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Interest payments as % of GDP are on the rise
YellowSnow
Moderator, Swaye's Wigwam Posts: 33,885
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US and everyone is screwed...no country can afford the debt they currently have if interest rates were 10%.
25% of the US debt is owed to itself via borrowing from the Social Security funds.
Probably don't much care to the extent that money is frigging cheap right now. Should probably be borrowing the shit out of things to build up infrastructure and long-term capital projects. Rebuild motherfucking bridges, get some tech projects jump started. Not a fan of borrowing to cover operating costs/current expenditures. Big fan of leveraging up to pay for 20 and 30 year projects. BIG fucking projects. Take your pick.
Instead all there is is bitching about minutia. Should be putting people to work in construction trades and repairing/replacing the fuck out of the neglect of our roads and bridges.
More concerned about the multiplier vs. GDP. If 1x is acceptable (don't know, haven't done that much research), then that needs to be the debt ceiling. If it's 1.5X, that needs to be the debt ceiling. It's like buying a house (whatever it is now - used to 1.5 times income, haven't bought a house for years). That's how the gubmint should operate.
@UW_Doog_Bot the economist probably has a better read.
Social Security costs climbed 5.7%; Medicare, 6.5%; Medicaid, 4.6%.
Defense spending is up 7.9%, but spending on everything else in the budget has climbed by 4.5%.
Here’s the really worrisome figure: Interest payments on the national debt is up 14% over the prior year.
It should go without saying that these levels of spending growth are unsustainable. Yet instead of confronting them, lawmakers and the Trump administration are aggravating them. Entitlement reform is a non-issue at the moment. Every increase in defense spending has to be matched with a hike in spending on domestic programs. The national debt continues to explode.
https://issuesinsights.com/2019/09/12/why-did-the-deficit-just-top-1-trillion-heres-another-clue-for-you-all/
While most Republican voters will talk a big game about cutting government spending as soon as you try and reign in the real driver of our deficit, entitlement spending, they will start sounding like a liberal Democrat.
There is no support for cutting entitlement spending.
Among the people who vote including citizens, illegals, dead people and people registered in multiple states – the majority doesn’t care about the unsustainable growth in our debt. Between our public education system which doesn’t teach basic economics or numbers and sh*t, the MSM which also has no understanding of basic economics or numbers and sh*t and those who should understand basic economics and numbers and sh*t (Paul Krugman) but don’t care. They will only care when it is too late and we’ve gone over the blue event horizon. I would hazard a guess that less than 10% of democrats care about the debt in any kind of functional manner. These are the commies – tax the rich, feed the poor until there are no rich no more. They would kill the golden goose and proclaim victory. See Venezuela. In Red China – the capital outflows are massive as the rich Chinese are not betting on their future or are definitely hedging their bets. I would hazard that well less than half the republicans also care about the debt. They want to be elected more than they want to do something about the debt.
We have a trillion and a half in student debt which already has major defaults. For these morons who borrowed tens of thousands of dollars for a degree in feminist studies they are stuck. Solution, vote for free sh*t. You think they are interested in the future when their existence has been always focused on the here and now?
Is it a bit of a black hole with lots of government pork? Sure. It's pretty good to live in the Pax Americana though.
Entitlements have a low multiplier and are essentially a transfer, currently from one generation to another mostly.
RN the US is the world reserve currency so money is in fact really cheap(and could be more so). We are the rich guy with a modest debt load and a perfect payment history that lenders are lining up to do business with.
The one thing I have been thinking about lately is capital flows. A LOT of private and government capital flow goes to places we either are in geopolitical competition with(China) or at best are resented(India) or taken for granted(Europe). I wouldn't mind seeing a more directed approach in this space to incentivize our markets, direct our government outlays, and encourage our allies in the same space. Bilateral trade deals and investment incentives that serve our and our allies interests. I realize that this sounds a bit tangential but such things do have an impact on debt to GDP.
Also, this is why it's dumb when people criticize US companies for taking advantage of capital tax breaks for investing in the US.
Directly, I'd love to see further tax incentives and R&D spending towards strategic industries; Aerospace, wireless, AI & robotics, energy, etc.
It's the equivalent to US markets investing in Volkswagen in the 1930's.
Trump & the current GOP are borrow and spend.
Younger me would have never agreed with the second but as long as we are the reserve currency I'm more ok with it.
The Throbber is a MASSIVE fan of right-sizing current fiscal expenditures. You don't borrow or take long-term money to pay for short-term, recurring operating expenses. Just don't do it. Like paying for your mortgage on a credit card. Likewise, you don't buy a house with cash unless you've got massive surplus/discretionary funds. You finance it over the life of the asset.
The Throbber would MUCH rather see a balance budget amendment for operations than the shitshow we have now where the bureaucrats give themselves blowies 'only' increasing spending by 2 or 3% over prior year...well, you overspent the last 30 years....big fucking deal.
Most definitely concur on the investment in infrastructure. Either the ones I listed like roads and bridges or the more high tech ones you listed. Been calling for 9G for like three years here.
And we? need to earmark funds for building the Mexican/Guatemalan border wall and Colombia/Venezuela military retreats as posted elsewhere.
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