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cliffside

(933 posts)
Mon Jun 2, 2025, 11:12 PM Monday

Economists Question G.O.P. Bill: Why Increase the Deficit in Good Times?

Source: NYT


".... The worry, long expressed by Mr. Romer and other economists, is that investors will eventually balk at lending the government money, or will demand punishingly high interest rates for doing so. That could set off a downward spiral in which rising interest payments add further to the debt, making investors increasingly reluctant to lend and eventually driving up the cost of government borrowing even higher.

No one knows exactly when that will happen. But economists warn that by increasing the debt during a period of relative economic strength, the government is running the risk that the tipping point will come at the worst possible moment, when the government needs to run large deficits to respond to a war or another crisis.

Already, the federal government spends more each year on interest on the debt than it does on national defense. If the House bill becomes law, federal debt could exceed 125 percent of G.D.P. by 2034, according to independent projections. That would be the highest since the country’s founding.

.... There are signs that investors’ appetite for U.S. government debt could at last be waning. Yields on long-term government debt have risen in recent weeks as investors have expressed mounting concerns about the cost of the Republican tax bill when Mr. Trump has waged trade wars with nearly all the countries with which the United States does business. Typically a safe haven that investors flock to during times of stress, the U.S. dollar has continued to drop against a basket of its peers even as the stock market has wobbled...."

Read more: https://www.nytimes.com/2025/06/02/business/government-debt-deficit-recession.html?unlocked_article_code=1.ME8.-Zmc.DeuRobwclp4M&smid=url-share



Full article at link.
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Bernardo de La Paz

(56,186 posts)
1. RepubliCONners increasing deficit when economy is balancing on knife edge -- BEFORE it falls
Mon Jun 2, 2025, 11:19 PM
Monday

And it is not designed to be stimulative. Billionaires don't invest tax cuts, they park the money in non-productive assets like land and gold and crypto and artwork.

Poor and middle class put money in motion by spending and paying off debts. Taxing them withdraws money from the economy when it is given to billionaires. Consumers are about 70% of the economy. Attack consumers and you make everybody poorer (though billionaires less so).

(chart via Paul Krugman)

cliffside

(933 posts)
3. Totally agree about not being stimulative for the US economy, well it has stimulated some bank accounts I suppose ...
Mon Jun 2, 2025, 11:35 PM
Monday

excellent points, we have a shrinking middle class and many who find it difficult to break into the middle class.

Well said, thanks!

"Poor and middle class put money in motion by spending and paying off debts. Taxing them withdraws money from the economy when it is given to billionaires. Consumers are about 70% of the economy. Attack consumers and you make everybody poorer (though billionaires less so)."

Silent Type

(9,743 posts)
2. Totally agree. But GOPers are going to read that as we need to cut much more than in Bill.
Mon Jun 2, 2025, 11:30 PM
Monday

I’ve heard a few in Senate pubs mention maybe raising rates a tiny bit for wealthy, even trump half-assed mentioned doing that several weeks ago (nothing since). They might pull something like that out at last minute if needed.

They could even reduce military budget. Of course, all of this is on paper. If they cut military budget $100 B on paper, there’s really no penalty if the cut never occurs a few years down road.

cliffside

(933 posts)
4. Thought they cried about the total debt to GDP, that was last year, do we really need the tax cuts? ...
Mon Jun 2, 2025, 11:52 PM
Monday

as mentioned above by Bernardo this will not stimulate the economy and instead be invested. Seems as if the GOP are slow learners or more likely just chickens not wanting to buck the party.

not fooled

(6,302 posts)
5. They are looting the U.S. Treasury. Their goal is to transfer any plunderable U.S. assets to themselves
Mon Jun 2, 2025, 11:55 PM
Monday

These are the small percentage of the population that are rapacious predators. In previous eras they were the sackers and looters of other civilizations. Now they want to empty the U.S. of publicly owned assets and take the money for themselves. They don't care what happens to the country or the rest of us.

And 77 million dumbfucks voted to allow this to happen.


cliffside

(933 posts)
6. Cannot disagree with your assessment and look what is happening with public lands, increased drilling etc ...
Tue Jun 3, 2025, 12:06 AM
Tuesday

all for short term profits, not to mention the decline of our education system.

Karasu

(1,287 posts)
7. Why elect fascists in "good times?" Economically, if nothing else?
Tue Jun 3, 2025, 02:41 AM
Tuesday

Insofar as Trump was even elected. We all know Musk bought this fucking shit.

republianmushroom

(20,118 posts)
8. Because we can make "MORE" money.
Tue Jun 3, 2025, 12:52 PM
Tuesday

And we don't have to pay it back. Someone down the road will, possibly>

Wonder Why

(5,819 posts)
9. Like economics is even a word that the King (uh C-rook, uh pawn) understands?
Tue Jun 3, 2025, 01:56 PM
Tuesday

With eco in the name, it must be a liberal climate change thing.

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