this post was submitted on 03 Jan 2024
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[–] [email protected] 59 points 1 year ago (1 children)

Why wasn't the Debt an issue when Trump was giving Free Money to rich people?

[–] Rapidcreek 35 points 1 year ago* (last edited 1 year ago) (1 children)

The simple fact of the matter is the debt ceiling is arbitrary, and a political tool to be brought out when convenient so Republicans can say, "We're spending too much!" Yet as soon as they get into office, they cut taxes and increase spending. The thing is we have more than enough sovereign wealth to pay our debts, and will continue to do so as long as our GDP continues to grow. The debt ceiling is a straw man and the ceiling is made of glass.

[–] Weirdmusic 30 points 1 year ago (1 children)

The real issue is not so much the debt but rather revenue raising, the increasing debt is merely a symptom of the US's inability to attract enough revenue (via taxes) to cover it's spending. Decades of propaganda by the right (you could easily substitute Oligarchy here) and the slashing of taxes on wealthy individuals and corporations has created an unsustainable debt situation. This is despite the sovereign debt issue.

[–] [email protected] -4 points 1 year ago (1 children)

It's not just lack of revenue. Spending has to stop too. The US is spending about 38% more than it takes in, and it's growing.

[–] surewhynotlem 4 points 1 year ago (1 children)

Meh.. or what exactly? What happens and when?

I see this number trotted out every election year, and everyone gets their panties in a bunch, but I can't see what happens if we don't fix it.

[–] [email protected] 5 points 1 year ago* (last edited 1 year ago) (1 children)

Eventually the interest in the debt will grow too large to service. The government will have to print more and more money leading to hyperinflation. The entire global economy will be impacted as faith in the dollar collapses. The global economy slows and eventually switches to trading in the Yuan. The US loses a ton of it's soft power globally.

[–] surewhynotlem 2 points 1 year ago (2 children)

That sounds ominous. When does it happen? There must be a point at which it tips.

[–] [email protected] 2 points 1 year ago

We have quite a while yet. We spend about 200 billion servicing the debt right now and have around 4.8 trillion in revenue.

The warning line is having a debt equal to your GDP. The US has a GDP of around 28 trillion but a debt of 34 trillion. So we are past that warning line, but by itself that doesn't mean anything.

For other countries it would signal to banks and other countries that it might be a bad idea to loan to them, but the US has a kind of special status in the global economy and this hasn't slowed down loaning so far.

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago)

Once it gets this bad there are only two ways out. Its pretty interesting cause in the 1800s both France and England were in similar debt to income ratio situations as we are now due to war spending but took different paths to fix it.

England tightened spending and had almost a century of lower economic growth to get back to near net zero debt right before WWI. Took a really long time. Was also helped out by explosive population growth, which isn't really an option for us at this point.

France didn't cut spending as much, and as a result had such massive inflation that the nominal value of the debt was close to like 1/100th of the initial value, bringing it to near zero as well. This also had the effect of wiping out any wealth not tied to physical assets. So like any family that was wrapped up in bonds lost everything. This is probably what's gonna happen to us

[–] [email protected] 28 points 1 year ago* (last edited 1 year ago)

so? wasnt a problem for rolling out that trillion dollar tax cut...

[–] FlyingSquid 22 points 1 year ago (2 children)

When has this ever mattered?

[–] [email protected] 8 points 1 year ago (1 children)

It matters when Republicans want to blame Democrats for something, especially when Republicans want to cut food and housing programs for poor people.

[–] FlyingSquid 6 points 1 year ago (1 children)

Republicans will always find a reason to blame Democrats.

[–] [email protected] 4 points 1 year ago

oh, sure. this just happens o be one of their favorite go-tos.

[–] [email protected] 18 points 1 year ago

All money is currently debt. Every dollar in existence is owed to someone at interest.

This is functionally the same as saying we have a lot of money.

[–] DoctorRoxxo 17 points 1 year ago (3 children)

Why don’t we just pin the debt on some guy and just kill him? Boom no more debt.

[–] FlyingSquid 14 points 1 year ago

We don't need to kill anyone. We can just do what rich people do and put all their debt into a private corporation so they don't have to worry about it anymore.

[–] [email protected] 11 points 1 year ago

Ah, the Christian approach.

[–] [email protected] 4 points 1 year ago* (last edited 1 year ago) (1 children)

FYI: “That guy” is (mostly) China.

[–] CaptainSpaceman 3 points 1 year ago

Actually its mostly Japan these days

[–] Mediocre_Bard 9 points 1 year ago

Who cares? Businesses get bailouts and foreign creditors get the threat of freedom.

[–] [email protected] 5 points 1 year ago (1 children)

Do you think they get calls from collection agencies during dinner?

[–] [email protected] 4 points 1 year ago

You get the spam Chinese phone calls to?

[–] [email protected] 4 points 1 year ago* (last edited 1 year ago)

Private savings in USD surpass $34 trillion

[–] Fog0555 4 points 1 year ago

I wish I could go $34 trillion dollars in debt. Hell, I'd even settle for $1 trillion. That's enough that it's the bank's problem, not mine.