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Federal Budget & the Debt Ceiling. How to tell they are lying.
Every year it’s the same old same-old. At budget time they explain to the American people how spending lots more money tomorrow actually saves money over 10 years, and anyone who can’t see that is just not fiscally savvy enough to understand the nuances of macroeconomics and the magic elixir of growth. We are going to grow our way out of debt!!! Today, we have the White House asserting that this year’s “Big, Beautiful Bill” will … “reduce deficits by at least $6.6 trillion over the next decade.”
Yeah. Right.
My first question is, “Reduced compared to what?” They are notorious for “reductions” that are really smaller increases than otherwise forecast. So, according to some reports, spending was forecast to go up by 100. But they are only raising spending by 95. That counts as a reduction of 5. Is this hypothetical 6.6 trillion more of the same?
Their forecasts, predictions, and promises are useless. None of them matter. There is one, and only one, place where the economic rubber meets the road: the Debt Limit. The debt is the actual real-world outcome of all their pie-in-the-sky prognostication. And it can’t be spun or argued around. It’s why, despite the annual promise of how “the bill pays for itself,” we are now 36.2 trillion dollars in debt, up from 5.5 trillion in Q1 2000.
So ignore their predictions about revenues or expenditures, deficits or taxes. They are only words, and they’ll swear to whatever they think you want to hear. Watch what they say and do regarding the debt limit. That gives away the game. And when Trump declares the debt limit should be abolished, it tells you the truth about what he really believes will happen.
Published in General
Same way as always. Their lips are moving.
You’re not forgetting, I hope, the untold trillions we’ll be raking in from tariff-paying foreigners, money we can use to reduce the national debt.
That’s the way the OI tells it, anyway, and he wouldn’t lie to us, would he?
You mistake me for someone who cares what the SF thinks.
That is a typo there. Probably Q1 2023?
Not really. The Debt Limit is just a law and Congress passes many laws. The Treasury can even work around the Debt Limit by minting special coins. The only reality is the bond rate. The market does not lie and interest rates are THE TRUTH. The only government manipulation is monetizing the debt, but that raises the money supply and inflation and interest rates. There is no escaping the bond market.
I heard Ron Johnson talking to Charlie Kirk. Ron was saying we needed more dialog and not one big bill, but two bills and that Trump and the House were wrong. Turns out what Ron was unable to say is that he wants a big bill in 2025 and another in 2026, but he was unable to say it coherently. How can the GOP be so bad at communicating? Are they all dumb? Are they liars? Are they just trying to sabotage America?
Here’s the actual rules:
1) there is one budget bill allowed to pass each year with reconciliation, which cannot be filibustered. This can only address non-discretionary spending in *future* years.
2) the president can send rescission bills at any time to reduce the *current* appropriations. These cannot be filibustered.
3) there are appropriation bills for each of the 13 departments each fiscal year. The appropriations must conform to the budget bill.
Why is that so hard for members of Congress to explain?
We have to take the blame here. The time to push hard to have fiscal conservatism today was back in the 90’s. Unfortunately, we took our eyes off the ball.
Instead of supporting Gingrich and holding the Republicans’ feet to the fire, we allowed him to be cut down at the knees in what was likely a palace coup within the GOP. (Yes, I know Ann Coulter will say it was a pair of lefty journalists listening in on his cell phone. I am suspicious that they “just happened” to know when and where to follow him and listen in. It sounds more like they were hatchet men for pols in the GOP who had it in for Gingrich.) We shouldn’t have fallen for this ruse and instead insisted he stay in the speakership. Falling on the sword of “airy principle” was, quite simply, stupid.
We also wasted precious time, and made complete fools of ourselves, obsessing over Bill Clinton’s sexual escapades. We needed to focus on policy, especially fiscal policy, and reward Republicans who held the line. It was indefensible for us to pee our pants because some D.C. courtesan was using sex to shake him down for a cushy, political appointee job.
Instead we rolled over for Bush and his ilk. Voters gave Republicans the House, Senate and White House. In return the GOP moved so far to the left they made Bill Clinton look like Barry Goldwater. This is our fault. We were asleep at the wheel and lazily assumed that all we had to do was vote for whatever idiot had an “R” next to their name.
The left understands the “ratchet effect”. They play the long game. The right keeps hoping for a stunning “hail Mary”. We can’t just blame Trump for not magically turning it all around in just 4 months after being sworn in, nor can we expect miracles from the GOP, many of whom are Bush holdovers. A return to fiscal conservatism will take years, we’re talking 10 to 20 years. Politics is like a tree; the best time to plant it was 20 years ago, the next best time is now. The push for fiscal sanity needs to start now, but it will take years to bear fruit. It’s our fault for not planting this fiscal “tree” back when Gingrich was speaker.
It is not as if we did not try. The history of republics is one of hubris and preventable disasters. Like the rest of history. A republic if you can keep it, the wag taunted us. Reminding us of the fate of all the previous ones. Okay, blame is assigned, lock and load.
I love your bluntness in this post! The whole spending thing is a one Big Beautiful Bag of Bull!!
We gave them their last chance in November. DOGE uncovered just how corrupt the swamp is. They have chosen to continue with business as usual.
I for one am done. It’s hopeless. The swamp won.
Nope. Q1 2023 total Federal debt was 31.4 Trillion
When Trump took office in 2017 debt was 19.9 trillion. When Biden took office in 2021 it was 27.7 Trillion. Both Trump1.0 and Biden added about 8 Trillion to the debt.
It’s Congress. The power of the purse rests with the House and they are incapable of stopping.
Amen.
True that the House of Representatives is the originator of spending bills and the Senate must agree with them, but the President must sign onto them also. Trump is equally as guilty. I don’t think he ever once seriously proposed cutting spending or lowering the debt ceiling, either in his first term or now. Anyone of this triad could stop the spending spree if they wanted to, but they are utterly fiscally irresponsible, or cowards, or both.
Perhaps the worst part is that Trump has convinced a whole generation of republicans that borrowing untold sums of money from Americans, the Chinese, Japanese, and other foreigners, and going into severe debt, is just fine and dandy. One of the reasons he doesn’t hold much leverage over China in trade is that we owe them so much money.
But China is also foolish, for selling us stuff that we pay for by borrowing money from them.
I don’t listen to any of it until they seriously talk about switching to deflation and switching the government to only public goods. It’s far too late for this, anyway. It should have been done the second the Soviet Union fell.
It turns out that America’s largest industry (healthcare) is powerful and thus Medicaid cuts are getting a lot of bipartisan pushback. American voters love big spending. The problem is bigger than the Swamp, it is your neighbors.
Or we sell them our infrastructure while they sell us widgets. It is just another way of stealing from future Americans.
I was thinking about something. We had all of this staggering debt after World War II. The stock market took off in the middle of World War II because “it” knew we were going to win. Then, I think totally outside the bounds of law, they proceeded to deflate the debt from World War II. Massive inflation. They stopped in 1952. Now everybody talks about how the 50s were so great because we simply bombed everybody else back to the Stone Age. We were the only ones producing anything. Next comes the part that doesn’t make any sense. The French started trading dollars for gold because they knew we were running out of money in the early 60s. Then they all started doing it. Then we told everybody to go screw themselves in 1971.
Why did the government overspend during that time?
Government is patently stupid. Public goods only.
But according to Trump et al, China is eating our lunch and taking us to the cleaners. So have you changed your mind on this and now think China is the losing party in our trade relationship?
Would you still think they were foolish if, instead of investing the profits from their US exports in US Treasuries, they invested in the US Stock market?
There are win-win situations. There are also lose-lose situations.
And in reality, most situations are one or the other. Not many are win-lose.
Hate Radio today continues to talk about another round of staggeringly lower trade deficit. What does this mean in regard to comparative advantage? Discuss! lol
Let see … the doctrine of Comparative Advantage, like many economic theories, is built upon the bedrock of free and competitive markets. International trade today is anything but … especially with China. Today’s trade deficit numbers have much more to do with tariffs and threats of tariffs than anything else.
We shouldn’t trade with China. Having said that if we were smart enough to run with deflation, none of this would matter.
How would you describe the U.S. – China trade situation?
Indeed. The Swamp couldn’t exist without them.
Both sides can lose, if they’re stupid enough.
More losers than winners at the moment. For instance, the slaves making many of the products are losers. The big companies might feel like winners, whether they really are or not. If we keep it to the two big entities, I’d call it lose-lose. What cannot go on forever, will not, and there will be consequences when the reckoning comes due.
They don’t have to even be stupid.