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When will people start caring about US budget deficit again?


tede02
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I think about this a lot because the deficit is expanding so rapidly during a "good" economy. If growth softens, or a recession occurs, the deficit and debt are going to explode just as we're on the door steps of the baby boom putting huge pressures on entitlements. It's amazing that basically no one in Washington is talking about it.

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

Republicans USED to care about it in the 70's and 80's.  Maybe even a little in the 90's, but that is largely gone now.

 

People are only going to care when there is some problem...runaway inflation, failed treasury auctions, some type of shock to the system.  Until then?  SPEND AWAY!

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

LOL. That should have been one of my choices.

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People are only going to care when there is some problem...runaway inflation, failed treasury auctions, some type of shock to the system.  Until then?  SPEND AWAY!

 

This is probably spot on. Also, maybe you get another Ross Perot type who brings a megaphone to the issue.

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

 

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

"But everyone else is doing it!"

 

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

Europe are not worse in terms of deficits. Germany actually runs a surplus and even Italy’s deficit is 2.1% if GDP vs US at roughly 4.5%.

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

Europe are not worse in terms of deficits. Germany actually runs a surplus and even Italy’s deficit is 2.1% if GDP vs US at roughly 4.5%.

 

Sure, in recent history deficits have been better, but historically they were not which is why overall debt levels are higher. The debt level is what I was referencing - I apologize that it wasn't clear.

 

Overall, I think the existing stock of debt, once large enough, is likely more important than incremental growth/reduction in that stock of debt.

 

Also, I was generalizing across the monetary union - obviously you'll always be able to find individual exceptions just like you can find states/counties/cities in the U.S. that are exceptions regarding deficits and debts.

 

 

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

True & a perfect example of how much smoke & mirrors get used in politics.

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Some data and interpretation of the data.

Who reads these CBO reports anyway?

https://www.cbo.gov/publication/55551

http://www.crfb.org/papers/analysis-cbos-updated-budget-and-economic-outlook-august-2019

I voted "other".

Answer to the question submitted: "When the music stops". I don't like to borrow but this quote has been borrowed from Mr. Chuck Prince, the guy bright enough to be prescient but not bright enough to do anything about it, at least from a fiduciary point of view.

http://business.time.com/2007/07/10/citigroups_chuck_prince_wants/

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When will people start caring about US budget deficit again?

When their own personal deficits become unendurable.

 

---

 

I don't even know why I bother setting budgets & balancing my accounts.

As always, you seem to be able to efficiently spot the key ingredients.

 

1-I like what the author of the following describes in terms of the dynamics that are currently playing out on your side of the border. The budget haggling is obviously nothing new but the current trajectory seems to be related to the political spectrum polarization and relative absence of moderates in the common grounds section. I like the conclusion that helps to remind the tribe that, basically, this is an individual decision.

"Elections make a difference in the budget process. One thing is sure, and that is whatever congressional budget decisions are made or not made and how they are made (centralized or decentralized), those decisions will have a transformative impact on the future of the America.

As with other congressional budget reforms over the last forty years, in the end the American voters will have the most lasting and significant

impact over Congress making those hard budget choices. As always, the final say about spending, taxing, and deficits lies with the American

electorate."

https://www.american.edu/spa/ccps/upload/the-dynamics-and-dysfunction-of-the-congressional-budget-process-from-inception-to-deadlock-2.pdf

 

2-I'm reading these days The Millionaire Next Door and enjoy it more than anticipated. The book effectively demonstrates that wealth is found in places where less than meets the eye and millionaires, proportionally speaking, seem to operate on a budget much more than others:

"They create an artificial economic environment of scarcity for themselves and the other members of their household."  (page 41)

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  • 2 weeks later...

I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

Exactly!

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

Europe are not worse in terms of deficits. Germany actually runs a surplus and even Italy’s deficit is 2.1% if GDP vs US at roughly 4.5%.

 

Sure, in recent history deficits have been better, but historically they were not which is why overall debt levels are higher. The debt level is what I was referencing - I apologize that it wasn't clear.

 

Overall, I think the existing stock of debt, once large enough, is likely more important than incremental growth/reduction in that stock of debt.

 

Also, I was generalizing across the monetary union - obviously you'll always be able to find individual exceptions just like you can find states/counties/cities in the U.S. that are exceptions regarding deficits and debts.

 

The most important thing is the deficit not the debt.  If your deficit is lower than growth rate of nominal GDP over the cycle you are generally fine.  Total government debt to GDP will never go above some upper bound.  The reasoning behind this is akin to a DCF.  The deficit is the growth rate of your debt, and the nominal gdp growth rate is you discount rate.  As low as your rate of growth is slower than your discount rate overall debt to GDP will stay bounded.  If your debt is above that bounded level, as long as you commit to the same deficit amount, your debt to gdp will actually go down even if are running a (low) deficit. 

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I picked "Other".  Democrats never care about the budget deficit and Republicans only pretend to care about it when there is a Democrat in the Whitehouse.  So the answer to "When will someone care?" is: As soon as there is a Democrat elected President.

 

100%

 

I'm concerned with it, but at the same time both Europe and Japan are worse than the U.S. in that regard and nothing bad has happened yet which emboldens policy makers to continue making unsustainable decisions.

 

When will it stop? When it can't continue.

 

Europe are not worse in terms of deficits. Germany actually runs a surplus and even Italy’s deficit is 2.1% if GDP vs US at roughly 4.5%.

 

Sure, in recent history deficits have been better, but historically they were not which is why overall debt levels are higher. The debt level is what I was referencing - I apologize that it wasn't clear.

 

Overall, I think the existing stock of debt, once large enough, is likely more important than incremental growth/reduction in that stock of debt.

 

Also, I was generalizing across the monetary union - obviously you'll always be able to find individual exceptions just like you can find states/counties/cities in the U.S. that are exceptions regarding deficits and debts.

 

The most important thing is the deficit not the debt.  If your deficit is lower than growth rate of nominal GDP over the cycle you are generally fine.  Total government debt to GDP will never go above some upper bound.  The reasoning behind this is akin to a DCF.  The deficit is the growth rate of your debt, and the nominal gdp growth rate is you discount rate.  As low as your rate of growth is slower than your discount rate overall debt to GDP will stay bounded.  If your debt is above that bounded level, as long as you commit to the same deficit amount, your debt to gdp will actually go down even if are running a (low) deficit.

 

You might be right, but the problem is that deficit growth HASN'T been lower than nominal GDP growth over this cycle. This is precisely why debt/GDP ratios the world over have been exploding.

 

 

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