The ability for the government to spend money it doesn’t have doesn’t cease to amaze. The deficit was $1.6T last year (over 5% of the GDP) but 2024 is starting strong.
A not-insignificant part of that deficit though was programs and tax cuts from the previous administration. I agree, our government probably shouldn't be allowed to spend money it doesn't have, but the obvious solution (higher taxes, especially on the wealthy) isn't politically palatable, so every president is locked into the same pattern: start a bunch of spending, but back-load the actual expenses so the next administration has to deal with it. The deficit has gone down over the last few years, which means that we're getting more revenue and saving some money, but because deficit is an easier number to digest than change-in-deficit, we keep whinging about it rather than changing anything. And then the next administration comes in and points fingers at the previous while continuing the cycle of overspending.
FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.
This is a different issue. This is a fix for the borrowers who were scammed by the Public Service Loan Forgiveness program, which although enshrined in law, was implemented as a massive fraud.
Amaze isn't the word I'd use, but Keynes did say something rather profound - "anything we can actually do we can afford". I think of the economy a bit like the power grid; it's really a just-in-time system that can only deliver productive capacity in real-time (though this analogy is changing with grid-scale power storage). In some sense, money is just an abstraction on top of that. Or I have no idea what I'm talking about, but also I don't think economists really have that good of a handle on things either.
From the perspective of a household (a cell), or a company (an organ), money (blood) are a limited resource, which constraints what you can do. If you don't have that resource, you will die.
But from the perspective of the state (the organism) or the government (CNS), money (blood) is just an accounting and distribution mechanism for real resources, which are things like energy, raw materials and labor (oxygen, minerals and sugar). From this perspective, amount of money/blood can be adapted to conditions (for example in emergency, money/blood can be redirected to vital industries/organs), and it is created or destroyed internally, in any amount required. So the amount of money (blood) is not a constraint, resources (oxygen, food) are.
As long as $ is the global reserve currency, these number are pretty much meaningless. Not to say it will be this way forever. We already can see other countries are doing everything they can to trade commodities in their own respective currencies (Russia, India, Japan, etc).
It is actually a great effort to forgive student loans. In US it is one of most debilitating factor for people who went to college (especially the private ones).
Why not do this earlier but wait for an election year? This just looks like a election campaign stunt to me.
Your final point feels poorly researched. I believe this administration has consistently focused on the student loan crisis outside of election years also.
The government isn’t spending money it doesn’t have. It does spend money it borrows from lenders. The lenders think it is a relatively safe investment since they keep lending money to the U.S. government.
I’ve been hearing doom and gloom about the deficit for 50 years. It primarily occurs when a Democrat is President and subsides when a Republican is President. This not a reference to OP. I state this to try to give some perspective to those who read this.
nameless912|1 year ago
FWIW the current administration and Congress have done a historically slightly-above-average job of reducing the deficit, I won't call it good but it's at least not terrible. The current spending isn't the problem, it's stuff from a few years ago coming to bite us in the ass.
willcipriano|1 year ago
That's like saying the deficit is down post WW2 and taking credit for it.
ihalip|1 year ago
anon373839|1 year ago
silverquiet|1 year ago
js8|1 year ago
From the perspective of a household (a cell), or a company (an organ), money (blood) are a limited resource, which constraints what you can do. If you don't have that resource, you will die.
But from the perspective of the state (the organism) or the government (CNS), money (blood) is just an accounting and distribution mechanism for real resources, which are things like energy, raw materials and labor (oxygen, minerals and sugar). From this perspective, amount of money/blood can be adapted to conditions (for example in emergency, money/blood can be redirected to vital industries/organs), and it is created or destroyed internally, in any amount required. So the amount of money (blood) is not a constraint, resources (oxygen, food) are.
thelastparadise|1 year ago
It's a sophisticated game of monopoly where select few players can coopt the productive capacity of the labor class.
vmfunction|1 year ago
It is actually a great effort to forgive student loans. In US it is one of most debilitating factor for people who went to college (especially the private ones).
Why not do this earlier but wait for an election year? This just looks like a election campaign stunt to me.
trust_bt_verify|1 year ago
skhunted|1 year ago
I’ve been hearing doom and gloom about the deficit for 50 years. It primarily occurs when a Democrat is President and subsides when a Republican is President. This not a reference to OP. I state this to try to give some perspective to those who read this.
thelastparadise|1 year ago
TimMeade|1 year ago
bryanlarsen|1 year ago
https://twitter.com/BrianCDeese/status/1768337427570061737
unknown|1 year ago
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