Perhaps, if reviewing and reducing spending is the goal, it should be an actual earnest effort. One that starts with collecting data, analyzing spending, and making recommendations instead of knee-jerk attempting to cancel things and lay off workers before understanding what they do.
There are also ways to reduce spending or improve spending efficiency without simply cutting spending on existing programs. A major point of spending is on health care, and I have seen analyses that the US spends much more per capita for health care with worse outcomes than some other western countries.
Careful, considered, data-driven healthcare reform that focuses on improved outcomes and reduced costs could make a much bigger impact than whatever it was that DOGE was trying to do.
no, it wasn't even a real effort. A REAL effort would have been to collect what all is being done, and seeing where things should be removed, processes changed, etc. This was a slash and burn.
One thing about being the world reserve currency is that there needs to be enough currency out in the world to circulate. When there's not enough currency of a certain type, people switch to other things. As the world has become much richer, it has a huge demand for US dollars, mostly in the form of T-bills. That's "free money" for the US government to take from others in the world.
The USD as reserve currency has enabled lots of extra spending and growth in the US, in a virtuous cycle of being the reserve currency because the US has the strongest and greatest economy, and then the reserve status increases our economic strength. Over the past 75 years the US spent a huge amount of effort to place itself into such a privileged and lucky position.
There will be some point where the currency might be devalued on the world stage because of spending. But what is happening right now because of Trump is a huge devaluing of the currency because of loss of trust in the US:
The true death spiral will happen when the rest of the world fully loses trust in the US. Right now we are too big to fail, but it doesn't have to be that way if we keep on pulling back from the rest of the world. The biggest losers from this pull back is the US itself, and the enormous economic privilege it gave us.
That big spike in deficit spending came from the initial Trump tax cuts in term one, and it looks like we'll be getting an even bigger spike in deficit spending now in term 2 with even bigger tax cuts for the wealthiest in the US, with zero relief for regular people (except those in real estate.... let me tell you about all the special tax benefits for real estate investors you see when you start doing your taxes as a sole proprietor, whew....)
Anyway, we will have to wait for another Democratic president before there's any addressing the deficit, if history is any guide. We only see deficit reduction under Democratic presidents and massive deficit increases under Republican presidents. But as I started, it remains to be seen if deficits are a bad thing inherently; it's more about the quantity of the deficit and whether we lose power or gain power economically from the deficit. Military spending is mostly "dead" money that does nothing to expand the economy, but research and funding the poor ends up increasing economic activity and growth.
Edit: and destroying small things like USAID greatly lessens trust in the US, and costs us far far more in dollars than we spend on it. And that's ignoring all the good for humanity that feeding starving people does.
Sorry, there are some things that are not true there.
Presidents that had a surplus include Coolidge (R), Truman (D), Eisenhower (R), Johnson (D) and Clinton (D).
Clinton is strong in my memory, he was working with Newt Gingrich’s Republican congress. The two seemed to work well together. Some suggest that Clinton’s stances on gay marriage, immigration, incarceration, etc. give him a right-leaning stance in today’s world.
It is 100% necessary, but without the backing of Congress to enforce the spending cuts and reductions in administrative bloat, the efforts will matter little in the grand scheme of things. Trump himself really didn't get behind the DOGE stuff the way he needed to to influence real lasting change.
It is not "100%" necessary. Worst case, we just print dollars to pay off the debt. The US Government is not a business in the sense dollars, it's a business in the sense of issuing equity out in the world. And just as a company can print more equity at any time, the US government prints equity, equivalently, by either printing dollars or by issuing Treasury Bills (debt), which are merely more complicated dollars. T-bills are more complicated dollars in two ways 1) they throw off a small amount of interest making them more attractive than regular dollars, 2) their value can be retroactively changed whenever the US changes interest rates. That second point, they dynamic revaluation of previously issued T-bills by interest rate changes, is what gives a lot more monetary control than if we just printed dollars.
But if we are in a situation where there's been a bond investor revolt, and there's nothing else to be done, we just give dollars to everyone as T-bills mature rather than issuing more debt, and we retract from the world stage, and become like other countries in the world.
We are a loooooong ways away from that position, but this presidential administration is behaving so erratically that the US dollar is closer to losing its privileged status than I ever thought possible. It's such irrational, damaging, and erratic behavior going on right now that everything could topple if it continues for much longer.
Perhaps, if reviewing and reducing spending is the goal, it should be an actual earnest effort. One that starts with collecting data, analyzing spending, and making recommendations instead of knee-jerk attempting to cancel things and lay off workers before understanding what they do.
There are also ways to reduce spending or improve spending efficiency without simply cutting spending on existing programs. A major point of spending is on health care, and I have seen analyses that the US spends much more per capita for health care with worse outcomes than some other western countries.
Careful, considered, data-driven healthcare reform that focuses on improved outcomes and reduced costs could make a much bigger impact than whatever it was that DOGE was trying to do.
> such an effort is necessary
DOGE gave cover for the GOP to blow out our deficit by trillions of dollars. The net effect of the whole system was to massively increase our debt.
I’ll gladly vote for any politician that pledges to cut spending and raise taxes. Democrat or Republican, either is fine.
If I recall, they went after GAO first and cut the people who audit federal agencies for waste and overspending.
no, it wasn't even a real effort. A REAL effort would have been to collect what all is being done, and seeing where things should be removed, processes changed, etc. This was a slash and burn.
Yes because government employees are famously good at judging how to spend taxpayer money.
The idea that they aren’t is nothing more than a right wing meme, presented without evidence while corporate wastefulness is ignored entirely.
6 replies →
> It’s likely tax increases will be needed besides [budget] cuts.
Not just likely. It's certain. But instead, we got tax cuts.
Things that make you go "hmm..."
One thing about being the world reserve currency is that there needs to be enough currency out in the world to circulate. When there's not enough currency of a certain type, people switch to other things. As the world has become much richer, it has a huge demand for US dollars, mostly in the form of T-bills. That's "free money" for the US government to take from others in the world.
The USD as reserve currency has enabled lots of extra spending and growth in the US, in a virtuous cycle of being the reserve currency because the US has the strongest and greatest economy, and then the reserve status increases our economic strength. Over the past 75 years the US spent a huge amount of effort to place itself into such a privileged and lucky position.
There will be some point where the currency might be devalued on the world stage because of spending. But what is happening right now because of Trump is a huge devaluing of the currency because of loss of trust in the US:
https://www.morganstanley.com/insights/articles/us-dollar-de...
The true death spiral will happen when the rest of the world fully loses trust in the US. Right now we are too big to fail, but it doesn't have to be that way if we keep on pulling back from the rest of the world. The biggest losers from this pull back is the US itself, and the enormous economic privilege it gave us.
That big spike in deficit spending came from the initial Trump tax cuts in term one, and it looks like we'll be getting an even bigger spike in deficit spending now in term 2 with even bigger tax cuts for the wealthiest in the US, with zero relief for regular people (except those in real estate.... let me tell you about all the special tax benefits for real estate investors you see when you start doing your taxes as a sole proprietor, whew....)
Anyway, we will have to wait for another Democratic president before there's any addressing the deficit, if history is any guide. We only see deficit reduction under Democratic presidents and massive deficit increases under Republican presidents. But as I started, it remains to be seen if deficits are a bad thing inherently; it's more about the quantity of the deficit and whether we lose power or gain power economically from the deficit. Military spending is mostly "dead" money that does nothing to expand the economy, but research and funding the poor ends up increasing economic activity and growth.
Edit: and destroying small things like USAID greatly lessens trust in the US, and costs us far far more in dollars than we spend on it. And that's ignoring all the good for humanity that feeding starving people does.
Sorry, there are some things that are not true there.
Presidents that had a surplus include Coolidge (R), Truman (D), Eisenhower (R), Johnson (D) and Clinton (D).
Clinton is strong in my memory, he was working with Newt Gingrich’s Republican congress. The two seemed to work well together. Some suggest that Clinton’s stances on gay marriage, immigration, incarceration, etc. give him a right-leaning stance in today’s world.
It is 100% necessary, but without the backing of Congress to enforce the spending cuts and reductions in administrative bloat, the efforts will matter little in the grand scheme of things. Trump himself really didn't get behind the DOGE stuff the way he needed to to influence real lasting change.
It is not "100%" necessary. Worst case, we just print dollars to pay off the debt. The US Government is not a business in the sense dollars, it's a business in the sense of issuing equity out in the world. And just as a company can print more equity at any time, the US government prints equity, equivalently, by either printing dollars or by issuing Treasury Bills (debt), which are merely more complicated dollars. T-bills are more complicated dollars in two ways 1) they throw off a small amount of interest making them more attractive than regular dollars, 2) their value can be retroactively changed whenever the US changes interest rates. That second point, they dynamic revaluation of previously issued T-bills by interest rate changes, is what gives a lot more monetary control than if we just printed dollars.
But if we are in a situation where there's been a bond investor revolt, and there's nothing else to be done, we just give dollars to everyone as T-bills mature rather than issuing more debt, and we retract from the world stage, and become like other countries in the world.
We are a loooooong ways away from that position, but this presidential administration is behaving so erratically that the US dollar is closer to losing its privileged status than I ever thought possible. It's such irrational, damaging, and erratic behavior going on right now that everything could topple if it continues for much longer.