Debt Limit

[Morphic Tide]

As opposed to a system where we already have corruption, incompetence, and ineptitude leading to lives and land being ruined, on top of the inhibitive effects of excessive regulation and bureaucrats on power trips trying to control everything?

The important difference is that what you're mentioning is the system being perverted and ignored, whereas in your proposed alternative it's the system not having the power to enact any preventative measures. Unwillingness to stop problems or bumbling into causing them is very different from intentionally refusing to let anyone stop them before they get people killed.

Again, things have bloated beyond what's actually needed, but the amount of shit that stops working if you just nuke the entire bureaucratic system is "Bronze Age Collapse" level civilization-wrecking. Inspectors of some description ensuring preventative measures are in place are very strongly required with how many things can rapidly fuck over major population centers, large fractions of watersheds, and entire aquifer systems.

 

[ThatZenoGuy]

The underlying issue is that we have incomprehensibly higher economic complexity. No matter how you look at it, there's a need for a several-fold expansion of the government's scale simply to keep up with the increased variety of businesses. For instance, GMO foods weren't a thing when the EPA was founded, and if we ever want to enforce environmental regulations on imports so they aren't just reflexively dodged with offshoring we'll be needing whole new departments that may as well go to the EPA.

It's expanded far more than necessary, and it's a rambling inefficient clusterfuck, but when people make statements they're usually referring to the pre-flaming-river times when "environmental protection" wasn't a thing. Pollution is far too acute a threat to public health to be rid of agencies like the EPA. That's just the most obvious case-study in why "back to before the 20th century" will not go well.

That just sounds like a copout to me though. We have to pay absurd taxes because big assholes in government complicated everything for minimal gain? Human happiness is lower than it's ever been and everything's all fucked up.

Yeah sure, smartphones on the cheap are a nice side effect, but is that worth it all?

It looks more to me that they complicated shit, explicitly so that it'd be harder to resist their actions.

 

[History Learner]

I think shutting down several government agencies would save quite a bit of money. And fire like half of the bureaucracy. We don't need the vast majority of it.

And more efficiency in everything government related including the military. The amount of waste is mind boggling.

And a consumption tax instead of the current insanity that is our tax code. Simplify that and the IRS could be vastly reduced instead of hiring like 80,000 new agents.

Dissolving the department of education, the ATF, reforming the rest of the Federal bureaucracies with half the manpower, more automation, and more accountability, that'd all make a pretty good start in bringing the budget back in line.

Ditching all the unconstitutional welfare programs would solve the problem overnight, but is even less politically plausible than the above. Government gibs are the national-level equivalent of a heroin addiction.

While I commend you both for making a plan, neither of you have eliminated the deficit with these proposals, never mind started paying down the debt. Entitlements (Social Security and Medicare/Medicaid), the U.S. DoD budget and Interest payments on the debt alone constitute 110% of current revenues.

You can literally eliminate about 70% of the Federal Workforce, the entirety of the Education and Justice Departments, etc and you still are running a deficit in the hundreds of billions.

 

[Morphic Tide]

That just sounds like a copout to me though. We have to pay absurd taxes because big assholes in government complicated everything for minimal gain?

We have to pay more taxes than the 19th century because there's been rather dramatic transformations in what "a good life" means on account of multiple new basic kinds of commodity becoming routine and former luxuries becomes ordinary.

Yeah sure, smartphones on the cheap are a nice side effect, but is that worth it all?

Smartphones and the multiple forms of information infrastructure behind them existing at all is a pretty big argument for a non-negligible chunk of the increases being complained about. Similar story for the military budget, even with excellent graft-purging there's no bringing it back to the 40s proportion of the economy let alone to where it was before Wilson's utter bullshit, because the minimum complexity for competitive hardware is so ridiculously higher.

Entitlements (Social Security and Medicare/Medicaid), the U.S. DoD budget and Interest payments on the debt alone constitute 110% of current revenues.

The DoD and Medicare/Medicaid are quite immensely reduceable as they're subject to monstrous price-gouging from habitual deficit spending and ridiculous numbers of middlemen, even before quibbling about just how much of what they do is needed. We're talking "1000% markup over the same-specifications civilian supplier" on literal nuts and bolts kind of price-gouging. You don't need austerity, you just need to actually try to spend money effectively and something like a third the budget vanishes in a puff of thrift.

 

[ThatZenoGuy]

We have to pay more taxes than the 19th century because there's been rather dramatic transformations in what "a good life" means on account of multiple new basic kinds of commodity becoming routine and former luxuries becomes ordinary.

But modern people AREN'T getting the benefits the added taxes should give. Yeah okay there's no more lead in the paint, but at the cost of...Shelter? Is that REALLY a good tradeoff?

Okay fine people back in the day didn't have flatscreen TV's.

...But they had job security.

 

[History Learner]

The DoD and Medicare/Medicaid are quite immensely reduceable as they're subject to monstrous price-gouging from habitual deficit spending and ridiculous numbers of middlemen, even before quibbling about just how much of what they do is needed. We're talking "1000% markup over the same-specifications civilian supplier" on literal nuts and bolts kind of price-gouging. You don't need austerity, you just need to actually try to spend money effectively and something like a third the budget vanishes in a puff of thrift.

Best guess for DoD waste is $125 Billion as of 2016; adjusting that to 2023 inflation rates gets you $157 Billion. For reference, Pentagon budget is ~$900 Billion nowadays. The Big Three is $5.1 Trillion, total revenue in 2022 was $4.9 Trillion. Even reducing DoD budget down to $750 on the basis of cutting waste, you still end up with about a $100 Billion deficit or where we were in the late Obama years as far as deficits go. This is also, again, assuming we cut everything else.

To contextualize it further, the $1.17 Trillion you've cut from Federal spending is 4.5% of GDP; you've just triggered a Great Recession. This is why Economists term this situation a Debt Doom Loop, every choice has pain, you just get to choose which.

 

[Bear Ribs]

Best guess for DoD waste is $125 Billion as of 2016; adjusting that to 2023 inflation rates gets you $157 Billion. For reference, Pentagon budget is ~$900 Billion nowadays. The Big Three is $5.1 Trillion, total revenue in 2022 was $4.9 Trillion. Even reducing DoD budget down to $750 on the basis of cutting waste, you still end up with about a $100 Billion deficit or where we were in the late Obama years as far as deficits go. This is also, again, assuming we cut everything else.

To contextualize it further, the $1.17 Trillion you've cut from Federal spending is 4.5% of GDP; you've just triggered a Great Recession. This is why Economists term this situation a Debt Doom Loop, every choice has pain, you just get to choose which.

That's less of a best guess and more what the Pentagon was willing to admit to in their own internal audit, which they then tried to bury anyway. The Pentagon has never, ever passed an external audit under any circumstances. Anybody not part of the military machine would find vastly more waste and a lot more fat to trim than the military found investigating itself.

There's a book on it, The Pentagon Catalog.



With each book purchase for a few dollars (4.95 when first published) you get a nut the military pays over two grand for. Thousand-dollar pliers, fourteen grand toilet seats, soap dishes running over a hundred, and five-hundred-dollar hammers are all old news for the Pentagon. The level of waste can get insane once politicians are grifting taxpayer dollars to their sponsors.

 

[History Learner]

That's less of a best guess and more what the Pentagon was willing to admit to in their own internal audit, which they then tried to bury anyway. The Pentagon has never, ever passed an external audit under any circumstances. Anybody not part of the military machine would find vastly more waste and a lot more fat to trim than the military found investigating itself.

There's a book on it, The Pentagon Catalog.



With each book purchase for a few dollars (4.95 when first published) you get a nut the military pays over two grand for. Thousand-dollar pliers, fourteen grand toilet seats, soap dishes running over a hundred, and five-hundred-dollar hammers are all old news for the Pentagon. The level of waste can get insane once politicians are grifting taxpayer dollars to their sponsors.

Undoubtedly so, but you have to assume their budget is around 50-75% fake to start seeing real cuts that matter. Even then, we are also assuming you've cut all else besides mandatory spending; no ICE, no Department of Energy, everything else has to be cut too. By that point, you're now talking a Recession worse than 2008 from these cuts.

There is a solution, however, that leaves all of this in place, and it's one the United States actually did in the late 1940s: You let inflation run red hot (10-20%) for a few years and inflate the debt away:

 

[Emperor Tippy]

If you want to actually fix the US budget then step one is to start with a blank piece of paper.

Every cent of government expenditure is put on the table.

Then you list out what tasks the Federal Government should be responsible for.

Then you figure out how to most economically complete those tasks.

---

But you aren't going to actually resolve the fundamental issues with the US budget until you deal with Medicare, Medicaid, and Social Security.

The national security budget might be large but 1) it is the highest priority task of the federal government and 2) it generally does not have unbounded expenses pushed into the future.

The "non painful" way to resolve the entitlements issue is fix it going forward and then just wait for the already entitled to die off, hoping that you can borrow at reasonable rates to cover that cost.

 

[History Learner]

But you aren't going to actually resolve the fundamental issues with the US budget until you deal with Medicare, Medicaid, and Social Security.

On average, they're 75% funded by existing FICA taxes. It's that remaining 25% that is the problem and the only real way you're going to fix that is by either hiking taxes on the young, rationing benefits or slashing them outright. Ultimately it all goes back to the fact we're three generations into sub-replacement level fertility with all that implies for old age programs like Social Security.

The national security budget might be large but 1) it is the highest priority task of the federal government and 2) it generally does not have unbounded expenses pushed into the future.

That's not actually true, case in point being the War on Terror having long running costs:

The research team's $8 trillion estimate accounts for all direct costs of the country's post-9/11 wars, including Department of Defense Overseas Contingency Operations funding; State Department war expenditures and counterterror war-related costs, including war-related increases to the Pentagon's base budget; care for veterans to date and in the future; Department of Homeland Security spending; and interest payments on borrowing for these wars. The total includes funds that the Biden administration requested in May 2021.​

There's pretty good evidence at this point U.S. enemies are aware of this weakness as well; Al Qaeda as early as 2015 was claiming the financial costs incurred by Iraq and Afghanistan had probably broke the U.S. and Putin spent much of the 2010s talking about the weak position of the U.S. in the same regard. For further evidence of this, the median year of the Baby Boom was 1956-1957; 2022 thus marked the year the majority of Baby Boomers are now eligible for retirement, which meant budget issues would start to bite no matter what. Interesting Russia attacks Ukraine at exactly that moment, no?

The "non painful" way to resolve the entitlements issue is fix it going forward and then just wait for the already entitled to die off, hoping that you can borrow at reasonable rates to cover that cost.

The problem with that is, again, how do you fix it? Each generation is having fewer kids than the last, so you're running into the issue of an increasing old age dependency ratio even after the Boomers die off. Borrowing at reasonable rates is also no longer viable; if your treasury bond is paying 3% returns but Inflation is 5% anybody taking that deal is an idiot and it's clear everyone realizes that now:

 

[History Learner]

Your only options are to either:

1. Crash the economy, at somewhere between Great Recession and Great Depression levels, by drastically cutting Federal spending.
2. Defaulting on the debt, with about the same impact as the above and immediately ends the Dollar Reserve status system.
3. Let inflation run red hot at 20% or so for 4-5 years, give or take. This will inflate the debt away like we did after WWII, but at the cost of mass reductions in living standards in a country where roughly equal numbers of Leftists and Rightists support secession, with active secession measures under debate in Texas and with roughly 25% of Americans saying taking up arms against the Government is valid.

The U.S. is not going to survive the next 15 years.

 

[ThatZenoGuy]

The U.S. is not going to survive the next 15 years.

I lost my mind when America (allegedly most powerful and wealthy nation in the world) offered payment plans for pizzas lmao.

 

[Zachowon]

Cut all social welfare programs first.
The DoD is the biggest employer in the world, and has an actual job.

That's all I will say.

 

[Blasterbot]

Cut all social welfare programs first.
The DoD is the biggest employer in the world, and has an actual job.

That's all I will say.

fair. I just wanna audit everything. if we can convert the DEI initiative bullshit into something that actually makes the military effective or stop putting woke shit in the military so they can actually do their jobs that would be great. you can't tell me every dollar is being used well and I wanna know what that money is going to at least.

 

[Zachowon]

fair. I just wanna audit everything. if we can convert the DEI initiative bullshit into something that actually makes the military effective or stop putting woke shit in the military so they can actually do their jobs that would be great. you can't tell me every dollar is being used well and I wanna know what that money is going to at least.

We can't tell you where all the money goes.
Because then youw ould know the super secret shit we are working on.
It would just fall under RnD and be the majority kf the budget

 

[History Learner]

Cut all social welfare programs first.
The DoD is the biggest employer in the world, and has an actual job.

That's all I will say.

You could cut all non-mandatory social welfare programs and you'd still be running a deficit in the trillions. Once again, even if you cut down to mandatory spending, DoD and interest payments, you're at 110% of tax revenue.

This is called a Debt Doom Loop, and you all had better learn it soon because that's your new reality.

 

[Cherico]

You could cut all non-mandatory social welfare programs and you'd still be running a deficit in the trillions. Once again, even if you cut down to mandatory spending, DoD and interest payments, you're at 110% of tax revenue.

This is called a Debt Doom Loop, and you all had better learn it soon because that's your new reality.

My money is that the US just defaults, and that it wont be us but pretty much every major country on earth.

 

[History Learner]

My money is that the US just defaults, and that it wont be us but pretty much every major country on earth.

Historically speaking, no country in this set up defaults. They'll print the difference instead, because they'd rather be Argentina than the Former Soviet Union. Unlike Argentina though, we have nascent secessionist movements and rampant political polarization.

Increasingly, I feel the United States reminds me of the Soviet Union, but in the context of the August Coup having worked in 1991. In 1990, the Soviet deficit as % of GDP was 10%; most recent figures I've saw for the United States is 9%. That ballooned to 30% in 1991 and, again, core spending alone is already 110% of tax receipts. Add in the rest of discretionary spending, COL adjustments, etc and yeah it start's looking a lot like 1991 is coming. Trump was our Gorbachev but Biden is Yanayev, a relic of a begone era trying to keep together a collapsing system.

 

[bintananth]

We can't tell you where all the money goes.
Because then youw ould know the super secret shit we are working on.
It would just fall under RnD and be the majority kf the budget

That's just a bullshit excuse.

The DoD has never passed an audit. No one in the DoD has the slightest clue where all the money goes. Billions get lost in the DoD's figurative couch cushions every year. The reaction to this state of affairs is effectively a collective shrug.

 

[Morphic Tide]

Once again, even if you cut down to mandatory spending, DoD and interest payments, you're at 110% of tax revenue.

Only because the DoD's blank checks get wrung for all they're worth, as has been cited multiple times with utterly absurdly inflated prices for basic maintenance supplies.