Because of the highly partisan, on again, off again, performative efforts to selectively highlight budget concerns. When the house and WH are controlled by repubs, no pushback on spending, or on allowing the borrowing for spending already accrued. When the WH is controlled by dems and the house by repubs, it’s automatic that performative brinksmanship games will occur over the artificial debt limit, which brings dire warnings and even debt downgrades, which only increases that interest burden. Our periodic drama over spending actually worsens the problem. And it’s always about things that don’t matter. That won’t move the needle.

What we need is rationality. First, unpleasant as it is, the only things that matter to our fiscal sustainability are entitlements and the military. We need to be willing to address them. Good news is, it isn’t urgent unless we manufacture the urgency with brinksmanship. No borrowing entity in history has enjoyed our capacity for debt. If we don’t squander that, we can turn the ship very gradually. For example we have to spend more to prepare for possible major power wars (imo). If we could be certain, we could watch our debt to gdp continue to rise for a number of years, if we knew that we’d start turning that around after some point in time.

If Biden suddenly cut to the point of eliminating deficits, the shock could cause a downturn, precipitating lost tax revenues and renewed focus on stimulus. It would likely cause deficits to spike, all in. Same with the repub default brinksmanship - we are light years from an “ability to pay” crisis. Unless we willingly continue and intensify “willingness to pay crises”. That could accelerate arrival of the “ability to pay” crisis point.

But it’s very far off now because of our unique “reserve currency” status. We should address our spending issues with those unique strengths in mind.



[Post edited by hoolstoptheheels at 04/24/2024 11:22AM]