Do deficits matter?

[KelleyNice]

Annual Deficits and Surpluses

For decades, other than an occasional surplus, there have been annual deficits. The Great Recession—plus the resulting stimulus laws and financial bailouts—caused the annual deficit to rise from $161 billion to more than $1.4 trillion in just two years (2007–09). Nevertheless, today the economy is growing, wages are rising, and interest rates are low. Most people have health insurance and very few people are hungry and homeless.

[AmandaYVR]

Since the Great Depression the American government has attempted to prevent a similar collapse, but this has resulted in massive artificial buoying of the economy (with bank bailouts, etc.) This means that quite often what seems like healthy, or rampant, growth, is just an illusion. Also, whatever administration is currently in place in government will always try to take credit for apparent gains, even if they were actually just the benefactor of fortunate timing. Americans are also notorious for not liking taxes, tax increases, and so every administration must play brinksmanship with being honest about how money is being spent, and where they are finding money. America also prints money like it's toilet paper. Being the world currency has responsibilities, and major advantages.

All in all, America spends. Not on dull things like infrastructure, ailing bridges, and whatnot, but on the sexy things that its citizens like to see, and can get behind. Adding to the national debt is kicking the can waaaay down the road, but peoples' memories are often short, so this tends to work as an avoidant strategy.

[Adaeva]

Deficits matter but it may take many decades before they cause major problems.

[NamerOfStars]

Yes- but not nearly as much for countries as they do for individuals. An individual needs to stay in the black as much as possible, because the day is going to come when they can't work any more, so their ability to make money all but stops. A country doesn't have that problem; new taxpayers (and workers) are constantly being born; it'll effectively be able to keep generating wealth forever. But since we're living in the days of fiat currency, people need to be convinced of the value of the dollar, so paying your debts routinely is a necessity.

[Sixgunsound]

Why do you think the government is so angry and desperate to destroy any kind of alternative currency than the Fiat currency it controls? Why do you think they went off the gold standard to begin with? If they actually had to go door to door with tax bills for what even a short modern war cost, to say nothing of the absolute travesty of 20 years of nothing accomplished recently concluded in the Middle East, peace would be concluded by morning because the taxpayers would balk. The inventors of democracy only gave him a vote to people who actually had something to lose, which is arguably a much better means of doing government business. No service, no boat. No property, no vote. Pay nothing in taxes, put nothing in the ballot jar. Nope that has nothing to do with race or gender, but everything to do with having something to lose, and this being constrained by that to make a better decision. Fear and greed rule the world, and nothing is more trustworthy than motivated self interest.

[NamerOfStars]

@Sixgunsound Um, they went off the gold standard because even THEY could no longer deny that there wasn't enough gold, which had obvious for nearly a century by that point. It's not about Orwellian social control (that's just a neat side effect); it's about basic physical realities.

And anyone who dies or is robbed because the government fails to protect them has a stake in it; pretending that wealth requirements make sense while the government prevents you from lining your lawn with land mines is damned disingenuous of you.

[Sixgunsound]

It’s all an illusion. Once the rest of the world stops buying US debt the circus tent collapses and mysteriously another war will break out with debt forgiveness as a condition of the enemy’s surrender.

[Sixgunsound]

I think about this one for a second: we pushed Russia and China together into one of the most unlikely friendships on earth right now. If we go to war with either of those powers it activates their agreement and we are at war with China. If you had to hazard a guess who holds the most US debt right now?

[Sixgunsound]

Thanks for MHO

[ArtemisSilver]

They do as they end up growing to the point where taxes only cover the interest on servicing the debt, making the only way for the government to raise funds quantitative easing. It's a major element of why there's an inflation crisis.

[DWornock]

Of course deficits matter and will lead to an economic collapse although technology advances will delay the collapse.

[RuthlessAggression]

Well yeah, i mean if you're in a 2 run deficit, you need to come back and try and win the game, right?

[007kingifrit]

they matter a lot, we just got to ignore them for a little while because of the age of peace made by the bretton woods era