This week’s “New Rule” bit on Bill Maher’s Real Time show is about the financial apocalypse that might result from the American national debt now being $40 trillion. And despite that, Trump keeps increasing it, despite his promises to cut it. He also says that he’ll give every American $5,000, which will add another trillion to the debt.
And the Left, as exemplified by the Democratic Socialists of America (but also “progressives”), tells us that in the future the government will pay for everyone’s housing, health insurance, food, daycare, medicine, and transportation. (Maher says the DSA promises will cost the government between $72 trillion and $212 trillion.) On top of this we have a growing rate of unemployment, defined as “people who are looking for work but can’t find it.” Maher’s conclusion about what this assumes: “Money is free (to be given away) and consequences don’t exist.”
And he’s right—we do have a problem. Although the problem will not afflict my generation so much, it will squeeze future generations: raising interest rates, reducing government benefits, increasing inflation, and reducing purchasing power.
The panel guests are Democratic political strategist Jessica Tarlov and conservative political activist Christopher Rufo x
I don’t recall his objecting to the ballooning debt under Obama and Biden. Still, he’s right. It’s time to drastically cut the size of government and end the enormous wealth transfers.
It’s fair to criticize how Biden and Obama handled the debt, but it ballooned significantly more under Trump than under them
The U.S. last had budget surpluses under Bill Clinton in the late 1990s.
Right, and politicians from both sides have contributed to that, but Trump has increased budget deficits significantly more than his predecessors. In his first term he increased the annual budget deficit by about $400 billion (before Covid) and the Big Beautiful Bill increases the budget deficit by several trillion
And fiscal conservatives everywhere rejoiced…NOT !!!
My theory, which is mine. Our federal government works best when there is a Democratic President, and a Republican Congress.
And, presumably, a non-mentally-impaired President of either party.
”And the Left, as exemplified by the Democratic Socialists of America (but also “progressives”), tells us that in the future the government will pay for everyone’s housing, health insurance, food, daycare, medicine, and transportation.”
Not housing, but many countries have free-at-point-of-service health insurance, daycare, and medicine as well as education (including university). Luxembourg has free public transportation.
Those things cost what they cost. The difference is whether people pay for them individually or through taxes. The latter option redistributes wealth, gives the poor opportunities they otherwise wouldn’t have, and doesn’t waste money on profits. Those things are fundamentally different from giving each person $5000, the absurd reparations, and so on.
Luxemburg, Phillip, is a good example but wouldn’t work here.
My mayor, the esteemed Mandami, has promised free public transport which people DON’T want.
They want reliability, safety, etc. not a $2 discount on the bus.
As for the reparations in Cali… hilarious!
best,
D.A.
NYC 🗽
One of the strong points of the late-lamented Union of Soviet Socialist Republics was the very low cost of housing accommodation. Beside the nominal charge, many citizens enjoyed the social benefits and jollity of shared kitchens and bathrooms in kommunalka flats. And a significant fraction of the population was provided with completely free housing in one of the many picturesque GULAG facilities above the Arctic circle or in Central Asia. Will the theorists of the DSA be able to provide equally utopian benefits here?
With respect, those things do not “cost what they cost.” When the government gets involved, it distorts the market, as is already the case in the U.S. health care system. Incentives get misaligned, money is wasted, and quality deteriorates.
A system where government limits itself to preventing force and fraud, instead of the overwhelming federal bureaucracy that mandates, among many other things, tying health insurance to employment, would allow and encourage individuals to make the choices that make sense to them. That would align the incentives properly.
A comparison of countries reveals: the more the state is involved in health insurance, the less expensive it is. It is well known that the US has the most expensive per-capita health-insurance costs in the world, but in terms of quality is only about #40. And there are tens of millions who are not insured at all.
No, the free market does not solve all problems.
Free market does not solve ALL problems. It solves some and creates some.
Social democracy does not solve ALL problems. It solves some and creates some. People usually think one excludes the other. Since the skill to discuss things on a rational level is forgotten, they are not likely to conclude otherwise. The exponents of extremes, not compromise or blending of the two ideas, are the loudest voices, so it is unlikely the public can be educated in distinguishing creative ideas from propaganda nonsense.
Right.
Common error of the right: the market is good at creating wealth, so it must be good at fairly distributing wealth.
Common errors of the left: disadvantaged people are automatically morally superior. Most workers want to remain workers, just better off.
Sadly, effective economic realism is in short supply — probably due to an intellectual market failure. And don’t think I’m not including the neoliberals.
He has a point. But there’s a trap here that the Germans fall into: household debt is NOT sovereign debt. I can’t issue “David Bonds” b/c I don’t have… intergenerational taxation power over a citizenry and a monopoly on violence to collect those taxes. Many people think of it in terms of credit card debt and it just.. isn’t.
Credit/Debt is GOOD. A LOT of YOUR assets are somebody else’s liabilities. A lot of your pension is the debt of others.
Can they/we pay it back as a society? That’s the question.
THAT SAID.. it is hard to know (and I’m a finance guy) when the national debt is getting “out of control” and unpayable, esp since we in the US are the paymaster, the banker, of the world.
Don’t eff with the US dollar is all I’m saying.
D.A.
NYC 🗽
(former employee Moody’s Investor Service, debt raters).
In my social feed, I keep seeing graphs that show the debt declining during Democratic administrations, and increasing during Republican administrations. I figured that was probably a deception. A check online for more graphs does show the debt increasing regardless of who was in power. But it looks to me like the rate of increase would decrease under Democrats. With the exception of Biden, since his increase looked just as steep as the Bush and Trump 1.0 admins.
Just a friendly reminder to all that presidents neither authorize nor appropriate funds. That falls squarely to Congress—regardless of the annual wish list known as the president’s budget.
Mark, the first thing I would ask about any such chart is “Which party controlled the Congress?” during a given administration. For instance, Democrats controlled both chambers of Congress consecutively from 1961-1981, including the entire terms of Nixon and Ford. During Reagan’s first six years, Republicans controlled only the Senate; Democrats controlled both chambers in his final two. Democrats also controlled both chambers all four years under G. H. W. Bush, as they did for the last two years of G. W. Bush.
By contrast, Republicans have seldom controlled the Congress while a Democrat was in the White House. They did so for two years under Obama and, notably, for the last six years under Bill Clinton. From 1998-2001, when Democrats like to tell us that Bill was balancing the budget and obtaining a surplus, the Congress was firmly under Republican control.
Another point that gets lost in the political tribe scorekeeping and spin is that the baby boomers are tapping Medicare in increasing numbers. That element of the budget is going to climb no matter who holds power.
https://history.house.gov/Institution/Presidents-Coinciding/Party-Government/
I am not an economist, yet I believe I followed the topic (College courses and discussion with in-laws, relatives, friends, etc.)enough through my working years to feel somewhat qualified to put my two-cents-or-similar-fraction -of 1 -dollar here: Perhaps, just maybe if more of our Oligarch Overlords were more like Buffett and less like Musk, Bezos, and the other Trillionaire wannabes, the future of democracy might have some promise for people in my grandchildren’s generation and beyond.
In the realm of tilting at windmills, here is a plan to balance the budget in five years that Rand Paul has been trying to sell in various forms for years. Feasibility aside, I found this tidbit interesting:
“With the national debt exceeding $37 trillion [as of 2025], it now stands at nearly twice the value of all bank deposits in the country. Put another way, even if all American bank accounts were emptied to pay down the debt, the amount would cover only about half of what Washington owes.”
https://www.paul.senate.gov/dr-rand-paul-introduces-six-penny-plan-to-balance-the-federal-budget-in-five-years-2/