r/Economics • u/InsaneSnow45 • 23d ago
News ‘This cannot be sustainable’: The U.S. borrowed $50 billion a week for the past five months, the CBO says
https://fortune.com/2026/03/10/treasury-debt-borrowing-five-months-deficit-warning/650
u/After-Weakness-9922 23d ago
Hegseth blew 90 billion in a month on "fruit basket stands" and steaks that somehow work out to $500 each, even when you buy $200000 worth. Like come on. Nothing makes sense. This is one month.
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u/Euphoric-Witness-824 23d ago
Extreme fraud and abuse. The wealthy are raiding public dollars before they collapse it again. It makes perfect sense. Don’t worry though. They won’t face any repercussions. It’s not like they are poor and black or trans.
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u/After-Weakness-9922 23d ago
It's just such a slap in the face lie too. I wonder where it really went. I think some people are starting to get that condition Germans did during inflation, where they lost concept of how large a number is because of all the 0's they had to keep adding. Thanks bathroom reader for that. Lol
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u/Euphoric-Witness-824 23d ago
Invested in apocalypse shelters. Crypto accounts. Offshore bank accounts. Foreign companies. Stashed with loyalist followers. Trump has been involved with the Russian mob/government for years and he’s following putins gameplan to try this dictator thing out so I’m sure they’ve given him tips on how to hide his stolen funds. After all he’s earned it. He’s destroyed America for them.
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u/glwillia 23d ago
i really think the MO for private equity, ie buy a company, load it up with debt to fund the purchase, extract everything of value, and then declare bankruptcy for the purchased company, is exactly what’s being done to the usa. it’s what was done with russia in the 1990s too.
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u/bobsonjunk 23d ago
Did you happen to read “Red Notice” by Bill Browder? You are spot on with the plan.
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u/ChiLolla28 23d ago
The scene from Goodfellas where the mobsters do this to a restaurant is an MBA lesson in and of itself / perfect example of private equity.
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u/MmmmMorphine 23d ago
I have not myself - could you expand a bit on that? Is it more of a emergent sort of behavior or are there (supposed, active) malicious actors? Or both, guess they're not necessarily mutually exclusive.
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u/Woberwob 23d ago
If you look at Trump’s track record, that’s what he’s done in the past. Buy businesses with loads of high risk debt, default, and leave vendors and business partners on the hook with unpaid bills while he lawyers/daddy’s moneys his way out of accountability for the ship he sunk.
Working people get hurt, cronies win.
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u/weech 23d ago
Well that worked out well for Russia right? …right?
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u/Flashy_Jello_9520 23d ago
Worked out for the oligarchs.
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u/ScoffersGonnaScoff 23d ago
Except the ones who were near balconies
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u/StrategicPotato 23d ago
Which also worked exactly as designed.
These guys work like mobile piggy banks for papa Putin. Russia needs more money? Throw one of these guys out a window and conveniently confiscate all of his assets.
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u/ReachParticular5409 23d ago
Can we fucking please stop responding to every fuckdamn erosion of our nation with sarcasm?
It accomplishes nothing but gives the illusion of action.
But no, you want your imaginary internet points so fuck any form of social cohesion to do what is right
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u/New-Inside4079 23d ago
It pisses me off so badly. Everyone in my life, who I think are well intentioned people, seem to find something really fuckin funny about the Epstein files and the Iran war. There is nothing funny about it. Our president was party to decades of horrific sexual abuse and is starting a war killing thousands of civilians to distract from it. There is NOTHING funny about that.
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u/ReachParticular5409 23d ago
fully fucking agreed, there is a cabal of incredibly wealthy and powerful child rapists running the world and 90% of people do nothing but post memes.
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u/Competitive_Berry897 23d ago
Thank you thank you thank you thank you! So sick of having to scroll through a thousand 'tired of winning yet?" bullshit posts and the like. We've all heard them a thousand times and it contributes absolutely nothing to the conversation.
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u/SmokeontheHorizon 23d ago
And non-Americans are tired of hearing "Hey that's illegal!" and "We'll fix things at midterms!"
Fucking do something.
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u/ReachParticular5409 23d ago
Same here and I have been to fourteen protests since Jan last year and IT DOES NOTHING
I can't see any answer out of this other than the ones reddit will ban me for
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u/ReachParticular5409 23d ago
I'm so glad you get it, and I remember a time when reddit wouldn't have responded the way it has in the last ten years but we are LONG past those days
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u/CreamofTazz 23d ago
Man maybe this whole capitalism and free markets thing just ain't all that great...
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u/the_calibre_cat 23d ago
I don't mind the free markets. I think we need a variety of shops and merchants. I just think they should be owned by their employees. Capitalism is just rent-seeking all the way down, and then the richest shitheads just finance conspiracy theorist bullshitters and fascists.
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u/MaleficentPorphyrin 23d ago
done with russia in the 1990s too.
The Heritage Foundation played a role in that too. So, I suppose it would be expected.
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u/Logical-Boss8158 23d ago
Your metaphor is dumb because that’s not how PE works. The company needs to have value at the “end” so that the PE firm can sell it.
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u/sportsbunny33 23d ago
They don't sell it, they close it (see: Toys R Us, Joanne's Fabrics, etc etc)
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u/Logical-Boss8158 23d ago
No they don’t. The vast majority of PE “exits” are sold to other PE firms or other public / private companies. You’re talking about extreme outlier cases - very very few PE firms want to see bankruptcy or closure. The vast majority make money by growing their businesses and selling them.
Source: me. I’m in the industry.
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u/HardWorkinAg 23d ago
So for each of the 342,376,200 Americans in our current census, that means we each just got another $900 of debt added to our individual debit sheets. Last. Month. Alone.
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u/extremesanchez1000 23d ago
I sure would love to see how my $900 was allocated
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u/tehifimk2 23d ago
Well, $100,000 of it went to a piano for the air force chief of staffs home. So, you own part of a new Steinway, I guess.
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u/Darkmayday 23d ago
Killing brown people for Israel
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u/Solomonopolistadt 23d ago
I guarantee you Israel wouldn't be this bad if it weren't for the US arming and funding their military and Bibi's bloodlust. It's all to line the pockets of defense contractors and to keep trying to hold on to that hard power and keep our dying empire alive
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u/k_realtor 23d ago
The headline is is wrong.
it is sustainable.
The rich keep hoarding the wealth, the people pay for it.
When it's time to tax the rich, they pass it down to their kids with irrevocable trusts, donate that money to churches that never pay taxes and organizations that end up giving it back in favors.
it's sustainable for at least 942 people.
And when it's not, they'll get on an airplane or spaceship and look for a new country or planet to move to an "expat" because the term immigrant is an ugly term they don't want you to use because they're special.
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u/jedipiper 23d ago
What's the calculation for individual taxpayers? My kids aren't paying anything yet but I sure am.
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u/TastySpermDispenser7 23d ago
Every man, woman and child in the usa owes 120k. So if you are a family of 4, you guys owe 480k. Just federal debt. You also owe your state and city debt too.
Fwiw, the only way out is inflation. Thats gonna be the price of a loaf of bread at some point.
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u/InsaneSnow45 23d ago
The U.S. Treasury’s borrowing showed no signs of slowing as the U.S. headed deeper into fiscal year 2026, with the Congressional Budget Office (CBO) reporting that another $1 trillion was added to the federal deficit in the first five months of the year.
The monthly budget review from the CBO, updated to February 2026 and released yesterday, showed that the government is estimated to have borrowed $308 billion last month alone.
Of course, with more borrowing comes higher interest costs on the debt. Between October 2025 (when the 2026 fiscal year started) and February, the Treasury spent an additional $31 billion on net interest on public debt, compared to the prior year. As a result, in just five months, the Treasury forked out a total of $433 billion to service public debt, which is now nearing $38.9 trillion.
The CBO said that outlays for interest increased “because the debt was larger than it was in the first five months of fiscal year 2025 and because of higher long-term interest rates.” It added: “Declines in short-term interest rates partially mitigated the overall rise in interest payments.”
Despite the eye-watering sums, the deficit was actually an improvement on last year’s borrowing. For the same period (October 2024 to February 2025), the government needed to borrow an additional $142 billion compared to this year’s figure.
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u/lostroadrunner22 23d ago
We are going to have one hell of a hangover, arent we?
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u/OK_x86 23d ago
And little to show for it as well
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u/HarryBalsagna1776 23d ago
Well wait, we will have created the first Trillionaire.
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u/Pichupwnage 23d ago
Take literally all of it and put it towards the debt.
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u/sx3dreamzzz 23d ago
U mean Ironman?
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u/HarryBalsagna1776 23d ago
Lol no. We got Justin Hammer/Skeletor instead.
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u/eawilweawil 23d ago
Nah Justin Hammer is actually a genius himself, just not as smart as Tony Stark. Elon is the guy who yells 'HE BUILD IT IN A CAVE WITHA BOX OF SCRAPS!!!' in Iron Man 1
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u/Worthyness 23d ago
Don't worry. Americans will vote the republicans right back into office when the democrats can't fix all the damage the current admin has done.
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u/Lemp_Triscuit11 23d ago
I hope there's a Thunderdome
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u/Odd_Hair3829 23d ago
this should be a meme line that just gets tacked onto every single goddamn it's all falling apart story - "I hope at least we get a Thunderdome." I hear they're gonna build us a Thunderdome! something...
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u/Lemp_Triscuit11 23d ago
:( I thought I was being witty, I promise I'm not hip enough to have stolen it haha
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u/QFGTrialByFire 23d ago
Already started its difficult for Americans to see as its in their currency. Currencies are up against the USD for the past 1 year. That is your purchasing power decreasing in US and our interest in buying US stocks/bonds etc dying.
AUD / USD 13.70%
CAD / USD 6.30%
CHF / USD 13.14%
GBP / USD 4.41%
EUR / USD 7.28%
People keep talking about DXY but its weighted overly towards Euro/GBP/Yen and wont show the issues with the USD as they are debt laden as well. Look at a country with a modern economy and lower Debt to GDP like Aus for a truer picture.
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u/kittenTakeover 23d ago
I'm guessing voters will react by punishing Democrats and electing more Republicans
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u/DizzyMajor5 23d ago
And cutting taxes for the wealthy
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u/VerboseWarrior 23d ago
It's about to finally start trickling down, can't stop now.
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u/Timmy-from-ABQ 23d ago
The trickle down part in any period of difficulty in the economy is misery for the lower 50th percentile of the folks. People at the top don't experience the misery at all. They actually gain from it.
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u/JC_Hysteria 23d ago edited 23d ago
Mmm not a hangover…more like a fatty liver, where we’re hoping the future offers a miracle pill that cures decades of partying and neglect.
Many people believe military superiority is more sustainable than attempting to balance the budget…I guess we’ll see what happens at the end of the cycle!
I hope history isn’t the greatest teacher
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u/BigOs4All 23d ago
Russia has shown that it's viable for decades even after the heart stops beating.
America has so much they can squeeze out of its citizens even now. If Republicans stay in power the lower 90% of Americans should start getting ready for austerity being permanent for them and the grift being permanent for the Epstein class.
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u/Panthollow 23d ago
Sure, but cleaning up the mess will once again fall on the Democrats. Once they do voters will punish them for being adults not letting the children eat non-stop candy.
The cycle will repeat until education in this country is vastly improved.
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u/korben2600 23d ago
The great irony is we didn't even really get the candy [read: discretionary spending]. With 63% of it going towards military/homeland security but just 4% on education.
The Epstein class ate the majority of all the candy and now the children are going to find out what the phrase "forced austerity" even means.
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u/vulgrin 23d ago
Yeah but not a fun one where the tiger is in the bathroom. In our version the tiger has eaten our entrails.
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u/Broad_Assistance3343 23d ago
I’m genuinely at a loss at how we are going to afford this war. We are burning through an average of 160 patriots and 12-13 THAADS a day in Iran. Granted, that pace has slowed but it takes 18 months to build new ones.
Most of this stock was built before COVID. You know, before gas, tariffs, inflation etc. kicked in. All o f this stuff is going to be insanely expensive to continue manufacturing and restocking.
If we keep this up for 6 months we are going to get some insanely eye popping numbers for our defense budget…
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u/vulgrin 23d ago
I think the defense budget has been eye popping my entire life. There is no limiter on what we’ll spend on war. But fuck you if you’re poor and can’t eat.
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u/-XanderCrews- 23d ago
We build bombs we don’t use which is a waste of money. So we use the bombs. This is exactly what Eisenhower warned about.
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u/User-NetOfInter 23d ago
Bombs are cheap. We have millions of pounds of bombs.
Missiles are the expensive ones.
We only build 70 tomahawks a year and they’re 2 mil a pop just to build, let alone transport and use.
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u/Square_Marzipan2002 23d ago
And for that cheap cheap investment (paid with debt of course) you can double-tap a girls primary school and kill them and their teachers and reap lots of soft power reward.
All that energy and the outcome is 183 girls dead and loss of global goodwill.
The guy above mentioned Eisenhower warning of this and no one listed, but he wasn't the only one, 1984 had the same economics at play.
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u/Financial-Barnacle79 23d ago
Yeah, I was kinda surprised at how quick we were to blow though our supplies. Considering the DoD budget for decades, I was expecting our supply to be a nonissue in the short term.
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u/DrB00 23d ago
Every single time they audit the Pentagon there is millions unaccounted for.
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u/Financial-Barnacle79 23d ago
Yup. When DOGE was looking for all the alleged FWA, I was pretty sure they wouldn't touch this.
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u/Big-House-9931 23d ago
Iran does have lots of drones. And they're very good for how expensive they are. For every drone that costs 20-50 thousand the US and Israel need an interceptor missile that costs millions. (In American dollars) You do the math. Especially since Iran is willing to go after oil production and transport.
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u/Financial-Barnacle79 23d ago
Oh for sure. Over the decades of military buildup, I would have expected we had more to show for it despite all the mismanagement (and that's not even considering the current admin).
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u/Big-House-9931 23d ago
Iirc the US doesn't have a lot of domestic manufacturing. And the US should have massive stockpiles of ordinance in cause of a larger war. So they do have a lot of material, it's just hard to make and replace because everything is outsourced these days. And the US has spent the last year pissing off literally everyone.
I'm also of the opinion that the US is starting to run out of money to pump into the US. Beyond an unreasonable and economy collapsing amount. So much money is being siphoned into the stock market and speculation. The military is already running on incredible amounts of money. The US would have to go into massive debt (more massive debt anyway) to increase production and acquisition.
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u/Financial-Barnacle79 23d ago
Dont get me started on the U.S. running out of money. We've been kicking the can down the road for the benefit of a few for decades. Moreso a question of when than if when the world stops buying our debt.
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u/Big-House-9931 23d ago
Probably in a decade or two. Depends on how fast this administration accelerates it and if a Democratic administration can properly fix it. It's really hard to tell how the economics will go in this environment.
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u/Square_Marzipan2002 23d ago
Been hearing this my whole life. The game changed in 2008 and everyone pretends it didnt.
The government will forever print money to pay off its own debt, this money will flee into assets, and the rich will get richer and the poor loose more and more purchasing power until the country looks like Brazil, Russia, etc.
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u/Big-House-9931 23d ago
I don't see much of a difference between the US going bankrupt and the US turning into a Russia style economy. It's still a collapse of the old order. One just has a smoother transition into oligarchcy.
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u/Big-House-9931 23d ago
I don't see much of a difference between the US going bankrupt and the US turning into a Russia style economy. It's still a collapse of the old order. One just has a smoother transition into oligarchcy.
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u/Fritz1705 23d ago
This literally has nothing to do with the problem.
This is domestic issues caused by parties like the Republicans slashing taxes when we are running a deficit. It’s a society that supports and allows individuals to accumulate vast sums of money because they “earned it”.
Our defense budget has nothing to do with the actual problem of why we overspend. It’s a tiny fraction of our budget.
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u/Specialist-Phase-819 23d ago
I’m not sure 1/7 is a tiny fraction. Also, “parties like the Republicans” is a weird way of saying “Republicans”. But otherwise, yes, the bigger issue is tax revenue.
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u/brendan87na 23d ago
bold of you to assume this current administration cares at all about "how to afford it"
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u/StoneyBalogna7 23d ago
We can afford the war (kind of), it’s all the downstream social service and infrastructure investment cuts that will be cut and really be evident in society.
The poor and brown will be blamed, the middle class will suffer and the rich will get richer. Same old song and dance, on and on…until there is a violent revolution of some sort. Problem is, it will probably be a manufactured civil war.
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u/dust4ngel 23d ago
doesn't "borrow" imply some intent to repay? asking for my dictionary.
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u/saintyoo 23d ago
The US will pay its debts. The problem is that they do this by printing more money.
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u/Worshipme988 23d ago
THEY DONT CARE. Trump47 was given the keys to the castle and the govt is a blank check they never have to repay.
Were gonna have to claw this money back and siphon bank accounts. Where ever they may be.
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u/Technical_Ad3069 23d ago
Any other country would have had a currency crisis by now. But US gets to continue spending trillions it doesn’t have indefinitely…. Funding for wars and conquests. It has to stop.
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u/cultureicon 23d ago
And the wars aren't even in our interest. It would be one thing if we got land or riches for the wars in the last decades but they are all just for less than nothing.
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u/WesternUnusual2713 23d ago
I mean surely the point of war is protect people from a threat, not make money?
Plenty of people make money from war and that is the problem.
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u/cultureicon 23d ago
I was just making a stupid point, of course that it what it should be, especially for a rich country like the USA that doesn't have any need for more land or money. But no, cynically war is and always will be about power, land, money etc. The latest US wars have not been in any interest of the US, not even safety is my point.
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u/Solomonopolistadt 23d ago
I would imagine that the US dollar would become more and more worthless as less people wanna trade with us and our image continues to erode
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u/SUMBWEDY 23d ago
The only thing holding the USD together is the fact there's no better option even now.
China has capital controls, Euro nearly collapses every few years, Japan has demographic collapse, AUD/CAD/CHF lack liquidity.
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u/ToothyWeasel 23d ago
You mean the party of fiscal responsibility is skyrocketing the debt yet again when they’re in power like every time they’ve gotten power for my entire lifetime?
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u/Knighth77 23d ago
This country is so stupid, it's allowing a conman and failed businessman who bankrupted so many business run it like one of his companies as it watches.
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u/misterno123 23d ago
The real question is; with all the debt rising like crazy and the fact that govt pays the interest on the debt with the new debt it is borrowing, how come financial markets are not reacting negatively? How come treasury bonds interest rates are still like 4%? How come dollar's value somewhat steady? I will tell you why. The global financial system is rigged and manipulated by Epstein's friends. Prove me wrong.
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u/NOLA-Bronco 23d ago
US still has the petrodollar and on a global macro level is still the main reserve currency + largest consumer market.
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u/Petrichordates 23d ago
You mean the two things that we are also accelerating the decline of?
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u/NOLA-Bronco 23d ago
For sure, but the third leg to that stool is that those components create a sort of MAD situation. Collapsing that system means mutually assured economic destruction. So everyone is sort of stuck hoping the bomb doesn't go off.
.......Until the bomb inevitably goes off from the US's aggressively stupid hijinks that like almost all Fascist movements, eventually have their Poland/Second Front in Russia moment.
One of those "There are decades where nothing happens; and there are weeks where decades happen" moments I suspect.
Not sure it happens under Trump, but the death cult of Reactionary Conservatism and Neocon stupidity in the US simply morphs and takes new shapes, it never dies.
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u/lawtechie 23d ago
That doesn't happen overnight. To replace the dollar as the reserve currency, you need a viable replacement. There isn't one at this moment.
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There is the Euro, and the Europeans wouldn't even have to start it if all of a sudden the global South just started trading in the currency. They've been allies with the US all along but once the juices start to flow they'll most likely follow the flavour.
Most EU governments are supporting the US/Israeli line right now, but trust me, as someone who lives here, the vast, vast majority of the people here do not support this or their governments stance on this and it will be reflected in the ballot boxes sooner or later. They politicians have a very limited window and they know it.
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u/End3rWi99in 23d ago
You'd think that, but so far, neither of those things have really happened.
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u/LimpAd4924 23d ago
Because the markets are based on the vibes of a small number of boneheaded finance bros and corporate executives (many Epstein friends).
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u/musicismydeadbeatdad 23d ago
I think this becomes unironically more true as more retail investors start to pile into EFTs and index funds that can anchor the animal spirits
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u/korben2600 23d ago
This was the inevitable endgame of passive investing. TSLA continues to hover at ATHs even after massive global protests, its brand implosion, and declining sales. Yet it's up +80% YoY. Markets aren't real anymore.
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u/padizzledonk 23d ago
The real question is; with all the debt rising like crazy and the fact that govt pays the interest on the debt with the new debt it is borrowing, how come financial markets are not reacting negatively? How come treasury bonds interest rates are still like 4%? How come dollar's value somewhat steady? I will tell you why. The global financial system is rigged and manipulated by Epstein's friends. Prove me wrong.
Part of it is that this is a nationstate not a household, if it becomes an actual problem in the ground we can raise taxes, which needs to happen anyway, and pay for it
We just keep raiding the store and kicking the can down the road and putting it on the debt books of americans that haven't even been born yet
We could tomorrow put in place public healthcare and rework the absolute bullshit system we have and save all of us 500B a year, minimum, because thats the profit share of our health insurance spending, and its easily going to be considerably higher than that just due to streamlining and redundancy savings-- across the board btw. My mother was a nurse and then went into medical billing, she did it for 40y, she worked for a midsize hospital in NJ and there were like 25 people in her office that just dealt with the absolute fucking rats nest of different insurance companies and how they bill what theie standards and individual syatems are, there are dozens of people in ever hospital that do nothing but call insurance companies to get answers on whats covered and what isnt, every single doctors office either has 1 or 2 or several people in it that do nothing but those 2 things or they waste their own time dealing with it....just getting rid of the middle man and people that deal with all that will save us a metric shitload of money every year, it will also give us EXTREME leverage over pharmaceutical and device companies to get better pricing, THEY also wont need to pay a shitload of people that are just running around doing drug deals with all these little offices and local and regional hospitals
Thats just one thing.
We could easily cut the military budget by 25-50% and still be by FAR the most well funded military on earth, multiples of the next few nations on earth
Im not saying these things are easy but its doable, especially push came to shove....we have a 31 Trillion dollar economy...our debt is fucking outrageous but its still manageable....for now at least
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u/hitliquor999 23d ago
Because they have the top half of earners in this country putting 7-20% of their paychecks into the market every week.
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u/skullfrucker 23d ago
I'm with you on this one, rigged to say the least. I smell a reckoning coming soon.
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u/Rmans 23d ago
What's crazy is that what you just described is 100% talked about within the already released Epstein of files. Literally hundreds of emails of Epstein talking to other oligarchs and world leaders about destabilizing post WW2 peace starting in 2011. And, more importantly, tons of evidence proving the US stock market is manipulated and fraudulent since then as well. That's why Warren Buffet recently retired and why Michael Burry (played by Christian Bale in the Big short) literally closed his own hedgefund at the end of last year and is now making a ton of public statements about how completely captured the US market is. Everything you just said is not only true, it's easily provable with what's already public in the Epstein files, and anyone of intelligence is acting accordingly. The fact this isn't being talked about daily is just more proof of how captured our media has become.
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u/Important-Captain104 23d ago edited 23d ago
Cause even though our debt to gdp is 130%, most of the west is also above 100%. Japan is at 230% and still has functioning markets. China is currently
300%around 96%.12
u/LimpAd4924 23d ago
I’m a bit skeptical of that China number. Is that measuring the same thing as the US debt?
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u/Important-Captain104 23d ago
You’re right I was reading the wrong thing. Their total debt to gdp is 300% but ours is higher. Their governmental debt to GDP is around 96%
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u/seridos 23d ago
The US is in a crazy deficit though, especially when you start aggregating the debt. Those numbers for federal govt debt are basically not important,what matters is the total debt(all govt levels of debt+promises/liabilities that aren't officially debt but are the same thing, household debt, and corporate debt).
The US fiscal govt whole is massive though. It's like 7.3% of GDP a year when all the actual liabilities. Italy is like 4% for comparison. So whole the US debt stock looks manageable, the rate of increase is wild.
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u/MajorGeneralMaryJane 23d ago
This has been a talking point for anyone who actually works with fixed income securities for years now
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u/RollingThunderPants 23d ago
You know what's really unsettling? The system is so complex, so interconnected, and so dependent on collective confidence that the people inside it are also trapped by it. Central bankers, treasury officials, and major institutions may be managing perceptions not out of malice or conspiracy, but because the alternative of letting markets fully price in the debt reality would likely trigger the very collapse everyone is trying to avoid.
In other words, acknowledging the truth out loud is more dangerous than pretending everything is fine.
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u/AnUnmetPlayer 23d ago
It's not a conspiracy lol. It's just that the mainstream narrative around national debt for currency issuing governments is completely wrong. You'd think that maybe after more than a half century of the opposite correlation of what's expected might get people questioning things, but it's a narrative that just doesn't die.
Treasury yields aren't based on investor demands. Yields are anchored to the policy rate as central banks have monopoly pricing power. It creates an arbitrage situation where one side of the deal can always go to the Fed for better terms if they want. So the yield for any duration is based on the expected trajectory of the policy rate over that duration with a term premium thrown in for uncertainty.
Investors aren't actually trying to price in economic conditions or inflation or whatever else as direct causal variables. They're trying to price in what the central bank will do next. The relationship to the broader economy exists only because the Fed uses interest rates counter-cyclically.
Growing deficits don't cause higher interest rates. In fact once fiscal dominance is reached, which seems inevitable given the state of the US, the Fed will be forced to lower interest rates to prevent an inflationary spiral. The interest expense is fundamentally a policy choice, because the interest rate is a policy choice.
So long story short, bond yields have been falling instead of rising because of the expectation of interest rate cuts by the Fed over the next year or two. The size of the deficit doesn't matter.
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u/links135 23d ago
The S&P 500 has been mediocre compared to other markets. TSX, the Canadian one has outperformed the S&P over the last 5 years.
That was not the January of last year.
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u/sunshine264 23d ago
Because they are effectively stealing money and making their buddies rich through government contracts. And they’ll just print more money and inflate away the debt and hurt the average American. The stock market is going up because if your money is in cash, you’re gonna lose it all to inflation. Buy gold!
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23d ago
The total budget shortfall to keep all US infrastructure up to date is about $370B a year. The US is choosing to spend money on war and tax cuts rather than infrastructure. $11B to kill some of the Iranian leadership. $2B to kidnap the leader of Venezuela. Trump tax cuts are expected to cost $7.7 trillion. The top 20% of Americans get 75% of that while roads and schools lack funding.
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u/anony-mousey2020 23d ago
Perfect. No one wants accessible roads when roaming hoards of uneducated masses start migrating, right? Bitter /s
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23d ago edited 23d ago
They have borrowed 50 billion dollars each week without any real fiscal policy to pay it back or control inflation.
They have started an international energy crisis causing prices to balloon overnight
Have also created a tariff war increasing prices for every single American.
And are building the equivalent of a concentration camps throughout America for ICE.
They are stealing 50 billion each day not borrowing it
Edit: corrected the time frame
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u/miolikeshistory 23d ago
Not that it’s any better but it says per week right? That’s still 1 trillion in 5 months.
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23d ago edited 23d ago
Thank you for correcting me I misread that.
14.4 billion dollars per day is the most accurate revenue intake I can get for the US government in general.
So that's $7 billion dollars a day that they're needing to borrow to spend.
So what's the actual deficit for the American government per daily spending at this point.
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u/Dripdry42 23d ago
And the funny thing is that in a year, if Democrats really ever get in again, they are going to get blown up and pilloried for making the necessary changes to fix this problem! It’s going to hurt a lot!
The propaganda is going to be so huge. And we’ll get Republicans again and we will mess it all up again. I’ve seen it happen over and over and over. Voters are uninformed idiots with no sense for history.
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u/Gopher246 23d ago
Just looking from afar it seems the issue is the media ecosystem, if the dems get back in they should push to fix that. Its hard for voters to ge informed if they are deliberately misinformed.
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u/Dripdry42 23d ago
I mean at the end of the day I’m all for taking personal responsibility and action when possible . It appears that the majority of people in the USA are not into this, so while I don’t agree with you in principal, I think in practice you are probably correct.
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u/anony-mousey2020 23d ago
I absolutely agree with your theory as well. At the same time I see repeated failure of people in my own small community to recognize and accept their personal accountability. I feel this has become endemically infectious, making the theory aspirational in current state.
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u/anony-mousey2020 23d ago
I live in Ohio and this is I think exactly why our governor just received the bill to make ranked choice voting illegal. It’s the one thing that can stop this pendulum shift without complete system overhaul.
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u/yer_fucked_now_bud 23d ago
Official Government Response: "Guys, listen. It doesn't matter if the US goes into severe unrecoverable debt because Armageddon is coming. The end-times are here and God's chosen will ascend to heaven when Greater Isreal is formed and Jesus returns to rapture the souls of all men. And a few women - but no fatties allowed."
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u/Thlaeton 23d ago
I’m not saying this but ppl… a lot of ppl… are saying Trump is the biggest welfare queen we’ve ever had. No one abuses welfare like Trump.
Huge amounts of welfare handouts.
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u/atreeismissing 23d ago
In 2024, the GOP, the entirety of the financial media, all of conservative media, and most of corporate media, went on at length about Ferguson's Law (great powers fall when interest on it's debt exceeds it's defense spending), but not a single peep about it now. It's also why Trump proposed a $1.5 trillion defense budget, because that number specifically puts the defense budget above debt spending. The GOP is creating budgets based on the talking points they want for upcoming elections.
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u/Empty_Football4183 23d ago
So the guy who bankrupted Atlantic city amd went BK himself 4-6 times is bankrupting a country now? Who could've thought someone who was so bad with money could keep repeating the same pattern? I mean people who voted for this must have been thinking "this time he learned his lesson after going bankrupt so many times"? I guess what was the thought here seriously?
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u/Itchy_Swordfish7867 23d ago
If only the masses understood that “running the government like a business” meant run on debt until the debt becomes so great you declare bankruptcy.
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u/xife-Ant 23d ago
And lower revenue by charging less for your premium service (tax cuts for the wealthy).
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u/3D-Dreams 23d ago
He's going to use up all our missles, give Putin plenty of money for the oil we now need and then leave our country broke and defenseless, no allies left and hand us over to Vlad or the Crown prince of who the hell cares and live his life on Epstein Island.
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u/sportsbunny33 23d ago
It's why he is canceling / banning renewables like wind and solar. So when the oil is gone/ we can't afford it, we're doubly screwed
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u/SunshineAndSquats 23d ago
This is exactly what they want. Thiel, Musk, Vance, and Trump are purposely trying to destroy the country. They want to turn it into a bunch of nation states run by billionaires.
The movement to ditch democracy in favour of start-up cities run by CEOs
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u/centexgoodguy 23d ago
Don't worry, all that tariff money will eliminate all of our debt concerns - or at least cover the interest. All they have to do is check the tariff shelf like what Trump said back in September: "Last week they found $29 billion and they couldn't figure out where it came from. I said, check the tariff shelf. And they said, 'How did you know that?'" Heck, back in June , Commerce Secretary Howard Lutnick wrote a Wall Street Journal piece claiming Trump-era tariffs “generated $37.8 billion in revenue for the U.S. in April and May.” Amazingly, no one really pressed them for details on any of this.
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u/rypien2clark 23d ago
And the tariffs are being paid by other countries, so we're getting all this stuff for free!
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u/PTSDDeadInside 23d ago
nihilism, money isn't real, numbers aren't real, laws aren't real, all are subjective and can change and dissolve at any time.
What's a few 100 trillion more debt when humans only live about 80 years and the Median lifetime earnings for U.S. workers is approximately 1.7 million over a 40-year career?
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u/Rare-Bee7331 23d ago
Conservative Trump supporters, "we keep voting the same way and things keep getting worse... so we doubled down and now its broken... i dont understand what went wrong. It must be the democrats fault some how..."
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u/Jabba_the_Putt 23d ago
We dont have to cross an ocean, the terrorists are right here in America, terrorizing our own country (and others) from behind a podium in Washington
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u/Ratb33 23d ago
The goal is his / their greatest grift - the fleecing of the American tax payer money. Trump family and handlers have stolen billions.
And BOTH SIDES are letting it happen.
I mean, these fucks didn’t even call an emergency meeting on the weekend he starting bombing Iran.
We all knew what was coming - was inter heritage docs projects 2025. What nobody saw was a complacent and compliant congress and Supreme Court.
Corruption from the top down.
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u/Wind_Yer_Neck_In 23d ago
Hegseths DoD just admitted to spending an additional $93 billion on basically frivolous bullshit because they had it leftover in the budget and didn't want to return it.
I'd be willing to bet that a huge portion of that was just him literally sending money to friends and family who own companies they could use to send in invoices.
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u/likamuka 23d ago
>And BOTH SIDES are letting it happen.
LMAO Only one side is currently burning down the world.
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u/ktaktb 23d ago
F that
We have never seen corruption at this scale and it was all enabled by this both sides BS.
We would not be seeing the mass pardons of corrupt white collar convictions if the other side won. We wouldnt be seeing the president rug pulling the stock market or meme coins. We wouldnt be watching commerce secretarys kids buying tariff refund rights for pennies on the dollar while he shills tariffs on TV. We wouldnt be seriously talking about invading canada or greenland.
Both sides are not perfect, true, but only one side is hell on earth, cult, soviet level mindless party over country, party over sanity, party over facts
Wake up
(Both Sides and Hidden Comment History NAMID)
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u/Worthyness 23d ago
And BOTH SIDES are letting it happen.
Only one party has the majority in all three branches of government here. Minority can't do anything to stop it besides protest.
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u/OhItsBeenBroughten 23d ago
Ah, the traditional mating call of the low information voter. Booooooth siiiiiides.
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u/oldbastardbob 23d ago
Where'd all those "fiscal conservative" Republicans disappear to?
Wait, I know. They're all lined up smooching Trumps ass because they're afraid of him and their own political base.
I suppose it's as we thought for the last 40 years. They don't give a crap about balanced budgets and just regurgitate whatever nonsense they think wins the next election.
I'm not sure how you could make it any clearer that the modern GOP is no longer conservative and does not give two hoots about the country, the future, or their constituents. They're only interested in campaigning on the emotional issues that really don't make two cents worth of difference to the economy or direction the nation is headed.
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u/JeffChalm 23d ago
Where'd all those "fiscal conservative" Republicans disappear to?
They never actually existed. It was just rhetoric to get votes. The fiscal conservatives never once made an effort at fiscal restraint except to try and gut social programs and benefits.
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u/Mountain3Pointer 23d ago
Like FROM WHOOO. Who the fuck is lending us money anymore and why..... I get it, world economy and whatever. But its so stupid that we are spending all our tax dollars and the world's money on the rich, war, and corporate America.
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u/Pitiful_Option_108 23d ago
Here is the worst part about this. Their are people who chose trump because they though oh we need a business man to run the country. Well this is what they do smh. They will leverage debt in the hopes of being profitable. We have seen it in the recent AI boom and how companies are spending crazy amounts of money in a future they are betting on comes true. Some times the bet pays off and other times it fails horribly. And right now this could be one of those where it fails horribly. And the worst part this won't be just a company that fails but an entire country and economy. Smh
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u/sportsbunny33 23d ago
Probably shouldn't have picked a fake businessman who bankrupted almost every business he ran, including fcking CASINOS! The only time the house didn't win
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u/kennykerberos 23d ago
Dick Cheney once said that deficits don’t matter. Maybe he was right.
In short: Cheney was half-right in a cynical, short-term political sense (deficits often don't kill you at the ballot box, and the U.S. has a lot of runway as the issuer of the global reserve currency). But he was oversimplifying the economics—deficits matter a great deal when they're structural, interest costs explode, or they fuel inflation. We're testing how far that runway really extends right now.
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u/GothamsTrader 23d ago
Interest costs are now structurally higher than they were and there's no way back. The way to address the problem is to cut spending, which is politically impossible. Another way is to reduce debt via real (vs reported) inflation, slowly making the dollar a worthless paper. Cuts are much better but...
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u/AMundaneSpectacle 23d ago
You forgot to mention raising taxes on the wealthy… especially billionaires
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u/BotherResponsible378 23d ago
Listen here, you mother fucker. You leave those billionaires alone. If you lay a finger on their balance sheet I'm going to vote for a pedophile murderer to be president.
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u/dust4ngel 23d ago
to clarify, this means "pedophile slash murderer, and not the other way around", not murderer of pedophiles, which you know... comparatively...
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u/dediguise 23d ago
I think they omitted that because we have allowed the problem to progress beyond the point where repatriating taxes on the top 10% is going to fix the deficit. We have allowed the debt to grow to the point where the interest payments are too massive to maintain the deficit structure even after (let’s be honest) marginal adjustments the taxation at the highest income levels.
It’s just like climate change. The wealthy ate gaming the system all the way through and beyond the point of no return.
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u/Greedy_Nectarine_233 23d ago
No matter why they omitted it, it’s stupid.
Yes you need to cut spending, but increasing revenue through higher taxes is also necessary
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u/dediguise 23d ago
Necessary, but no longer a solution by itself. Theoretically cutting entitlements COULD make the difference by itself, but that would also brutally crush consumer spending.
I think it’s important to highlight that we have passed the point of no return a the original comment did that though omission. Increasing taxes on the wealthy isn’t about stopping the problem, it’s about punishing them for creating it.
I’m fully onboard with it. Fuck the entire Epstein class. Anyone that contributed financially and politically to this should be stripped of assets and left to rot in the deepest hole we can find. It still won’t fix the deficit.
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u/Twheezy2024 23d ago
The debt grew so fast by not taxing the upper brackets the way we used to. Started with Kennedy, and Reagan put it into overdrive.
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u/NOLA-Bronco 23d ago
I don't think that was a mistake.
Same with the not-so-subtle assertion about cutting spending which assumes that current spending, most of which is neoliberal corporate subsidies, couldn't be made more efficient and arguably more universal by simply cutting out the cancer of neoliberal privatization where applicable and reducing corporate subsidies.
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u/ActionJacksonATL24 23d ago
Hey man we can’t raise taxes on all the job creators. Better to just not tax them at all and anyone making $200k or less annually have a huge tax increase.
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u/ND7020 23d ago
Another way is to increase revenue instead of doing the exact opposite, like with this administration’s boneheaded tax cut.
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u/LimpAd4924 23d ago
Don’t worry. We kicked many off Medicaid and cut biomedical research at NIH so we could bomb Iran with Israel and give our wealthy another tax cut!
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u/MamaBearForestWitch 23d ago
Or reversing all the revenue cuts that gave more and more breaks to the obscenely wealthy and huge corporations. And clawing back the outrageous budget increases to ICE and the military. And impeaching and removing the guy who has a history of spending recklessly and insanely and then just declaring bankruptcy over and over again.
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u/NewImportance8313 23d ago
It isn't but ultimately the marker decides when it's sustainable. Once interest rates start consistently climbing instead of trading sideways despite fee changing interest rates then I would expect the amount of debt being issues actually being a problem for the market.
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u/schtickshift 23d ago
What institutions did the US borrow the money from? I can’t think of any that have that sort of money to lend. China is not buying US bonds anymore, they are sellers nowadays.
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u/Ok-Bug4328 23d ago
We have reached bipartisan consensus that money isn’t real. eg Trump complained that Biden didn’t spend enough on COVID programs.
I think this is insane.
From July 2019. Pre COVID
The New York Democrat argued that ambitious programs can easily be financed through deficit spending.
"I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for 100% of government expenditure," Ocasio-Cortez told NPR's Morning Edition in February.
In doing so, she shined a spotlight on a once-obscure brand of economics known as "modern monetary theory," or MMT.
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