Comment by ANewFormation | Hacker News Reader

Comment by ANewFormation | Hacker News Reader

Parent Full thread

The problem you have here is differing perspectives on, for instance, current government financial responsibility.

The government is currently $36 trillion in debt with that debt growing at an exponential rate. Our annual expenditure of interest on the debt has exceeded $1 trillion per year and will soon exceed the entire discretionary budget of the US.

And this is happening as growth starts to slow and other countries continue to reduce both their reserves and dependency upon the dollar.

Many don't see this as sustainable, or really even remotely sustainable. And so working to create more sound governance and spending today is motivated precisely by an effort to prevent a catastrophic crash.

Like think about to back before the housing crash. There were numerous shows on TV about people getting a house (often with near 0 deposit), adding granite counter tops, and then reselling it within weeks for a $20k+ profit.

Anybody could see that that sort of economic system could not possibly be stable, but most people have this instinct that a status quo must inherently be stable, but that's just not true. That unstable things have not crashed today is hardly an argument against them crashing tomorrow.

The trouble is that the statements and their actions don't line up at all. USAID, CFPB, and other government regulatory agencies make up a tiny, tiny portion of our current deficit. Even if these agencies were completely eliminated, it wouldn't do _anything_ to affect our financial troubles. Even completely eliminating every single government worker wouldn't solve the deficit.

That's not even considering that these agencies can have positive, not negative, financial impact. A well-regulated economy can avoid disastrous recessions and thereby pay for itself manyfold. Hell, the CFPB was put in place to prevent the exact housing crash situation you just mentioned, but now one private citizen is getting rid of it because... he doesn't like it?

Outside of Biden and Obama (first term only interestingly) deficits were far less. As recently as 2015, it was "only" $442 billion, and generally less than a trillion.

USAID's budget was upwards of $50 billion, so cutting that single organization brings us 5-10% of the way there.

And its primary purpose was propaganda of the sort that, when effective, just ends up driving us into conflicts half way around the world and making it very difficult to ever truly improve relations with 'foreign adversaries.' I'm tired of being at war with Eastasia.

And Musk has zero power. He can only make recommendations. The 'President Musk' stuff is a transparent effort to try to foment antagonism between Trump and Musk by exploiting Trump's insecurities.

Why do you omit Trump who pushed the government debt higher than Biden (and actually significantly higher than Obama in his second term, thus excluding the GFC)?

https://www.investopedia.com/ask/answers/030515/which-united...

As a side note Usaid portion of the budget hasn't increased over the last >30 years (despite the large peak due to Ukraine support).

https://usafacts.org/explainers/what-does-the-us-government-...

You can see a table of the deficits per year here [1], which should answer your question.

[1] - https://www.thebalancemoney.com/us-deficit-by-year-3306306

Money is only trusted if everyone agrees that "a number in a ledger" is money.

Ultimately, wealth, beyond what you physically control, is only real if everyone else agrees that it's real. Otherwise you're just tapping a rock on another rock and walking out of the store with eggs.

And that 36 trillion in debt was created with a complex dance out in the open; I've got some paper who wants some paper I'll give you number go up in a year if you give me number now! And we can all look at the ledger and there are people in robes in a locked room who protect the ledger when we're not looking.

If instead we've got a ledger, left floating around the house and garage, and all the people in robes have been fired, and all of a sudden we don't need that tedious "pass laws" stuff to "balance the budget" and the ledger's full of sharpie scribblings, what are the numbers in that ledger? The fewer people who believe that number or ledger, the fewer eggs you'll be able to buy by tapping your rock on someone else's rock.

The same goes for other ledgers -- stocks -- the US stock market is trusted only because people trust the numbers that are reported. If you've fired all the regulators, auditors, and enforcers, your stock market will lose trust, and again, the numbers will be the same but worth less because nobody will believe anything.

Money has a perception of value because of scarcity + demand. The government could, in theory, 'print' enough money to make every single American a trillionaire tomorrow.

Of course all that would do is make the dollar worthless and completely destroy the US economy. I think you would obviously agree.

That also means that we must agree that 'money printing' taken to an extreme can have catastrophic effects. So where we disagree is where we are on the line between the points of inherently valuable and stable currency, and lol funny money.

When the interest on the debt is starting to exceed our total discretionary budget, let alone at a major inflection point in global economics/relations, I tend to think we're prettty far down that line.

I'm going to agree with you actually that we should reduce spending and pay down the debt because it's gotten too big especially with respect to the debt/gdp ratio.

So we can start on a solid foundation where we both agree. The thing I have trouble with is I don't think the people in government right now talking about reducing the debt by cutting waste and fraud agree with you and me.

The reason I think this is because last time they were in full control of the government they also had talked a good game about reducing the debt, but instead they cut taxes for the richest Americans and added to the debt, substantially. They told us it would pay for itself -- that didn't happen.

They also did it the time before that, during the Bush Administration. They ran up trillions in debt on a war that we didn't need to go into and we ended up losing, erasing an inherited budget surplus.

Now they are talking about ethnic cleansing Gaza, and giving themselves yet another tax break. On the other side of it, they're slashing and burning programs that they oppose on ideological grounds, which as a percentage of the budget won't even move the debt needle a smidge. And they can't show these programs were actually fraudulent or wasteful.

So my question is: why do you trust these people to cut the debt and deficit if they haven't been able to do so at any point in the past 20 years, a period during which they had majority control of the government multiple times, and they're proposing the same failed playbook?

Obviously you're right about what politician's promising being irrelevant. Things are different this time because of actions. To weigh impact you need to consider discretionary vs mandatory spending.

Mandatory is made up of things like social security, pensions, medicare, and so on. That's all automatically funded with no role played by Congress. The money that's left over after is what Congress actually decides how to spend in those thousands of pages long budget bills that nobody reads - that's discretionary spending.

In 2024 the discretionary budget was $1.7 trillion. Exclude the military (which is also discretionary) and you're down to $900 billion for all the projects people typically associate with government - transportation, education, infrastructure, and so on. USAID took up ~$50 billion of that. That's a major reduction!

This discretionary:mandatory divide is also why DOGE is going after the Pentagon next. Slashing mandatory spending is hard, though you might be able to cut e.g. administrative costs. But discretionary spending is just chock full of pork and corruption with negligible accountability.

I agree they're cutting ideological programs - I don't agree this is intrinsically ideological. They're cutting e.g. DEI and atheism propaganda, but not just replacing it with e.g. color-blind society and respect for religion propaganda. They're just dropping the propaganda funding altogether. I'd like to see this carried out everywhere, even in cases where the propaganda might align more closely with my own biases.

Money at this point has value because we all agree it has value.

You walk into a store, pick up a box of eggs, bonk your rock on another rock, the other rock makes a happy beep or turns green, and you walk out.

There's no scarcity or demand or anything going on besides "everyone with the rocks trusts the rocks"

We're all going to pretend to trust the rocks as long as we can, because the alternative is violent chaos.

There's no trust or belief - you're just trading one scarce in demand resource due another scarce in demand resource - nothing more and nothing less.

This is the reason your money becomes worth less when we print more. A vendor selling whatever will want even more because his product is just as scarce as it was before, but what you're trading for it has become less scarce, and so has less value.

And taken to extremes this value can approach 0 quite rapidly. Trust, belief and all these things don't matter if you're trying to trade me something I see as less valuable than what you want in exchange for it.

Wouldn't debt as a percentage of GDP be a much better metric than debt alone?

I think that's another interesting metric. It's also a rather terrifying graph. [1]

[1] - https://fred.stlouisfed.org/series/GFDEGDQ188S

That starts at 1966, go back to 1941 and it's not unprecedented.

We're only 3.8% above our 1945 peak.

https://tradingeconomics.com/united-states/government-debt-t...

The 1940's and 1950's reduced it through raising taxes, not cutting social services. There was actually a large expansion of social services and infrastructure projects at the time.

Slash and burn economics/austerity are not the only option.

The reason you saw high spending starting around December 7th 1941, is because that's the day we entered WW2 and started working as the industrial/commercial vessel behind the most expansive war humanity has ever seen.

It plummeted afterwards because of dramatic spending cuts after the war ended in 1945. The budget in 1946 cut discretionary spending (which is what funds the military) by 43% (38.5 billion), and then it was cut another 41% in 1947. Inflation adjusted the spending cut in 1946 was $619 billion.

The 'great expansion' of social services began in the 60s which led (in part, Vietnam and other issues obviously played a huge role) to the US defaulting on its economic obligations under Bretton Woods in 1971, which is when our current economic era of unconstrained completely fiat spending began.

| is because that's the day we entered WW2

I'm fully aware (as everyone is).

The 1950's expanded social services considerably, including major infrastructure projects like housing and highways. The cost of the GI bill alone after WW2 was $140 billion in today's dollars.

Cutting military spending is an option but doesn't seem to be on the table.

DOGE's next target is the Pentagon which has repeatedly failed audits, on a massive scale, with 0 consequences. Previously.

Good luck to them. I'll believe it when I see it.

It remains words for now but Trump is now calling for a mutual 50% defense spending cuts amongst Russia, China, and the US - as well as a return to nuclear nonproliferation arguing quite reasonably that we all have enough nukes to destroy the world multiple times over, so what's the point? [1]

It's likely to preempt media attacks claiming Trump is undermining US defense and security by cutting military spending, especially if DOGE manages to find some large areas to cut (one can only imagine the headlines...). It's unclear if they would agree (especially when there's going to be immense distrust), but this sort of rhetoric is the most rational and logical that I've seen in decades.

Having a leader with messianic delusions is not necessarily a bad thing it might seem, at least for now.

[1] - https://apnews.com/article/trump-china-russia-nuclear-bbc1c7...

Reply on news.ycombinator.com