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https://x.com/unusual_whales/status/1912571852456608095
As I stated in the tariffs thread, I did not want more market distortions (farm subsidies), and view any new spending without offsetting cuts or revenue to be excess spending.
We’re at an inflection point on debt. If we have to refinance all the debt the Biden administration rang up at 3-5 year maturities, at 4-5%, the US will have to either default on treasuries, or drastically cut everything, including entitlements. That the Republicans were willing to pass a continuing resolution shows how feckless they are on this issue. It is also why I oppose DOGE dividends or other return of taxpayer money. I understand the multiplier argument, but the consumer is tapped out and consumer debt levels are high as well. There are no easy choices right now, but making them will head off harder choices ahead.
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Outstanding point, rog. Basically, it’s the reason I left the Republican party over 20 years ago, Bush’s refusal to address the mounting national debt. The lowest the debt has ever been, expressed as a percentage of GDP, was in 1929. Then President Hoover, reviled as the Great Depression president, actually increased the debt during his term from 16% to 17% to 22% to 34%.
That old boy was spending. FDR pushed it to a new level, jumping it to 40%, where it held steady until 1938 and 1939 when the Depression was supposedly over, but the debt jumped to 42% and then 51%, and of course WWII skyrocketed the debt.
In the wake of WWII, America’s share of global manufacturing jumped from 1/4th prewar to one half. And our debt declined from 119% of GDP in 1946 to 31% in 1974 and again in 1981, the year of the Reagan tax cut. It’s been climbing ever since. It went down in Clinton’s last two years, then inched up by 1% a year every year in Bush’s two terms.
Then Obama took over and it exploded, increasing from 68% in Bush’s last year to 82% in Obama’s first year, then 90% his second year, then 95%, then 99%, increasing to 105% in Obama’s last year. And remember, that was with the Fed’s interest rate of 0.25% for seven of Obama’s eight years in office.
Trump actually kept it the same for his first three years. Then COVID hit, and it increased from 107% to 129%. It is 122% now, far above WWII debt levels.
We have to make the hard choices. Agreed.
Audaces fortuna iuvat
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