I see a lot discussion About what the government should do with the $ 1 trillion dollar that does plan to save by reducing waste government spending. In fact, this is not a meaningful question, even in the unlikely scenario in which doge $ 1 trillion reaches, there would be no money available to pay.
Of course the government can send checks to the public if he wants. But that is not because it has “money” in the normal definition of the term, it is because it is able to borrow money. Take the following information:
Federal expenses = $ 6.2 trillion
Federal income = $ 4.4 trillion
Federal loans (budget deficit) = $ 1.8 trillion
If Doge were able to reduce $ 1 trillion expenses, which reduces the total to $ 5.2 trillion, the budget deficit would fall to $ 800 billion. But that would not mean that the government had $ 1 trillion dollars in cash that it could pay as it would, it would rather mean that the federal government borrowed $ 1 trillion less than before.
The federal government could decide to continue and borrow the same $ 1.8 trillion that it borrowed before Doge made its savings, and they could then distribute $ 1 trillion to the public in transfer payments. But in that case they would only replace one form of federal expenses with another, essentially drawing up a new UBI expenditure program. The total government spending would remain $ 6.2 trillion. What would that achieve?
I recently saw Elon Musk give a passionate speech to Trump’s cabinet who indicates that it was budget deficit untenable:
Elon Musk focuses on national debt, warns of ‘de facto bankruptcy’ without doge: ‘$ 2 trillion of shortages’
That may be a bit extreme, but he is right that the budget deficit is a big problem. For that reason it would not make sense to give the saving back to the public, because the shortage problem would remain as great as always. Of course the fact that something is illogical, of course has no implication anymore Today America:
Trump, Musk Float idea of checks of $ 5,000 ‘doge dividend’. This is what experts say
Again, there is no money to give back to the public. The federal cookie spot is empty.
Okay, so what is the counter argument for my post? How can someone defend the proposal to repay $ 1 trillion to the public? The argument would have different components:
1. First of all, you would claim that the budget deficit is not a real problem and that there is no reason to reduce our current $ 1.8 trillion deficit. You can quote a kind of MMT model. I clearly think that is wrong, but let’s go with this assumption right now.
2. Secondly, you should claim that we would be better off to reduce the current programs by $ 1 trillion and to increase the expenses for “transfers to the public” by $ 1 trillion.
In a practical matter, every $ 1 trillion reduction in federal expenditure is likely to come almost entirely from reductions in various rights programs such as social security, medicine and medicaid. That is because De Gop does not want to reduce the defense and interest payments are a contractual obligation than cannot be reduced. The remaining programs are relatively small and will probably not be cut – at least in total some will be cut (foreign help) and some will be increased (border security.)
For this kind of plan to be useful, you should claim that it is better to give each adult a check for around $ 5000, instead of paying the same amount to a subset of the adult population through different pension, medical and welfare programs.
I hope you see the bizarre nature of this proposal. To argue for repaying $ 1 trillion to the DOG Savings public, you should not buy one but two controversial theories. Moreover, these theories are of opposite sides of the political spectrum. The theory that huge shortages don’t matter is an extremely left idea associated with Mmters. The theory that programs such as social security and medicine are poor is associated with those on the far right.
I have met many people who have one of these two views. But I can’t remember ever meeting a single person who has both views. And yet, in order to repay this so -called “money” to the public, you have to hold both views at the same time.
I think people often have trouble thinking about two topics at the same time. One subject is the size of the budget deficit. The other subject is the right role of the government. Let me explain it with the following example. Suppose someone argued that America would be better off replacing $ 1 trillion on federal expenses to various programs with $ 1 trillion spent on a new UBI program of $ 5000/person. Based on what I said in the above post, you could assume that I would regard this change as undesirable. Not necessary. It is quite possible that a UBI program would be superior to the current use of the government of this borrowed money. But I would also claim that an even better solution would be The money does not borrow primarily.
Suppose my wife told me she had just gone to the bank and had borrowed $ 1.8 million. Then she asked me what to do with the money. Should we buy shares, bonds, bitcoin, real estate? I would not respond to this question by considering possible use for $ 1.8 million, I would ask her why on earth she decided to borrow $ 1.8 million?
Yes, a UBI program might be fun. But who will pay for it? Lowering the government spending by $ 1 trillion does not release money for a UBI program, it does not even reduce our national debt. All it does is the rate with which our national debt increases. We are so deep in a hole that even painful sacrifices will offer little immediate advantage. The fact that policymakers hold out “visions of Sugarplums” shows how deeply unhealthy our politics has become.