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PaperclipPerfector  6d ago (text post)   29665 thread views

Culture War Roundup for the week of March 3, 2025

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The below is from Tom Woods last Thursday. I think I agree with him:

Some people are unhappy about the new spending bill that just passed.

It envisions $2 trillion deficits as far as the eye can see.

How, in this age of DOGE, people wonder, can this be happening?

Answer: nobody cares about cutting spending. I think Thomas Massie does. But nobody else.

Why would they? The constituency for drastically lower spending, which is what we obviously need, is nonexistent. If you poll even Trump voters and give them a list of possible areas to cut, all they'll agree on is foreign aid, which doesn't come close to solving the main problem.

So it's time to face the situation squarely: no one really wants to see spending cut, especially once they come to terms with what that would really mean.

In a way, this realization is liberating. It puts you at peace. You understand that the problem will never be solved until a fiscal crisis occurs.

Then you can begin to have realistic expectations of politics and politicians.

Maybe you can hold off the civilization destroyers for a while. Even defund them.

You can make sure the Supreme Court isn't dominated by left-wing lunatics.

And if you have the will and the desire, you can change foreign policy.

If these things happened, I'd be perfectly content even if spending were not brought under control. This inner peace comes from recognizing that nobody cares and that it's never going to happen.

This inner peace comes from recognizing that nobody cares and that it's never going to happen.

I had been resigned to this. Then Elon and Trump appeared initially quite serious about fixing the deficit. If there was a silver lining to these greedy unprincipled clowns taking control of the government, to the fucking all-in podcast / PayPal mafia now being in the President's ear, it would be that they were at least serious about the budget. Libertarians rejoice!

Except they aren't. Or, at least, Trump used Elon. Or, Elon was never serious about it either.

Instead we're slash and burning the government, which includes useful important stuff with no replacement. And we're doing it for, what... approximately nothing? Because the cruelty is the point? To own the libs?

Because the cruelty is the point?

I truly don't understand this argument. The DOGE has canceled government-funded-ism (through DEI), which is cruel in itself. The mass firings of worthless bureaucrats elicit glee from yours truly because they're so obviously needed. I take no joy in their suffering, even if they are the type of people incapable of replacing a smoke alarm battery. The contribution of these people to the debt is significant, and only getting worse as pension obligations balloon. Attacking the workforce is an incredibly valid tactic, and these games of pretending that nobody can unlock bathrooms if anyone gets fired only confirms my suspicions.

Then Elon and Trump appeared initially quite serious about fixing the deficit.

I don't think either of the two campaigned on keeping taxes high while slashing medicare/medicaid and setting an end date for social security benefits. It's political suicide because Americans are stupid and selfish.

Was it dishonest for them to pretend like they'd permanently fix the problem? Yes. Am I happy with any cuts at all being possible, even if my Javier Milei fantasies are ultimately no closer to reality? Also yes.

the type of people incapable of replacing a smoke alarm battery

Genuine question - do we know if this is that people are incapable of replacing the smoke alarm battery, or if they are not allowed to by a union work rule?

The interview was conducted in his home in this case

Does a union work rule have any jurisdiction in how one controls one's own electronics in one's own home? The only way I could see that applying is if someone rents from a landlord that has some exclusive deal with some union to maintain the property, which seems possible but I have no idea how common that is. I was also under the impression that even renters have substantial rights over their homes that override the desires of the landlord. In Massachusetts, I know that landlords aren't allowed to enter the premises without the renter's permission, for instance.

IANAL, but I also can't see such a rule being enforceable or legal, given how much of a personal and public safety issue that unpowered smoke alarms can cause.

No union work rules apply in one's personal residence.

True - I'm at work so I can't watch the video, and assumed the smoke alarm was in a government office.

even if they are the type of people incapable of replacing a smoke alarm battery

I realize this is completely a tangent, but the fact that there are people out there able to tolerate their ceiling birds constantly chirping at them is one of the biggest sticking points to me that parts of America are completely incompatible with each other. The chirp is so obnoxious for me that it's a drop everything immediately and break out the ladder (and run to the store for batteries if needed) sorr of thing.

I have to wonder if it only started running out of battery in that clip.

No, not really, it's actually kind of a thing and always has been, to @ChickenOverlord 's point.

elicit glee from yours truly because they're so obviously needed.

I have expressed similar amounts of glee. Here on TheMotte even. Repeatedly. Watching people on /r/fednews react with outrage at the collision with reality has been like porn.

But I still think the government does some useful, good things and the carpet bombing approach DOGE is taking is very costly. I would consider it worthwhile if the goal was to substantially reduce the deficit, but not if the goal is to score ideological victory. If the goal is to keep the deficits and cut taxes, you can score ideological victory through more surgical cutting.

Ideological victory is upstream from other victories. Slashing at the bureaucracy, even if it is symbolic, it at least a step in the direction of dismantling certain entrenched ideas. I would choose a bureaucracy and institutions that were constructed in the same way if they simply leaned in the other direction ideologically. I'd choose it over either side right now. That does not seem to be an option though. Next best option is to root for this administration to do as much damage as possible to the progressive left. Chemotherapy.

In a way, this realization is liberating. It puts you at peace. You understand that the problem will never be solved until a fiscal crisis occurs.

And the next step, for even more complete inner peace that lets you sleep like a baby at night: realizing that the government's deficit is the private sector's surplus, which most people find desirable and wouldn't want to cut. That's why we run government deficits for centuries, because the private sector likes accumulating net savings over time.

I think we're still in mistake theory territory with some true believers like Musk who thinks government debt is "our" collective debt, which would somehow be an existential problem soon. But unless things really ramp up dramatically with DOGE with congress's backing, it's currently still thankfully mostly beating up the ideological opponents with the current small cuts.

the government's deficit is the private sector's surplus, which most people find desirable and wouldn't want to cut.

Citation needed? Every citizen is ultimately on the hook for the government's debts in one way or another. If you find it desirable, why not cut the middleman and increase corporate surplus by donating your money to a corporation directly?

Every citizen is ultimately on the hook for the government's debts in one way or another.

I'm pretty sure they were also saying 200 years ago "our grandchildren are going to be burdened by paying off this debt!" Somehow the bill hasn't come due yet, but maybe our grandkids will finally be the time? Seems a bit more likely that people should solve their cognitive dissonance on this stuff by realizing they don't quite understand money, accounting, banking, and government finance as much as they thought they did.

"The fiscal crisis is about to destroy this country, the government deficit is about to hit $10 million $2 billion $90 billion $1 trillion $50 quadrillion"

Particularly if anyone finds themself like Elon saying 'what, the total worldwide debt is $100 trillion...lol who do we owe it to, Jupiter??', surely there must be some sense of 'maybe I just don't understand this fully'.

If you find it desirable, why not cut the middleman and increase corporate surplus by donating your money to a corporation directly?

If I had the power of broad taxation where the only thing I accept in payment is my own IOUs back to me, then: my IOUs would be perpetually valuable, people would probably want to save some extra for a rainy day / retirement, and I would indeed (have to) satisfy their savings desires by spending & giving them out (hopefully in reasonable ways).

I'm pretty sure they were also saying 200 years ago "our grandchildren are going to be burdened by paying off this debt!" Somehow the bill hasn't come due yet, but maybe our grandkids will finally be the time

Has it not? Per Wikipedia, the US spent about 14% of its total federal budget on debt servicing in 2023, or 726 billion per year. Put differently, everyone's taxes could be 14% lower if you were not paying off the debt. This seems nontrivial, especially for businesses that operate on slim margins.

They are choosing to set the interest rate above 0%, to subsidize savings by giving money to people who have money. Interest is just another type of deficit spending. On balance I agree with the view that it's probably a pretty dumb idea to do that subsidy spending. But the current macro regime still thinks that higher interest rates are anti-inflationary (even with large debt-to-gdp, which doesn't seem to have been worked into their models), and they want to have the ability in the future to drop rates (because they still think that's stimulative).

realizing that the government's deficit is the private sector's surplus, which most people find desirable and wouldn't want to cut.

You're reasoning from an accounting identity, and I won't stand for it.

Yes, in order for the private sector as a whole to be a net creditor, the government must be a net debtor, but that's meaningless. There's no reason we should care about the private sector being a net creditor.

Note that this does not mean that the private sector can't accumulate net positive wealth without government debt. Private wealth did not decline along with net federal debt in the late 1990s, but grew rapidly. Real wealth is physical assets, not entries in a ledger.

It's true that if government doesn't run deficits private investors can't invest in government bonds, but they can buy private bonds or invest in equities. The government borrowing doesn't alleviate private actors of the burden of borrowing so that others may be creditors, but adds to the burden of private borrowers by driving up interest rates and reducing the amount of capital corporations can get by issuing stock.

If there's enough demand for government bonds that government can borrow at rates low enough to invest in infrastructure that will add enough value to pay for itself, that's a reasonable thing to do, but government borrowing does not, in itself, enrich the private sector.

Under no circumstances should the government borrow 6% of GDP at 4% interest at the peak of the business cycle in order to subsidize middle-class consumption.

Yes, in order for the private sector as a whole to be a net creditor, the government must be a net debtor, but that's meaningless. There's no reason we should care about the private sector being a net creditor.

Well I agree that it's not like a rule of the universe that the private sector must always need or want to be in perpetual surplus, accumulating monetary savings. It just happens to be how people have acted, in the US in the past few centuries at least.

In the US's history, there have been 6 periods where the government went significantly into surplus, with the private sector being significantly in deficit. Those ended in the 6 depressions in the country's history:

  1. 1817-21: In five years, the national debt was reduced by 29 percent, to $90 million. A depression began in 1819.
  2. 1823-36: In 14 years, the debt was reduced by 99.7 percent, to $38,000. A depression began in 1837.
  3. 1852-57: In six years, the debt was reduced by 59 percent, to $28.7 million. A depression began in 1857.
  4. 1867-73: In seven years, the debt was reduced by 27 percent, to $2.2 billion. A depression began in 1873.
  5. 1880-93: In 14 years, the debt was reduced by 57 percent, to $1 billion. A depression began in 1893.
  6. 1920-30: In 11 years, the debt was reduced by 36 percent, to $16.2 billion. A depression began in 1929.

And it seems pretty understandable logically, that people like accumulating net savings over time.

In more recent history, the private sector going into financial deficit (some combination of spending down savings and increasing private debt) in the late '90s and mid '00s ended with a massive recession. Your contention that non-financial physical asset wealth was fine didn't seem to stop that resulting recession.

It's true that if government doesn't run deficits private investors can't invest in government bonds, but they can buy private bonds or invest in equities.

It's not even about the actual financial savings instruments being available, because we have banks with infinitely flexible balance sheets (indeed, the current monetary policy regime is simply paying interest on reserve balances directly, so treasury securities are a pointless vestigial leftover). It's more about the flows of spending: someone's spending is someone else's income.

The government borrowing [...] adds to the burden of private borrowers by driving up interest rates

If there's enough demand for government bonds that government can borrow at rates low enough

For a government that uses their own currency and has their own central bank, the base interest rate is a simple policy tool set wherever you want -- it's not subject to market forces.

Under no circumstances should the government borrow 6% of GDP at 4% interest at the peak of the business cycle in order to subsidize middle-class consumption.

Totally agreed, as they should drop the interest rate much closer to 0-1% and leave it there. Interest income is just deficit spending in a mostly-pointless, regressive way.

But isn’t it “our” debt but the surplus of the rich who buy bonds?

It's not our debt, it's just the government as a balance sheet entity which is issuing IOUs that we (the actual people/households/firms) get to hold as assets. As for people/firms 'buying bonds': at that point it's just an asset swap between different types of interchangeable government IOUs (reserves, notes, coins, bonds, etc).

Anyone benefiting from the government spending more money into the economy than it drains back out in taxes is taking part in the aggregate private sector surplus. The rich undoubtedly are benefiting from the government deficit, but the evidence isn't that they're holding their savings in the form of bonds at the end of the day. (The government could set the interest rate at 0% permanently, and would still use the deficit to inject savings into the private sector.)

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