Tariffs Are Way Up. Interest on Debt Tops $1T. and Doge Didn't Do Much

Original Article ↗ Hacker News Discussion ↗

Partisan Spending, DOGE, and Actual Savings

  • Many commenters argue DOGE was mostly “shock-and-awe theater”: small headline rescissions, large collateral damage (agency disruption, lost research, city “punishment”), and no meaningful dent in a multi-trillion budget.
  • Some note that any DOGE savings were easily swamped by simultaneous spending increases (around $200B), and by populist giveaways and bailouts.
  • A minority view points out that if tariffs are up and some contracts were canceled, then “less than planned” was spent, which is technically better than doing nothing—though critics counter that DOGE’s own operating costs and long‑term damage aren’t reflected in this year’s deficit.

Tariffs as Revenue and Hidden Tax

  • Tariff revenue is recognized as “real money” to the government, now on the order of ~$200–300B and a few percent of federal revenue.
  • Strong consensus that tariffs act like a sales tax on Americans, hitting poorer and middle‑class consumers hardest while offsetting upper‑income tax cuts.
  • Debate over framing: some say tariffs merely shift money within the U.S. economy and are net harmful; others insist that, for deficit accounting, they undeniably raise income.
  • Legality and durability are questioned: some tariffs may rest on contested emergency powers and could be refunded.

Corporate Taxation and Alternatives

  • One camp wants to close big‑company “dodges,” arguing small firms pay near statutory rates while mega‑corps enjoy much lower effective rates.
  • Others respond that global minimum-tax rules and effective rates near 20–25% make “zero tax” claims exaggerated, and that AI capex is mostly debt‑financed, not proof of evasion.
  • Competing proposals include:
    • Heavier taxation of corporations vs. none at all (tax only individuals, dividends, or trades).
    • Replacing income/corporate taxes with trade taxes.
    • Shifting toward land‑value and rent taxes.

Entitlements, Social Security, and Medicare

  • Disagreement over whether Social Security is a “driver” of the deficit:
    • One side stresses it has its own payroll-tax funding and, by law, can’t borrow; once its trust fund runs down, benefits must be cut.
    • Others emphasize that its trust-fund surpluses were lent to Treasury, so redeeming those bonds forces more public borrowing; canceling the program could, in theory, extinguish that intragovernmental debt.
  • Medicare is widely seen as a genuine budget problem due to U.S. healthcare costs. Several commenters argue only major structural reform (e.g., something like single‑payer) can fix long‑run pressures.
  • Cutting Social Security or Medicare is described as both political suicide and, for some, morally unacceptable; younger commenters push back, saying older cohorts promised themselves unsustainable benefits and shifted the burden.

Debt, Interest Costs, and Long‑Run Risk

  • Interest payments exceeding $1T spark concern that debt service is crowding out other spending and will increasingly squeeze infrastructure, education, and public services.
  • Some fear an eventual breaking point where investors demand much higher yields or refuse to roll debt; others note similar doom predictions have persisted for decades without crisis.
  • Multiple comments describe likely paths as:
    • Financial repression and inflation to erode real debt.
    • The central bank ultimately backstopping debt markets, risking currency depreciation rather than outright default.
  • Discussion of a Keynes line (“anything we can actually do we can afford”) leads to arguments over whether real resource constraints, not accounting, are the true limit vs. whether GDP and current metrics hide unsustainable dynamics.

Historical Reform Attempts and Current Polarization

  • Simpson–Bowles and 1990s “reinventing government” efforts are cited as the last serious bipartisan attempts to combine tax increases and spending cuts; they either stalled or were overwhelmed by later trends.
  • Clinton-era surpluses are attributed by different commenters either to serious reform or mostly to the dot‑com boom and capital‑gains taxes.
  • Several participants argue that present polarization—especially deliberate obstruction and primarying of moderates—makes grand bargains on taxes and entitlements politically impossible.

Motives Behind Tariffs and DOGE

  • Many see a pattern: tax cuts first, then force future administrations (often Democrats) to raise taxes or cut programs, thereby achieving small‑government ideological goals while shifting political blame.
  • Tariff rationales are portrayed as constantly shifting (deficit reduction, China containment, onshoring, immigration leverage, etc.), fueling skepticism that the true objectives are power, patronage, and self‑enrichment rather than coherent fiscal strategy.