Congress passes the BBB – and before the Fourth, as well
The GOP-led House passed the One Big Beautiful Bill Act in a 218-214 vote Thursday following hours of relentless arm-twisting and deliberation that included the longest floor speech and longest procedural vote in the body’s 236-year history.
In the end, just two Republicans, Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania, voted against the measure after Trump held 11th-hour White House meetings Wednesday with more than a dozen holdouts — before deploying his Truth Social account in the final stretch.
“Largest Tax Cuts in History and a Booming Economy vs. Biggest Tax Increase in History, and a Failed Economy. What are the Republicans waiting for??? What are you trying to prove??? MAGA IS NOT HAPPY, AND IT’S COSTING YOU VOTES!!!” Trump, 79, erupted just after midnight.
I wrote about the bill at some length this past Tuesday. It’s not perfect – fancy that. It has things to like and things to not like, and to top it all off it’s so long that it will take a while to get clear on what’s actually in it and what isn’t. The Democrats, of course, mischaracterize it as awful, but what else is new? The proof will be in the results.
Trump is right, though, that doing nothing was going to lose votes for members of Congress. People are fed up, and the tax cuts were due to expire. I don’t think anyone should underestimate how difficult it was to herd the GOP cats into passing this when the majorities are razor-thin. It’s quite an accomplishment for Johnson and Thune, and I doubt it would have happened if McCarthy and especially McConnell had still been in there.
More:
The final vote was further delayed by House Minority Leader Hakeem Jeffries (D-NY) reading letters from constituents who expressed concern about their Medicaid benefits being stripped.
The House Democratic leader would end up using his “magic minute” of debate against the bill to stall its passage for almost nine hours, shattering the record previously held by former House Speaker Kevin McCarthy (R-Calif.) in 2021 during his opposition to the Build Back Better Act.
“It’s an utter waste of everyone’s time, but you know, that’s part of the system here,” Johnson groused to reporters about Jeffries’ stall tactics.
“It takes a lot longer to build a lie than to tell the simple truth,” the speaker later clapped back during a floor speech just before voting on the actual bill took place.
Trump will sign it, of course.
… the tax cuts were due to expire.
Does anyone know if the tax rates, after passage of the BBB, will expire in 10 more years? Or are they “permanent” now, barring new modifying legislation?
So I’m seeing the new talking point on the right-leaning blogs that the BBB is needed to help the economy grow faster than the debt, and so that it doesn’t rein in spending or borrowing isn’t the main concern. That is completely innumerate.
The national debt in Q1 2008 was about $9.4 T. As of Q1 2025, about $36 T. That’s an average of 8.2% annual growth over the last 17 years. The economy has never grown at that rate for that long since it was measured. GDP was $14.7 T in 2008 Q1 and $30.0 T in 2025 Q1, an average annual rate of 4.2%.
How is the economy, no matter how good, going to grow past the debt if spending and borrowing are not restrained?
That average is not materially skewed by 2020, either: since Q1 2021 debt has been growing at 8.0% annually, thanks to how Congress continues to manage the budget despite the promises of the House GOP leadership to change it.
Out debt to GDP ratio is currently #10 in the world, worse than such paragons of fiscal discipline as Cuba, France, and Canada but below Italy, Greece, and Venezuela–for now.
But I guess we’ll just continue to fail to hold the GOP accountable for making meaningful changes, we’ll continue to cheer every time the letter R outvotes the letter D, and see what happens in another 17 years while the debt continues to grow, all the boomers retire and get to their very expensive end-of-life care, and the economy grows at half the rate of the debt, shall we?
The numbers are easy enough to see: GDP would be at $69 T given 5% annual growth with no recessions, versus a national debt of $133 T having grown at 8%, over 17 years. At 193% debt-to-GDP ratio vs today’s 120%. I am skeptical that things could go on that long, that the government would ever be able to sustain that without lots of inflation.
The math does not care if the GOP is really doing its good faith best or is scamming us, the math does not care how slim the majority was or why it was hard to route around the filibuster or override/fire the parliamentarian this month (versus last month when both those things were done). The math is what it is. We continue to be on an unsustainable path, nothing meaningful is being done about it, and when the crash comes blaming the Democrats for it and saying the GOP did their best and the Dems would have been worse will mean sweet FA.
But who remembers January 2025? That was WEEKS ago.
”Does anyone know if the tax rates, after passage of the BBB, will expire in 10 more years? Or are they ‘permanent’ now, barring new modifying legislation?”
According to Wikipedia, the tax rates are permanent, but the provisions creating tax deductions for tips, overtime, and Social Security expire in 2028.
PS: For those wondering what’s in the bill, Wikipedia has an itemized list. I have not checked it against primary sources, however, so be forewarned.
Now that the bill has passed, we can read it to see what’s in it. It looks like they increased the state and local tax deduction limit to $40 K from $10K. Even though I live in high tax California, proposition 13 has saved me from needing to use the deduction. Even if it cost me, I do not think they should have raised it. The Democrats flipped three House seats from Republican to Democrat here in 2024 and I don’t think the deduction limit made any difference. It was all Trump derangement.
@TommyJay:Does anyone know if the tax rates, after passage of the BBB, will expire in 10 more years? Or are they “permanent” now, barring new modifying legislation?
It’s not hard to search for this.
Most of what affects individual tax rates are “permanent”, until Congress changes it again. Depends on your situation how affected you might be by what still expires.
also redrawn districts and that month long of counting,
the previous set of tax rates, had an eight year window,
@Bob Wilson:Now that the bill has passed, we can read it to see what’s in it.
Yes, I believe a different Speaker of the House once said something similar. Back then the national debt was growing at 8% annually. Sure glad we have a different party in charge which grows the national debt at 8% annually.
And here comes Dathan again to denounce the GOP for all of the federal deficit spending since the first year of the Obama administration. You know, such well-known GOP spending as Barack Obama’s $787 billion stimulus bill, Joe Biden’s $891 billion Inflation “Reduction” Act, and Biden’s $1.9 trillion American Rescue Plan.
And let’s not forget the Democrats’ stated policy of filibustering every spending bill that passes the House so as to force the federal government to rely on continuing resolutions that lock in that “one-time” spending every year thereafter.
Now, I’ll be the first to admit that the Republicans have not been adequate to the task of reining in federal spending. In fact, I’ve publicly criticized the very bill that passed today. But to denounce the Republicans for federal spending with nary a discouraging word for the Democrats is the height of folly and, I suspect, disingenuousness. It is like blaming Moses for the food supply in the Sinai and suggesting a return to Pharaoh. Yeah, things will the much better under
Pharaohthe Democrats /s.If you want to cut federal spending, you need to increase Republican majorities, not hand everything over to the Democrats.
N. C., all excellent and pertinant questions.
How far might the following go to reduce the deficit?
– The tariffs
– Getting the Fed to reduce rates
– Supercharging the US economy and significantly reducing unemployment
– Keeping DOGE hard on the scent
– Using EOs to offset, reduce or even eliminate some (or many) of the excesses implemented in the bill to get it passed by both houses.
– Reducing monetary commitments to the UN, NATO, the WHO, etc.
– Other
@mkent: the GOP for all of the federal deficit spending since the first year of the Obama administration. You know, such well-known GOP spending as Barack Obama’s $787 billion stimulus bill, Joe Biden’s $891 billion Inflation “Reduction” Act, and Biden’s $1.9 trillion American Rescue Plan.
The math doesn’t care.
$36 T – $9.4 T = $26.6 T. What you have there adds up to only $3.6 T.
If you want to cut federal spending, you need to increase Republican majorities, not hand everything over to the Democrats.
That is a false choice. No one here said “hand everything to Democrats”. We need Republican majorities dominated by real fiscal conservatives and not fake ones.
That would mean targeting a few of them in primaries. Does not mean electing Democrats. Target just a few at a time, the rest will come to Jesus. They don’t want to lose their seats. You can settle for a slightly less liberal one if you need to, but you must punish some of them. When they see that each of them has personal consequences, they will fly right. When they are always let off the hook they will never change.
When the Dems say to blacks or Jews or women “but Republicans!” we call that “the plantation”. Republicans should not have their own plantation, but I see that some of us cheerfully sign up for it.
But you look at this chart, and you will see that the party in control of Congress did not matter that much, it was practically the same 8% annual growth. You get some culture war noise, some nibbling around the edges of problems, and the same 8% annual growth.
It will crash unless it is fixed and it will not matter who was to blame. The math does not care.
@Barry Meislin:
N. C., all excellent and pertinant questions.
How far might the following go to reduce the deficit?
Jack squat. The debt grows at 8% and the economy at less than 5%. The debt has grown twice as fast for the last 17 years. For “superchargin” the US economy, no one has a magic wand to create sustained 8% economic growth, so we are never going to catch up unless we curb spending and borrowing.
Nothing you said makes a dent in it, and some things offset other things.
For example, you said “DOGE”. DOGE was just blown off by the Republican-majority Congress. Even the hundred-ish billion they found was blown off, last year’s deficit was $1.8 T. DOGE is not going to save us and find $1.7 T in money. That is Congress misusing its power, that’s not mistakes or fraud. If DOGE did find it Congress would have to agree and the whole problem is they don’t.
As for EOs, a budget passed by both Houses of Congress is a law. EOs don’t cancel out laws.
Tariffs are kind of tax. You can’t tax your way to trillions of deficit reduction AND “supercharge” the economy at the same time. Tariffs are another $0.1 T like DOGE and we need at least $1.8 T.
Then the foreign aid stuff, again, that’s like $0.1 T and we need $1.8 T.
My favorite take so far (emphasis mine):
I don’t think anyone is prepared for what they just did w/ ICE.
This is not a simple budget increase. It is an explosion – making ICE bigger than the FBI, US Bureau of Prisons, DEA, & others combined.
It is setting up to make what’s happening now look like child’s play. And people are disappearing.
AOC July 3, 2025 at 11:58 AM
https://bsky.app/profile/aoc.bsky.social/post/3lt3fvohzjc2q
Correct, Sandy. Homan is literally coming for your illegal constituents – one by one by one. Soon they’ll all be gone.
Until voters feel the actual cost of these huge deficits, there will be no incentive to reign in spending. Half of the country pays no income tax. Why would those folks understand or even care how bad is the balance sheet of the country.
As long as the checks keep flowing, the tax credits keep payments low, there will be no reduction in spending.
Ron Johnson had a good proposal to start the process of reducing spending. Take the 2019 budget, increase it by inflation and population growth and set the budget at that level. I think the figure he was suggesting would have reduced the deficit by about $800 billion.
Historically we’ve had deficits of around 3% of GDP. We’re currently at around 7%. When interest rates were near zero, it would have been possible to cut the budget $800 billion, since that’s the increase in the budget caused by rising interest rates.
The deficit projections I’m seeing so far for 2025 are too politicized, with baseline games and other narrative devices. In the next few weeks two numbers will emerge:
X: Projected Federal revenue for 2025
Y: Projected Federal expenditure for 2025
Y – X = D, the deficit. I expect the deficit will be at least $1.8T, what it was for 2024. I’ve seen projections of $2.4 T but like I said, we can wait for the true numbers to emerge, but if D is not less than $1.8 T then the GOP has delivered something worse than they did under Biden.
That is the math. The math does not care if Trump wanted it, if the GOP sold us out, or has the best intentions but gosh darn it just not enough votes and the parliamentarian was just so mean. The math does not care.
2/3 of the money we borrow is to pay the interest on the money we already borrowed. We’re 17 years down this road. I can’t time the market, no one can, but another 17 years doesn’t seem likely.
When the fire department shows up to your house with squirt guns instead of fire trucks, most people don’t look at it as a “don’t let the perfect be the enemy of the good” situation. (If the current projections pan out, they showed up with squirt guns full of kerosene instead of water.)
Most people see that as, some people committed to delivering a different outcome, and they are not doing anything remotely like what is needed to make that happen, and so some of those people ought to be replaced with someone who does better.
One of the most prominent of those people said only in January of this year:
He and his counterpart in the Senate have instead delivered an outcome that is the polar opposite of “fiscal responsibility” and “meaningful spending reforms” and “more sustainable fiscal trajectory”.
It’s great that we’ll have a neater deck chair arrangement, a pity that we didn’t do anything about the water pouring into the hull, but let’s just be happy with the win and not let the perfect be the enemy of the good and remember that 1/20th of a loaf is better than none, if not as good as the 1 we were promised, and let’s keep those deck chair arrangers in charge of the ship because think how bad it would get if the OTHER guys started rearranging the chairs instead of plugging the breach in the hull.
https://babylonbee.com/news/continental-congress-reluctantly-agrees-to-trim-down-name-of-big-beautiful-declaration-of-independence
Brian E.
As to voters feeling….
There is no arrangement in this country where the bad results of your vote show up on your porch with a copy of your ballot attached.
The results go through various agencies, NGOs, economic verities like….higher taxes mean less of what’s taxed or it costs more……
I understand what Trump was saying about the Fed keeping interest rates too high.
Rates in the EU, UK, and China are about 2 to 3%. Japan is about 0.4%. Here they are 4.3% per the IMF. Even the IMF’s “Special Drawing Rights” interest rate is 2.9% and that’s for distressed loans to countries in financial trouble.
So where is the tax-free Social Security I was promised?
Until voters feel the actual cost of these huge deficits, there will be no incentive to reign in spending. Half of the country pays no income tax. Why would those folks understand or even care how bad is the balance sheet of the country.
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They pay payroll taxes and property taxes and sales taxes influence the sticker price of goods.
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Our politicians are quite capable of being completely unresponsive to public opinion when it suits them, so you cannot lay this disaster on constituent kvetching. Efforts to put Social Security spending on a sustainable trajectory are the most likely to be sabotaged by constituent kvetching. For the most part members of Congress are doing what they want to do or what their attentive publics prefer.
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Republicans have put themselves in a straight-jacket for > 40 years by making a fetish of reducing marginal income tax rates, though they harbor the reasonable suspicion that if the Democrats control congressional committees, any increase in revenue streams will be diverted to project to feed their clientele.
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Right now, Congress is so closely divided that the usual crew of careerists in the Republican caucus could sabotage just about anything.
We know in a coarse way what has to be done:
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A. Institute cohort-specific retirement ages for Social Security and Medicate, so the ratio of beneficiaries to working adults bounces around a set point.
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B. Stop awarding disability benefits to people for ‘anxiety disorders’ and ‘mood disorders’. Last I checked, about 1/4 of the heads of households awarded benefits received them from these two sets of ‘ailments’.
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C. Maintain federal spending on Medicare at a fixed % of gross domestic product through the institution of a deductible adjusted each year. Limit federal distributions for Medicaid to a fixed % of gross domestic product and remove impediments to the imposition of deductibles by state governments.
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D. Fix mean employee-compensation-per-worker among the federal workforce at a particular ratio of that in the private sector. Finance federal employee benefits out of levies on employees’ notional compensation, levies which will appear as with-holdings on employee pay stubs. Allow certain categories of federal employee to earn early retirement credits – military, uniformed police, fire and rescue personnel, and construction workers – but only those employees. These aside, federal workers should be retiring at the same time as everyone else and federal workers should have defined-contribution plans. (Fully implementing this will take decades).
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E. Eliminate as far as possible no-bid contracting by federal agencies. Institute an oversight agencies whose task is locating situations where contract specs are written so as to pitch the business to one particular contractor.
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F. End the distribution of grants to private corporate bodies bar for disaster relief (at home and abroad). Make use of such grants only because the exigencies of the moment may require it. Limit grants to agencies working on site or able to put boots on the ground. Quite a mess of federal agencies would be dissolved or see their budgets radically cut. Among the former, would be NSF, NEA, NEH, CPB. Among the latter would be the NIH and FCC.
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G. Limit federal grants to local government to (1) disaster relief and (2) payment-in-lieu-of-taxes on federal real estate. Distributions under the latter would be part of a locality’s general revenue and could be used for anything; the compliance cost of such a program would be in configuring your tax assessment system so as to be eligible. The District of Columbia and the low census insular territories might also be eligible for such distributions, but not the state governments or Puerto Rico.
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H. Limit grant distributions to state and territorial government to (1) Medicaid, (2) unemployment compensation, (3) a residue of the federal highway program, (4) general revenue sharing to the tune of 2.3% of gross domestic product; the distribution to each state (and territory) would be directly proportional to resident population, directly proportional to mean-employee-compensation-per-worker in the state’s private sector workforce and inversely proportional to personal-income-per-capita in the state; Mississippi and Puerto Rico get comparatively large per capita distributions, Connecticut and New Jersey get nothing.
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I. In re foreign aid programs, favor the provision of services by federal employees and contractors, equipment, and credits to purchase equipment. Be vary chary about providing cash. Be selective about which intergovernmental agencies to join and finance.
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J. Limit the federal welfare programs and the like to (1) overseas development and relief, (2) domestic disaster relief, (3) veterans’ benefits, (4) the Big Five programs (Social Security, Medicare, Medicaid, unemployment compensation, SSI), (5) services delivered by federal employees and contractors to niche clientele (civilian federal employees posted abroad and their dependents, servicemen and their dependents, residents of the low census territories, reservation Indians, miscellaneous persons in itinerant occupations, people living in remote areas, people facing actions in federal court); (6) tax rebates distributed to low wage workers, to the disabled, and to the elderly. Everything else goes and the administering agencies go with them (among them the Food and Nutrition Service (USDA), HRSA (HHS), SAMSHA (HHS), the Administration on Aging (HHS), most components of the Administration for Children and Families (HHS), the entire Department of Housing and Urban Development. Federal financing of education would be eliminated except for veterans and niche clientele.
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K. Limit military spending to about 3.8% of gross domestic product and federal spending on miscellaneous services to 1.8% of gross domestic product. Any increases in the latter category would be for immigration enforcement and only immigration enforcement.
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L. End the USDA’S subsidy programs and rural development programs and institute countervaling tariffs on agricultural goods.
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M. Close down federal agencies which make loans, the Federal Reserve Banks excepted. Liquidate all federal loan portfolios (the Fed’s excepted) to retire outstanding debt. End loan guarantees. Expand the circumstances under which student loans might be discharged in bankruptcy proceedings.
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N. Sell off federal land to retire debt. Start with federal grazing lands.
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O. Limit the menu of veterans’ benefits to rehabilitation care, medical care for service-related ailments, long-term care, cash pensions for elderly and disabled veterans (and their survivors), vocational training (typically in post-secondary institutions), vocational training for spouses of disabled veterans, grants for adapting the residences and vehicles of disabled veterans, and funeral and burial expenses. Rebalance modes of provision between direct service provision, vouchers, and insurance.
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P. Finance Social Security, Medicare, and unemployment compensation through a % assessment on total employee compensation not to exceed a particular dollar value. The maximal dollar value would be a function of nominal-employee-compensation-per-worker and would be adjusted annually. For the finance of unemployment compensation, there would be a supplementary charge on employers which would be actuarially-rated. At this time, a 17% assessment on employee compensation would be about right to make to the programs in question sustainable.
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Q. Set income tax collections at about 7.5% of gdp and place half in a loosely dedicated fund which finances Medicaid, SSI, veterans’ benefits, miscellaneous subsidies to niche clientele, domestic disaster relief, and overseas development and relief. The other half would be rebated. You could structure the tax so that the more affluent 40% of the population would have a liability of between 0% and 40% of discoverable personal income (but with the mean at around 17%) and the less affluent 60% would have a negative liability. The negative liability would be intended to (1) replace the EITC and miscellaneous federal welfare programs, (2) partially compensate the less affluent for increased payroll taxes, and (3) partially compensate the less affluent for the effect of a hypothetical federal value-added tax on their purchasing power. ‘Taxable personal income’ might be understood to be all that benefits the material welfare of your household except (1) in-kind benefits received from governments and philanthropies, (2) judgments and indemnities (understood as a restoration of one’s assets), (3) gifts and inheritances (the latter understood as an adjustment of one’s assets, the former as substitutable with the latter, and both as subject to separate taxes), (4) capital gains (subject to a separate tax), (5) the excess of nominal interest over real interest; (6) vouchers, insurance, and cash distributed under the rubric of federal benefit programs named; and (7) certain private retirement benefits. You define in the first instance someone’s federal income tax liability as [(0.4 x T) – P – (m x c)] where ‘T’ is taxable income, “P” is one’s payroll tax withholdings for the calendar year, “m” is the members of one’s household, and “c” is a dollar value credit. Calculating ‘m’ would require a worksheet as some youths and incompetent adults are under joint custody arrangements or have support obligations attached to them, as you might have quondam dependents between the ages of 18.0 and 21.0, and as the composition of the household may have changed during the year; all this would make funny fractional values for household membership common. If the formula resultant is a positive number, that would be your liability; you subtract your withholdings for the year and that determines whether you send an additional remittance or are due a refund. If the formula resultant is negative, the absolute value of the resultant would be the maximum possible net rebate you were due. You’d have to have a worksheet to calculate the cap applicable for your household/. If the cap is below the absolute value of the formula resultant, you receive only the capped value. You add what you are due to ahy withholdings for the year and the sum you are due is paid out to you in installments over the course of the next year. If none of the signatores of the return qualify as elderly or disabled, the cap would be a function of your earned income. If all were elderly or disabled, the cap would be a function of personal income per capita in your region. If one was elderly / disabled and one wasn’t, the cap would be an average of the result of those two functions. If the status of your taxpayers changed during the year, you calculate the cap for one part of the year and one for the other and then calculate a weighted average. As for ‘regions’, each off shore territory of the United States would be its own region; the continental United States you might divide into as few as two regions (sunbelt and plains v. the rest). If you’ve moved, you’d calculate a weighted average.
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R. Aim to collect 2% of gross domestic product in federal corporation taxes. One can imagine a four-fold classification of corporations: intrastate v. interstate and business v. other. Intrastate corporations might be excused from federal corporation taxes. Non-profits &c. might face a tax liability which is a function of (1) employee-compensation-per-worker in the economy at large; employee-compensation-per-worker at the agency in question; and the compensation paid to the agency’s most handsomely compensated employee. A non-profit could avoid liability by keeping it’s compensation schedules and especially executive compensation within bounds. A business corporation might be given the option of paying in cash or paying in shares. If they paid in shares, the voting rights on them would be in abeyance until the shares were sold by the government for revenue; those of publicly traded firms could be sold on the capital markets and those of private firms could be sold in online auctions. If you elected to pay in cash, your liability would be (a x (1-e) x R), where ‘a’ is a %, ‘e’ is the portion of your outstanding shares in a compliant employee stock-ownership program, and ‘R’ is total refenue. If you paid in shares, your liability would be (b x (1-e) x S) where ‘b’e is a %, and ‘S’ is total outstanding shares. One would set the values of ‘a’ and ‘b’ so that the typical company would be indifferent over time as to which payment method to use and so the total take would approach 2% of gross domestic product in a typical year.
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S. Aim to collect about 8.5% of gross domestic product in a federal value-added tax. The tax would apply to all transactions to which income, payroll, gift-and-inheritance, and capital gains taxes did not apply bar sales of donated, discarded, and salvaged property. A rate of 17% on calculated value-added might be riht.
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T. In calculating capital gains liability, multiply the purchase price by the change in the GDP deflator since the purchase and assess a tax of 40% on the differenbe between the purchase and indexed sales price. If you sold it at a loss, you have a credit with the federal tax collectors which is indexed annually and which you can work off with future income or capital gains liability. Any revenue the government obtains can be deposited in the loosely dedicated fund with income tax revenue.
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U. You can require by law that people register the sum of gifts and inheritances they’ve received in a given year if such exceed a threshold value. The threshold would change each year and be a function on nominal personal income per capita. The federal government would each year calculate a lifetime-to-date figure for the sum of receipts you’ve had by applying an index to each year’s receipts equal to the change in nominal-personal-income-per-capita since the year of the receipt. If you’re over a certain threshold of lifetime-to-date recipts, further receipts incur a notional liability of 40% of what you’ve received; your actual liability would be your notional liability less what you’ve remitted to your state government. Any revenue the federal government received would go into a holding fund.
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V. Tols, fares, and fees charged by the federal government would go into dedicated funds meant to finance particular agencies. The court system, the civil aviation apparat, and the maintenance of long-haul Interstates might be financed by such charges.
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W. Federal excises might be reduced to four: liquor, tobacco, firearms, and motor fuels. A merchant’s federal liability might be equal to a $ value per physical unit less what the merchant paid to state government.
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X. Federal tariffs, excises, Pigou levies, fines, and unclaimed property might be placed in a holding fund with the gift-and-inheritance receipts. At the end of the fiscal year, you distribute the contents of the holding fund to federal income tax filers on a per capita basis.
Why do Republican/Conservative legislators refuse to vote for cuts to spending?
They fear being tossed out of office if they do. There are some exceptions in conservative districts where the opposite is true, but this is a small minority.
We can’t cut spending to balance the budget. Taxes will have to increase as well. Given how Congress was unwilling to address this in even a modest way, it’s unlikely the debt increases will be brought into a reasonable level. We’re likely see a $70 trillion debt in 10 years.
We will need 6-8% GDP growth consistently over years, as well as spending cuts and tax increases in addition to the increased receipts from high economic growth.
They fear being tossed out of office if they do.
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Some in marginal districts might. For the most part, the careerists do not wish to do so. The Republican plurality in the House may have been sufficient 14 years ago, but they did not hold the Senate or the presidency.
We can’t cut spending to balance the budget.
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Certainly we can, just as we can increase taxes. Our politicians refuse. This will not end well.
It should have read, “we can’t cut enough spending to balance the budget.”
All of this leads to one conclusion, inflate the debt away, which will destroy everything. There has been discussions of whether the new Fed inflation target should be 3%, but why not 4% or 5%? What is magic about 2%?
Inflation crushes those on fixed incomes, but hey, they need to take one for the team.
Where’s Ross Perot when you need him?
Senator Ron Johnson had a good idea to make a dent in the deficit spending.
We could start with zero base budgeting.
Sequestration would also be a good start.
Both Brian E and Art Deco have presented solutions that would work. But the problem is not that no one knows what to do. It’s that a majority of the political class of both parties is unwilling to do any of things that would do it. The Party of Grift won’t give up grift and the Party of Government won’t shrink government, and most of the House and Senate has membership in both Grift and Government.
It can’t go on forever, so it won’t. It’s quite likely that most of us here will live to see it break.
Niketas:
Do you really think most voters would support any politician who actually did what you say they should do?
@Niketas Choniates: [Our] debt to GDP ratio is currently #10 in the world…
One may see that glass as half-full. I know I do. 🙂
In this epic race to the bottom we will see at least nine other countries go splat before we do.
Maybe we’ll learn something from it.
@neo:Do you really think most voters would support any politician who actually did what you say they should do?
The math doesn’t care how the voters see it. They’re going to like fiscal collapse a lot less, but the math doesn’t care about that either.
@huxley:In this epic race to the bottom we will see at least nine other countries go splat before we do.
It need not come to that. Some countries lower down on that list already did. They got lower the hard way. We COULD learn from their example, or we could try to beat math with narrative. I have an inkling how it will go, and I imagine you are much of the same mind.
Argentina: 73% debt-to-GDP
Zimbabwe: 59% debt-to-GDP
US: 123% debt-to-GDP
Do you really think most voters would support any politician who actually did what you say they should do?
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No clue what motivates voters anymore. State legislatures seem to be able to balance their books in a rough sort of way. Congress is a disaster. There really is no excuse for any of this. For Trump it is not a priority. We’re going to learn the hard way, it appears.
The implication of Speaker Johnson’s remarks given the events of the last six months is that we are now reduced to hoping for a conscientious and patriotic autocracy – a Fujimori, a Pinochet, a Franco. Not a happy business.
Niketas:
My point is not what will happen some day in the future – although that certainly is a relevant point. My point is that, if voters won’t vote for politicians who will do what is necessary to prevent the problem, the point about the future is moot – for now. And the problem cannot be resolved in time to matter.
According to Grok, and other sources I have read, the reconciliation bill only allows cuts to mandatory spending. The bill makes small adjustments to Medicaid and SNAP of $1.4 Trillion over 10 years.
Whether or not Congress can be cajoled/threatened by voters to make other cuts, possibly through sequestration is unlikely.
Here’s a synopsis from Grok about the reconciliation process:
-Grok