Every time I leave my cloistered little circle of Washington wonks, I realize that most smart, well-informed people who spend a lot of time thinking about politics pay no attention to the deficit, or to the ways in which is likely to constrain political choices going forward.
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National debt and deficits are very large. Interest rates have risen sharply from the "effectively zero" level of the teens. Debt service costs will likely soon exceed military spending. We're chewing through fiscal capacity like pac-man on an adderall binge.
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But everyone still talks about economic policy like there's a lot of room for their pet projects, while in Washington, actual politicians charged with delivering those projects resort to pay-fors that are either impractical fantasies (tax unrealized capital gains!) or [crickets]
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Same for SS and Medicare. In six to eight years, everyone's going to act TOTALLY SHOCKED that grandma's SS check and health care are going to get massively cut NEXT YEAR, and why didn't anybody warn us this was going to happen sooner?
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In fairness, they won't get cut, because the politics are impossible. Rather they'll just keep putting more and more pressure on the federal purse.
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We’ll discuss but first: free college tuition, universal pre-K and a 500
ship Navy.
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I’m not sure the libertarian minded Right has gotten their heads around that under the best set of circumstances the TCJA is the last broad based tax cut we’ll ever see
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I think there is vast underestimation of both:
1) Current deficits
2) Current aging of society
At least in the 2) we see what happens to other nations first.
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Inflation won’t resolve the pressure either. SS, healthcare, military and interest on debt are effectively indexed to inflation. Something’s got to give.
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I and other like-minded people think and talk about it a lot. We also understand that at some point default is likely to happen. When debt servicing and entitlements reach a certain point, something will have to give.
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