My politics and observations about the national debt (v1.2)

This is a summary of my politics. I am a firm institutionalist.  I am actually a fiscal conservative, social liberal and overall, a moderate democrat (being a democrat also makes sense in my state where republicans almost never win an election - elections are decided in democratic primaries). I for one am a fan of Joe Biden based on character and accomplishments to advance his policies (see separate essay). I am no idealogue though. 

In our country, tactics and opinions like lies, disinformation, falsely villainize an opponent, exaggeration, innuendo, deflection, applying spin, propaganda, spinning an alternate reality, defamation, conspiracy theories, false equivalences, prejudice and bias, ignorance, exaggerations, twisting what and opponent says or take it out of context, faulty reasoning, misdirection, tarring your opponent with precisely what you are guilty of, flawed whataboutism arguments, media echo chambers, stand up a bogeyman to attack even if it doesn't exist, falsely claim persecution or play the victims game, claim powers and accomplishments in the future or a hypothetical scenario that cannot be evaluated, and repeating a lie again and again until people believe it is the truth, are largely up to voters to discern and judge and discard when casting their votes or shaping their viewpoint so I have nothing to say about that except to say I am careful to filter these out the best I can. These are all tools in the dark art of deception and often deployed in political and social discourse.   

I am happy to pay more taxes to fund important social programs and reduce debt if a law is so passed. I am OK if benefits/premiums for Social Security and Medicare was somewhat adjusted to make the program more fiscally resilient long term. More than specific policies I am far more interested in good governance, the proper functioning of institutions and laws, rules of the political game/constitution/democracy, the tactics used by political actors and also largely adherence to truth. Policy formation (sausage making as it is sometimes referred to) is hard and complex both in the legislature and executive and not really something we laymen can do sitting in armchairs, so I focus much less on that. 

Ideologically I am neither a fan of channeling govt support (in the form of tax cuts or entitlements) to able bodied, educated, employed, middle class/rich individuals, nor am I a fan of trickledown economics by channeling govt support to corporations and the wealthy. This is especially true if funded by excessive unpaid for spending/tax cuts. Government has a significant role to play for public works and infrastructure, enacting regulations to constrain negative behavior, providing incentives to encourage positive behavior, provide a safety net for key groups (example poor, old, sick, disabled, unemployed), and helping struggling families survive by helping lower costs of essentials to them without driving up debt (like raising child/family, healthcare, education, eldercare, food/energy, and housing). I don’t necessarily agree with all the remedies and policies democrats offer, especially those from the progressive end of it and especially unpaid for spending. However agree on all freedom/rights/equality/democracy issues, policies on abortion, guns, social security, Medicaid and Medicare, most policies for a decent safety net, all foreign policy/military moves by the Biden administration, pandemic response by Biden administration, most laws actually passed in democratic majority 117th legislature, extra focus on affordable healthcare and education and environment/climate, some - but not all - economic policies, but disagree on border policy and excessive unpaid for spending like parts of the rescue act. Biden as a president is actually required to govern and has been far more moderate than the average democrat on border policy and I roughly agree with his moves given the limitations on his power (see separate essay). The bipartisan border bill negotiated was the biggest advancement in thinking for a very long time but is currently stalled. I am not naive enough in thinking any politician is driven primarily by altruism, but the needs of the democratic base that shapes their policies roughly aligns with my priorities and values. As a voter, you don't get to dream up your perfect candidate or party. You make a judgement and pick from available real-world choices with flaws and all. 

On the policy front (will talk about fiscal policy later), I disagree with most GOP social policies. On other policies, I feel the GOP don't really have any workable clear consequential economic, border, or environmental/climate policies. If we examine them critically it is hard to see if they really work (build a wall and let Mexico pay for it? force deport 10's of millions? supply side economics has not really been demonstrated to work to increase growth.  Also increased govt revenue is necessary to cut deficit while tax cuts make it worse. GOP has been obstructionist on addressing climate/environment degradation) and if they make things better for the people, now and in the future in these challenging times. There are also big questions about their ability to govern (witness repeated drama in the GOP controlled house!!). I do believe in fiscal responsibility, but the GOP approach of just budget cuts of the non-defense discretionary budget with democratic priorities (16% of budget) and then pass tax cuts which further grows the deficit is untenable. Similarly creating a scene to raise the debt limit under democrat control but quietly passing it otherwise is untenable. The debt ceiling is meaningless and just a political cudgel because the real discretionary spending is decided in appropriations bills and adjusting mandatory spending requires new laws to be passed. A party that does one thing under democratic control and the opposite under republican control is not one that instills a lot of trust. 

The national debt is a huge drain on national revenue for debt servicing. The political/economic/geopolitical conditions that facilitate a solution has not emerged yet for both parties to gain political will. Any solution must be bipartisan, and I think likely everything would be needed to be put on the table for negotiation.  I don't have confidence in either party to consider this holistically. Also are the people really ready for what that really means when the excess deficit money spending is removed from the economy? Addressing debt won't be easy and must be done carefully and thoughtfully or even in stages. Japan's debt to GDP ratio is 225% and Greece is 171%, Italy is 144.7%, Singapore is 131% compared to US's 121% in Q1 2023. It was 135% in Q2 2020, so it has gone down. The debt increased by 7 trillion dollars under Trump!  It is now rising for debt servicing due to high interest rates. In Q1 2024, it was 124.7%. The GDP is at 27.36 trillion now (2023). Japan and Greece and Italy are still standing despite high debt so there is still time for US. However, comparing debt-to-GDP ratios with other countries provides context, but each nation’s unique circumstances matter. Some theories (MMT) claim debt or printing money to pay is not a problem at all. I would hardly rest the fate of the US on such an untested theory in the real world. 

To really address the debt, hard long-term choices need to be made on the big-ticket items like social security (20% of spending), Medicare/Medicaid/other healthcare (29% of spending), defense/veterans (16% of spending), discretionary spending (16% of spending). growing the economy, printing money, and tax increases/close loopholes/improved tax collection. We likely have to wait until the right conditions arise (example strong popular will, a more amenable political environment, or adverse economic conditions) for that political will to materialize.  

Just went through a harrowing experience of the country almost defaulting when the extreme right republicans decided to take the country hostage and demanded an extremely one-sided ransom to raise the debt ceiling. In politics, if there is a way to win, however unsavory but legal, it will be taken by the extremists in the party. However, that is categorically not the way to reduce the debt!! The crazy extremes don't allow the rational middle to do sensible legislation. The only sensible legislation that seem to come out of congress are bipartisan pushed through by the center left and right. Fortunately, cooler heads prevailed - a special thanks to Biden and McCarthy. What emerged from their 11th hour deal was what would have naturally emerged anyway during appropriations later with a divided government in place and after significant increases over the last two years for non-defense spending!! McCarthy got rolled by Biden in negotiations!! The final deal is a far cry from the draconian cuts for democratic priorities the GOP house envisioned. I would say it is actually good for democrats in the fine print, and the concessions made were either fair or going to happen anyway, which explains why many more democrats voted for it than republicans!!  What was that all about? 

Biden waited until the last moment to negotiate (the wisdom from decades of experience) and thereby got a better deal than otherwise and made it so there was no possibility of back and forth and amendments since there was no time. The good news is that Biden managed to lock the GOP into spending ceilings right now itself which are pretty much the same as 2023 budget ceilings for non-defense spending (after some gimmickry) until after the 2024 election. Therefore, there should be no more such attempts by GOP to again take the US hostage to try to cut areas deeply that democrats care about at least in this congress. The non-defense spending has been on the rise for a couple of years so leveling off for another couple is fine. Also, no way non-defense ceilings would have increased anyway with divided government. Smart. Interestingly the debt limit is suspended so there is no limit at all until after the elections and there are no constraints at all on supplemental spending bills!! Nothing to prevent the treasury to create a cash cushion to delay the next debt debate to well into 2025 after a new term starts.  He also managed to get a sequester put in (across the board 1% cuts) if congress does not pass the full budget by end of year! Biden also cleverly asked for lower money for defense in his budget than republicans want which got adopted in the house bill. There is just a 3% increase for 2024 and 1% increase for 2025 - does not even keep up with inflation and effectively a cut. What that means is that senate republicans now will push for increases in defense spending in a supplemental bill going forward and will have to give democrats something to go along!! Also, the defense spending limit does not include Ukraine aid so congress will have to pass supplemental bills to provide!! Does the GOP house even care about defense or Ukraine? Very interesting! 

With respect to the other items in the deal, I am OK with able bodied people without dependents working longer (to 54 instead of 49) for food stamps. But the positive is that homeless, veterans and young people out of foster care are now eligible and exempt from work requirements for food stamps. I am OK limiting environmental impact studies for projects to 1 or 2 years. The IRS can come back for more money for major improvements sooner rather than later since their allocation of 80 billion was cut to 60 billion. Perfectly OK to claw back unspent COVID funds (provided NIH research and pandemic preparedness are still funded). Fine with the West Virginia natural gas pipeline - a promise made by democrats to those states senators and a promise kept.  

The bill got passed by both chambers with 90% democratic support in senate and 80% democratic support in house but only 66% of republicans in house and only 33% of republicans in senate. But what is going to happen next time? The full faith and credit of the US should never be a bargaining chip. Will this periodic dance with catastrophe continue or will the government or the courts put a stop to it?

Over the last four years I have learnt what I needed to on politics and media coverage. This is the last essay on that subject. No more. Moving on to other subjects. My job as a citizen is to pick the party and candidate I vote for and decide if I am going to contribute to that party or campaign. A lot goes into these seemingly simple acts. Others also choose to participate in political activism or choose to run for elected office. But I am an old man and beyond that.

The bottom line is this. First: Policy formation is done by institutions (legislature and executive) and is complex. I am not really interested in policy second guessing, or partisan finger pointing, or what if analysis or attempts at formulation. I am more interested in functioning of institutions which I quietly observe. On foreign policy, I observe what is happening in the wider world quietly and observe the policy selected by the US in response. Second: My vote does not really matter either way since my state is heavily democratic, but I do get a say in the primary and could donate to a campaign or party. I use a combination of my political judgement, values and ideology (described here) to decide my vote and donation. For president, I primarily use three criteria to assess candidates. First - Effectiveness to advance his/her preferred policies (policy itself much less important). Second - Character to uphold the constitution, laws and US system of governance and advance American interests. Third - Class. I try to track the accomplishments of my elected officials to advance their preferred policies (written an essay for Biden). Assessing the actual net true benefit to the people is more difficult.