In a recent op-ed Krugman argues for reducing the budget deficit but think it's not that likely that politicians will do it. Worth reading the article as there is much I did not quote. Perhaps even for you,
@Mikado463?
>>>Amid terrible events abroad and the takeover of the Republican Party by agents of chaos, the U.S. economy has been delivering lots of good news. All indications are that real G.D.P. is still growing fast; we’re
adding jobs at an extraordinary pace, even as
inflation continues to fall.
There is, however, one piece of the economic picture that’s worrisome: Long-term interest rates have gone up a lot since early 2022, especially over the past six months. (I’ll talk about the break-even rate in a minute.) This spike in long-term rates is problematic in a couple of ways. It’s not a crisis, at least not yet. But in a better world we’d be taking action to bring interest rates down in a sustainable way. In particular,
now would be a good time to rein in budget deficits. [bold added]
...
To make room for lower interest rates, then, we would need to take some heat out of the economy in another way — most obviously by reducing the budget deficit, which is very high for an economy close to full employment.
...
So while we needn’t panic over budget deficits, a lower deficit would really help with economic management right now.
But it isn’t going to happen.
...
Social Security, health care and other safety net programs accounted for most government spending. Add military spending and interest payments, and what’s left — NDD, for “nondefense discretionary” spending — is a small slice of the total. Furthermore, NDD has been squeezed by past austerity.
So there’s no possibility for major spending cuts unless we slash programs that are extremely popular. [bold added]
...
The point is that the economics of deficit reduction are straightforward. It can be accomplished either by reducing social benefits or by raising taxes. Given that America has weak social spending compared with other countries, taxes are the most plausible route. But I don’t see any plausible political path to a tax increase that would make a large dent in the deficit.
So serious deficit reduction, a bad idea a decade ago, is a good idea now. [bold added] But I see no way to make it happen.<<<
The economics are easy. The politics are impossible.
www.nytimes.com
