, that's "MIllion" with an "M.")

 

[Lumpenproletariat]

The realistic answer
(not the lies of the Repubs and Dems)

The only way out is for a future election to decimate the GOP, hand overwhelming control to the Democrats, who can finally do the right thing.

No, it's not more of the same that we need, not still more Red vs Blue partisan political sloganeering and demagoguery. The way out is for many candidates to threaten to vote negative on raising the debt ceiling and for voters to elect them. These candidates should name what tax increases or spending cuts they want, and should pledge to vote against a higher debt ceiling unless first the deficit is brought down to a certain level -- below the recent record high levels.

Until then, nothing much can be done, nothing much will be done.
It is time to be realistic about this.

Until there is real deficit reduction, yes. Deficit reduction is what would be realistic, and threatening to vote against the higher debt ceiling is the way to force the needed spending cuts and tax increases.

Realistically, if the debt ceiling is not raised, then something will be done, however drastic, to force some spending cuts and/or tax increases (or revenue increases). Without defaulting on the debt. Whatever it takes, no matter how many crybabies howl and scream. It is a lie to say the debt ceiling must be raised in order to avoid defaulting on the debt.

 

[Lumpenproletariat]

Stop insisting that never-ending higher and higher debt is the only solution.
(higher as a % of the economy)

From here:

In October 2013, the Federal Reserve simulated the effects of a binding debt ceiling that lasted one month—from mid-October to mid-November 2013—during which time Treasury would continue to make all interest payments. See this report. The Fed economists estimated that such an impasse would lead to an 80 basis point increase in 10-year Treasury yields, a 30% decline in stock prices, a 10% drop in the value of the dollar, and a hit to household and business confidence, with these effects waning over a two-year period. According to their analysis, this deterioration in financial conditions would result in a mild two-quarter recession, leading to an increase in the unemployment rate of 1.25 percentage points and 1.7 percentage points over the following two years. Such an increase in the unemployment rate today would mean the loss of 2 million jobs in 2022 and 2.7 million jobs in 2023.

Macroeconomic Advisers conducted a similar exercise in 2013. It assessed the economic costs of two scenarios—one in which the impasse lasted just a short time and another in which it persisted for two months. Even in the scenario in which the impasse was resolved quickly, the economic consequences were substantial—a mild recession and a loss of 2.5 million jobs that returned only very slowly. For the two-month impasse, which included a deep cut to federal spending in one quarter, offset by a surge in spending in the next quarter, the effects were larger and longer lasting. In the analysis, such a scenario would lead to the near-term loss of up to 3.1 million jobs. Even two years after the crisis, there would be 2.5 million fewer jobs than there otherwise would have been.

In 2021, when an impasse among policymakers once again threatened Treasury’s ability to pay its obligations, Moody’s Analytics concluded that the costs to the U.S. economy of allowing the debt limit to bind then would be severe. In Moody’s simulation, if the impasse lasted several months in the fall of 2021, employment would decline by 5 million and real GDP would decline almost 4% in the near term before recovering over the next few quarters.

The debt ceiling has never before gone "binding" in all of history, but Secretary Yellen estimates that the bind will occur in ten weeks, if Lauren Boebert, Matt Gaetz and other dominant Republicans do not relent. Rather than prioritization (triage), Treasury is expected to order across-the-board check-writing holidays as needed, but with bondholders' interest payments exempted. Debt will be rolled-over, though perhaps with 5% coupons if the rate would otherwise be 4%.

@Lumpenproletariat -- If Boebert et al have their way, bind the ceiling and cause a recession, will they get your political support? Will you blame Biden et al for not privatizing SocSec or whatever the blackmailers require?

The GOP DOES have a plan for cutting spending -- Cancel all spending on "wokeness." OMB estimates this will save $19 million annually. (Yes, that's "MIllion" with an "M.")

If spending cuts are really this impossible, so that nothing but tax increases alone can possibly save the country from total collapse and crash and bankruptcy, then there are ways, short of declaring martial law and cleaning out everyone's bank account, whereby revenue can be raised, even without approval from Congress.

Those ways -- by Executive Order -- would probably be illegal, but no one can arrest the President and throw him in jail. And the Senate will never vote to convict even if he's impeached by the House. No matter how you slice and dice it, defaulting to the bondholders is the worst possible outcome, so absolutely anything short of that would have to be done. If you insist that spending cuts really are impossible -- which is not the case -- then there are ways to force up taxes in some form, in order to get the needed revenue. This is preferable to continuing to run up the debt without limit as we're doing.

It's better to have this big showdown now, during Biden's term, rather than in 2025-28 when we might have a Republican President.
One way or another, something is needed to force/pound/shove into place the needed tax increases and/or spending cuts.

 

[Swammerdami]

Stop insisting that never-ending higher and higher debt is the only solution.
(higher as a % of the economy)

Who is insisting this? Name names, and I will help Boo them down.

Meanwhile, your recent dialog is with Cheerful Charlie and myself. Neither of us is so insisting, so can we drop the repetitive and inappropriate claim? Please? Especially with the bold-face.

Meanwhile, will you PLEASE deign to answer my questions?

(1) You assert that Biden will always be able to find tricks to keep spending. Can you be more specific? Platinum coins? Illegal bond issuance? Can you name any expert who agrees with your claim?

Your "case" for the claim appears to be: "Yellen can juggle books and defer binding for ten weeks; therefore she could defer binding for ten years." Is that about it?

(2) If your claim WERE true, wouldn't that render the debt ceiling irrelevant? It's only purpose being to force Yellen and Biden to do some waddle dance?

The debt ceiling has never before gone "binding" in all of history, but Secretary Yellen estimates that the bind will occur in ten weeks, if Lauren Boebert, Matt Gaetz and other dominant Republicans do not relent. Rather than prioritization (triage), Treasury is expected to order across-the-board check-writing holidays as needed, but with bondholders' interest payments exempted. Debt will be rolled-over, though perhaps with 5% coupons if the rate would otherwise be 4%.

(3)

@Lumpenproletariat -- If Boebert et al have their way, bind the ceiling and cause a recession, will they get your political support? Will you blame Biden et al for not privatizing SocSec or whatever the blackmailers require?

The GOP DOES have a plan for cutting spending -- Cancel all spending on "wokeness." OMB estimates this will save $19 million annually. (Yes, that's "MIllion" with an "M.")

It's better to have this big showdown now, during Biden's term, rather than in 2025-28 when we might have a Republican President.

(4)
How do you expect the debt ceiling "crisis" to play out? What outcome are you rooting for? The Freedom Caucus wants less spending on Medicaid and education. Is this the outcome you want? If not, what outcome are you hoping for in June, as dollar markets roil?

The Freedom Caucus does not want tax hikes on the rich -- Will you settle on tax hikes for the poor and middle class instead?

 

[Cheerful Charlie]

Most of the GOP congressmen and congress women have signed the Grover Norquist pledge to never raise taxes . Many of them are demanding Trump's massive tax cuts be made permament. And there is no way we can cut the budget to balance the budget. Again, the GOP is now promising not to cut Social Security or Medicare. Of course these liars might just be lying, as usual. And now what about that national debt these morons are caterwauling about? Their massive tax cuts and loopholes since the Regan days helped give us that. But the GOP has no realistic plan to deal with it.

I think I have gone about as far with your sealioning nonsense as is reasonable. By now it is obvious I am wasting time with you. I see no signs anybody else cares either. The GOP hasn't a clue. The numbers show cutting our way to a balanced budget and eliminating the national debt is impossible.

 

[Cheerful Charlie]

The GOP budget.

....
This spring, House Republicans are expected to release an annual budget resolution that calls for large health care cuts, and Medicaid and the Affordable Care Act’s (ACA) marketplace coverage are likely to be prime targets. House Republican leaders are calling for cutting the deficit and making the Trump tax cuts permanent, while saying they will shield certain areas of the budget (Medicare, Social Security, and military spending) from cuts.
.......

It's the numbers, Stupid! The Trump tax cuts are to be made permanent.

Congressional Republicans’ Budget Plans Are Likely to Cut Health Coverage | Center on Budget and Policy Priorities

This spring, House Republicans are expected to release an annual budget resolution that calls for large health care cuts, and Medicaid and the Affordable Care Act’s marketplace coverage are likely to be prime targets.

www.cbpp.org

 

[Cheerful Charlie]

Let's hear it now! Death panels! Death panels! GOP death panels!

 

[Lumpenproletariat]

Stop insisting that never-ending higher and higher debt is the only solution (higher as a % of the economy)

Who is insisting this?

Everyone who demands that the debt ceiling be raised higher and that Biden's current budget be passed which contains higher deficit than the previous year.

Name names, and . . .

OK, if you're not insisting it, then tell us what is your proposal to reduce the deficit (2023 and 24) in contrast to Biden's budget which increases it?

Neither of us is so insisting, so . . .

So you agree that Congress must reduce the current deficit rather than increasing it as Biden's budget calls for. Good. What kind of pressure do you want placed onto the Congress to get it to do that?

Meanwhile, will you PLEASE deign to answer my questions?

(1) You assert that Biden will always be able to find tricks to keep spending.

To cut spending and also increase revenue, maybe even taxes, without agreement from Congress. I.e., if and when bondholders must be paid to avoid default. Yes he can do that. Perhaps illegally, but somehow it can be done.

Can you be more specific?

No, it's been done already, but I don't know how. Nixon impounded funds which had been appropriated. That could be done again, probably illegally. I don't know the specifics how it's done.

Platinum coins? Illegal bond issuance?

Probably not the latter. Unauthorized debt is probably not possible, because that debt has to be repaid, years later, meaning the repayment could be revoked by a later President or Congress. Whereas impounding funds in order to repay bondholders cannot be revoked later after those bondholders are already paid.

Can you name any expert who agrees with your claim?

Can you name one who says what would stop the President? given the choice to do it by Executive Order (illegally) or to have the nation default to the bondholders and thus be deprived of future borrowing? Why would the President choose to have the nation default and then be unable to borrow for the foreseeable future? forcing massively greater spending cuts in the future, in SS and other popular programs and entitlements? You're saying the President should make that choice for default and thus elimination of future debt? causing future entitlements etc. to be cut by 20% or 30% or worse? Why do you think he would choose that route rather than much smaller cuts while also paying the bondholders?

Your "case" for the claim appears to be: "Yellen can juggle books and defer binding for ten weeks; therefore she could defer binding for ten years." Is that about it?

(What's the above quote from?)

They can transfer revenue away from spending programs and into repayment to bondholders. It's the Executive where the funds are spent. Federal Police will not bust into the President's office and arrest him for falsely spending funds. There are ways to get the funds, and also probably to increase taxes. If it means cutting all federal programs in half and diverting half of total revenue to paying the bondholders, then so be it. Just because it's drastic and illegal doesn't mean it can't be done, given that the alternative (DEFAULT) would be even worse. What's going to stop him from doing it if there's no other way to pay the bondholders? You and others posting here have not answered this.

If your claim WERE true, wouldn't that render the debt ceiling irrelevant? It's only purpose being to force Yellen and Biden to do some waddle dance?

No, its purpose is to restrain the debt. Which would happen if the debt ceiling is not raised.

(4) How do you expect the debt ceiling "crisis" to play out? What outcome are you rooting for?

Return to the deficit levels (as a % of the economy) which were achieved by Obama 9-10 years ago (or even better, the level prior to the 2008 crash). Did Obama's lower deficits cause the Sky to fall? Were you screaming bloody murder back then and condemning Obama for drastically cutting needed programs? What's your evidence that the lower debt level back then (or back before 2008) is not possible today? (again AS A % OF THE ECONOMY)

The Freedom Caucus wants less spending on Medicaid and education. Is this the outcome you want? If not, what outcome are you hoping for . . .?

The same level of debt (as a % of the economy) which Obama gave us 10 years ago. But also gradually lower over time after that. The debt/gdp should decrease to below 90%. Almost all experts used to say 80% was the proper maximum. Do you have evidence that they were wrong?

The Freedom Caucus does not want tax hikes on the rich -- Will you settle on tax hikes for the poor and middle class instead?

If there's a showdown because of the debt ceiling not raised, then the Freedom Caucus might be forced to accept some tax increases, as there might be ways it could be done by Executive Order, forced onto those bastards against their will.

There are many possible higher taxes, on all income categories. E.g., gasoline taxes should be increased. Don't say there's no way it can be done, even against the popular sentiment. If it's necessary in order to make sure bondholders get paid, then it will get done one way or another.

(Throughout all the above, I'm relying on numbers for the debt level in earlier years -- 2012-2015 (decreasing deficit), 2018-19 (increasing deficit), also prior to 2008 when the debt/gdp was lower, and so on. As best as I can check these, they are what I'm saying, with the debt/gdp increasing, as the long-term normal trend, with certain jumps at 2008 and 2020, followed by decreases which were less than the jumps up. Also Biden's current budget/deficit compared to last year. But the numbers are not easy to identify in many cases. So it would be fine for someone to determine the numbers more precisely. It's fine if anyone can find a mistake, make a correction, etc.)

 

[Cheerful Charlie]

Actually, the CBO estimates the Biden budget, if enacted will slash the yearly deficits from about $1.2 trillion a year to $500 billion. That could be improved on if there was no GOP and no Grover Norquist No Tax Pledge.

Slashing ACA and Medicare while making Trump's massive tax cuts permanent won't do the job.

See the Brookings Institute. The Trump tax cut slashed corporate taxes from 35% tp 21%. Plus tax cuts for every one else. Alfred Laffer claimed the tax cuts of 2017 would pay for themselves. Laffer is chief economist for ALEC. This slashed tax revenues for 2018 by $275 billions. Many corporations with billions of dollars in profits pay little or no taxes.

Did the 2017 tax cut—the Tax Cuts and Jobs Act—pay for itself?

William Gale disproves a popular mischaracterization of the 2017 Tax Cuts and Jobs Act.

www.brookings.edu

 

[Swammerdami]

In this dialog or "debate" -- or whatever it should be called -- we are constantly talking past each other.

Name names, and . . .

OK, if you're not insisting it, then tell us what is your proposal to reduce the deficit (2023 and 24) in contrast to Biden's budget which increases it?

MY plan? As if I had an important voice in Congress?

I would increase taxes on corporations and the rich; I would explore ways to reduce health-care costs; there are ways to reduce net SocSec outlays. It is well-known that the Pentagon budget has pork-barrel fat. But trying to cut the deficit by a trillion dollars all at once would be ... very disruptive.

I would NOT do what the GOP wants to do -- reduce coverage of health-care, education etc. while further cutting taxes on the rich and working to increase the profits of drug companies. Pro-human spending has already been cut to the bone.

Meanwhile, will you PLEASE deign to answer my questions?

(1) You assert that Biden will always be able to find tricks to keep spending.

To cut spending and also increase revenue, maybe even taxes, without agreement from Congress. I.e., if and when bondholders must be paid to avoid default. Yes he can do that. Perhaps illegally, but somehow it can be done.

So your solution is to stop issuing pay-checks to government employees and stop issuing checks to retirees? I guess you are happy with the current situation, and rooting for Boebert et al to succeed,

Yes, that's exactly what Yellen plans if/when the debt limit binds in June. The unpaid government workers will be furloughed -- yet another "government shutdown" will happen -- but neither they nor retirees will be happy when their money doesn't arrive.

(4) How do you expect the debt ceiling "crisis" to play out? What outcome are you rooting for?

Return to the deficit levels (as a % of the economy) which were achieved by Obama 9-10 years ago (or even better, the level prior to the 2008 crash). Did Obama's lower deficits cause the Sky to fall? Were you screaming bloody murder back then and condemning Obama for drastically cutting needed programs? What's your evidence that the lower debt level back then (or back before 2008) is not possible today? (again AS A % OF THE ECONOMY)

Keep your eye on the ball! We're not speaking of the budgets for 2024 or 2025. The question is: What will happen in June as the GOP threatens to shut down the government?

The Freedom Caucus wants less spending on Medicaid and education. Is this the outcome you want? If not, what outcome are you hoping for . . .?

The same level of debt (as a % of the economy) which Obama gave us 10 years ago. But also gradually lower over time after that. The debt/gdp should decrease to below 90%. Almost all experts used to say 80% was the proper maximum. Do you have evidence that they were wrong?

Keep your eye on the ball! We're not speaking of the budgets for 2024 or 2025. The question is: What will happen in June as the GOP threatens to shut down the government.

There is no "magic threshold number" like 90%. If 95% is "bad," then 85% isn't real good either. But, yes, debt is already at a troublesome level. But the debt ceiling "crisis" has nothing to do with debt! It is about extortion to force Democrats to defund Medicaid, Medicare and education and to make the Trump tax cuts permanent. Once the "Freedom Caucus" gets their way, they will cheerfully help deficits to soar as part of their "Starve the Beast" agenda.

 

[Cheerful Charlie]

News from Business Insider.

The GOP wants to cut $1 trillion in spending. And are planning 500 bills to swamp the Congress over cuts. Remember, budget for discretionary spending is $1.6 trillion and the GOP has stated they won't cut SS or Medicare. (They lie.) And still want Trump's massive tax cuts made permanent. These numbers don't work.

Republicans want to cut $1 trillion in spending — and instead of introducing 1 bill, they've introduced 500 to do just that

GOP lawmakers just put forth over 500 ideas on areas they might want to cut spending, with some including typos like "Educcation" and "Enironmental."

www.businessinsider.com

 

[bilby]

These numbers don't work.

They're not supposed to work. They're supposed to be popular.

 

[Lumpenproletariat]

What's popular is tax cuts, increased spending and no spending cuts, and speeches about balancing the budget. Like the popularity of lower gasoline taxes so people can increase their driving and consuming fossil fuel, plus speeches to reduce carbon emissions.

 

[Cheerful Charlie]

What is popular is GOP obstructionism, ignorance and incompetence. Biden's budget slashes deficits more than half. The GOP with fight him all the way. After all, if Biden succeeded, people would vote for him in 2024. THE GOP CANNOT ALLOW THAT POLITICAL DISASTER TO OCCUR!

 

[Lumpenproletariat]

What is popular is GOP obstructionism, ignorance and incompetence. Biden's budget slashes deficits more than half.

That's only promises for years into the future, not his current budget he wants this Congress to pass.

His current budget increases this year's deficit.

 

[Cheerful Charlie]

U.S. fiscal years starts October 1. If the Biden budget gets passed, it would not begin until then, and would be accounted as the 2024 budget.

 

[Swammerdami]

An opinion ("Republicans Can't Agree on a Path Out of Their Own Debt Crisis") in the recent New York Times summarizes the impending debt ceiling "crisis":

It's been obvious for months that Republicans in the House of Representatives intend to lead the country toward a calamitous debt ceiling crisis in order to get their way on spending. Only in the last few weeks, however, has it become clear just how truly chaotic that process will be.
. . .
"I don't see how we get there," said Patrick McHenry, a Republican of North Carolina and the chairman of the House Financial Services Committee, who is close to Mr. McCarthy. "And this is a marked change from where I've been. I don't even see a path."
. . .
When the G.O.P. took control of the House in January, Mr. McCarthy had to meet the demands of a handful of far-right members to get their votes to become speaker. One of his concessions was a promise not to raise the debt ceiling unless there was an agreement to balance the budget within 10 years by cutting the heart out of the federal government.
. . .

But what will replace that ultimatum? So far, there has been a cacophony of proposals from the so-called five families representing different gradations of small government ideology in the House Republican conference, all vague and lacking details of what members really want to cut. . . . That's why there is still no official budget statement from the House G.O.P., because its different factions can't agree on how open they should be about the results. The details of austerity are unpopular, and it's easier to just issue fiery news releases.
. . .
But Mr. Biden says he won't let the government and the economy be blackmailed, and he has adamantly rejected the demand that he discuss terms for raising the ceiling. He says it has to be raised cleanly, with no conditions, just as it was three times during the Trump administration. The last time a Democrat negotiated with Republicans over the ceiling was in 2011, when President Barack Obama capitulated and agreed to a deal that created the notorious "supercommittee" to agree on cuts and imposed a stark sequester of spending when the committee couldn't agree. Almost everyone hated that deal, and Mr. Obama vowed never to negotiate again, an important principle adopted by his vice president.

. . . Tom Cole of Oklahoma, chairman of the House Rules Committee, said a few days ago that several House members will never vote for any debt ceiling increase, "even if we gave them everything they wanted." Mr. McHenry said he had never been more pessimistic about reaching an agreement.

Democrats say privately that with the debt ceiling deadline probably arriving this summer, they are counting on mounting pressure from financial markets, already jittery from the recent banking crisis, as well as business lobbyists, to persuade enough Republicans to join Democrats in ending the threat at the last minute. Maybe, but with the radical mind-set that now pervades the House, it's hard to count on that.

The opinion piece is brief and well-written, but I deleted much of it from the excerpt to comply with copyright rules. Anyone confused about the debt ceiling crisis -- I'm looking at one of you! -- should read the entire opinion. (I've previously mentioned how to bypass the NYT wall easily.)

 

[Lumpenproletariat]

Biden's budget slashes deficits more than half.

If the Biden budget gets passed, it would not begin until then, and would be accounted as the 2024 budget.

If it gets passed, the deficit/GDP and the debt/GDP will immediately increase, not decrease. His budget makes deficits/debt go higher (as a % of the economy), despite the usual phony promises of reduced deficits later down the line. Those promises are not at issue in the upcoming budget vote. Biden's budget right now, to be voted on, drives the debt up higher.

(Any legitimate deficit numbers which can be cited show Biden's current budget producing a higher deficit, not lower. You might argue that it's only a small increase, while the previous 2 years were decreases. But Biden's actual deficit now is higher (as a % of the economy) than Trump's record-high in 2019.)

No one is giving any reason why the debt/deficit must increase (as a % of the economy), or why the proposed budget could not instead REDUCE the deficit from its current beyond-normal high level which is a result of the covid crisis and might be defended has having been a necessary response to the pandemic. Now that this crisis is over and the deficit-level should decrease back to normal, instead of this almost everyone is just accepting on faith that the federal debt must continue/resume its ever-upward direction, regardless whether there is a need for this higher debt.

The best outcome, given the failure of both Parties to act responsibly, will happen if the debt ceiling raise is voted down, so that the Administration is forced to keep the spending down within the budget limits while also ensuring that the bondholders get paid. This can be done. It's a lie to say a default on the debt would be necessary without a higher debt ceiling.

 

[Jimmy Higgins]

The problem with the budget is spending increases are now strongly related to mandatory spending for retirement support. We could strip all non military discretionary spending and be well in a deficit (and recession).

We are stuck with a social security funding problem the GOP gladly helped create since 2004 by refusing to address the issue like adults.

 

[Cheerful Charlie]

Biden's budget slashes deficits more than half.

If the Biden budget gets passed, it would not begin until then, and would be accounted as the 2024 budget.

If it gets passed, the deficit/GDP and the debt/GDP will immediately increase, not decrease. His budget makes deficits/debt go higher (as a % of the economy), despite the usual phony promises of reduced deficits later down the line. Those promises are not at issue in the upcoming budget vote. Biden's budget right now, to be voted on, drives the debt up higher.

(Any legitimate deficit numbers which can be cited show Biden's current budget producing a higher deficit, not lower. You might argue that it's only a small increase, while the previous 2 years were decreases. But Biden's actual deficit now is higher (as a % of the economy) than Trump's record-high in 2019.)

No one is giving any reason why the debt/deficit must increase (as a % of the economy), or why the proposed budget could not instead REDUCE the deficit from its current beyond-normal high level which is a result of the covid crisis and might be defended has having been a necessary response to the pandemic. Now that this crisis is over and the deficit-level should decrease back to normal, instead of this almost everyone is just accepting on faith that the federal debt must continue/resume its ever-upward direction, regardless whether there is a need for this higher debt.

The best outcome, given the failure of both Parties to act responsibly, will happen if the debt ceiling raise is voted down, so that the Administration is forced to keep the spending down within the budget limits while also ensuring that the bondholders get paid. This can be done. It's a lie to say a default on the debt would be necessary without a higher debt ceiling.

Again, CBO estimates are that if Biden's budget plans pass the current deficit of $1.2 trillion will be cut to $500 billion. Again, if not having to battle an utterly incompetent, obstructionist GOP, a balanced budget is possible. But that involves raising taxes, which the GOP will never support. SS could be made sound, but the GOP has opposed the measures to do so for decades now. GOP rat fuckery. Bil Clinton balanced the budget. It can be done. But not with the GOP retaining its current level of power.

That is all.