“The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.”
“The first debt limit was established to give the Treasury autonomy over borrowing by allowing it to issue debt up to the ceiling without congressional approval, making it easier to finance mobilization efforts in World War I. Before that, Congress generally had to authorize the Treasury to borrow in smaller increments.”
So what’s different now? Welll…
“In the last two decades, the U.S. has added $25 trillion in debt, spending nearly $1 trillion more than it receives in taxes and other revenue every year since 2001—in large part due to financing wars, tax cuts, emergency responses, and expanded federal spending. To make up the difference, the government has to borrow money to continue to finance payments that Congress has already authorized.”
A large part of that spend were the wars in Afghanistan and Iraq. Under President Bush, the war spending was “off budget”. In other words, it was funded by emergency spending declarations. $1.1 trillion in direct costs and $2.4 trillion in indirect costs and interest.
Social Security was $1.22 Trillion, we can’t touch that because people have been paying in their whole lives.
Transfers to States $1.21 Trillion, Medicaid, Transportation dollars, “other”. Same problem as defense, too many Congress critters demanded this money.
Other Spending $1.16 Trillion, Education, “Other”.
Defense $1.03 Trillion - Needs to be cut. What isn’t cut needs to be audited.
Medicare $756 Billion - Needs an audit for fraud and abuse, but won’t come close to balancing everything.
No argument there. Thing is that the military budget is basically a way to funnel taxes away from public spending which they’re intended for such as building infrastructure, providing healthcare, education, and so on. Instead, tax dollars end up being fed into the war industry owned by the oligarchs, which is why the military budget continues to balloon each and every year.
We could make some meaningful changes, but it would annoy a ton of people, such as:
phase out SS benefits for wealthier people, and increase/eliminate SS income tax cap
end “use it or lose it” budgeting so agencies don’t feel like they need to spend a ton at the end of the year; perhaps roll over 70% of the unused budget?
increase IRS budget, and allow them to launch their own tax prep software
audit spending for defense - we spend way too much, and there’s undoubtedly a ton of corruption
close down certain foreign military bases and trust our allies to defend themselves
But none of that is going to happen because reasons. I think the above could get us to a balanced budget without too much pain, though we may need to increase taxes a little or make more painful cuts.
Regardless, a lot of the debt is held by the government and US citizens, so it’s not nearly as big of a pound as people make it out to be, but it’s still a problem and nobody seems interested in actually fixing it.
I don’t think we need to go back to pre-Reagan tax policy. We don’t need to jack up top tax rates to 50% again, we just need to enforce the tax code we already have and eliminate loopholes.
That alone should bring in hundreds of billions. When paired with some cuts and audits, we should be able to balance the budget.
You realize the debt ceiling is about paying old debt, not incurring new debt, yes?
https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/debt-limit
“The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.”
This is just double speak to justify never cutting spending. The authorizing spend, is a lot more like add to cart than actually paying for anything.
It really isn’t. The history of the debt ceiling is fascinating. It was invented in 1917 in relation to WWI.
https://time.com/6281003/debt-ceiling-history/
“The first debt limit was established to give the Treasury autonomy over borrowing by allowing it to issue debt up to the ceiling without congressional approval, making it easier to finance mobilization efforts in World War I. Before that, Congress generally had to authorize the Treasury to borrow in smaller increments.”
So what’s different now? Welll…
“In the last two decades, the U.S. has added $25 trillion in debt, spending nearly $1 trillion more than it receives in taxes and other revenue every year since 2001—in large part due to financing wars, tax cuts, emergency responses, and expanded federal spending. To make up the difference, the government has to borrow money to continue to finance payments that Congress has already authorized.”
A large part of that spend were the wars in Afghanistan and Iraq. Under President Bush, the war spending was “off budget”. In other words, it was funded by emergency spending declarations. $1.1 trillion in direct costs and $2.4 trillion in indirect costs and interest.
You realize that the payments on the old debt are becoming unsustainable, yes?
“becoming”? - LOL!
Here’s the thing, nothing substantive will ever be done about the debt until we commit to slashing, and I mean SLASHING the military budget.
Which will never happen because of all the military bases that are in different Congressional districts.
Point of comparison:
In 2022, the feds collected $5 Trillion and spent $6.5 Trillion:
https://usafacts.org/state-of-the-union/budget/
Social Security was $1.22 Trillion, we can’t touch that because people have been paying in their whole lives.
Transfers to States $1.21 Trillion, Medicaid, Transportation dollars, “other”. Same problem as defense, too many Congress critters demanded this money.
Other Spending $1.16 Trillion, Education, “Other”.
Defense $1.03 Trillion - Needs to be cut. What isn’t cut needs to be audited.
Medicare $756 Billion - Needs an audit for fraud and abuse, but won’t come close to balancing everything.
Unemployment, SNAP, etc. “Welfare” - $619 Billion
Interest on debt - $483 Billion
No argument there. Thing is that the military budget is basically a way to funnel taxes away from public spending which they’re intended for such as building infrastructure, providing healthcare, education, and so on. Instead, tax dollars end up being fed into the war industry owned by the oligarchs, which is why the military budget continues to balloon each and every year.
Yup, yup… Exactly what Ike warned about and likely what got JFK and RFK capped.
We could make some meaningful changes, but it would annoy a ton of people, such as:
But none of that is going to happen because reasons. I think the above could get us to a balanced budget without too much pain, though we may need to increase taxes a little or make more painful cuts.
Regardless, a lot of the debt is held by the government and US citizens, so it’s not nearly as big of a pound as people make it out to be, but it’s still a problem and nobody seems interested in actually fixing it.
Going back to pre-Reagan tax policy alone would be huge, and like you say, the SS income tax cap.
I don’t think we need to go back to pre-Reagan tax policy. We don’t need to jack up top tax rates to 50% again, we just need to enforce the tax code we already have and eliminate loopholes.
That alone should bring in hundreds of billions. When paired with some cuts and audits, we should be able to balance the budget.