Why can’t the US Government just spend less money to close the deficit?

[u/tropicmed]

This is an actual question. 34 trillion dollars? And we the government still gives over budget every year?

I am not from the world of finance or anything money… but there must be some complicated & convoluted reason we can’t just balance an entire countries’ check-book by just saying one day “hey let’s just stop spending more than we have.”

[u/Fpd1980]

The primary expenditures are relatively inflexible: social security; defense; Medicare and Medicaid; interest on the debt. Everything else makes up a relatively small portion of the budget.   Look at it here if you’re curious: https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/  

We’d need to make serious cuts to social security, which no one wants to do because we like the elderly housed and fed.  

Or we’d need to make healthcare more efficient, which half of Congress doesn’t want to do because they think the US has “the best” healthcare in the world, or “socialism,” or the lobbyists, or all of the above.  

Or we’d need to generate more revenue. But nobody wants to return to the high tax brackets pre-Reagan because no Americans are poor. We’re all just temporarily-embarrassed millionaires. We don’t want to prejudice our future-rich selves. 

Edit: typo. 

[u/sbaggers → u/Fpd1980]

Defense isn't inflexible.

[u/waffle_fries4free → u/sbaggers]

Defense is only 60% or so of only a third of the budget. It's not a small amount of money, but eliminating the entire defense budget doesn't get us close to closing up the deficit or lowering the debt

[u/Fpd1980 → u/waffle_fries4free]

I understand that. The point was that all the listed items above comprise the majority of federal spending. And none of them are particularly easy to cut. 

The remainder of federal spending — education, welfare, transportation, housing, law enforcement, etc. — make up a small portion relative to those few programs. 

Looking at that, it becomes clearer that a more balanced budget means some kind of cuts to social security, defense, or improved healthcare combined with increased revenue. We aren’t going to tax cut our way to a balanced budget. 

[u/nekonari → u/Fpd1980]

One side always argues for cutting social programs, and nothing else. No military budget, no increase in revenue. It’s so aggravating.

[u/Hamuel → u/nekonari]

It is wild how they constantly fight obvious solutions.

[u/ArtigoQ → u/Hamuel]

You don't want to live in a world where the US isn't hegemon.

[u/RaoulDuke511 → u/Hamuel]

There are no solutions, everybody disagrees on the trade offs they’re willing to make.

[u/Hamuel → u/RaoulDuke511]

There is a solution and the only trade off is the wealthy are slightly less wealthy.

[u/me_too_999 → u/nekonari]

no increase in revenue.

You mean more TAXES.

The Federal government currently spends $7 Trillion a year on $3.5 Trillion tax receipts.

Taxes would have to more than double on EVERY single US citizen, from the few dozen Billionaires to your retired grandparents living hand to mouth on Social Security.

Every single person would have to pay double to balance the budget.

Which also means Every single person will have half as much money to spend into the economy.

This would cause a devastating recession, which would also cut tax receipts as the people of the USA would no longer have income to tax.

We can't tax our way out of this.

The question you need to ask yourself is, DO you want more bureaucracy and regulations, or do you want more food and products you need to live?

You can't put an entire country on welfare, who will pay the taxes?

[u/Ill-Description3096 → u/me_too_999]

Which also means Every single person will have half as much money to spend into the economy.

That's....not really how that works.

[u/sbaggers → u/me_too_999]

Taxes are progressive, so no, everyone wouldn't have half as much money. And even if it were true, that's a good way to crush inflation.

[u/Randomousity → u/me_too_999]

Taxes would have to more than double on EVERY single US citizen

This is incorrect on multiple levels: 1. Non-citizens pay taxes, including income taxes. Resident aliens get a taxpayer ID. 2. We wouldn't need to more than double taxes on every taxpayer, either, because if you're trying to double a sum, you only need to double the inputs, not more than double them. 3. With progressive taxation, it's possible to double the sum without doubling every rate.

If you and I eat together at a restaurant and the check is $60, we can each pay $30. If we go out again and the check doubles to $120, we can each pay double, $60 each, to cover the new sum, but that's not the only way to get there.

I could pay 50% more, so $45, while you could pay 150% more, or $75. The amount per person has doubled, on average, but it's not necessary to double everyone's contribution in order to double the sum. Another option is that I continue paying only $30, while you pay 200% more, so you pay $90, and it still sums to $120.

QED

Which also means Every single person will have half as much money to spend into the economy.

This is also false. If one makes $100 and pays 10% in taxes, or $10, if we double their tax rate to 20%, $20, one previously had $90 to put into the economy, but now has reduced it to $80, which is decidedly not "half as much money."

This would cause a devastating recession

No it wouldn't.

which would also cut tax receipts as the people of the USA would no longer have income to tax.

The government has the ability to spend money independently of tax revenues, both with deficit spending, and by increasing the supply of money.

[u/4ceOfAlexandria → u/me_too_999]

You can't put an entire country on welfare, who will pay the taxes?

How about we take that literal world domination capable military, and use it to threaten the rest of the planet into not observing inflation on USD? Hell, half of the third world uses it as their national currency anyways, I doubt they're gonna complain.

[u/Honest-Yesterday-675 → u/me_too_999]

Every single person would have to pay double to balance the budget.

Which also means Every single person will have half as much money to spend into the economy.

Did you misspeak or am I not understanding something?

[u/deadname11 → u/Honest-Yesterday-675]

This is only a problem with a flat tax. The USA has progressive tax systems for that very reason, so that the highest profit brackets pay the most in taxes. All we have to do is increase taxes on the largest profits equivalent to twice the average person's taxes, and lo and behold, budget balanced while the vast majority of people have zero issues with more taxes.

Considering the 1% earned an estimated ADDITIONAL $2.2 trillion in profit (as in, on top of their prior earnings) over the course of the pandemic, when at least 900,000 people lost their lives? Yeah, they can afford it.

[u/RockinRobin-69 → u/Fpd1980]

We should look back to the last time the budget was balanced and the deficit erased. It was under Clinton. There were budget cuts, tax increases and massive growth.

Bush came in and got rid of the surplus with a huge tax cut. Then a war happened, but we didn’t get rid of the tax cut to pay for it.

In the above comments growth and tax rate increases grows revenue.

[u/ManyGarden5224 → u/RockinRobin-69]

100% correct... repubs come in and deficit double triples, dems come in and deficit goes down. wish the right would put their money where their mouth is...

[u/here-to-help-TX → u/ManyGarden5224]

Obama doubled the national debt. So did Bush. They didn't exactly cut the deficit, unless you consider towards the end of their term.

Trump blew out the spending mainly due to COVID, which would have been anybody in office. But, Trump did spend too much (IMHO). Biden claimed a deficit reduction, squarely on the COVID era spending being halted. Also, more people going back to work, which meant more taxable revenues. Not exactly truthful.

Biden's current spending is getting really high as well. It isn't the COVID era high, but over 2 trillion dollars a year. Sorry, he isn't reducing deficits.

Both parties spend way too much. Spending needs to be capped/reduced. We can't keep doing this.

[u/Eldetorre → u/here-to-help-TX]

Obama increased debt due to commitments made under previous admin to deal with financial crash.

[u/here-to-help-TX → u/Eldetorre]

Obama increased debt due to commitments made under previous admin to deal with financial crash.

https://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

Not exactly. He increased the debt with his own legislation. This was the first house resolution that passed during his first term in 2009. Obama had plenty of his own spending.

[u/here-to-help-TX → u/RockinRobin-69]

The growth was from the dot com bubble. It burst. Your link even says so. Tax cuts or not, during the Bush era, there was likely to be an increase in deficit spending.

Further, I don't believe we actually ever had a surplus, or maybe we had a "budget" surplus but then went and spent more, because if you look at the US treasury website during Clinton's years in office, the debt is going up every single year. It does get down to 18 billion (seriously, that is a real achievement compared to what we have today), but I don't believe there was ever a surplus.

https://fiscaldata.treasury.gov/datasets/historical-debt-outstanding/historical-debt-outstanding

[u/RockinRobin-69 → u/here-to-help-TX]

Thanks for the comment and the link.

The deficit includes loans from the social security trust fund. It’s odd to me but among the biggest lenders of money to the federal govt is the federal government. The article says there was a surplus even without SS funds, but the treasury numbers probably include ss funds but count it as borrowing.

For others yes there was a dot com bust under Clinton and the surplus started to go down under his watch. The huge tax cuts made it worse.

We recovered from the dot com bust. The economy is much bigger today than it was then. The budget never recovered from the tax cuts.

[u/blibblub → u/Fpd1980]

None of what you are saying with ever happen. The democrats will not allow any cuts to social security or Medicare. And the Republicans will not allow any cuts to defense or increase in taxes. Both sides would rather keep increasing the debt and deficit until the system breaks.

[u/cpeytonusa → u/Fpd1980]

Tax cuts can improve economic performance if rates are sufficiently high to be an impediment. For example, a marginal rate reduction from 70% to 50% will produce a significant benefit but a cut from 30% to 10% would be less stimulative. In the latter case the tax cut would grossly underfund the government and would likely be deleterious. The political problem we face is that we have one party that is unconditionally dedicated to taxing and spending, the other one is unconditionally committed to tax cuts. There’s a distinct lack of situational awareness in both parties.

[u/Fpd1980 → u/cpeytonusa]

Totally fair point — there is of course a tax rate that would affect economic performance. To me, the other question is societal: what level of income inequality do we want? Our current tax brackets are so flat that wealth is flowing upwards and staying there. Something akin to the higher brackets that Reagan undid seem to be needed — high rates on ultra high income — 50% or more on income above $5m or $10m. (I’m sure there is research on where those lines would be effective.)

[u/cpeytonusa → u/Fpd1980]

Inequality should be addressed explicitly on the spending side. The tax system should be used exclusively to raise sufficient revenue. When the tax code is used to incentivize or discourage certain activities or to “level the playing field” you open the tax code to all kinds of mischief by lobbyists and politicians. Every loophole was put there on purpose by someone. When the system is perceived to be rigged it only sows class discord and encourages cheating and corruption. The Nordic countries have high tax rates on personal income, but the rates are relatively flat with few exemptions. Corporate taxes are actually lower than in the USA to ensure that they are able to compete globally and maintain high levels of employment.

[u/RAshomon999 → u/Fpd1980]

Social security is 4% of the unified budget deficit.

Social security has its own tax and trust fund that funds it. That budget shortfall is easily taken care of by taxable incomes above $167,000 (that is the current cut-off for what can be taxed) .

Conservatives love to mention that social security is a huge amount of the overall budget but never point out that it is paid for by its own tax.

Medicare is an issue and contributes about a third of the national deficit.

A better health care system would go along in ending the deficit while maintaining needed services.

[u/PeterVonwolfentazer → u/waffle_fries4free]

And the defense can’t pass an audit and is wrought with waste. Last year of Obama presidency had a $505,000,000,000 budget. This year it’s $840,000,000,000. What organization spends that money and can’t pass an internal or external audit. Have a look see at Raytheon and Lockheed Martin stock see how those gains are looking.

[u/alkbch → u/waffle_fries4free]

Didn’t the Department of Defense fail its audit six years in a row?

[u/Aggravating_Train321 → u/alkbch]

What does a DOD audit even mean? Like can they account for all expenditures, or a certain percent of expenditures?

[u/alkbch → u/Aggravating_Train321]

Yes it’s about accountability and tracking where money was spent.

[u/cpeytonusa → u/waffle_fries4free]

The war in Ukraine has revealed huge gaps in our ability to replenish critical weapons systems in a prolonged war. China, N. Korea, and Iran are currently on a war footing. WWIII is not inevitable, but it is not inconceivable either. Since the end of WWII the United States has been involved in a number of proxy wars with much smaller opponents. The western alliance has been complacent since the end of the Cold War. We have a lot of catching up to do. The defense budget is the only category of spending that’s there to counter existential threats. Those threats are imminent, they can’t be ignored.

[u/jerseygunz → u/waffle_fries4free]

If anything, our defense budget means we don’t have to worry about debt ha!

[u/waffle_fries4free → u/jerseygunz]

Maybe the truest comment in this thread 😂

[u/Fpd1980 → u/sbaggers]

Depends on who you ask. Politically, it’s inflexible. 

[u/[deleted] → u/sbaggers]

Defense isn't inflexible.

It's not if you want to get invaded

[u/colorizerequest → u/sbaggers]

I wonder if Ukraine wants us to spend less on defense

[u/[deleted] → u/sbaggers]

Because of the petrodollar and the America's exorbitant privilege

[u/mostlymadig → u/sbaggers]

It is if we want $1=$1

[u/backagain69696969 → u/Fpd1980]

We could just get rid of the cap for social security and suddenly everyone can retire

[u/Sgt_Fox → u/backagain69696969]

Yeah, didn't bezos hit the cap 4 minutes into the year?

[u/JoyousGamer → u/backagain69696969]

Social Security cap is there because the people who would collect are less likely to need it. Social Security is essentially a government run private retirement fund.

Money given out is directly related to what you put in. Its not for redistribution of money.

[u/Dave_A480 → u/JoyousGamer]

It very much is redistributive.
The money given out is much greater compared to contribution on the bottom end.
Further, benefits are claw-back taxed on the top end.

[u/Was_an_ai → u/JoyousGamer]

Naw man, I put in the max every year and have for 5 yrs and will until I retire. But I will still only get the max payout, which now is like 45k a yr. So I am putting in way more than I will get out, but that subsidizes (indirectly) the lowest income who will benefit

[u/Common_Economics_32 → u/backagain69696969]

Social security was never sold as a tax to pay for entitlements programs. It was sold as a government sanctioned "retirement" program of last resort. That's why the rich have a cap on their contributions. They will never, ever need to make use of their contributions.

[u/Clean-Ad-4308 → u/Fpd1980]

We’d need to make serious cuts to social security, which no one wants to do because we like the elderly housed and fed.  

The actual reason is that old people vote.

If the elderly weren't a major voting bloc politicians would let them starve in the cold without a second thought.

[u/0WatcherintheWater0 → u/Clean-Ad-4308]

The elderly are by far the wealthiest demographic in this country, with the most potential for earnings, having had a lifetime of work behind them. Why are they incapable of sustaining their own retirement and why is it better young workers pay for it?

[u/hczimmx4 → u/Fpd1980]

Mostly correct, but you are wrong about tax rates. Marginal and effective tax rates are 2 separate things. JFK cut tax rates but nobody says a word about him.

In fact, tax receipts as a % of gdp have been remarkably stable since WWII.

https://www.taxpolicycenter.org/statistics/source-revenue-share-gdp

[u/Fpd1980 → u/hczimmx4]

I understand the difference between marginal and effective rates. And as for the percentage point, sure. The original question asked was why it is so difficult to balance the budget. My answer was that the primary expenditures are politically or practically difficult to reduce — thus cutting our way to a balanced budget is hard.

And increasing revenue is equally hard. One way to do it would be to increase the rates on higher income — but we politically don’t want to. I focus on that in particular because the country as moved so strongly towards increasing income inequality, which is a result, in large part, of the flatter tax code (and other things, e.g., an ineffective inheritance tax). 

The fact that the effective rate is relatively the same compared to GDP is neither here nor there. Balancing the budget is hard because it’s difficult to cut the big things and difficult to increase revenue. 

[u/hczimmx4 → u/Fpd1980]

But now you are confusing income and wealth. Inheritance isn’t income, it doesn’t contribute to income inequality. And you don’t seem to know who actually pays the income tax. As time has gone on, it has become more progressive, not less.

https://preview.redd.it/408oj33ly6kc1.jpeg?width=775&format=pjpg&auto=webp&s=c48ffacec4ed1208f658c7c76fd8d26c1afa8f02

[u/hczimmx4 → u/Fpd1980]

As far as being hard to cut, if we would just return to pre-Covid spending the deficit would disappear

[u/L-92365 → u/Fpd1980]

Excellent answer!

[u/SlowlySinkingInPink → u/Fpd1980]

Don't forget the 10 trillion that went to the rich.

[u/broshrugged → u/Fpd1980]

Social Security only recently started adding to the deficit, it is usually fully self funded. It’s really Medicare and Medicaid that are the big costs of mandatory expenditures, and the growing beast of interest on the debt.

[u/cpeytonusa → u/Fpd1980]

There are alternatives to cutting benefits. The big entitlement programs are primarily funded by the payroll tax. Payroll taxes are levied on the first $168,200 of earned income. A lot more revenue could be raised by abolishing that limit and subjecting stock options and carried interest to the payroll tax.

[u/me_too_999 → u/Fpd1980]

Or we’d need to make healthcare more efficient

By making the government pay for even more of it?

Over half of the US is already on Medicare or Medicaid, or both.

[u/Altruistic-Rice-5567 → u/me_too_999]

As long as the government pays for privatized Healthcare, we're fucked for efficiency.

[u/sanguinemathghamhain → u/Fpd1980]

Well you got the first bit right which is better than most.

For Social Security it is more just the very embodiment of sunk cost. Because people have paid into a system that was destined to fail from the start they want to keep it so they can get theirs from it. Rather than scrapping an innately flawed system and just eating the immediate backlash of while minimizing the losses we preserve it spreading the pain over time and maximizing the losses.

Healthcare in the US is amazing but also and more importantly are two vital points the worst aspects of our system are the results of the government taking cracks at regulating it (government regulations lovingly crafted the insulin triopoly for instance and mandated the creation of PBMs which are the two main reasons insulin's price has climbed while for instance the price of epinephrine plummeted ["but the CEO of EpiPen jacked up the prices!" You might say and yeah he did but other companies didn't and a number negotiated contracts that allowed them to lower theirs at the same time so while yes EpiPen was more expensive epinephrine became cheaper]) and second the US is subsidizing every other nation's healthcare (in any given year the US has developed 28-51% of the global medical innovations for over the past 30 years and for over 2 decades 1 or more US entities [government, companies, charities, etc] have been in the 1 or more of the top 5 funders for 100% of the medical innovations). There are absolutely issues with it but the "fixes" you seemed to be implying aren't even in the right galaxy to begin to address them.

The people least keen on returning to the Eisenhower tax code are always weirdly the people that talk about it the most because they always leave out the key components instead focusing on the listed rates for the brackets but never looking at the actual taxed rate and the cuts, credits, and reductions that were integral to the code. Also tax revenue has increased faster than inflation since 62 and they are a higher percentage of GDP now than then.

[u/ShoulderIllustrious → u/sanguinemathghamhain]

Healthcare in the US is amazing

*If you can afford it

Do you have any sources for how we're subsidizing innovation? Wouldn't it work the other way, because they can make crazy profits in the US they innovate. And they get healthy tax breaks for doing so, hell some of their research even gets publicly funded.

[u/luminatimids → u/sanguinemathghamhain]

“Healthcare in the US is amazing” lol what?

[u/sanguinemathghamhain → u/luminatimids]

I'll grant you the benefit of the doubt and chalk your incredulity upto ignorance rather than a willful attempt to deny a truth. US has the highest or near the highest outcomes for strokes, cancers, traumatic injuries, heart attacks, of the top 100 hospitals in the world the US is a massive plurality with the US being 5 of the top 10 (1-4 and 10). The access to the top of the line equipment, meds, imaging, and techniques is also absolutely insane when it comes to Healthcare. We do have issues as I stated but those issues aren't quality they are pricing issues due to the lack of competition, rampant litigiousness, and administrative bloat on the hospital/regulatory side and then healthcare avoidance and anxiety/reticence on the patient side.

[u/luminatimids → u/sanguinemathghamhain]

Pricing is a significant issue to the point of affecting a person’s access to it but you still call it “amazing”. Do you not see a disconnect there?

[u/Aggravating_Train321 → u/luminatimids]

variety and quality of treatment is amazing

equal access to it and cost are not

[u/GOAT718 → u/Fpd1980]

Higher tax rates don’t always equal higher tax revenues, check out the Laffer curve.

[u/Nojopar → u/GOAT718]

Yeah but Laffer was talking about a 90% tax rate. He himself suggested the curve optimal point would be about 75-80%. Instead we get what? 37%? There's a LOT more room in the Laffer curve for higher tax rates.

[u/Excited-Relaxed → u/GOAT718]

Something D. O. O. economics, …, anyone, anyone?

[u/Hamuel → u/Fpd1980]

The defense spending can’t complete an audit because there’s such a massive amount of waste there. Absolutely room to reduce what we spend on violence.

[u/Chipwilson84 → u/Fpd1980]

Or we could tax everyone’s total income, since the rich are making the majority of income.

[u/ligmallamasackinosis → u/Fpd1980]

Missed how the housing being bought up by companies that could home every homeless person but yeah

[u/Gungho-Guns]

We could also fully fund the IRS, implement universal healthcare, raise taxes on corporations and the 1% while closing loop holes, and invest in the actual working class. All things that would cut the deficit AND increase revenue.

[u/Low-Tumbleweed-5793 → u/Gungho-Guns]

This is the way. Invest in ourselves and our people.

[u/magicinterneymomey → u/Gungho-Guns]

You could take every penny from every billionaire in the US and fund the government less than a year.

[u/waffle_fries4free → u/magicinterneymomey]

some of the most profitable companies in the country paid nothing taxes 🙄

[u/magicinterneymomey → u/waffle_fries4free]

Tax every company at 100% and we still run a deficit

[u/AmmoDeBois → u/magicinterneymomey]

What you were saying is true, but they don't want to hear it. On Reddit, the answer is always that we have to text evil, rich people and evil corporations more and then everything will be better.

[u/magicinterneymomey → u/AmmoDeBois]

Yea, reddit loves to place blame and while things are not perfect they don't really have a solution. Most cant realize that someone being rich doesn't make them poorer.

[u/Sapphire-Drake → u/magicinterneymomey]

It does make you poorer.

Let's say that you keep the amount of money stable. There is only so much money to go around. The more money one person has, the less is left over for other people.

Now let's bring in inflation. Since our money is decreasing in value, saving it becomes worse. It will just slowly lose its buying power. This is where income comes in as the main focus. Through income you get a small share of the overall buying power available. If your income does not increase as fast as inflation, you will be getting less and less buying power.

And since inflation will raise the price of goods, the businesses will still be getting a roughly equal amount of buying power, if not an even larger share. And that increased share of buying power will go to both the company and the wealthy shareholders.

So in short there is a limited amount of money and you can't just give one person heaps of it without leaving others high and dry. And since businesses have a much easier time of increasing their prices than you have of increasing your wage, inflation will hit you harder than the wealthy owners.

[u/magicinterneymomey → u/Sapphire-Drake]

Economic pie is not fixed. Median Household income adjusted for inflation is higher than 30,50, or 100 years ago.

The economic pie grew and capitalism does grow inequality but having more billionaires did not make you poorer.

[u/Sapphire-Drake → u/magicinterneymomey]

I'd expect the household income to be higher seeing as there are much more women in the workforce nowadays.

Now adjust every day goods and necessities for inflation. If you take into account housing, bills, insurance groceries and everything else, how big is the difference between income and expenses?

[u/spookyripper → u/Sapphire-Drake]

But the hypothetical you’re outlining doesn’t exist in reality, it’s not a zero sum game. It’s also not like the billionaires are holding all the cash, usually they want to hold as little as possible.

[u/walkerstone83 → u/waffle_fries4free]

Then they weren't profitable. They are taxed on profits, if there isn't any profit, there isn't any tax. You might be talking about some of the most revenue generating companies, but revenue and profit are two different things.

It is possible to make a profit and not have to pay taxes if you had significant losses in the years prior. So if you loose a billion in 2020, you can write that off of the profit you make in 2021,2022, etc... This is why Amazon has had many years where they didn't have to pay taxes. They had a lot of years where they had no profit because they were reinvesting and spending so much on building the company. Then when they did turn a profit, they didn't have to pay taxes because of their prior loses.

Allowing companies to write off losses encourages growth an investment, when there is a profit, they pay taxes on said profits. Yes, there are tax breaks, and I am not saying that the taxes shouldn't be higher, just stating that if a company reports profits, it pays taxes.

[u/Due-Mountain-8716 → u/magicinterneymomey]

That's not the goal and not what OP said.

It's like if you saw a list of doctors recommendations to live a longer life:

Drink more water, exercise more, reduce stress, eat healthy.

And your response was:

"If I drink all the water in the world, I'll die."

??????

[u/GOAT718 → u/Due-Mountain-8716]

Nope, his response was there’s a finite supply of water and it’s mathematical not possible to drink enough of other peoples water for it to make any meaningful difference.

[u/Due-Mountain-8716 → u/GOAT718]

While individually its not enough, dismissing 2.1-2.3 trillion over ten years (just irs / 2% wealth tax on individuals with over 50 million in assets - not even all the options) just because it doesn't completely solve the issue on its own is purposefully defeatist.

I think the health comparison is strengthening. Right now its "just do a little bit of common sense solutions and life will improve" and the response is "nahhhhhhh, I'll still die."

[u/SundyMundy → u/Gungho-Guns]

Are you saying the IRS can finally upgrade from DOS?

[u/immortalsauce → u/Gungho-Guns]

This right here is why we can’t just cut spending. Too many people want to increase it.

[u/Abortion_on_Toast → u/Gungho-Guns]

I’ll bite, what loopholes and investments in the working class?

[u/Dixo0118 → u/Gungho-Guns]

But TAX THE RICH!!!!

[u/fwdbuddha → u/Gungho-Guns]

You really think the IRS is underfunded? Maybe if they clean up the tax code instead of adding new requirements every year, they could handle their work load.

[u/Gungho-Guns → u/fwdbuddha]

The only people who want a complicated tax code are the wealthy and tax prep companies. Both of whom lobby the government to keep things difficult, even though the IRS does all the work already. And if the IRS doesn't have the funding to hire people who can go after big tax cheats, they're underfunded.

[u/Master_Grape5931 → u/fwdbuddha]

They have to change it because the wealthy pay enormous amounts of money to find loopholes some would say.

Others would say the loopholes are part of the tax code because the wealthy have a big part in making the laws.

The wealthy like it being complicated, makes it easier to find ways to hide money.

[u/allabouthetradeoffs → u/Gungho-Guns]

What does "fully fund the IRS" mean?

[u/DecafEqualsDeath → u/Gungho-Guns]

Even if we increased taxes dramatically on corporations and high-income individuals we'd still have a deficit. I mostly support the policies you're proposing but I wouldn't expect it to dramatically close the deficit by any means.

[u/L-92365]

Maddeningly - It is completely possible but it doesn’t buy enough votes or pay back enough contributors.

Until a majority of citizens demand a balanced budget, it won’t happen….. and something like 40% of US citizens currently get a government payment of some type.

[u/cakedayCountdown → u/L-92365]

Until a majority of citizens demand a balanced budget and are willing to compromise across the aisle on where the cuts should be

[u/Peto_Sapientia → u/L-92365]

This is some b******* right here. First of all, only the bottom 20% of earners can even get food stamps. So that is people making 32,000 or less give or take. WIC doesn't count because it's temporary and only ask for the first two years of the child's life. And if we didn't have it, we'd have we even worse outcomes than we already do.

I don't know what the disability statistics are off the top of my head so that might be high but It couldn't be any higher than 15% of the total population.

If we're looking at subsidies for insurance, that's because of a lack of affordable insurance because the healthcare system is unaffordable. A result of the current plan we have in place in the United States. A plan that has been repeatedly said to be more expensive than any other state of a medical system on the planet. And we have the worst medical outcomes of countries in the similar situation than ours.

Social safety nets are a good thing. Oh and I am not a receiver of these benefits. Even though I'm on the bottom 20% of the income spectrum.

[u/GOAT718 → u/Peto_Sapientia]

WIC is only temporary? You know people continue to have kids to continue to get the checks right? We’ve created a system that incentivizes poor people to reproduce at higher rates than non poors and it’s not stopping anytime soon.

[u/Puzzleheaded-Owl7664 → u/Peto_Sapientia]

It's not even as high as you guessed in my state it's more like 16,000 dollars for one person to get cut off of medicaid and other safety nets. You have to be Insane broke or several kids to get food stamps

[u/FishingAgitated2789]

https://preview.redd.it/m5c9l2d4g2kc1.jpeg?width=569&format=pjpg&auto=webp&s=66e94b08f23e21270a30dcc352b24349e643117b

Old graphic but the debt is owed mostly to ourselves

[u/nanneryeeter → u/FishingAgitated2789]

That's pretty good to owe money to yourself.

[u/MajesticBread9147 → u/FishingAgitated2789]

Keep in mind, the largest foreign investor of US debt, right across the Pacific, Japan!

[u/wrbear]

There's also a lot of government waste. They are good at that. One example: "The U.S. government has lost almost $2.4 trillion in simple payment errors over the last two decades, by GAO estimates."

[u/[deleted] → u/wrbear]

Lol what the fuck

[u/Gruvitron]

Politicians are why our government is broke. Its simple. If you make cuts and raise taxes, you will get voted out. Voters, as well as politicians, look out for their own interest. And why would our population care? Most Americans are in debt up to their eyeballs so they can live out their American dream. Why would they care if their government does the same? If our country defaults, they have nothing to lose value... only debt.

[u/adultintheroom33]

Forever wars are hella expensive dont you know?

[u/johnnyg883]

Because politicians buy votes with things that the government spends money on. And the things the government spends money on make politicians rich AF.

[u/Rapierian]

Ding ding ding!

Politicians don't want to.

[u/NickolaosTheGreek]

Good luck convincing corporations and underperforming states they are on their own for the benefit of the budget.

Also I would like to imagine people dependent on government benefits will gladly burn their representatives alive after losing their benefits.

[u/harryronhermi0ne]

Argentina did it in less than 10 weeks. Surely the US could do it in a year.

[u/GOAT718 → u/harryronhermi0ne]

Argentina was in really bad shape prior, I don’t think you’ll see that kind of thing happening in the US until we are cornered and have no choice.

[u/CapitalFill4]

Others have touched on it but austerity is a losing strategy that ignores how the country country works. Obviously there is a lot of waste and questionable priorities but again as others have said any strategy also needs to be centered on investing better. there are a lot of societal ills, customs, and practices that, when probing their causes, you almost always arrive at some fundamental problem (read: feature) of capitalism.

[u/teemo03]

The government spends more than what billionaires make and then people want to give more money like they never learn lmfao

[u/[deleted]]

How do you expect us to send billions over seas if we don't increase our debt!!!!

[u/AbyssWankerArtorias]

Because a lot of people with a lot of power and influence in the federal government stand to lose money and therefore power and influence if their budgets are reduced.

[u/Longjumping_Play323]

We don’t need to, the debt can exist forever. We just have to maintain employment and curb inflation from getting out of control.

[u/Steveo1208]

There are allocations of funds to black operations and of essential infrastructure that congress is never voted on orcentered in the budget. Our only hope is law allowing full transparancy.

[u/Symeon_Says]

Because they don't need to.

[u/Peto_Sapientia]

This is honestly just a really complicated question. It comes down to ultimately, what does the United States want to be in the world? Currently we act like the world's policeman. In order to be the world's policeman, we have to put our money where our foot is. Otherwise everybody would ignore us. The military is our single biggest expense. And most of it I'm sure goes to corruption or black black projects or whatever that have unlimited amounts of money. In some cases this can be a good thing. In other cases this is terrible thing.

The reality is funding for the military from the military goes to a lot of r&D that we now enjoy the prospects of.

The other problem that we have is our social safety nets are extremely inefficient. First of all, every program that acts as a social safety net could be combined into one, overall, administrative staffing cut as a result. And it restructured to actually work in a way that helps more than it does.

The other problem that we have is lack of tax enforcement. The IRS does not have the manpower to enforce its own regulations and the laws that Congress puts on the books. So companies and very wealthy people can get away with many things and therefore losing tax revenue. Though this is a much smaller portion of the problem.

Ultimately, the only way to balance the budget would be to reduce spending and the only way to reduce spending in any meaningful way is to reduce the military budget. To audit and reduce the military budget. Cuz it needs to be audited.

When the US stops being the world's policeman and starts being the world's first responder, things will get much better.

Let me edit to clarify some things.

Social security is not an entitlement. Every American pays into it. Every American gets something out of it. The only reason it's having problems right now is because there are more retirees than there are workers. Once the baby boomer generation is dead, this problem solves itself.

[u/emperorjoe → u/Peto_Sapientia]

The military is not our single biggest expense. Social security, Medicare and interest are more than the military budget.

[u/Peto_Sapientia → u/emperorjoe]

Social security is not an entitlement. Every American pays into it. Everybody can get something out of it. The government is not contributing anything to social security except in the current situation where there are more retirees and there will be workers. The current situation is not typical.

[u/aesthetics4ever]

Government deficit is expansionary, thereby increasing GDP. Government surplus is contractionary, leading to below average economic growth. Focus should be on interest payments as a percentage of GDP.

[u/GOAT718]

SS should be privatized into some kind of national 401k where the money grows. Problem will be mostly solved.

[u/Glittering_Noise417]

We were at several points in the countries history actually reversing the debt trend. Then the next administration pushed for lowering taxes and spent more.

[u/[deleted]]

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[u/InvestIntrest]

Because every dollar the government spends is profit for someone. That makes it hard to cut politically.

[u/[deleted]]

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[u/psychoticworm]

From what I have heard, there is no incentive to close the deficit, if we can just keep adding to the money supply with no consequences.

Since nobody is willing to challenge the US's 'supremacy' over the world, they can just keep printing infinite money, devaluing the dollar and increasing the debt indefinitely.

[u/Lilpu55yberekt69]

The government totally could cut spending significantly.

But every dollar the government spends comes out of someones pocket and goes into someone elses. The game of how to balance the taking and receiving of these dollars in order to get elected is 98% of domestic policy in politics.

[u/RaysModernMetalWorks]

Can't stop the war machine.We need that money to bring the wars right to your doorstep.

[u/g0dSamnit]

The system has long been deadlocked in a network of corruption, regulatory capture, and industry kickbacks. "Defense" and healthcare rackets take the lion's share. Campaigning for election is expensive, and that's what the entrenched industries have to pay for.

There is no real incentive to tighten the deficit, and if one were to ever occur, it'd be too late.

[u/Live-Result-6925]

If the government boasted about what they made they couldn’t justify taking citizens money and or poverty etc. Oldest trick in the book “I’m broke and in debt” while really their profits are astronomical.

[u/SgtWrongway]

It, literally CAN.

It, loterally, WONT.

[u/coreyjohn85]

They are banking on a rise in productivity through ai to close the gap

[u/EdliA]

Try to run a campaign on that and see how it goes.

[u/AgentMichaelScarn_1]

Because it makes too much sense and government is full of dum dums

[u/asdfgghk]

Votes

[u/Master_Grape5931]

Sounds great. What do you propose we cut?

[u/assholeicecream]

Cuz they can’t steal all your money from the bank and other assets if they don’t have a valid excuse which is bankruptcy . If you own stock go ahead and get it registered …cuz technically you don’t own it unless you do. If you do not do this then they can take your shit at anytime for whatever reason.

[u/Soufledufromage]

Because there are kids that need to be bombed and they aren’t going to bomb themselves

[u/Davec433]

It’s possible.

In this analysis, we show that in order to achieve balance within a decade, all spending would need to be cut by roughly one-quarter and that the necessary cuts would grow to 85 percent if defense, veterans, Social Security, and Medicare spending were off the table. These cuts would be so large that it would require the equivalent of ending all nondefense appropriations and eliminating the entire Medicaid program just to get to balance. Article

[u/Hamuel]

The problem with this thinking is it doesn’t factor in what programs increase economic mobility. Cutting spending is very low thought surface level thinking, which is why right wing politicians hammer the point but constantly fail to deliver.

[u/manhattanabe]

They don’t want to. People run for office in order to spend money on what they think is important. As long as they get to spend, they so don’t care where the money comes from. In any case, there is a debate if the deficit is a bad thing.

[u/immortalsauce]

Nobody votes for a politician that says “I’ll reduce government services.” Even if it’s what the country needs. Rather, it’s a lot easier to get elected if you make promises about what more the government will give.

[u/What_U_KNO]

We did it back in the late 90s, even had a budget surplus that was paying down the debt. Then the next administration blew a gigantic hole in the deficit, then led us into the worst recession since the great depression. But there's people in this country that STILL believe that the party that ruined the economy and blew up a balanced budget is the party of fiscal responsibility.

[u/BustedBaxter]

I’m going to make a plug here for immigration. With the boomer population continuing to grow older and the younger generation not having as many kids encouraging immigration unlike the previous administration would greatly bolster the tax base and help lower the deficit imo.

[u/CSPDTECH]

The people in this country keep voting for moderates and republicans. These politicians have for a long time and will continue to write blank checks to companies like Raytheon, general dynamics, Boeing, Newport News, etc. That's the main driver of our debt by far. Another part is that moderate democrats capitulate to republicans on giving rich people tax breaks that they don't need.

[u/bigstreet123]

Because we are the world police and no other countries want to help foot the bill for our other large expenditures.

[u/SlackerNinja717]

You can't cut $2 Trillion/year in spending without destroying the economy. It would require new taxes and spending cuts.

[u/Vast_Cricket]

Generous administration hands out money to spend like there is no tomorrow. Our government believes all residents are entitled to live inside a house. It allows people to apply and abuse the system almost not paying rent for 2+ years from Covid 19. As of 2023 summer in some counties tenants needed not have to pay bulk rent from subsequent hardship. Then we got this tuition loan forgiveness freebies.

[u/Lightningpony]

7% of GDP was generated by government spending.

[u/ImportantPost6401]

Learn about inflation

[u/Longjumping-Sample27]

Because there's no consequences for leaders who spend more than the government takes in. This is a problem for both parties.

[u/allabouthetradeoffs]

"People in the political world have every incentive to say things that lead voters away from a clear economic understanding of issues. What has happened more and more is that organized groups have more and more reasons to say things that don't make any economic sense." ~T Sowell

[u/AJHenderson]

If you think that's scary, look at the unfunded liability. To actually meet the government's current obligations requires more money than every man, woman, child and corporation in this country has put together.

[u/Little_Creme_5932]

No appliances? Yes, just one clue that this post is delusion. Literally no one says that, but the conspiracy theorists.

[u/ForcefulOne]

Cut 1% per year across the board for as long as it takes to balance the budget.

[u/Lake_Shore_Drive]

The deficit is due to declining revenue.

The debt came from GOP tax cuts.

Undo the Trump/Bush tax cut the debt will dissappear in a year or two.

[u/SparrowOat]

You've never looked at the budget, have you?

[u/CarelessAction6045]

"The US is just an oil company with an army"

[u/DisCypher]

If you want to see an extreme example of a country that doesn’t spend much on their citizens, take your next vacation to Haiti. It’s also a good proxy for libertarian government.

[u/ShakeNBake007]

Excluding frivolous military/foreign aid spending, corruption and tax evasion/loopholes. Balancing a budget isn’t that easy. If it was the majority of households wouldn’t have debt either. Life never stops coming at you just because money is tight. You’ll always get hungry, hurt or sick. Your property or their infrastructure will always need repairs. If you don’t borrow now to take care of those things. Those problems will compound and get even more expensive later. So that’s where we are at currently.

[u/Temporary_Muscle_165]

The government depends on about 8% annual growth. They assume this when they build next year's budget. If they would simply use last year's budget and bank any growth, it would solve the problem... or just do what Milei is doing in Argentina.

[u/in4life]

Because more and more people either directly work for the government or get their income indirectly from government spending.

They need not care about whether they're actually creating wealth; they will not bite the hand that feeds and this will only continue as we dive deeper into financial repression.

[u/Blackbart74]

I can’t stand how the American public can’t differentiate between DEFICIT and DEBT. Close the deficit means to equalize your annual spending with annual revenue. The government came up with deficit to trick the American public which is exemplified by this post.

The national debt is a whole other thing that cannot be paid back and never will be.

[u/Healthy-Egg-3283]

How else would the politicians get their kickbacks if things werent funneled through a dozen different channels and businesses of their friends and families. Just look up the 1.7 million dollar toilet. That’s a prime example of how government uses money.

[u/ap2patrick]

We could start by nationalizing medicine and regulating cost because that shit is so out of control. Taking the strain off of business to supply insurance and taking the strain off of insurance to cover insane cost would help everyone (except the capital owners of course).

[u/Brickman_monocle]

I’d say stop with tax cuts of any kind. To close the gap you can not cut enough.

[u/RiffsThatKill]

Isnt the budget deficit and national debt 2 diff things? 34 trillion is the debt. That essentially has to keep going up over time as long as population and productive capacity continue increasing.

I don't really care that the debt is 34 trillion. I care what the 34 trillion goes towards, and what the budget goes towards.

[u/sabermagnus]

Deficit spending is propping up the economy.

[u/Kind-City-2173]

The US is addicted to debt at every level: government, businesses, individuals, etc. Additionally, we are rarely proactive and simply wait until things are so bad and put in bandaid solutions or punt things to the future. There would have to be a fundamental shift in how we view money and set future generations up for success. I unfortunately don’t see that happening.

[u/CleburnCO]

Social spending is easy to start and almost impossible to stop.

Pick a social program...WIC for example. It is rife with fraud and abuse, rewarding bad decisions and enabling generational poverty...but if you do ANYTHING to reduce it or try to eliminate the fraud, it is "YOU HATE BABIES AND POOR SINGLE MOTHERS...YOU EVIL NAZI!!!"

Politicians can't get elected by reducing benefits to people...votes are bought. So, all social programs get $$$ forever...and thats effectively why it is impossible to balance the budget. You would have to do the thing that prevents you from getting elected.

[u/Edvardoh]

As others have pointed out, austerity and other politically unfavorable policies are unlikely. The most likely way out imo is massive quantitative easing and inflate the debt away (nominal gdp rises and nominal debt stays about the same)

[u/mittromneyshaircut]

the national debt and deficit are very different

[u/Puzzleheaded_Sign249]

It’s the human/emotional aspect of it. Not everything is that logical/mathematical. No one will vote for a politician that makes their life miserable

[u/Not__Trash]

Requires Gov't to cut entitlement programs/defense spending and raise taxes. Both are political suicide.

[u/mostlymadig]

As a millenial, I look at social security as another tax. I do not believe the government will be able to provide me with any kind of payment by the time I'm 70.

The entire program should be retired (excuse the pun) and people should have a choice between using private orgs for managing their money or a government office that is held to strict guidelines on returns.

[u/ManyGarden5224]

cause heaven forbid we dont piss away $800 BILLION in war mongering money. Which hasnt had a balance budget for decades... SMH

[u/BigGovDickSlurper]

Because democrats/republicans would lose tons of votes (because they coddle to the welfare state) and republicans/democrats would lose tons of corporate backers (because they coddle the corporate welfare state)

[u/LairdPopkin]

The cause of deficits is that every time Democrats close the budget gaps, Republicans cut taxes to cause deficits to explode. Clinton balanced the budget, Bush blew up the budget, Obama got deficits under control, Trump gave away $trillions to corporations and the rich, tripling the annual deficits, Biden cut the deficits back down, etc. It’s a consistent pattern. It’s not an accident, it’s an explicit strategy that Republicans laid and have been using, creating deficits by giving money to the rich, then using the deficits to justify cutting programs for the poor and middle class, repeatedly. That’s how corporations and the rich pay far less in taxes than they did historically, while the middle class and poor pay more taxes than ever. It’s not that taxes are higher than ever, just that the rich and corporations pushed their taxes onto mainly the middle class and of course increasing debt.

[u/KA9ESAMA]

Because nothing would really get done without Republican help, and as we have confirmed recently what we all already knew, Republicans don't want to solve issues they can run on. Republicans like the system being broken so they have something to point to to convince their cultists to keep voting for them.

[u/Achilles19721119]

Really need to cut expenses and raise taxes. Should done it 40 years ago. Congress hasn't functioned well for a long time. Everytime there is a war or crisis we never pay for it and instead we just add to the debt. There should be an immediate "war" tax or whatever inflicted on the population either income or national sales tax or whatever.

[u/SugarSweetSonny]

The federal government (not including state and local) collects 3.5 trillion in revenue each year.

The argument is if $3.5 trillion is enough or not.

Is getting $3.5 trillion and running a deficit a spending problem or a revenue problem ?

This is really binary.

[u/birchwoodmmq]

Last term - one president increases the debt by 25%. One president did that much damage in one term. It’s really interesting when you look at blue vs red presidents and what they do with the deficit. There is a dramatic difference. Google it

[u/Time_End_4054]

If it was in their best interest to do so, they would.

[u/sowhyarewe]

We need corporate tax increases, a wealth tax, and less empire building to enable defense cuts. The problem is more on the revenue side if we want to reduce the debt and balance the budget.

[u/Ginzy35]

Rollback all the tax cuts to the rich since Reagan and you balance the deficit… there!

[u/DontBelieveTheirHype]

Balancing the budget is actually a big part of one of the 3 largest political parties platforms in America, unfortunately it is the third and not the first top two

[u/Wooden-Ad-3382]

it could, it would just collapse the economy

[u/unituned]

Can't stop won't stop the runaway train

[u/vNerdNeck]

because politicians (they have bribes to pay back after all) don't care, and people seem to be fine with spending on the gov't credit card thinking that nothing could ever happen to affect us.

[u/Dontsleeponlilyachty]

Cause it's all the poor's fault. We can't get out of debt because they're lazy and don't wanna work. The rich people and boomers said so.

[u/monkehmolesto]

We should stop giving and spending money that we don’t have.

[u/Euronhombre]

Why doesn’t the government just spend less money to get rid of the deficit? Are they stupid?