In 2012, the US federal government ran a budget deficit of roughly $1 trillion (out of roughly $3.5 trillion in total spending). I think it's safe to say that many/most Gladers favor rapidly reducing that deficit via spending cuts alone. For those of you who do think that, I'm curious (a) how fast you think that process should be (i.e. just cut $1 trillion of spending right now or phase it in over X years) and (b) what you think the net economic impact of that would be over the next 1, 5 and 10 year periods.

In 2012, the US federal government ran a budget deficit of roughly $1 trillion (out of roughly $3.5 trillion in total spending). I think it's safe to say that many/most Gladers favor rapidly reducing that deficit via spending cuts alone. For those of you who do think that, I'm curious (a) how fast you think that process should be (i.e. just cut $1 trillion of spending right now or phase it in over X years) and (b) what you think the net economic impact of that would be over the next 1, 5 and 10 year periods.

I'd prefer a shockstyle cut approach. Instant cuts of at least half the current spending.

This prevents scheduled cuts from being reduced by a future congress or pres and hits the systems that are dependent on that funding in a way that makes them severly disinclined to associate with again and prevents a long lasting wore of attrition by defunding public sector unions over night. There will be a big to the death fight over it but then their members whom they depend on funding vanish and the union either ceases to exist or losses massive power to fight against future cuts.

isnt that a bit like saying "I'm only going to pay the interest on my credit cards and never pay them off"?

Granted gov't debt isn't like individual debt, and actually has useful functions as well.

There's nothing preventing Congress from going back and repealing your "instant cut" plan. You'd just make people panic and they'd rush to elect representatives who would increase spending back to where it was. You'd need to do it gradually to get the people on board with it, which will be necessary absent a dictatorship.

Implement 2% cuts in REAL spending over the next ten years.

Economic impact would be an increase in the growth of the overall economy. I lack sufficient data to indicate how much.

isnt that a bit like saying "I'm only going to pay the interest on my credit cards and never pay them off"?

Granted gov't debt isn't like individual debt, and actually has useful functions as well.

If your credit cards had a 2% interest rate, it absolutely would be a good idea. Max out as many as they'll give you and invest the money, it's pure profit for you.

Invest at a profit? A guaranteed profit, at that? Is that what you think we do with the money?

Not guaranteed, no, but your odds of coming out behind are pretty miniscule. What is your point, anyways? Would you say it's bad financial advice for someone with a hypothetical 2% interest credit line to tell them to max out and invest said credit line?

the people are the ones that suffer for it. This inflation is just another form of taxation.

Depends. Inflation is generally a loss for savers and lenders but a gain for debtors (assuming their loans aren't pegged to inflation). Given how deeply in debt most American households are, I think slightly higher inflation would probably result in a net transfer of wealth from banks and credit card companies to regular people.

Depends. Inflation is generally a loss for savers and lenders but a gain for debtors (assuming their loans aren't pegged to inflation). Given how deeply in debt most American households are, I think slightly higher inflation would probably result in a net transfer of wealth from banks and credit card companies to regular people.