Soaring U.S. Debt Is a Spending Problem Revenue is stable, but outlays are reaching new heights as a share of GDP.

[West Dundee Hawkeye]

You may have heard that the 2017 GOP tax cuts blew a giant hole in the federal budget—or so Democrats tell voters. The Congressional Budget Office’s revised 10-year budget forecast out Tuesday offers a reality check. Spending is the real problem, and it’s getting worse.

CBO projects that this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit. This is unprecedented when the economy is growing and defense spending is nearly flat. The deficit this fiscal year will be 7% of GDP, which is more than during some recessions.

CBO says deficits will stay nearly this high for years, and the total over the next decade is now expected to total $21.9 trillion compared to $19.8 trillion in its February forecast. Debt held by the public will grow to 122.4% of GDP in 2034 from 97.3% last year.
Notably, CBO’s revenue projections are little changed. Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows. But CBO significantly revised up projections for federal spending. Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade. Wow.


CBO on Deficits

 

[Joes Place]

Revenues should be increasing w/ GDP and population

The fact they are "stable", indicates we're falling behind, because the wealthy no longer pay their fair share.
And it's why they pummel you with propaganda and shell out billions to put people in office who will cut their taxes even further. They only do it, because they get a substantial ROI. So, when they spend $400M to elect their buddy, they know they'll be seeing a $400B or more ROI on that "investment", nearly annually.

 

[Joes Place]

You may have heard that the 2017 GOP tax cuts blew a giant hole in the federal budget

They did.

Revenues have not kept pace w/ population and GDP.

 

[seminole97]

Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows. But CBO significantly revised up projections for federal spending. Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade.


The Feds have never collected more than 20% of GDP under any rate structure.
At the end of the Clinton presidency spending was 17.7% of GDP.
Current spending is nearly 50% higher than then.
Spending needs to be cut.

 

[Huey Grey]

Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows. But CBO significantly revised up projections for federal spending. Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade.


The Feds have never collected more than 20% of GDP under any rate structure.
At the end of the Clinton presidency spending was 17.7% of GDP.
Current spending is nearly 50% higher than then.
Spending needs to be cut.

Then cut the gd military. And stop with all these gd rich tax cuts. It's like the Rs want screwed up deficits.

 

[West Dundee Hawkeye]

The report came from the non-partisan CBO.

 

[fsu1jreed]

So record people working, but revenue is stable....seems like it's also a tax problem

 

[West Dundee Hawkeye]

China is growing their Navy by the size of the Royal Navy every 2 years.

Should we just take the easy way out and shrink the Navy and let China control the Pacific and tell Australia and our other Indo-Pacific Allies they are on their own?

 

[seminole97]

Then cut the gd military.

We should cut the military, but so we’re so deep in the hole now, paying a trillion just in interest (more than the ‘gd military’!), that we’ll need to cut more than that.
Spending is up 50% from the Clinton era, it needs to come down.

And stop with all these gd rich tax cuts. It's like the Rs want screwed up deficits.

2022 had the highest percentage of income taxed in our history.
You still don’t seem to grok the distinction (and importance) between tax rates and tax collections.
In 2022 income tax collections were 66% higher than in 2017.

Why do you want higher rates that result in lower collections?

 

[West Dundee Hawkeye]

The report states it is as a percentage of GDP.

Taxes should go up with population growth but so should spending.

 

[Joes Place]

Corporate income taxes and other revenues (cap gains, etc) are flat, or lower.
Boost those back up to 1980s levels, and you balance the budget.

 

[alaskanseminole]

Then cut the gd military. And stop with all these gd rich tax cuts. It's like the Rs want screwed up deficits.

By "cut" you mean regulate it better, right? For example, this year's spending (or non spending) shouldn't impact next year's. We don't need military staff members figuring out a way to blow through "fallout" money on Sep 30th out of fear of not getting the same amount the next. Additionally, defense contractors should be held accountable for failed R&D efforts.

 

[seminole97]

China is growing their Navy by the size of the Royal Navy every 2 years.

The Royal Navy isn’t even a shadow of its former self. They don’t have enough boats in service to mimic the components of the Falklands sortie.

 

[Joes Place]

We dropped the same level of debt from WWII by taxing the rich in the 50s 60s and 70s (even 80s)

If they paid their share now, we would knock this out in no time

 

[West Dundee Hawkeye]

There has to be a "grand compromise" like Bill Clinton did in 1993 which led to 4 balanced budgets.

I would cut non-defense spending and also raise taxes.

Everybody needs to kick in.

 

[SolarHawk]

To anyone who thinks the deficit and budgetary woes are to blame on one party or the other, you're not to be taken seriously as you are most certainly a partisan hack. It's politicians that are to blame, both sides. Just fvcking stop it.

 

[West Dundee Hawkeye]

The Royal Navy isn’t even a shadow of its former self. They don’t have enough boats in service to mimic the components of the Falklands sortie.

China now has a bigger Navy than the US Navy and the US Navy has a global mission the Chinese the Indo-Pacific.

 

[West Dundee Hawkeye]

To anyone who thinks the deficit and budgetary woes are to blame on one party or the other, you're not to be taken seriously as you are most certainly a partisan hack. It's politicians that are to blame, both sides. Just fvcking stop it.

I totally agree both parties are to blame.

But both parties are ignoring it as an issue.

Dick Cheney said deficits don't matter and the Far Left believes in MMT.

This issue needs to be addressed.

 

[SolarHawk]

I totally agree both parties are to blame.

But both parties are ignoring it as an issue.

Dick Cheney said deficits don't matter and the Far Left believes in MMT.

This issue needs to be addressed.

I agree with you in principle, but let's be honest, nothing will change until catastrophe strikes. Americans( I'm including myself here) are way too comfortable and selfish to do anything meaningful. It's part of the control they have over us.

 

[seminole97]

China now has a bigger Navy than the US Navy and the US Navy has a global mission the Chinese the Indo-Pacific.

Larger count, but smaller tonnage afloat.
They are going to surpass us though, their shipbuilding capacity is way, way beyond ours.

Satellite (Starlink) controlled, unmanned is where I think we need to pour a lot of our money. Less expensive platforms like the Zumwault, and much more stuff like that Ukrainian kamikaze boat that we could fly/ship to Japan/Philippines/Vietnam and unleash into the South China Sea for denial if we see China gear up for war.

 

[seminole97]

I totally agree both parties are to blame.

But both parties are ignoring it as an issue.

Dick Cheney said deficits don't matter and the Far Left believes in MMT.

This issue needs to be addressed.

Cheney was saying that they don’t matter politically.
Ross Perot’s candidacies were the only time I’ve seen the deficit/debt issue assume primacy.
Gingrinch effectively co-opted it, and his Congress ratcheted down spending as a share of GDP through the 90s.

At the time of Cheney’s famous nostrum about deficits, in 2002, he was lecturing a skeptical Treasury Secretary Paul O’Neill that the expensive war in Afghanistan was no reason to scuttle a push for new tax cuts. An unmoved O’Neill was fired. President George W. Bush got his tax cuts. A bitter O’Neill fed Cheney’s quote to author Ron Suskind (the Michael Wolff of Bush’s first term). The deficit exploded. And Cheney was proven right—nobody cared.

 

[West Dundee Hawkeye]

Cheney was saying that they don’t matter politically.
Ross Perot’s candidacies were the only time I’ve seen the deficit/debt issue assume primacy.
Gingrinch effectively co-opted it, and his Congress ratcheted down spending as a share of GDP through the 90s.

At the time of Cheney’s famous nostrum about deficits, in 2002, he was lecturing a skeptical Treasury Secretary Paul O’Neill that the expensive war in Afghanistan was no reason to scuttle a push for new tax cuts. An unmoved O’Neill was fired. President George W. Bush got his tax cuts. A bitter O’Neill fed Cheney’s quote to author Ron Suskind (the Michael Wolff of Bush’s first term). The deficit exploded. And Cheney was proven right—nobody cared.

Cheney is a fricking idiot. My point is the GOP bought into his BS. Ever since then the GOP has gotten dumber and dumber.

 

[seminole97]

Cheney is a fricking idiot. My point is the GOP bought into his BS. Ever since then the GOP has gotten dumber and dumber.

I can remember Robert Novak writing about ‘the cardinals’ (what he called the GOP leaders of several committees key to spending) chafing under Gingrinch’s budgets.
When he was gone and the Republicans had the WH they got real open to spending.

 

[onlyTheObvious]

China is growing their Navy by the size of the Royal Navy every 2 years.

Should we just take the easy way out and shrink the Navy and let China control the Pacific and tell Australia and our other Indo-Pacific Allies they are on their own?

BFD. We have enough.

We could do a count of aircraft carriers. US has more and better than Russia and China combined and then some.

Also drones will render a lot of the crap obsolete.

 

[NoleinATL]

The only "spending" that matters in an attempt to correct this issue is mandatory.
Cutting the military spending or not paying our interest is a drop in the bucket compared to the outlays for mandatory spending. Until we elect people that will confront this fact we are doomed to go further and further in debt.

 

[Bulldogs1974]

Cut subsidies to the “taker” red states.

 

[seminole97]

BFD. We have enough.

We could do a count of aircraft carriers. US has more and better than Russia and China combined and then some.

Also drones will render a lot of the crap obsolete.

I’m afraid it can render the ‘good stuff’ obsolete too.

The future for land, sea and air combat is very murky right now.

How much easier does it get for Iran to close the Straits of Hormuz with the developments we’re seeing in drones?

 

[Joes Place]

The only "spending" that matters in an attempt to correct this issue is mandatory.
Cutting the military spending or not paying our interest is a drop in the bucket compared to the outlays for mandatory spending.

Actually, the mandatory spending is quite low.

Military and other, including interest, are a larger fraction of our budget.
Social security needs fixing, but the GOP just wants to eliminate it, entirely, rather than fix it.

Only Democrats have pushed proposals to shore up SS recently.

 

[binsfeldcyhawk2]

You may have heard that the 2017 GOP tax cuts blew a giant hole in the federal budget—or so Democrats tell voters. The Congressional Budget Office’s revised 10-year budget forecast out Tuesday offers a reality check. Spending is the real problem, and it’s getting worse.

CBO projects that this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit. This is unprecedented when the economy is growing and defense spending is nearly flat. The deficit this fiscal year will be 7% of GDP, which is more than during some recessions.

CBO says deficits will stay nearly this high for years, and the total over the next decade is now expected to total $21.9 trillion compared to $19.8 trillion in its February forecast. Debt held by the public will grow to 122.4% of GDP in 2034 from 97.3% last year.
Notably, CBO’s revenue projections are little changed. Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows. But CBO significantly revised up projections for federal spending. Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade. Wow.


CBO on Deficits

Yep. We’re F’d.

 

[binsfeldcyhawk2]

Student loan relief contributing to 27% jump in projected federal budget deficit, per CBO​

Student loan relief contributing to 27% jump in projected federal budget deficit, per CBO

By Tami Luhby(CNN) — The federal budget deficit will hit $1.9 trillion this fiscal year, according to an updated projection released Tuesday by the Congressional Budget Office. That’s 27% – or $400

www.cbs58.com

 

[NoleinATL]

Actually, the mandatory spending is quite low.

Military and other, including interest, are a larger fraction of our budget.
Social security needs fixing, but the GOP just wants to eliminate it, entirely, rather than fix it.

Only Democrats have pushed proposals to shore up SS recently.

Mandatory spending is quite low?
Are you aware of what makes up mandatory spending?

 

[RagnarLothbrok]

Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic, as the nearby chart shows. But CBO significantly revised up projections for federal spending. Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade.


The Feds have never collected more than 20% of GDP under any rate structure.
At the end of the Clinton presidency spending was 17.7% of GDP.
Current spending is nearly 50% higher than then.
Spending needs to be cut.

It’s got to be both. It’s got to be increased revenue and decreased spending.

That’s if we are actually serious about the debt. It seems to me now that we’re well past $30 trillion everyone has given up on that and just wants to focus on budget deficits.

Even then, I don’t see how we can get the budget under control without also increasing revenue. Where do you see an opportunity to drastically cut spending enough to make a significant difference without a tax increase? How much do you want to cut military spending? Healthcare? Social Security? Because those three things are the meat and potatoes of the federal budget. Anything else you talk about cutting won’t even put a dent in the problem.

 

[Joes Place]

It’s got to be both. It’s got to be increased revenue and decreased spending.

This was how it was done during the Clinton years.

And past corporate taxes as % GDP have been more like 2-3% in years we had more balanced budgets. Those are historically low now, along w/ cap gains.

Cap gains needs to go back to 30+% on non-retirement accounts
Keep them low on retirement accounts so long as your total amount is below some cap (like a few $M)

Things we need to continue spending on are infrastructure w/ long-term benefits. We do need to reel in Medicare/Healthcare, and enabling the US government to negotiate pricing can go a long way there.

 

[RagnarLothbrok]

This was how it was done during the Clinton years.

And past corporate taxes as % GDP have been more like 2-3% in years we had more balanced budgets. Those are historically low now, along w/ cap gains.

Cap gains needs to go back to 30+% on non-retirement accounts
Keep them low on retirement accounts so long as your total amount is below some cap (like a few $M)

Things we need to continue spending on are infrastructure w/ long-term benefits. We do need to reel in Medicare/Healthcare, and enabling the US government to negotiate pricing can go a long way there.

I definitely agree with your last paragraph especially.

 

[seminole97]

It’s got to be both. It’s got to be increased revenue and decreased spending.

That’s if we are actually serious about the debt. It seems to me now that we’re well past $30 trillion everyone has given up on that and just wants to focus on budget deficits.

Even then, I don’t see how we can get the budget under control without also increasing revenue. Where do you see an opportunity to drastically cut spending enough to make a significant difference without a tax increase? How much do you want to cut military spending? Healthcare? Social Security? Because those three things are the meat and potatoes of the federal budget. Anything else you talk about cutting won’t even put a dent in the problem.

Social Security is a separate issue. SS funding by law is tied to its payroll revenue stream.
The 'bankruptcy' of Social Security is that in time the payroll tax revenue won't meet outlays. That figure settles in somewhere around 77% of promised benefits. So that spending cut is baked into current law.

I registered as a Republican in order to be able to vote for Ron Paul in the FL primaries because of his preference for peace and spending cuts.
My first vote for president was Perot's second run, because I wanted to see the country adopt balanced budgets so that by the time my kids came along the nation wasn't dumping a trillion dollars into the wealth transfer of interest on the national debt.

It shouldn't be considered a radical idea to oppose spending we can't afford.
I wish I could vote for Calvin Coolidge.

 

[onlyTheObvious]

I’m afraid it can render the ‘good stuff’ obsolete too.

The future for land, sea and air combat is very murky right now.

How much easier does it get for Iran to close the Straits of Hormuz with the developments we’re seeing in drones?

Electric Cars, wind, solar, and nuclear can make the entire Middle East obsolete.

Oil will not be king forever.

3D printing, AI, and robots will eventually make trade less of a thing.

Quantity of food a nation can produce may be all that matters on a long enough time line.

 

[RagnarLothbrok]

Social Security is a separate issue. SS funding by law is tied to its payroll revenue stream.
The 'bankruptcy' of Social Security is that in time the payroll tax revenue won't meet outlays. That figure settles in somewhere around 77% of promised benefits. So that spending cut is baked into current law.

I registered as a Republican in order to be able to vote for Ron Paul in the FL primaries because of his preference for peace and spending cuts.
My first vote for president was Perot's second run, because I wanted to see the country adopt balanced budgets so that by the time my kids came along the nation wasn't dumping a trillion dollars into the wealth transfer of interest on the national debt.

It shouldn't be considered a radical idea to oppose spending we can't afford.
I wish I could vote for Calvin Coolidge.

I agree the only rational and responsible position to have is to oppose spending the government can’t afford.

My question still stands: What can the government cut that would negate the need to raise revenue? I understand SS is supposed to be separate but government has colossally ****ed that up as well, so I don’t quite understand your point on that. Are you suggesting the government just give the baby boomers the middle finger and stop paying out benefits?

I, like you, have also always favored Republicans because I believe in fiscal restraint and lower taxes. Unfortunately, GWB and the war hawks really amped up the spending party (I’m still mad at myself I bought into all the Iraq war bullshit but I was young at the time) and doubled the debt. Obama and Trump then blew that out of the water.

And now here we sit in 2024 at almost $35 trillion. I mean, when does the bottom finally fall out? When do we finally reach the point of no return, or have we already passed it? When do the chickens finally come home to roost that our parents warned us about in the 1990s if the national debt got too big?

I am not an expert in this subject and don’t claim to be, but even from a layman’s point of view I think my point still stands. Even with increased revenue and decreased spending, at this point I don’t think our nation will ever get ahold of its debt problem. With just a decrease in spending, forget about it.

So, realistically, how do you see this working out if the government only decreases spending?

 

[Joes Place]

I definitely agree with your last paragraph especially.

When people tell you that revenues are "flat", but corporate taxes and high-end taxes have become a much smaller share, that literally explains that the middle and lower classes are now paying a far higher share of taxes.

If you want the US economy to thrive, you have to put the $$ back into the pockets of the people who spend, which are those taxpayers. They simply do not have billions to lobby Congress with to make their case; the corporations that want lower taxes do, and that's why they spend so much. It pays off 100-fold or more for them, so that this tax burden is passed on to the rest of us.

Trickle-down does not work, and cannot work in an economy driven by services and spending.
Trickle-up is exactly how you drive growth; keep the $$ in the pockets of the people who will propel the economy.

 

[Joes Place]

Social Security is a separate issue. SS funding by law is tied to its payroll revenue stream.

Correct.

And the GOP has refused to shore up that shortfall for the past 15 years.
Dems have not had a comprehensive fix, either, but at least they have proposed changes to partly address it, vs just allowing it to continue a march to default. Fiscal conservatism demands that it be returned to solvency w/ fixes to payroll taxes (caps) and retirement age adjustments.

 

[seminole97]

I agree the only rational and responsible position to have is to oppose spending the government can’t afford.
My question still stands: What can the government cut that would negate the need to raise revenue?

The only thing that is non-negotiable is actually the debt expense (14th amendment).
So you have to cut back the military empire, and you have to roll back government transfer payments insofar as they are financed by increasing debt.

I understand SS is supposed to be separate but government has colossally ****ed that up as well, so I don’t quite understand your point on that. Are you suggesting the government just give the baby boomers the middle finger and stop paying out benefits?

I'm sorry I was misunderstood.
FDR gave America the middle finger with this stupid ponzi scheme. That's done.
Baby Boomers are still getting 100% of promised benefits (22 tax increases later), but in time the IOUs at the Treasury will be burned through, and the payroll taxes will cover ~77% of benefits for the tail end of the Boomers and those who follow.
Ponzis can't work. The government didn't 'screw it up', aside from convincing the public to support it in the first place.

So, realistically, how do you see this working out if the government only decreases spending?

None of the debt is dated beyond 30 years, most of much shorter.
The decision to run deficits is wholly political, and the inflation that results is wholly the negative aspect of a deliberate and ultimately regressive policy choice to spend more than the country taxes.

When look back to the 1950s, or whatever decade with a different income tax rate structure the Progressives demand, I see less than 20% of GDP captured in taxes.
So we need to find a way to spend under that reality, and not let the Left throw a tantrum about a return to Clinton era spending levels.
It was not 'End Times' for crissakes.