* https://www.cato.org/commentary/sadly-fiscal-restraint-no-lo...
When you've lost the Cato Institute…
More recently in 2025, "The petrodollar, not GOP fiscal restraint, is what sustains our unsustainable debt":
* https://thehill.com/opinion/finance/5465671-republican-fisca...
Not that I believe the folks at the top at the GOP really cared about it, ever, going back to (at least) Reagan; it was mostly an excuse to cut taxes on the wealth and cut social programs:
* https://archive.is/https://www.nytimes.com/2003/09/14/magazi...
What's funny is that this era (the 1950s) is often fetishized by people who absolutely oppose the policies that made that possible, including a top marginal tax rate of 91% and a CEO to median worker ratio of 20-25x instead of the 400x+ it is now.
So the Cato Institute finally realized something that hasn't been true for 50+ years. What we're witnessing is the looting of government coffers and transfer of wealth from the poor to the rich on a scale never seen before. And they don't care about the consequences because capital is mobile. They'll simply leave.
I can't speak to the Republican politicians if the era, but all the Republican voters I know where legitimately focused on fiscal issues and balancing a budget until Trump showed up. Most of the older Republicans in my family have since left the party and registered independent, the younger Republicans I know are just about Trump though and, similar to Trump, don't really seem to hold any principles that underlie their views on any one topic.
This a big worry. I thought Trump was for old angry people shaking their fist at sky. The ones with dementia. Why are young into him?
In both areas, the young people I know that are Republicans, and pay any attention to politics, seem to mostly be attracted to his energy and wild promises/claims. They also tend to laugh at the things that I expect many here are concerned by.
At that point, there's going to be a huge shakeup in the Republican Party, and the American right wing more generally, because from all indications, he's the only thing holding that coalition together, and they do not have a successor who could do anything like the same.
The Democratic Party has been the left-wing party since around the turn of the 20th century. Yes, there was a flip, but it was (roughly) under Teddy Roosevelt. Not Franklin Roosevelt.
And the comment you are replying to didn't mention Franklin Roosevelt. Are you in the right thread?
Democrats Change In Deficit
----------- --------
Joe Biden -$999B
Barack Obama -$747B
Bill Clinton -$383B
Jimmy Carter +$25.3B
Republicans Change In Deficit
----------- --------
Donald Trump +$2.108T
George W. Bush +$1.541T
George H. W. Bush +$102B
Ronald Reagan +$73.7B
Gerald Ford +$47.5B
Richard Nixon +$9.4B
Dwight Eisenhower -$3.2BThere's nothing "these days" about the idea: that's how all debt should be looked at. How much in interest will it cost you, and are the benefits you get worth that cost?
Borrowing money at 2-4% to build water/sewers infrastructure so your population does not die, and thus allows for better economic growth, can pay for the borrowed money easily. Or roads, bridges, rail, schools, scientific research, etc.
If you're borrowing money because you have low revenues due to tax cuts (especially in top tax brackets), then perhaps your ROI won't be as good.
Can you share more about this? I'm unfamiliar with a post-World War II civil war risk. Who were the conspirators? Who would be fighting whom?
> Nowadays the American Left is Center Right, but back then the American Right was Center Left. Things change, things stay the same.
I don't think this is the case. Populism has confused some folks about where things stand. There also seems to be this default assumption, kind of like the End of History, that being "left" is associated with moral goodness and so haha the American left is only just center right, ergo not quite good enough yet! I'd challenge that assumption. Frankly, the center is often the best because moving too far to one side or the other is destabilizing. Communism would be awful, as would other authoritarian ideologies like fascism.
FDR Democrats: fixed the Great Depression by bailing out the people not the banks (construction of roads, bridges, schools, dams, airports), regulated the banks, legislated protections for unions, electrified rural America, ended elder poverty with Social Security, won WWII, won the peace after WWII. Paid for it by taxing the rich, paid down the debt by taxing pensions.
Clinton Democrats: cut the government to the bone, "DOGE but real," massive tax hike on top workers, massive tax cut on capital, kicked offshoring into gear (NAFTA was voted against by most House and Senate Democrats), teed up the China WTO admission for Bush, and handed him a massive budget surplus with a bow on top ready to be pissed away on not one but two pointless Republican forever-wars. Oh, and bonus Epstein connection.
These are not the same. FDR Democrats would see Clinton Democrats as 100% DINOs, doing everything that Republicans say they want. The DINOs can only be identified as non-Republican due to their fiscal restraint which has not been a Republican quality since Eisenhower. Obama Democrats were better, but chose to bail out the banks not the people, didn't pass single-payer healthcare, and didn't end Bush's forever wars. Biden ended Afghanistan and quietly started enforcing Trump fair trade policies. So the Democratic party has been moving left at a snail's pace after reaching a zenith of "Republicans but less shit," but they are still far, far from FDR. Who was in turn far from actual socialists or communists. Here's hoping that on this next swing of the pendulum we land on FDR again, yeah?
In any case, you cannot average your way to enlightenment. If you want that, you must learn about actual policies and actual history.
Though I would like to see which dates were used to calculate them. And if it was from ”first day to last day of office” it would also be interesting to calculate with a certain ”lag” to account for the fact that effect of some legislation may not show until a bit later.
Also the correct measure is % of GDP
Democrats Change in Deficit
--------- -----------------
Joe Biden -6.1% GDP
Barack Obama -6.4% GDP
Bill Clinton -5.0% GDP
Jimmy Carter -0.2% GDP
Republicans Change in Deficit
----------- -----------------
Donald Trump +8.6% GDP
George W. Bush +11.0% GDP
George H. W. Bush +1.1% GDP
Ronald Reagan +0.2% GDP
Gerald Ford +2.3% GDP
Richard Nixon +0.7% GDP
Dwight Eisenhower -1.1% GDP
https://www.whitehouse.gov/omb/information-resources/budget/...
Despite being witehouse.gov, I am pleased to see that this is one page that Trump has not yet updated to read "Republicans Rule Democrats Drool" over an editorialized fever dream replacing inconvenient data. Grab it while it lasts, and let's hope that accounting remains boring enough to repel such attention!
Change in U.S. Gross Federal Debt Democrats
---------------------------------------------------
President Start End Change
---------------------------------------------------
Joe Biden $28.386T $37.375T +$8.989T
Barack Obama $11.876T $20.206T +$8.330T
Bill Clinton $4.351T $5.770T +$1.419T
Jimmy Carter $0.706T $0.995T +$0.288T
Republicans
---------------------------------------------------
President Start End Change
---------------------------------------------------
Donald Trump $20.206T $28.386T +$8.180T
George W. Bush $5.770T $11.876T +$6.106T
George H.W. Bush $2.868T $4.351T +$1.483T
Ronald Reagan $0.995T $2.868T +$1.873T
Gerald Ford $0.484T $0.706T +$0.223T
Richard Nixon $0.366T $0.484T +$0.118T
Dwight Eisenhower $0.266T $0.293T +$0.027T
These are changes between fiscal-year endpoints, not the exact amount of debt incurred during each president's time in office.Fiscal years do not line up with inauguration dates.
So cutting debt, cuts GDP.
Also. Not sure GDP is completely normalized verses inflation.
Other way around.
Debt comes from spending, that spending is on stuff, which drives GDP.
So whole concept that we could reduce debt by increasing GDP and tax it, is not how the money actually flows.
This is why in economic downturns, often the best solution is more debt, by more spending. And trying to fix economy by 'austerity' makes things worse.
Of course, also I don't know solution, or what the 'right size' debt should be. Just that it isn't black/white.
Democrats Change In Debt/GDP
----------- ------------------
Joe Biden +0.1 pp
Barack Obama +22.2 pp
Bill Clinton -9.4 pp
Jimmy Carter -3.1 pp
Republicans Change In Debt/GDP
----------- ------------------
Donald Trump +18.9 pp
George W. Bush +27.3 pp
George H. W. Bush +12.6 pp
Ronald Reagan +19.8 pp
Gerald Ford +2.3 pp
Richard Nixon -4.7 pp
Dwight Eisenhower -16.1 pp President Change pp
Eisenhower -1.8
Nixon +0.8
Ford +0.8
Carter 0
Reagan +0.5
GHW Bush +1.8
Clinton -6.1
GW Bush +4.3
Obama -6.6
Trump +11
Biden -5.8
Assuming my assumption is correct, I hope you're just recognizing the fact that MAGA didn't get where it is today without massive help from non-MAGA Republicans (in Congress as well as outside), in numerous ways. So you're not going to see the outcome you're waiting for if that's the case.
That explains a large part of why democrats were able to lower the debt - the republicans in congress wouldn't go along with efforts to raise the debt.
Cutting taxes without cutting spending raises the deficit and seems to be the GOP's most common fiscal policy.
Complete nonsense in practice, obviously - but political gold! Voters get all the same public services, lower taxes, and to think they're being responsible with money. And if you're a 65-year-old legislator, you'll be dead and buried before the consequences start to bite.
The best way to make sense of the GOP is in it's opposition to wealth redistribution. Primarily downward wealth redistribution. That's their north star.
Upward redistribution is mostly OK though, they consider it just giving rich people their own money back
While I agree, surely the assumption that the Democrats will be more fiscally responsible isn't true either?
This is more an issue with modern political expectations imo – compounded by challenges of aging demographics.
I can only give my view as a Brit, but I think the same applies here as in the US. Here people expect far more from the government today than at any point in history. Some of these exceptions are reasonable, but many are not.
But either way, despite huge government revenues theres just never enough money to fund all of the social programs voters ideally want. And under this pressure the only option to win elections is to borrow.
I guess to frame it another way – what spending would people want to see the politicians cut? I suspect the only way Western governments will get spending under control is to understand that government can't solve every problem, however nice it might be if they could.
See the sibling thread parallel to yours, https://news.ycombinator.com/item?id=49329791
Democrats have a track record that speaks to them being more fiscally responsible than GOP, in spite of the rhetorical narrative.
You can't assume anything about the next crew. Past performance is no guarantee of future results. But if you're predicting fiscal responsibility, past performance favours the Democrats.
The markets generally respond to US concerns by buying more US treasuries. That’s counter-intuitive but reflects the situation that if things hit the fan they feel loaning the US money is still the safest place for their money.
For better or worse there’s unlikely to be a scenario where the US becomes insolvent but it’s not far worse for those outside the US.
So no matter how much the US fucks up, they just print more and more dollars and ensure the entire world collectively pays up for their fuck-ups. But if the US doesn't fuck up and does something good, then the benefits of that? Oh, that's a different story. No excessive benefit printing, no sir.
All hail exorbitant privilege.
Investors know the US is going to lose this status if the current momentum continues and there are some possible alternatives.
Investors won't sit by and tolerate MONEY PRINTER GO BRRRRR if they have ANY alternatives and they have LOTS of incentives to find any.
"The Insane US-Japan Currency Bailout" - https://youtu.be/yh18YXKMk3g
Why does the US need to prop Japan? Because they are the biggest holder of US treasuries ...and if they need to prop up their own currency, they will need to sell them. <Insert Pearl Harbor reference...>
No, it won’t. The worst case we are looking at is paying more interest on debt. It’s not great but we aren’t in danger of becoming insolvent because of Japan.
> You are just stating an opinion that...
You don't say?
3.1 percent. Just for context.
If I'm not mistaken, $1.2T is roughly the year-to-date trading volume of the treasuries market [1].
[1] https://www.sifma.org/research/statistics/us-treasury-securi...
The US sold Euros to do the propping of Japanese bonds without telling the EU. Not only did we spend a lot to save our biggest sovereign buyer, but we undermined our relationship with another. And we didn't buy the Japanese much time.
Worth mentioning that lots of buyers is jumping into Chinese bonds over the past week.
It feels like the BRICS are taking over as of this month.
How many?
> It feels like the BRICS are taking over as of this month.
Taking over what?
https://x.com/macropaperr/status/2089255200918007854?s=46
Obviously we don't measure it in "how many traders", but what the effect their trading has on the instruments they buy.
The US Dollar is slipping from the world's reserve currency status and the US treasury is slipping from the default safe haven for liquid assets. The BRICS countries bonds are becoming more attractive as of this month.
Russia is obvious outlier you can’t price well.
If there is any news this month in Chinese bonds it’s a) a crazy upward move that corrected and b) the Chinese authorities have upped the quota on foreign bonds that their asset managers are allowed to buy.
Brazil is a major risk given political turmoil and generalised corruption; Bolsonaro attempted a coup in a country already plagued in history by coups, his son is going to run for presidency and has a chance to win it.
South Africa's economy is in shambles, their electricity grid can barely function, the country is going backwards socially and economically.
Russia I don't think we even need to talk about.
That leaves China and India, China has capital controls and is notoriously difficult to invest in.
I don't think there's much in common with BRICS as it was in the early 2000s when the acronym surfaced, as of now they are very dissimilar societies and economies.
> The US Dollar is slipping from the world's reserve currency status
As I always like to remind folks, the US dollar is just one of many currencies that banks keep in reserve. There is no status to lose other than being the one held the most. There are also downsides to being the dominant currency - I'm sure you're aware of those, right?
> - and the US treasury is slipping from the default safe haven for liquid assets.
Based on what?
> The BRICS countries bonds are becoming more attractive as of this month.
Are you buying? I'm not buying Chinese bonds. The US stock market is at all-time highs and more people than ever are buying into safe haven American companies.
You should provide more details and context about the cause and effects, why it matters, and what it means. Just saying "people find XYZ more attractive" isn't compelling.
being in an All time high is only better than not being in ATH. With high inflation, it doesn't mean much. It is like Apple every year launching the best iphone ever.
My point is, the OP was just saying stuff without any evidence or even really much personal analysis.
> It is like Apple every year launching the best iPhone ever.
In many respects that is technically true.
I think the market is buying more gold from US than ever -- this is trading US dollar for gold
US gold export is at its all-time high.
I thought that dynamic broke down with the liberation day tariffs, where both stocks and bonds dropped at the same time?
Trumpanomics is trying to weaken the dollar to make us more competitive as an exporter (along with tariffs which make imports into the US less competitive with domestic goods) and he is Trump's Congress is blowing away previous deficits, so investors are wise to reevaluate their previous risk mitigation strategies.
The Yen Carry Trade is now fully in reverse and both JP and US are going to see higher interest rates, causing both of their debt service to take up an increasing slice of the budget pie.
Investors are jumping into CN bonds now and are likely to look to the rest of the BRICS nations as the IS looks increasingly unable to manage a responsible budget, an economy that doesn't seem to be growing much, and sovereign bonds which have fewer buyers today than a month ago.
How can any organization that issues its own fiat currency become insolvent? Being solvent is simply an issue of adding digits to the borrowers' account in an electronic database.
The only thing that happens (and is happening) is the increase in the supply of currency outpaces the increase in the economic value of goods and services that can be exported, hence the currency loses purchasing power.
The US also used to have the distinction of being the most stable large organization, allowing it to earn a "trust" premium on its currency. But we are voluntarily giving that up.
What is the difference between insolvent and still existing but nobody trust / wants your currency? The US can issue currency all it wants, but if nobody wants it that does no good. My boss (I live in the US) could pay me in Euros, Rupees, or any of a number of other currencies - we already have plenty of employees who get their pay in the above currencies. I have to pay my taxes in US dollars, and the local stores all only take dollars, so I want dollars. However if things get bad I'll take some other currency and trade only for dollars as I need them - there is no reason my local grocery store couldn't take a different currency. If they want that currency they will give me a discount for using it.
We know from other countries where this happens, taking other currency is done on the black market. The stores and my pay is officially in the local currency, but everybody finds a way to ensure that they do as much as possible in a different system. (What really happens is far more complex than the above and not something I understand well enough to put into a comment, thus the gross oversimplification that is false because of it)
There will never be a real default, but it is likely that the USD will lose reserve currency status. The U.S. Government has $114+ Trillion in total debt. (Something like $325,000 per person in the US) We are never paying that off. The only way we can do anything about it is to grow the economy and devalue the debt via inflation.
To what though? Even if we accept the US and USD have issues, there is no other currency even close to be able to step in.
Most people don't remember what hard money is, and why it's important.[1]
If you take a national currency and make it a world reserve currency then the nation that does do has problems with balance of trade, deficits, and mathematically screws themselves over. This is because you currency becomes overvalued compared to those of over countries, meaning your domestic manufacturing has problems competing, among other things.
We already made the mistake of one national currency becoming the world currency post WW2. I hope its not a mistake the world chooses to repeat.
Think sht would get very real for everyone fast both inside and outside the US.
Global economy can’t even deal with a ship stuck in the suez without wobbling…
Sure, there's a precedent for what's happening, the Late Bronze Age collapse.[1] Instead of the Sea People, we've got rogue actors with drones.
Iraq started taking Euros for oil. Shortly after that, they were invaded. Venezuela started selling oil for Yuan. Shortly after that, their president was kidnapped by American troops. Iran is selling oil in Yuan. Shortly after that, American bombs started falling on them.
There is a very strong incentive for oil producing nations to only accept USD.
In fact, is China or Russia involved in similar planet-scale military enforcement?
Any American who ponders this out loud is quickly silenced with "America! Love it or leave it!".
https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A...
In short, if the US becomes insolvent, the rest of the world will largely ignore what happens in the (at that point) 8th economy in the world, and mostly try to untie their economy from it.
I believe this is wrong? USA is the largest oil producer in the world, and also one of the 5 largest oil exporters.
That is already happening.
The rest of the world is finding the likes of China to be more stable and predictable trading partners than the USA.
Just consult Google. All a country has to do to find itself on the receiving end of punishing Chinese trade actions is being mildly critical of China in the wrong way, and next thing they know their exporters to China report being held up for months. The EU has taken offense at how China kicks around smaller EU members, Australia has been on the receiving end of it more than once.
If you'd said the EU might be seen as a relatively more stable trading partner, that may be true, the EU does seem to be fairly happy deindustrializing itself. Though it's fueling a rise in the fractured politics there too.
Given their track record and interest in other forms of currency, I could see them going too far.
It’s scaremongering nonsense.
All treasuries will be swapped back into dollars on maturity and interest settled
/s
- Government Debt: 123.0%
- Tax Receipts: 17.2%
- Spending: 23.1%
- Deficit: 5.9%
- Interest on Debt: 4.2%
So yeah, 1/4 of taxes go to paying interest. To allay the debt concern crowd a bit: gdp numbers are real numbers, so inflation of 3% and growth of 1% = 4% nominal, so that deficit number actually means that next years govt debt as percent of gdp won’t be materially higher.
This is the government playbook: create actual inflation of 6% per year, with reported statistic inflation of 3% per year. This means real growth looks like +3% before you need to talk about contractions/recession.
All this means that the sovereign crisis is not near and the government steals your savings at 6% per year.
Considering the US has one of the lower overall tax rates of developed economies, I’m not sure we’ve reached any sort of crisis level
There are so many other issues to worry about at the moment more immediate than solvency.
The U.S. government spends about one-third! (roughly 33% to 39%) of individual income tax revenue strictly to pay the interest on the national debt and that is not even paying off the principal balance itself:
https://budget.house.gov/imo/media/doc/cbo_baseline_february...
A raise in interest rates for treasuries, can bring this into 50% to 60% within days.
Yeah...worry about other things...
You’re not wrong. But it’s not as simple as 33-39% disappearing into a black hoe.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
To your point, I don’t think anyone has to be worried about American solvency, but a looming debt crisis doesn’t seem like a stretch of imagination at all.
Wait...
It seems to be more of a subjective topic to me. Otherwise we would all have a perfect plan and never any monetary concerns. Highlighting weak links in the system is I believe a perfectly healthy thing to do. A sanity check would go a long way these days.
Anyone not taking that seriously is in for the most hilarious of surprises.
There is less and less demand for US treasuries, and Trump’s tariff war has only accelerated it.
The GENIUS act gets US a set of entitites that are forced by law to buy US treasuries - stablecoin issuers. It helps the digital dollar be used around the world, and treasuries to still have some demand. That is probably why it is called “genius”. This is the last step before the demand shock.
The US will have to stop borrowing and eventually print money to service its sovereign debt.
And when they do, they could either send it to banks, corporations, fatcats and pork projects — or they can send it to every American equally. The latter would be a UBI that would trickle up into the economy, with people spending it on their actual needs. It would increase most health outcomes, emotional health as well, raise average effective IQ by 13 points. And then they could tax the corporations and robots, and pay down the debt.
As it is, there are literally not enough dollars in existence to pay down that debt. The US will have to print them, or default.
“Are we the baddies”? Well, our empire might be. If we are really a democracy, we should try to reform it.
Why exactly would UBI help the average person? It gives them pennies and only worsens US spending.
How would it help the average person? Because it lets people have better health outcomes, including mental health, including for kids and elderly, makes everyone have 13 points higher IQ and productivity. Helps them renegotiate with their employer, without minimum wage laws. Helps them be more entrepreneurial and start their own businesses. That $1000 a month can pay for a ton of AI spend for example, and will soon be able to pay for timeshared robots.
The average person will be paid less and less or even be laid off soon. We dint have a mechanism to supplement their income. At least we have medicaid, I guess.
Elon Musk is more extreme than me — he says money won’t even matter in 10 years. Meanwhile the guy is worth $1 trillion on paper. I don’t want to tax him. I want to tax his corporations as they lay off workers.
MMT isn't inevitable. You're describing a path to where Argentina was before Milei. A path to amplifying all the social issues that started in the US with the creation of the welfare state. The alternative would simply be fiscal restraint.
The only real problem or question is if democracy is capable of restraint. The answer is unclear, seems like it may be 'no'.
You need to increase taxes on corporations and automation if you want to prevent inflation, otherwise you aren’t removing money from the economy.
Printing money on the one hand can be counterbalanced by taxing the money on the other hand — if you actually burn the money collected by the taxes in a giant hole.
But instead the money from the taxes can be used to pay the treasury holders, and make them whole. This is in fact what the Grace commission found in the 80s under Reagan:
With two thirds of everyone's personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt and by federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services that taxpayers expect from their government. https://en.wikipedia.org/wiki/Grace_Commission
with a UBI gradually given directly to the People, and raising taxes on corporations?
The former led to a 1993 constitutional crisis where the parliament wanted to oust Yeltsin (“our man in the white house”) and Yeltsin had troops fire on the parliament and arrest the congress, which represented the people fed up with the wage repression and looting
Yeltsin had a 6% approval rating and we helped him win re-election by meddling in Russian elections. We bragged about in 1996 with movies like “Spinning Boris” and “Yanks to the Rescue” Time Magazine cover.
The latter led to - amazing health, business and productivity outcomes under MINCOME in Canada, and the lowest gini index in America under Alaska’s Permanent Fund
https://www.youtube.com/watch?v=cUiyQ-yrk7k
https://en.wikipedia.org/wiki/1993_Russian_constitutional_cr...