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US fiscal deficit debt levels and economic policies

4 min read

From: allin
The United States is facing significant fiscal challenges, characterized by a growing national debt and persistent budget deficits. Concerns are frequently raised about the sustainability of current spending trends and their long-term economic implications.

Current State of US Debt and Deficit

There is “extraordinary concern” regarding the fiscal deficit and the nation’s debt levels [00:19:10]([00:19:10]).

  • The U.S. is consistently running deficits “north of a trillion dollars a year” [00:19:20]([00:19:20]).
  • The total national debt is cited as “33 trillion” [00:19:23]([00:19:23]), and later as “32 trillion” [00:21:07]([00:21:07]).
  • The debt-to-GDP metric has “exceeded 130%” [00:19:29]([00:19:29]), with current GDP around “25 trillion” [01:21:11]([01:21:11]). Historically, among 52 nations that reached this debt-to-GDP level, only one did not have to restructure its currency or debt payments [00:19:34]([00:19:34]).
  • The U.S. is borrowing approximately “six billion dollars a day,” primarily from China and Japan, just to service the interest on its debt [00:22:39]([00:22:39]).

Causes of the Debt and Spending

Several factors are identified as contributing to the current national debt and fiscal policy issues:

  • Military Expenditures The “primary cause” of the deficit is military expenditures [00:21:20]([00:21:20]). Current military budget is “8.4 trillion” this year [00:21:28]([00:21:28]). Including homeland security and surveillance, the total annual expenditure attributable to “war mongering” is “$1.1 trillion” [00:21:38]([00:21:38]).
    • The U.S. maintains “800 bases around the world” [00:21:54]([00:21:54]).
    • The Iraq War alone cost “$8 trillion” [00:27:57]([00:27:57]).
    • Current aid to Ukraine, such as an additional “$750 million” sent in March, is highlighted as a significant expenditure that impacts domestic social programs [00:29:31]([00:29:31]).
  • Pandemic Spending “$16 trillion” was spent on the pandemic and lockdowns, yielding “nothing in return” [00:28:38]([00:28:38]), contributing to inflation and economic strain.
  • Bank Bailouts Ongoing bank bailouts, such as the “$300 billion” printed by the Federal Reserve for Silicon Valley Bank, further exacerbate the problem [00:28:48]([00:28:48]).
  • “Bipartisan Unmitigated Spending Spree” Over the last five years, there has been a “bipartisan unmitigated spending spree” largely driven by the electorate’s desire for benefits, which must eventually be paid back [00:20:23]([00:20:23]).

Proposed Solutions and Fiscal Discipline

To address these economic challenges, a shift in economic policy is advocated:

  • Reduce Military and Surveillance Spending Cutting military expenditures is suggested as the “primary cause” of the deficit [00:21:20]([00:21:20]). A significant target for opportunity is the “$1.1 trillion” annual cost of military and homeland security/surveillance expenditures [00:24:26]([00:24:26]).
  • Focus on Domestic Economy The U.S. should prioritize rebuilding its middle class and becoming a “Fortress America,” self-sufficient and focused on economic power at home rather than projecting military strength abroad [00:21:57]([00:21:57]).
  • Fiscal Discipline and Debt Ceiling There is a need to “impose fiscal discipline” [00:22:52]([00:22:52]). Playing “chicken in Congress about raising the debt ceiling” is deemed irresponsible, as it risks the “full faith and credit of the United States” [00:24:54]([00:24:54]). Negotiation between parties is essential to resolve the debt ceiling dispute [00:33:07]([00:33:07]).

Social Safety Nets

  • Protecting Existing Benefits Social Security, Medicare, and Medicaid are considered “red lines” that should not be cut [00:26:05]([00:26:05]). It is argued that those who paid into the system with a promise of benefits should be taken care of [00:26:12]([00:26:12]).
  • Challenges to Sustainability Social Security is projected to go bankrupt around “2035” [00:23:55]([00:23:55]). The increase in life expectancy means social safety nets designed for shorter lifespans need reevaluation [00:25:31]([00:25:31]). However, a specific plan for restructuring or raising taxes to bridge the gap in these programs is not yet defined [00:23:30]([00:23:30]).
  • Impact of Spending Examples of current fiscal irresponsibility include simultaneously cutting food stamps for millions of Americans while increasing aid to Ukraine or bailing out banks [00:29:28]([00:29:28]). It is argued that asking the poor to sacrifice while engaging in massive military and bailout spending lacks “moral authority” [00:30:47]([00:30:47]).

Broader Perspective on Fiscal Health

The current fiscal situation is likened to an “alcoholic who is behind on his mortgage and who takes the milk money and goes into the bar and buys rounds for strangers” [00:32:00]([00:32:00]). This critique highlights a systemic problem where the nation’s priorities may not align with the needs of its citizens. The fundamental issue is a “NeverEnding debt spiral” that will lead to a “massive crisis” [00:23:46]([00:23:46]).

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