The scale of the debt crisis.

[luiza]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

First, let's clarify basic terms that many people confuse. The federal deficit is how much more we spend than we take in each year. The national debt is the total accumulated amount we owe from all previous years combined. For fiscal year 2025, our deficit was approximately $1.8 trillion. Our total national debt is now over $36 trillion. Every year we run a deficit, it adds to that total debt, and we're now paying over $1 trillion annually just in interest on money we've already borrowed.

Here's the reality about military spending. Even the most dramatic cuts wouldn't solve this problem. If we completely withdrew from Europe and Asia, closed all 750+ overseas bases, and dramatically reduced our military presence globally, we might realistically save around $500 billion annually. That sounds enormous, and it is, but it would only reduce our annual deficit by roughly 25-30%. We'd still be running a deficit of $1.2-1.4 trillion every single year.

It gets worse. If you completely eliminated the military, no Army, Navy, Air Force, Marines, no defense budget whatsoever, we'd still have an annual deficit of approximately $900 billion. Think about that. The thing politicians argue about most could be entirely zeroed out and we'd still be adding nearly a trillion dollars to the national debt every year.

The structural problem is this. Total federal spending is roughly $6.8 trillion while revenue is only about $5 trillion. Just three categories, Social Security ($1.5T), Medicare/Medicaid ($1.6T), and interest on existing debt ($1T), consume nearly $4 trillion alone. That's more than our entire tax revenue before we spend a single dollar on defense, infrastructure, education, or anything else.

Here's what many people really don't understand about who we owe. The debt isn't primarily held by China or foreign adversaries. Foreign holders own about 23.5% of our debt, with China holding just 2.2% of the total. The vast majority is owned by domestic interests such as the Federal Reserve, American mutual funds and pension funds, banks, insurance companies, state and local governments, and Social Security trust funds. When we pay that $1+ trillion in annual interest, we're mostly transferring money from taxpayers to American asset holders, pension funds, 401ks, IRAs, and financial institutions.

This creates an impossible trap. We can't simply default on this debt. US Treasury bonds are the foundation of global finance, considered the world's safest asset. Every interest rate globally is priced off Treasury rates. A US default would trigger immediate economic apocalypse: pension funds would collapse, retirement accounts would evaporate, the dollar would lose reserve currency status, and the 2008 financial crisis would look mild by comparison. Defaulting to stick it to monied interests would devastate ordinary Americans whose retirement savings are in these "safe" investments.

The intergenerational injustice is profound. We're running up massive debts for current consumption and leaving the bill to future generations. By the time our great-grandchildren inherit this debt in 2125, it will be so woven into the financial system that they can't refuse to pay it without destroying their own economy. They'll be trapped, the debt too large to realistically pay off, but too catastrophic to default on. We're essentially robbing our descendants, and they'll have no choice but to service obligations created by our spending decisions.

This isn't a problem that can be solved by cutting any single area of spending or making any one policy change. It's structural and requires either massive entitlement reform, significant tax increases, or realistically both. These are political third rails that neither party wants to seriously address. The longer we wait, the deeper the hole gets and the more limited our options become.

What are your thoughts on realistic solutions? Or is this problem already beyond the point where democratic politics can address it?

Trumpfy has it well under control .
He is inventing these lovely Collateral Creating narratives to delay the finale .

He needs to sow up all the loose ends before moving to Digital ID , expanding Israel to every part of Africa and the Middle East and substituting Trump Tokens for Fiat currency .

Get prepping and sink everything into precious Metals and other invaluable resources like Copper and Uranium --- big storage sheds required !!

 

[Independent thinker]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

First, let's clarify basic terms that many people confuse. The federal deficit is how much more we spend than we take in each year. The national debt is the total accumulated amount we owe from all previous years combined. For fiscal year 2025, our deficit was approximately $1.8 trillion. Our total national debt is now over $36 trillion. Every year we run a deficit, it adds to that total debt, and we're now paying over $1 trillion annually just in interest on money we've already borrowed.

Here's the reality about military spending. Even the most dramatic cuts wouldn't solve this problem. If we completely withdrew from Europe and Asia, closed all 750+ overseas bases, and dramatically reduced our military presence globally, we might realistically save around $500 billion annually. That sounds enormous, and it is, but it would only reduce our annual deficit by roughly 25-30%. We'd still be running a deficit of $1.2-1.4 trillion every single year.

It gets worse. If you completely eliminated the military, no Army, Navy, Air Force, Marines, no defense budget whatsoever, we'd still have an annual deficit of approximately $900 billion. Think about that. The thing politicians argue about most could be entirely zeroed out and we'd still be adding nearly a trillion dollars to the national debt every year.

The structural problem is this. Total federal spending is roughly $6.8 trillion while revenue is only about $5 trillion. Just three categories, Social Security ($1.5T), Medicare/Medicaid ($1.6T), and interest on existing debt ($1T), consume nearly $4 trillion alone. That's more than our entire tax revenue before we spend a single dollar on defense, infrastructure, education, or anything else.

Here's what many people really don't understand about who we owe. The debt isn't primarily held by China or foreign adversaries. Foreign holders own about 23.5% of our debt, with China holding just 2.2% of the total. The vast majority is owned by domestic interests such as the Federal Reserve, American mutual funds and pension funds, banks, insurance companies, state and local governments, and Social Security trust funds. When we pay that $1+ trillion in annual interest, we're mostly transferring money from taxpayers to American asset holders, pension funds, 401ks, IRAs, and financial institutions.

This creates an impossible trap. We can't simply default on this debt. US Treasury bonds are the foundation of global finance, considered the world's safest asset. Every interest rate globally is priced off Treasury rates. A US default would trigger immediate economic apocalypse: pension funds would collapse, retirement accounts would evaporate, the dollar would lose reserve currency status, and the 2008 financial crisis would look mild by comparison. Defaulting to stick it to monied interests would devastate ordinary Americans whose retirement savings are in these "safe" investments.

The intergenerational injustice is profound. We're running up massive debts for current consumption and leaving the bill to future generations. By the time our great-grandchildren inherit this debt in 2125, it will be so woven into the financial system that they can't refuse to pay it without destroying their own economy. They'll be trapped, the debt too large to realistically pay off, but too catastrophic to default on. We're essentially robbing our descendants, and they'll have no choice but to service obligations created by our spending decisions.

This isn't a problem that can be solved by cutting any single area of spending or making any one policy change. It's structural and requires either massive entitlement reform, significant tax increases, or realistically both. These are political third rails that neither party wants to seriously address. The longer we wait, the deeper the hole gets and the more limited our options become.

What are your thoughts on realistic solutions? Or is this problem already beyond the point where democratic politics can address it?

I must have missed your realistic solution. In reality, we have a two party system and neither party wants to address this problem. We also have 100 Senators and 435 Congress critters, all going to DC to fight for more money for their states and districts. While we can play pretend on how to fix the problem, it is only pretend. Translation: Long term we're screwed because there isn't even a grain of sand on the beach trying to fix the problem.

 

[Concerned American]

Trumpfy has it well under control .
He is inventing these lovely Collateral Creating narratives to delay the finale .

He needs to sow up all the loose ends before moving to Digital ID , expanding Israel to every part of Africa and the Middle East and substituting Trump Tokens for Fiat currency .

Get prepping and sink everything into precious Metals and other invaluable resources like Copper and Uranium --- big storage sheds required !!

and lead.

 

[Anomalism]

I must have missed your realistic solution. In reality, we have a two party system and neither party wants to address this problem. We also have 100 Senators and 435 Congress critters, all going to DC to fight for more money for their states and districts. While we can play pretend on how to fix the problem, it is only pretend. Translation: Long term we're screwed because there isn't even a grain of sand on the beach trying to fix the problem.

I don't know what the solution is. Uncertainty is part of the reason for the post.

 

[cnm]

So logically there are people who will never live well.

Only in those countries where society is a feeding frenzy rather than a community.

That'll be you.

 

[cnm]

Translation: Long term we're screwed because there isn't even a grain of sand on the beach trying to fix the problem.

And the funny thing is you can't be told your system is dysfunctional.

'Greatest founding documents in the world.'

 

[kyzr]

I don't know what the solution is. Uncertainty is part of the reason for the post.

The solution is one that politicians are loathe to do.
Cut spending and raise taxes.
Raise the top rate to 40% and eliminate the capital gains tax break
Remove the cap on SS. Fixes SS
Phase the "social safety net" back to the states, Welfare, snap, etc.
Phase education back to the states
Freeze military spending
Pass a "balanced budget law", no more borrowing.

Start paying down the $39T debt. "A journey of 1,000 miles begins with a single step"

 

[Anomalism]

The solution is one that politicians are loathe to do.
Cut spending and raise taxes.
Raise the top rate to 40% and eliminate the capital gains tax break
Remove the cap on SS. Fixes SS
Phase the "social safety net" back to the states, Welfare, snap, etc.
Phase education back to the states
Freeze military spending
Pass a "balanced budget law", no more borrowing.

Start paying down the $39T debt. "A journey of 1,000 miles begins with a single step"

Tax increases would need to be across the board. Most tax naturally comes from the mean because there are far more people there.

 

[kyzr]

Tax increases would need to be across the board. Most tax naturally comes from the mean because there are far more people there.

True, but you need to look, as Willie Sutton said, where the money is...

 

[Concerned American]

True, but you need to look, as Willie Sutton said, where the money is...

View attachment 1212515

Which proves the old maxim--"It takes money to make money."

 

[Anomalism]

True, but you need to look, as Willie Sutton said, where the money is...

View attachment 1212515

That's wealth, which is different than the flow of money. Wealth is not income. It's not spending. It's the amount of money and assets you have combined. Rich people save way more money, but way more money moves through the lower and middle class people. That's why meaningful taxation would largely come from the middle class. There are profoundly more normal people than there are wealthy people.

Wealth is only relevant if you actually plan on seizing assets from private citizens.

 

[JWBooth]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

There is no misunderstanding there is complete denial.

 

[Woodznutz]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

First, let's clarify basic terms that many people confuse. The federal deficit is how much more we spend than we take in each year. The national debt is the total accumulated amount we owe from all previous years combined. For fiscal year 2025, our deficit was approximately $1.8 trillion. Our total national debt is now over $36 trillion. Every year we run a deficit, it adds to that total debt, and we're now paying over $1 trillion annually just in interest on money we've already borrowed.

Here's the reality about military spending. Even the most dramatic cuts wouldn't solve this problem. If we completely withdrew from Europe and Asia, closed all 750+ overseas bases, and dramatically reduced our military presence globally, we might realistically save around $500 billion annually. That sounds enormous, and it is, but it would only reduce our annual deficit by roughly 25-30%. We'd still be running a deficit of $1.2-1.4 trillion every single year.

It gets worse. If you completely eliminated the military, no Army, Navy, Air Force, Marines, no defense budget whatsoever, we'd still have an annual deficit of approximately $900 billion. Think about that. The thing politicians argue about most could be entirely zeroed out and we'd still be adding nearly a trillion dollars to the national debt every year.

The structural problem is this. Total federal spending is roughly $6.8 trillion while revenue is only about $5 trillion. Just three categories, Social Security ($1.5T), Medicare/Medicaid ($1.6T), and interest on existing debt ($1T), consume nearly $4 trillion alone. That's more than our entire tax revenue before we spend a single dollar on defense, infrastructure, education, or anything else.

Here's what many people really don't understand about who we owe. The debt isn't primarily held by China or foreign adversaries. Foreign holders own about 23.5% of our debt, with China holding just 2.2% of the total. The vast majority is owned by domestic interests such as the Federal Reserve, American mutual funds and pension funds, banks, insurance companies, state and local governments, and Social Security trust funds. When we pay that $1+ trillion in annual interest, we're mostly transferring money from taxpayers to American asset holders, pension funds, 401ks, IRAs, and financial institutions.

This creates an impossible trap. We can't simply default on this debt. US Treasury bonds are the foundation of global finance, considered the world's safest asset. Every interest rate globally is priced off Treasury rates. A US default would trigger immediate economic apocalypse: pension funds would collapse, retirement accounts would evaporate, the dollar would lose reserve currency status, and the 2008 financial crisis would look mild by comparison. Defaulting to stick it to monied interests would devastate ordinary Americans whose retirement savings are in these "safe" investments.

The intergenerational injustice is profound. We're running up massive debts for current consumption and leaving the bill to future generations. By the time our great-grandchildren inherit this debt in 2125, it will be so woven into the financial system that they can't refuse to pay it without destroying their own economy. They'll be trapped, the debt too large to realistically pay off, but too catastrophic to default on. We're essentially robbing our descendants, and they'll have no choice but to service obligations created by our spending decisions.

This isn't a problem that can be solved by cutting any single area of spending or making any one policy change. It's structural and requires either massive entitlement reform, significant tax increases, or realistically both. These are political third rails that neither party wants to seriously address. The longer we wait, the deeper the hole gets and the more limited our options become.

What are your thoughts on realistic solutions? Or is this problem already beyond the point where democratic politics can address it?

As long as we are paying most of the interest on the debt to ourselves it stimulates growth, albeit with some inflation.

 

[kyzr]

That's wealth, which is different than the flow of money. Wealth is not income. It's not spending. It's the amount of money and assets you have combined. Rich people save way more money, but way more money moves through the lower and middle class people. That's why meaningful taxation would largely come from the middle class. There are profoundly more normal people than there are wealthy people.
Wealth is only relevant if you actually plan on seizing assets from private citizens.

The bottom 50% basically have no "wealth", they survive.
Raising the top tax rate to 40% would help
Eliminating the "capital gains" tax loophole would help, income is income.
Ending "corporate welfare subsidies" would help. (buy stock instead of giving cash to raise stock value for the wealthy)

 

[leftwinger]

The bottom 50% basically have no "wealth", they survive.
Raising the top tax rate to 40% would help
Eliminating the "capital gains" tax loophole would help, income is income.
Ending "corporate welfare subsidies" would help. (buy stock instead of giving cash to raise stock value for the wealthy)

View attachment 1219050

The business tax rate not mentioned? What is it now? 21%?

I dont really like raising the CAP SS. It just seems wrong? It is a contractyou entered into with a max payback and defined contribution levels. But it wont cost me at this time. Sigh

 

[leftwinger]

Stopping $1T fraud and waste would cover debt interest right away

 

[TNHarley]

DOGE looked at it. There wasn't that much fraud.

We want more government than we are willing to pay for.

No. YOU do.

 

[Greenbeard]

No. YOU do.

Big cuts coming under the next administration once Social Security benefits adjust downward to match available revenue.

 

[berg80]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

First, let's clarify basic terms that many people confuse. The federal deficit is how much more we spend than we take in each year. The national debt is the total accumulated amount we owe from all previous years combined. For fiscal year 2025, our deficit was approximately $1.8 trillion. Our total national debt is now over $36 trillion. Every year we run a deficit, it adds to that total debt, and we're now paying over $1 trillion annually just in interest on money we've already borrowed.

Here's the reality about military spending. Even the most dramatic cuts wouldn't solve this problem. If we completely withdrew from Europe and Asia, closed all 750+ overseas bases, and dramatically reduced our military presence globally, we might realistically save around $500 billion annually. That sounds enormous, and it is, but it would only reduce our annual deficit by roughly 25-30%. We'd still be running a deficit of $1.2-1.4 trillion every single year.

It gets worse. If you completely eliminated the military, no Army, Navy, Air Force, Marines, no defense budget whatsoever, we'd still have an annual deficit of approximately $900 billion. Think about that. The thing politicians argue about most could be entirely zeroed out and we'd still be adding nearly a trillion dollars to the national debt every year.

The structural problem is this. Total federal spending is roughly $6.8 trillion while revenue is only about $5 trillion. Just three categories, Social Security ($1.5T), Medicare/Medicaid ($1.6T), and interest on existing debt ($1T), consume nearly $4 trillion alone. That's more than our entire tax revenue before we spend a single dollar on defense, infrastructure, education, or anything else.

Here's what many people really don't understand about who we owe. The debt isn't primarily held by China or foreign adversaries. Foreign holders own about 23.5% of our debt, with China holding just 2.2% of the total. The vast majority is owned by domestic interests such as the Federal Reserve, American mutual funds and pension funds, banks, insurance companies, state and local governments, and Social Security trust funds. When we pay that $1+ trillion in annual interest, we're mostly transferring money from taxpayers to American asset holders, pension funds, 401ks, IRAs, and financial institutions.

This creates an impossible trap. We can't simply default on this debt. US Treasury bonds are the foundation of global finance, considered the world's safest asset. Every interest rate globally is priced off Treasury rates. A US default would trigger immediate economic apocalypse: pension funds would collapse, retirement accounts would evaporate, the dollar would lose reserve currency status, and the 2008 financial crisis would look mild by comparison. Defaulting to stick it to monied interests would devastate ordinary Americans whose retirement savings are in these "safe" investments.

The intergenerational injustice is profound. We're running up massive debts for current consumption and leaving the bill to future generations. By the time our great-grandchildren inherit this debt in 2125, it will be so woven into the financial system that they can't refuse to pay it without destroying their own economy. They'll be trapped, the debt too large to realistically pay off, but too catastrophic to default on. We're essentially robbing our descendants, and they'll have no choice but to service obligations created by our spending decisions.

This isn't a problem that can be solved by cutting any single area of spending or making any one policy change. It's structural and requires either massive entitlement reform, significant tax increases, or realistically both. These are political third rails that neither party wants to seriously address. The longer we wait, the deeper the hole gets and the more limited our options become.

What are your thoughts on realistic solutions? Or is this problem already beyond the point where democratic politics can address it?

This problem is beyond repair. Can things be done to lower the deficit? Sure. We will ever get to a point where budget surpluses will make a dent in lowering the national debt? No. The day of reckoning is coming. Probably faster than any one of us wants to admit.

What will that day look like? Foreign buyers of our debt will begin to demand a higher rate of return as investment in US treasuries and bonds no longer are seen as a safe haven purchase. That's when the spiral of higher interest rates begins as the market prices in higher yields on US debt. A point of no return. Higher yields leading to higher interest rates which will begin to stifle the economy. Leading to lower tax receipts for the government. Leading to still higher deficits, debt levels, and thus higher yields. It's a cycle that will feed on itself. When the defaults come, that is when the world economy goes in the tank.

The game is over. Most people just don't know it yet.

 

[Hafar1014]

I want to talk about the federal debt because I think most people fundamentally misunderstand the scale of the problem we're facing.

First, let's clarify basic terms that many people confuse. The federal deficit is how much more we spend than we take in each year. The national debt is the total accumulated amount we owe from all previous years combined. For fiscal year 2025, our deficit was approximately $1.8 trillion. Our total national debt is now over $36 trillion. Every year we run a deficit, it adds to that total debt, and we're now paying over $1 trillion annually just in interest on money we've already borrowed.

Here's the reality about military spending. Even the most dramatic cuts wouldn't solve this problem. If we completely withdrew from Europe and Asia, closed all 750+ overseas bases, and dramatically reduced our military presence globally, we might realistically save around $500 billion annually. That sounds enormous, and it is, but it would only reduce our annual deficit by roughly 25-30%. We'd still be running a deficit of $1.2-1.4 trillion every single year.

It gets worse. If you completely eliminated the military, no Army, Navy, Air Force, Marines, no defense budget whatsoever, we'd still have an annual deficit of approximately $900 billion. Think about that. The thing politicians argue about most could be entirely zeroed out and we'd still be adding nearly a trillion dollars to the national debt every year.

The structural problem is this. Total federal spending is roughly $6.8 trillion while revenue is only about $5 trillion. Just three categories, Social Security ($1.5T), Medicare/Medicaid ($1.6T), and interest on existing debt ($1T), consume nearly $4 trillion alone. That's more than our entire tax revenue before we spend a single dollar on defense, infrastructure, education, or anything else.

Here's what many people really don't understand about who we owe. The debt isn't primarily held by China or foreign adversaries. Foreign holders own about 23.5% of our debt, with China holding just 2.2% of the total. The vast majority is owned by domestic interests such as the Federal Reserve, American mutual funds and pension funds, banks, insurance companies, state and local governments, and Social Security trust funds. When we pay that $1+ trillion in annual interest, we're mostly transferring money from taxpayers to American asset holders, pension funds, 401ks, IRAs, and financial institutions.

This creates an impossible trap. We can't simply default on this debt. US Treasury bonds are the foundation of global finance, considered the world's safest asset. Every interest rate globally is priced off Treasury rates. A US default would trigger immediate economic apocalypse: pension funds would collapse, retirement accounts would evaporate, the dollar would lose reserve currency status, and the 2008 financial crisis would look mild by comparison. Defaulting to stick it to monied interests would devastate ordinary Americans whose retirement savings are in these "safe" investments.

The intergenerational injustice is profound. We're running up massive debts for current consumption and leaving the bill to future generations. By the time our great-grandchildren inherit this debt in 2125, it will be so woven into the financial system that they can't refuse to pay it without destroying their own economy. They'll be trapped, the debt too large to realistically pay off, but too catastrophic to default on. We're essentially robbing our descendants, and they'll have no choice but to service obligations created by our spending decisions.

This isn't a problem that can be solved by cutting any single area of spending or making any one policy change. It's structural and requires either massive entitlement reform, significant tax increases, or realistically both. These are political third rails that neither party wants to seriously address. The longer we wait, the deeper the hole gets and the more limited our options become.

What are your thoughts on realistic solutions? Or is this problem already beyond the point where democratic politics can address it?

First the annual deficit has to be paid and Trump has reduced that to 1.7 trillion from 2.6 trillion. Thank tariffs for that. When thats zero we can pay down the national debt by cutting spending and GDP growth. If democrats get back in power that all ends.