the US government has to start paying for things again
Rising U.S. deficits and national debt are prompting renewed scrutiny of how much a government can safely borrow, what actually triggers a crisis, and whether the real constraint is politics rather than any fixed “magic number.” Commenters debate whether deficit spending is a useful tool for growth or a long‑term threat, touching on issues like Social Security and Medicare costs, low tax rates, the Federal Reserve’s role, and the dollar’s reserve‑currency status. They also argue over which administrations and parties bear responsibility, how healthcare and defense spending fit in, and whether recent U.S. performance versus the EU shows that higher debt can coexist with strong growth and manageable inflation.
Debt Thresholds and Credit Ratings
- Several comments challenge the article’s “no magic number” framing.
- Some argue there must be a tipping point (e.g., loss of reserve currency or further credit downgrades), even if it can’t be precisely known.
- Others note the US has already lost some AAA ratings without a crisis, and that prior downgrades were driven more by political dysfunction than raw debt size.
Role and Impact of Government Spending
- Debate over whether high federal spending “bloats” the economy or underpins growth.
- Critics say government crowds out productive private activity, props up “leeches,” and that cutting spending could raise long-run GDP after a painful adjustment.
- Defenders emphasize that government is not a profit-seeking firm, funds essential non-market services (defense, Medicare, Social Security), and can rationally use debt for long-lived investments.
Deficits, Politics, and Voter Incentives
- Multiple comments argue voters don’t really care about deficits; politicians are punished for surpluses and rewarded for tax cuts and spending.
- Disagreement over whether presidents or Congress deserve primary blame, but broad consensus that both parties have contributed and campaign rhetoric about “fiscal responsibility” is mostly symbolic.
- Some frame debt as a predictable outcome of wars, crises, and tax cuts not matched to spending.
Entitlements and Healthcare Costs
- Rising Social Security, Medicare, and Medicaid outlays seen as main structural driver.
- One camp argues universal or more government-run healthcare would reduce overall costs and match other rich countries’ outcomes.
- Others claim greater government involvement historically correlates with higher US healthcare costs, countered by replies citing lower costs in VA/Medicare and abroad.
- Medicaid reimbursement is criticized as too low to sustain some providers.
Nature of Money, the Fed, and “Printing”
- Disagreement over whether “national debt” is meaningfully different from money creation.
- Some view bonds as internal accounting the government can always roll over or monetize, with the real issue being inflation and wealth transfer to finance.
- Others stress that Social Security trust-fund holdings and Fed-owned Treasuries are still “real” liabilities and not costless.
- Confusion and dispute over whether the Federal Reserve is best seen as a government entity, a private system, or both.
Risk, Default, and Inflation Scenarios
- Speculation about eventual outcomes: explicit default, implicit default via inflation, or perpetual rollover.
- Some distrust Treasuries, preferring equities or gold to avoid sovereign risk; others point out there is no clearly safer alternative.
- Concern that large debt plus rising rates makes the US vulnerable to future rate shocks; interest-to-GDP is flagged as more informative than debt-to-GDP alone.
US vs. EU and Recent Macro “Experiment”
- One view: post‑2020 US demonstrates that higher deficit spending can coexist with stronger growth and lower inflation than lower‑deficit regions like the EU, especially given immigration and stimulus.
- Skeptics say the timeframe is too short to draw conclusions; the “experiment” isn’t over and longer-term iceberg risks remain.