The Huge Problem That Nobody Cares About

[Yo_Mama_Been_Loggin]

The Treasury Department reported last month that the nation closed its fiscal year with the national debt having reached a record $31 trillion, a stunning rise from a comparatively modest $20 trillion just six years earlier.

-snip-

While President Biden is approaching only the halfway mark in his term, the four-year record of the Republicans — the party that most often lectures the nation about fiscal rectitude — is likely to end up being even worse than that of the Democrats. After the spending spree of the past nearly three years, the appetite for more big unfunded spending packages has fortunately diminished, at least for the moment. The Republicans, conveniently resuming their commitment to fiscal responsibility just as they may be about to take power in Congress, are threatening to leverage a debt crisis to force through spending cuts — all while simultaneously aiming to extend Trump-era tax cuts.

But the abandonment of fiscal restraint began under Republican leadership. President George W. Bush pursued both tax cuts and substantial spending increases (like the unfunded prescription drug plan) with considerable vigor. A remark reportedly by Vice President Dick Cheney provided justification: “Reagan proved deficits don’t matter.”

Whatever Mr. Bush’s sins, President Donald Trump took fiscal irresponsibility to a new level. He arrived thumping the tax-cut drum, and his Republican-controlled Congress quickly enacted a $1.9 trillion tax cut that delivered 84 percent of its benefits to Americans earning more than $86,000 per year.

https://www.msn.com/en-us/news/opinion/the-huge-problem-that-nobody-cares-about/ar-AA13JoHQ

[gab13by13]

1. I care about it, somewhat,

we should repeal Trump's tax breaks for the rich that are permanent and never paid for.

[FoxNewsSucks]

2. We should repeal every tax cut going back to, and including, Raygun's

[Igel]

3. They sunset. n/t

[HariSeldon]

4. The national debt is the wrong question

It mostly represents a balancing of vast increases of gross domestic productivity against a desire for a small, positive amount of inflation. It got a bit out of control during the height of the pandemic response, leading to some of the inflation we are currently experiencing.

The national debt is the stock accumulating from the flow of the annual budget deficit which, itself, is the difference between what the federal government collects in tax and spends on governmental programs. The US government has traditionally borrowed this deficit (at interest) rather than printing/coining money to cover it. The federally-supported programs, the federal taxes, and the gap between them are really the only effective levers the government has on the economy (particularly excluding the Federal Reserve overnight rate, Treasury bond yields, and anything else). These facts are not widely understood, and show why the Fed's recent moves to raise the overnight rate have not effectively cooled inflation.

To really cool inflation, the federal government needs to remove money from circulation. The most direct way to do this is by raise taxes on the wealthy (probably rolling back some of the Republican tax cuts enacted during my lifetime) and, yes, using the money to retire some of the national debt. This will stretch the remaining dollars over barely reduced gross domestic productivity, which counteracts the inflationary forces.