rats19 wrote: ↑Thu Oct 03, 2024 1:33 pm
Also this
The blame game on federal debt is not clear cut.
Much of the current federal debt stems from mandatory payments, such as those for Social Security and Medicare. These began spiking when the baby boom generation started drawing heavily from these programs around 2010. Not coincidentally, that’s when the federal debt began accelerating.
Generations of politicians in both parties approved and modified these programs long before Trump took office.
"It is always challenging to figure out how much spending was on whose watch," said Steve Ellis, president of the federal budget-watching nonprofit group Taxpayers for Common Sense.
The biggest single spikes in the federal debt came from the initial rounds of coronavirus relief legislation in 2020. Trump signed them, but they passed with broad bipartisan support.
"Everyone, including me, said it was worth it, and without it, things would have been worse," said Douglas Holtz-Eakin, president of the center-right American Action Forum. "So, (it’s) not fair to blame Trump exclusively for something everyone thought was needed."
It is true that this entitlement spending is driving a good deal of this -- its a structural problem that was baked in and will be gets exacerbated further by lower birth rates. Gen X might be smaller in numbers than the baby boomers were, but the millennials aren't even replacing themselves. I mean, there's a fair policy solution here. You can have social security, or you can have abortion, but you can't have both.
I don't give them a total pass for not addressing this, but the last time it was seriously tried (2005, after the GWBush reelect), it failed miserably and is absolutely the third rail. Its almost unspeakable to discuss social security reform; it is so very unpopular. Not only does the general public believe in unicorns when it comes to this program, a politician who merely points out that they are believing in unicorns will have a hard time getting elected. I think there's a huge amount of abuse in the disability part of the program that probably wouldn't be third rail to crack down on, but its ultimately a "pennies" issue -- and if it might just push the fiscal aspect of the problem to another government program.
Other entitlement programs are also an increasing problem. Changes in health care policy during the Obama administration moved tons and tons more people into state medicaid programs (which have federal aid). So more entitlement spending there. All the good work that the 1990s Republicans and President Clinton compromised on to reform welfare/unemployment more or less disappeared with American Reinvestment Act era reforms of 2009 and an unwillingness to undo what was began as temporary. (Never let a crisis go to waste stuff).
The big ticket discretionary spending of recent years -- Trump's Covid spending, Biden's Covid/American Rescue Plan, Biden's "Inflation Reduction Act," and immense amount of $$ to blow people up in wars (the most recent of which we aren't even on the ground fighting) -- it is mostly dubious policy.
But as bad as a lot of the spending was for Covid, worse was the intentional shut down of the economy. Much of this happened at the state level (and Trump didn't object, and his agencies were recommending it), with all Democrat run states and most Republican run states imposing draconian measures in an obviously knowable at the time futile effort to stop the spread of Covid. Then, when that spring of 2020 passed and summer came, things opened up again. There was a good recovery when things opened up -- but when you drop 30% (or whatever) in a quarter, when you go 10% up from the new baseline you are still 23% down overall. But there were periodic shut downs again in the late Trump administration and in Biden's 2021, and Biden's policies did all sorts of new havoc on the economy. Landlords can't charge rent. The federal government can't collect student loan payments. Etc. All while the worst of the pandemic was passed.
That both parties passed the covid relief doesn't excuse the Republicans. The facts are neither party cares much about the next generation and the debts they are leaving and the be-like-Europe structural issues that will invariably lead to either collapse or endless "quantitative easing" that will likely make Gen Y and their successor generations poorer when they are 40 (in terms of buying power) than the Gen Xers and boomers on the board were when we were 40.
It is true that the initial Covid spending had the biggest hit on the deficit. And its true that *if* there were a time to spend, that was it. If people are forced out of work, what will they do? It had a double effect on the deficit because productivity stopped. So less coming in, more going out. The Biden era spending, in my view, was more dubious in terms of public policy justification, but it had slightly less effect on the deficit than the first round because receipts were better because the economy wasn't shut down. But it ended up being a major contributor to the inflation that followed, so while it didn't affect the deficit as much, it made us all immediately poorer. Inflation is the greatest regressive tax there could be, especially when the pricing effect were so concentrated in core commodities like food and energy.
Bottom line, without some reform of entitlements and/or significant growth, the trends are bad. But the 2020 to the present discretionary spending has been nuts, and it accelerates the trends immensely.
