> At what point, if ever, do Americans acknowledge the horrific fiscal situation the Baby Boomer generation bequeathed to us and accept that painful & deep spending cuts must be made, instead of piling more spending atop expenditures this country cannot afford?
Thank you. Exactly this.
I am very fiscally conservative, but I have no problem with welfare in general. However, this country cannot afford it. Many other countries can, and I think that's great. We cannot. There is really no question here.
> I have no problem with welfare in general. However, this country cannot afford it. Many other countries can, and I think that's great. We cannot. There is really no question here.
There is absolutely a question here, and it is obvious.
Other countries raise more revenue (taxes) and pay for more things. That is "great", you say. The US could do the same.
Other countries spend less on other things (classic example is defense). The US could do the same.
The US can absolutely positively definitely afford welfare, and universal health care too.
If we prioritize these things the way other countries do.
The important question is: which countries get the best outcomes for their people through government spending? There are strong arguments that the US is not at the top of that list.
> Other countries raise more revenue (taxes) and pay for more things. That is "great", you say. The US could do the same.
Well sure, but we'd have to pay off our debt first. If you want to raise taxes to pay off debt, I'm actually more in support of that than raising taxes to pay welfare. So far, all tax raising plans to pay off welfare just continue to increase the debt (and it's not like the anti-welfare people end up decreasing it either). So really until then, I'm not in support of anything other than lowering the debt.
I'm not sure that raising taxes will help. The US federal government pulls in a larger percentage in taxes as percentage of GDP than ever before, and yet is still spending it all + some. This is not sustainable.
> The important question is: which countries get the best outcomes for their people through government spending?
No it's not. The important question is: which countries get the best outcomes, whether via government spending or not, and do so while not being in debt?
We agree on one point: the important question is which countries get the best outcomes, regardless of spend or funding.
But I'm unclear on the importance of paying down debt in this case. Will it lead to a better state of things, or is that expectation just a habit we have from thinking about household debt?
Govt debt is different, and US govt debt is even more different.
It is not strictly bad to carry debt at the national govt level. Especially when your debtholders are mostly citizens. People talk about China and other countries holding US debt, but the numbers are not significant.
So what is the right level of debt? That's a good question, but it doesn't seem to be terribly relevant right now (and literally no one knows the answer!). When your debtholders will no longer lend you money, then it becomes an issue. We are not there yet, regardless of what the number is.
Debt owed to your neighbor is usually bad. You deprive them of resources, and the math is zero-sum.
Debt to your bank is usually OK. Everyone benefits from the transaction, at least by design.
Debt to your citizens is great! Your debt limit is a meaningful fraction of the sum of economic value of the nation. Your creditors are also the beneficiaries of your spending. The more you spend, the more you can borrow, because you create economic activity on behalf of your creditors, who then have more to lend.
Debt is absolutely very different when the debtors and creditors are the same people.
Debt to other nations (if you're the US) is also great! But that's a special circumstance.
Except it's not. Debt to citizens represents tax payments that are owed from all citizens to the subset of citizens owning debt.
The rich own a disproportionate amount of bonds. This is expected.
By taxing all people to pay interest to the rich you're just taking from the poor to give to the rich.
Especially considering that the next generation is made up of larger numbers of children of the poor rather than children of the rich, this is tantamount to stealing from the future of the already disadvantaged to give to the ready advantaged.
That is not correct. Something like the bottom 50%(?) of earners, including all of the truly poor, do not pay taxes at all, but they benefit from the spending done on their behalf -- in some cases through directed programs, and in other cases just like all citizens.
There is a stratum of taxpayers who do not benefit directly (i.e. loan repayments) from government debt because they do not hold bonds. And as you say, in the upper economic strata, bond holding is more common.
So the strata that are least-benefitted are somewhere in the middle to upper middle class (such as it is). But these people are mostly OK -- their needs are met, most of their wants are met, but they could optimize better. NBD.
AND: If those strata did optimize better (move some income/savings into govt bonds), then the govt could borrow more and everyone would be even happier except the folks who obsess over the number for political reasons (when political party "not-mine" is in office).
Of course there is a "donut hole" in the middle where the social benefits available (programs) are inadequate, and the economic benefits (bond holding) are unreachable.
But the proposed programs which are running into this wall of discussion are in many cases designed to address this gap. There are good arguments about how best (effectively, cost-effectively, etc) to address the gap, how to design the programs.
But the argument that "we can't afford it" is short, pithy, and easily-comprehended, but much too simplistic to be honest. "We don't want to" is more correct.
Thank you. Exactly this.
I am very fiscally conservative, but I have no problem with welfare in general. However, this country cannot afford it. Many other countries can, and I think that's great. We cannot. There is really no question here.