patrick.net

AmericanKulak says

No bill is going to balance the budget in one swoop. This one is ONLY mandatory spending

Mandatory spending is the biggest fraction. Social security and Medicare are HUGE. You cant fix the deficit by just working on discretionary spending. Have to touch mandatory spending, and thats the biggest opportunity. If you pass on this, then you arent serious about doing it. (and yes, I know... they arent serious about doing it)

Everyone wants to go through the non-military discretionary and pick out a few boogeyman projects in there as if that can solve the deficit problem. You cant solve the problem this way. Cutting taxes makes it worse.

Like it or not, the greys, and their social security and medicare are the cause of the problem. Either we tax our way to balance, or we cut those services. or we deficit spend.

DeficitHawk says

Mandatory spending is the biggest fraction. Social security and Medicare are HUGE. You cant fix the deficit by just working on discretionary spending. Have to touch mandatory spending, and thats the biggest opportunity. If you pass on this, then you arent serious about doing it. (and yes, I know... they arent serious about doing it)

Have you read this bill?

It's the biggest entitlement cut and adds more work and qualification requirements than any bill since the 90s.

DeficitHawk says

Like it or not, the greys, and their social security and medicare are the cause of the problem. Either we tax our way to balance, or we cut those services. or we deficit spend.

Bringing in tens of millions of welfare recipients who work off the books, don't contribute into programs but instead sign up all their relatives for food stamps, housing, and taxpayer money laundered to "Charities".

Most of the $37T in debt was not entitlements, but bank and airline bailouts (2-3x times to entire industries and the century is not a quarter over!) and COVID "business loans". Things like Solandra, Chrysler, etc. A trillion for banks as a reward for lending to anybody with a pulse in 2007.

We just found out Biden was paying to stop FHA loans from going delinquent. Including ones made long after 2021.

What would really help is a Corporate Tax AMT. Google, Amazon, etc. pay single digit % of profits in tax. Far less percentage than somebody with a straight median income job.

AmericanKulak says

Have you read this bill?

Oh god no. Im not going to read the bill. I don't think congress will either. I just read the headline result that it increases the deficit. That's all I need to know.

DeficitHawk says

Oh god no. Im not going to read the bill. I don't think congress will either. I just read the headline result that it increases the deficit. That's all I need to know.

And you're aware the CBO by law has to count the 2017 Tax Cuts (the current rates) being made permanent in this bill as trillions in new spending?

Even though the tax cuts were first instituted over 7 years ago?

And does not use reasonable estimates of long term GDP growth from tax cuts when counting the tax cuts as all new spending?

That this just sets the budget and doesn't actually spend any money? And is only, and limited to only, mandatory spending? But there's already a $1.6T permanent cut just in the bill? All of it to entitlements?

DeficitHawk says

AmericanKulak says

who gives a shit about defaulting later?

You sound like Paul Krugman. Always rationalizing why its ok to deficit spend. "Dont worry about it... spend spend spend... there will be no consequences... it will never catch up to us"... That guy never met a spending program he didnt love. I'd hate to be his accountant though.

C'mon say it...that you are in favor of the tariffs because they reduce the deficit.
Betcha can't...probably voids what you're getting paid.

AmericanKulak says

And you're aware the CBO by law has to count the 2017 Tax Cuts (the current rates) being made permanent in this bill as trillions in new spending?

OF course. or rather as revenue cuts. because they ARE revenue cuts compared to current law. If changing the law drives the deficit up, we shouldnt do it.

AmericanKulak says

And does not use reasonable estimates of long term GDP growth from tax cuts when counting the tax cuts as all new spending?

I hear this rationale from Paul Krugman every time. But its never true. If deficit spending produced more growth% than debt%, our debt/gdp ratio would be in secular decline but its its not. Its rising.

Misc says

C'mon say it...that you are in favor of the tariffs because they reduce the deficit.
Betcha can't...probably voids what you're getting paid.

I like the money coming into coffers, but I dont think it will be enough to offset the tax cuts. I also think sales tax/consumption tax like tariffs is a bad way to generate revenue... partly because its regressive and partly because I think it degrades market efficiency by moving low value work onshore instead of high value work.

DeficitHawk says

Misc says

C'mon say it...that you are in favor of the tariffs because they reduce the deficit.
Betcha can't...probably voids what you're getting paid.

I like the money coming into coffers, but I dont think it will be enough to offset the tax cuts. I also think sales tax/consumption tax like tariffs is a bad way to generate revenue... partly because its regressive and partly because I think it degrades market efficiency by moving low value work onshore instead of high value work.

Then why in the world are you in favor of having low skilled illegals come into this country?

The Congressional Budget Office (CBO), a nonpartisan federal agency that has been ridiculed by Republicans, estimated this week that Trump's "big, beautiful bill" would leave 10.9 million people without health insurance, including 1.4 million who are in the country without legal status in state-funded programs.

But Republicans are holding firm in their defense of Medicaid reform, which Republicans say only cuts benefits to illegal immigrants, those ineligible to receive benefits who are currently receiving benefits, duplicate enrollees in one or more states and those who are able but choosing not to work.

"The people who would not continue to get Medicaid benefits under this bill were not qualified to get them in the first place," Sen. John Kennedy, R-La., told Fox News Digital.

https://www.foxnews.com/politics/right-down-line-medicaid-reform-big-beautiful-bill-divides-lawmakers-party

The BBB will get 12M off Medicaid according to CBO whingers. No more reimbursement for California, Illinois, NYS, etc. giving medicaid benefits to illegals and the non-qualified but getting federal reimbursement.

DeficitHawk says

I hear this rationale from Paul Krugman every time. But its never true. If deficit spending produced more growth% than debt%, our debt/gdp ratio would be in secular decline but its its not. Its rising.

Not deficit spending, Tax Cuts. And you can't restructure a concern without spending money.

It takes $5000 to deport an illegal,an overstay, a fakefugee, etc. but saves thousands per month in total costs.

I guarantee the CBO isn't factoring in the Medicaid savings of thousands of dollars each and every year going forward by deporting a fat Haitan woman with insulin-dependent diabetes and a heart condition, but IS counting the $5000 it costs to deport her.

Misc says

Then why in the world are you in favor of having low skilled illegals come into this country?

I'd prefer to have legal immigrants and not illegal immigrants. Both low skill and high skill. But the presence of illegals does not worry me enough to spend a lot of effort on dealing with them, unless they are doing some crimes worse than immigrating.

Overall I think we have a deficit of working age people in our population because there are too many olds in USA sucking up the housing stock and public spending while not contributing to taxes, food growth, housing or infrastructure buildout, and this burdens younger people and makes life hard for them. So I think the strategies to combat that are outsourcing and immigration. There is such a thing as "Too much". But "Zero" is not the right amount either. I dont know what the right amount is. Maybe about enough to maintain our working/retired population ratio i suppose. Of course immigration does put strain on our infrastructure and housing stock too.. but also contributes disproportionately to the buildout and increased supply of those things.

Turning the olds into soylent green would also work, but I don't favor that approach. I like the olds in my family, and plan to become one someday. So I prefer outsourcing and immigration. And I think we need to balance our taxes with our spending, including medicare and social security... which may be a bitter pill to swallow.

Another thing that would help the Debt: cut the rates.

“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE,” Trump wrote on Truth Social.

“He is unbelievable!!!” the president said of the central bank chairman, whom he has frequently pressured to shave borrowing rates in hopes of spurring economic growth.

“Europe has lowered NINE TIMES!” Trump added.

I'm comfortable lowering the rate now since the housing market downturn is baked in and going to happen by sheer demographic force.

DeficitHawk says

I'd prefer to have legal immigrants and not illegal immigrants. Both low skill and high skill. But the presence of illegals does not worry me enough to spend a lot of effort on dealing with them, unless they are doing some crimes worse than immigrating

By your logic., the US should be running a huge budget surplus. We have about 20 million extra people in this country than there should be. If they were following the law then the taxes these folks would pay would be enormous.

Unfortunately. they are a drain on the country's resources instead of benefitting us. You would like .American taxpayers to pay for this instead of forcing the illegals to pay for the benefits they are stealing from Regular Americans. Including having the government go further into debt to pay for the upkeep of these illegals.

Modern monetary theory. MMT.

Deficits don’t matter.

We live in clown world. Fools argue about deficit spending as if nations operate by the same financial principles as your personal finances.

Here is a hint. The same “banks” that funded the building of the German military prior to and during the Second World War, funded the Soviets later in the war. Governments, in collusion with international banking cartels, create money out of thin air and reward nations for doing the bidding of the globalists.

Keep arguing about deficits, you are wasting your time.

If you care about fiscal responsibility, get rid of the banking cartels and the corrupt leaders who they use to control government.

You want to eliminate the deficit? Eliminate the globalists. Lock them up and let them live like the people they enslaved.

AmericanKulak says

‘Too Late’ Powell must now LOWER THE RATE,” Trump wrote on Truth Social.

Of course Trump will say this. He needs to pre-identify his scape goat in case there is a recession.

But Powell can only really control short term rates. IF he cuts too soon, long term rates will spike due to people expecting inflation. This has already happened just recently, in the current rate cutting cycle. Powell knows he is right on the edge.

They will cut eventually. But people calling him 'Too Late Powell" either dont care about inflation and long term bond yields, or will just blame Powell for that too if it happens.

PeopleUnited says

Modern monetary theory. MMT.

Deficits don’t matter.

We live in clown world.

I mean... thats one way to try to run the country. Zimbabwe did it... they are doing... fine? I guess??

Maybe we can have a 100 trillion dollar bill with Trumps face on it!

I dont believe in MMT. I dont believe in "Spend spend spend, there are no consequences". I dont believe "Tax cuts produce proportionally more growth than debt". I dont believe in abandoning fiscal restraint. I dont believe in Paul Krugman.

Markets may suspend disbelief for a while... maybe much longer than I would have guessed... but sooner or later our chronically growing deficits and lack of resolve to pay down the debt will end in a hyperinflation event or default.

The first signs will be long term bond yields increasing... at some point fed intervention will just produce the opposite of what was intended, raising long term rates instead of lowering them when money supply is increased.. At first orderly, but then disorderly. Eventually there would be failed treasuries auctions or yield spikes.

Its not happening yet... but I think it could happen. I don't buy long term treasury bonds anymore, I stick to <3 month maturities... and I'm clinging to my 2% fixed mortgage with a death grip.

While I agree that the bill needs to cut more spending and was pork laden it is not that simple. MMT while junk can work if all countries deficit spend as well, so debt becomes relative. You'll see bond yields blowing out and the dollar crater only and only if other countries dump US debt and balance their budgets. Right now for most countries to stop doing business with the US would mean to impose significant austerity onto their own citizens, and so far nobody has even hinted at it. If the US does not pay their debt one day or hyper inflates it which is pretty much the same there would suddenly be a gaping hole in the debtors nations budgets. A debt jubilee where debt is reset in a relative manner and countries settle on pennies on the dollar is much more likely.

mell says

You'll see bond yields blowing out and the dollar crater only and only if other countries dump US debt and balance their budgets.

I wonder about this. I get it that if the US dollar is the cleanest of the dirty shirts, then that's the one people will choose to wear.

BUT at what point do arms-reach investors just not want to buy government debt as an asset class anymore? I for one wont buy long term US treasuries. I liquidated all of them out of my accounts and 401ks, etc.. I'd rather buy gold or land or something that I can count on to still hold value after hyperinflation. At what point do other people and institutions stop wanting to buy this asset class? MMT seems to ignore the idea that people could attempt to escape the debt/asset system and hold their wealth in other assets... refusing to buy the monopoly-money-debt.

I dont have any bitcoin... but I think the valuation of bitcoin is a sign of the times as people explore ways to escape the monopoly money.

Exactly Mell. The house of cards will crash, but not until the globalists want it to crash. Then, the great reset satanic globalist new world order takes full control, a Techno-dictatorship like none other in human history. So there is not point in arguing about federal deficits. Maybe spend less? Sure. Good idea. Congress is Congress. Let’s not pretend we have any sway with Congress.

News flash, Congress passes bills. Most of them suck. Has always been this way. But if arguing about deficits makes you happy. Enjoy your shouting into the wind.

DeficitHawk says

thats one way to try to run the country. Zimbabwe did

Suggesting that Zimbabwe is a harbinger of America’s future is nominated for best comment ever on Patnet. I mean Zimbabwe is exactly like America in every way! “As Zimbabwe goes, so goes The USA” my grandpa always reminded us!

Zimbabwe... I mean they were the most powerful economy on earth until inflation killed their currency, remember? People were moving to Zimbabwe from all over the world for education and technology and freedom and prosperity unrivaled on the world stage. For over a century they were the driving force in technology and freedom. They had the strongest military in the world until they spent themselves in to destitution. Since the beginning Zimbabwe, was a city on a hill, a beacon in a dark world. Too bad they wrecked it all with deficits.

Yes, Zimbabwe. Good point. Well played sir.

“Throw your grandparents off Social Security so we can import a gajillion H1B visas” was rejected at the ballot box

PeopleUnited says

Yes, Zimbabwe. Good point. Well played sir.

Are you saying that hyperinflation can not happen to the United States because it is a more powerful nation than Zimbabwe was?

The dynamics of debt, expectations of inflation, and trust of intentions to pay the debt all still apply to big or small nations. If the US turns its monetary policy into a political entity, and gives control to short term politicians who only care about the next election, we will wind up exactly like Zimbabwe did. Every administration wants to give the gift of free money, even at the expense of degrading trust in debt repayment. Debt repayment is always the next administrations problem.

I agree the US gets some latitude because our currency is entrenched as the reserve currency, and there is great resistance to upturning that... but it doesnt mean that it wont happen. I don't buy long term bonds anymore because I don't trust the discipline or intention of the US government to repay them, and I think I will just get monopoly money in repayment if I buy them.

Context: President Trump proposed an initial $1.6 billion down payment for the border wall as part of his budget, with estimates suggesting a total cost of up to $21.6 billion. Several Republican Senators voiced skepticism about the financial burden and whether Mexico would pay for it, as Trump had promised.

Details:
Senator Jeff Flake (R-AZ): Expressed significant concern about the cost if the U.S. had to pay, stating, “I don’t care at all as long as Mexico’s paying for it — it’s neither here nor there for me. But if we’re paying for it, it’s a significant concern.”

Senator John Cornyn (R-TX): Indicated a need for more clarity on the plan, suggesting caution about the cost, saying, “I support border security, but I think we need a little more definition of exactly what the plan is.”

Senator Bob Corker (R-TN): Avoided committing to the wall’s funding, stating he would comment after seeing the budget, indicating reluctance to endorse the costly project without further details.

https://x.com/i/grok/share/qHMGdqTxELguUHPIywo9LWCkv

Amnesty:
John McCain (R-AZ): Co-sponsored the bill, drawing on his earlier support for immigration reform in 2005 and 2007. McCain advocated for a comprehensive approach that included legalization for undocumented immigrants, particularly DREAMers.

Lindsey Graham (R-SC): A Gang of Eight member, Graham supported the bill, emphasizing a balanced approach with strong enforcement and a merit-based path to citizenship.

Jeff Flake (R-AZ): Also part of the Gang of Eight, Flake supported the bill, arguing it addressed border security while providing a fair process for undocumented immigrants.

Additional Republican Supporters: The bill received votes from 14 Republican Senators in total, including Lamar Alexander (R-TN), Kelly Ayotte (R-NH), Susan Collins (R-ME), Bob Corker (R-TN), Deb Fischer (R-NE), Orrin Hatch (R-UT), Dean Heller (R-NV), John Hoeven (R-ND), Mark Kirk (R-IL), and Lisa Murkowski (R-AK). These Senators supported the bill’s framework, which included amnesty-like provisions for legal status and eventual citizenship.

https://x.com/i/grok/share/yLoihTFEK5RngsgYbR0DXHYZy

There's always money for amnesty, not even $1.6B for border security, and yet we have a $37T deficit.

DeficitHawk says

Are you saying that hyperinflation can not happen to the United States because it is a more powerful nation than Zimbabwe?

I’m saying if/when America experiences hyperinflation, it won’t be because of deficit spending/the big beautiful bill.

There are plenty of reasons we might see hyperinflation, chief among them the new world order globalists decide to create chaos in order to restore “order.” But don’t believe the hype, deficits won’t be the reason. Maybe war or famine, or some other black swan like the rapture. Or maybe it will happen because the globalists want it to happen.

Congress won’t create hyperinflation, nor can they stop it from happening (if that is what the globalists want to happen). Certainly the bill in Congress right now is unable to create hyperinflation.

PeopleUnited says

I’m saying if/when America experiences hyperinflation, it won’t be because of deficit spending

How much debt-to-GDP do you think can be sustained without triggering a crisis? Today debt-to-GDP is ~120% and we will spend ~20% of our tax revenues to service this debt.

If, hypothetically, debt-to-GDP grew 10% every year like clockwork, when would it break? Do you think we could go until our interest payments were equal to 100% of our tax revenues? Further, like reverse amortization mortgage? Interest payments on the debt this year will be ~950 Billion.

I don't understand MMT. I think its a fantasy or some sort of collective 'head in the sand' messaging to stay calm in the face of unavoidable crisis. I don't believe debt can accrue forever. I think people will eventually stop wanting to buy the debt. I dont know where the limit is for everyone else. I know for me personally, we've already passed the limit where I think US debt is a good investment. My opinion is not because the debt-to-GDP or debt-service/revenue ratios are so bad they can not be fixed... Its because the political climate does not give me confidence that they have any intention to fix it, and do not care about the deficit.

The BBB eliminates the $600 reporting requirement for 1099-Ks:

If any increase under the preceding sentence is not a multiple of $100,
such increase shall be rounded to the nearest multiple of $100.''.
(c) Application to Reporting on Remuneration for Services.--Section
6041A(a)(2) is amended by striking ``is $600 or more'' and inserting
``equals or exceeds the dollar amount in effect for such calendar year
under section 6041(a)''.
(d) Application to Backup Withholding.--Section 3406(b)(6) is
amended--
(1) by striking ``$600'' in subparagraph (A) and inserting
``the dollar amount in effect for such calendar year under
section 6041(a)'', and
(2) by striking ``only where aggregate for calendar year is
$600 or more'' in the heading and inserting ``only if in excess
of threshold''.
(e) Conforming Amendments.--
(1) The heading of section 6041(a) is amended by striking
``of $600 or More'' and inserting ``Exceeding Threshold''.
(2) Section 6041(a) is amended by striking ``taxable year''
and inserting ``calendar year''.
(f) Effective Date.--The amendments made by this section shall
apply with respect to payments made after December 31, 2025.

https://www.congress.gov/bill/119th-congress/house-bill/1/text

No, Rand Paul.



People are still pretending this is the 1910s and 20s and these people aren't getting any tax dollars.

Juan is not supporting Juanita, Juanito, and his 300lb wife Martita on a few home depot or harvest season jobs with no Welfare handouts.

Freedom Caucus Clowns want the cheap labor. If they were really worried about the deficit, they'd be worried about off-the-books jobs not being taxed, entitlement drain, increased wear and tear expense on infrastructure, need to expand schools and roads, etc.

Why not remove the tax cuts out of this bill? Then it would be going the right direction on the deficit.

I think the bill needs to cut more and spend less, but tax cuts should be the last on the block. Also I agree that if you are advocating for more spending cuts, you need to full support the removal of all illegal immigration and only support legal immigration which can pay for themselves, skilled, vetted and able to work and add to the GDP. The amount spend on immigration, esp. illegal is staggering.

I dont like the taxes i pay. I get hit from every side. I live in california... I would love lower taxes. But I think its OK to put the taxes up if it lowers the deficit. As long as Im not the only sucker still paying them... which I sometimes feel like I am.

DeficitHawk says

How much debt-to-GDP do you think can be sustained without triggering a crisis? Today debt-to-GDP is ~120% and we will spend ~20% of our tax revenues to service this debt.

America is the least bad of all the bad investments a person can make. If that changes, then who knows? I can’t think of a better place to invest in now though. And that is why the chatter about this bill is silly. A bill will be passed. Nobody will be entirely happy with it. Some people will feel betrayed or accuse the other side of hypocrisy. But we won’t have hyperinflation.

PeopleUnited says

America is the least bad of all the bad investments a person can make. If that changes, then who knows?

I hear this a lot... if all you have is dirty shirts, which is the least dirty shirt? thats the one to wear.... Thats like the american bond market vs all the other bond markets. But what if all the shirts are so dirty you decide not to wear a shirt today?

Why do people have to keep buying sovereign debt at all? What happens when they decide to put their money into some other asset class entirely and just not attend the Treasury bond auctions at all? They can buy precious metals or ammo and yams, or whatever they want to buy.

You may think differently, but I dont think a 30 year US bond is a safe investment at all. I am pretty sure I will be able to redeem it at nominal value, but in 30 years, the nominal value in monopoly money may have less purchasing power than I'd invested today. I'd be better off buying gold.

Boy, I hope the US economy doesn't collapse as these two vital workers we're wasting tax dollars on arresting don't show up for whatever vital job they do at some Leftist NGO.

AmericanKulak says

Boy, I hope the US economy doesn't collapse as these two vital workers we're wasting tax dollars on arresting don't show up for whatever vital job they do at some Leftist NGO.

follow the money , as I won't be surprised that the federal grant money from USAID, EPA, etc makes it to these left wing domestic terrorists via "pass throughs" like Act Blue and Bend The Arc

.

DeficitHawk says

You may think differently, but I dont think a 30 year US bond is a safe investment at all. I am pretty sure I will be able to redeem it at nominal value, but in 30 years, the nominal value in monopoly money may have less purchasing power than I'd invested today. I'd be better off buying gold.

Right now the 6 month Treasury is at 4.3%. I would just buy short term bonds.

Vanguard's Total Bond Market ETF (ticker BND) has had an inflation adjusted CAGR of around 0.5% since its inception in 2007.

It did drop about 30% during 2022 to 2024 in price because of interest rates increasing essentially from 0% to late 1990 levels which explains the low CAGR.

AD says

Right now the 6 month Treasury is at 4.3%. I would just buy short term bonds.

Exactly, thats what I am doing. SGOV. (0-3 months) And gold. And ammo. Not yams though, I find they don't store well as some would have us believe.

Im not really a financial person, but I just don't see the rationale for investing in long term government debt if you dont trust the politicians will control deficit spending.

DeficitHawk says

Im not really a financial person, but I just don't see the rationale for investing in long term government debt if you dont trust the politicians will control deficit spending.

I ran a Google Gemini AI query and it said CBO is projected the Fiscal Year 2025 deficit will be the same as the 2024 deficit. That would be the first time the deficit did not increase (as least adjusting for inflation) since 2000.

I'm in wait and see mode until next February as far as trade deficit, federal government deficit and debt, and manufacturing jobs as a percentage of total jobs.

.

DeficitHawk says

Why do people have to keep buying sovereign debt at all?

Not sure, laziness/ignorance probably. There are better investments.

“Buying“ debt, should be risky. Even sovereign debt is a bad investment in my opinion. Why would anyone think it is a good idea is beyond me.

Real estate (if you can buy low), stocks and precious metals is a better way to beat or at least keep pace with inflation if not build wealth. That and a pension. It is free money. There is nothing better than free money. That is why the US will be OK. We have a nearly limitless supply of free money. The fed and the treasury can both create money out of thin air, and even buy those bonds you are so concerned about.

There is one thing that separates a thriving economy from a dying economy: The ability to secure the resources necessary to produce more this year than last year. Production includes products, assets and In America’s case, printing money. When people decide they don’t want dollars, then we are in trouble. For now, everyone wants them, though supposedly Saddam wanted to stop using them, and he was killed if you recall.

Seems to me we are going the way of Greece. BTW, whatever happened to raids on employers to see how many illegals worked there?