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Re:U.S. October PPI Rises 6.5% YoY, Highest in Nearly Four Y... by akramachamarei on Friday November 13, 2026 @02:07PM (#50488255)
I have some questions about this story. I ask genuinely out of confusion combined with some informed disagreement. If I glance at the deficit in [1], it seems the deficit was lowered a lot, after rising meteorically in 2009, so yes, _someone_ turned the heat down after turning it up super high. Not sure where you're getting a $2T deficit decrease though.

My confusion is augmented by the focus on the first derivative (the deficit) during this period while the national debt rose by more than $10T [2#Background]. It's not clear what matters more on an admins report card. Interest accruing is arguably less under your control, which might be relevant to this question.

Finally, I'm struggling to understand why the 2011 passage of the BCA (which cuts spending in exchange for raising the debt ceiling) is attributed to Democrats primarily. Reading [2], if I were to narrativize it, the story seems to be that the Republicans, spurred on especially by the Tea Party, forced Democrats to agree to spending cuts.

Quoth Wikipedia: "The Republican Party, which gained control of the House of Representatives in January 2011, demanded that President Obama negotiate over deficit reduction in exchange for an increase in the debt ceiling, the statutory maximum of money the Treasury is allowed to borrow. The debt ceiling had routinely been raised in the past without partisan debate ... </quote>

Furthermore, in the House, 72% of Republicans voted for the bill, while only half of Democrats did. In the 112th Senate the story was more mixed, with about 86% Dems and 60% Reps voting yes.

I have not read all this shit in great detail but I hope you can appreciate my confusion, and invite you to indicate what I might be missing. For example, I don't why the deficit was so high in 2009. In one universe of explanations, the conclusion: it's not very praiseworthy to decrease the deficit you skyrocketed yourself.

1: https://www.us-debt-clock.com/data/deficit-by-year

2: https://en.wikipedia.org/wiki/2011_United_States_debt-ceilin...

Re:U.S. October PPI Rises 6.5% YoY, Highest in Nearly Four Y... by JauntTrooper on Friday November 13, 2026 @05:54PM (#50491299)
The 2009 deficit was high because of the 2008-2010 financial crisis. Deficits increase dramatically in economic downturns because tax collections decline (job losses, lower profits, bankruptcies) and increased spending (unemployment, bailouts).

Most mainstream economists think it's good for a government to increase deficit spending temporarily during a recession because it helps prevent deeper recessions that cause long-term impairment of the tax base. If you let half the auto industry fail, for example, it may take a long time for your tax base to recover and start generating taxable income again.

After the crisis, there was bipartisan agreement that the deficit needed to be reduced, but the disagreement was on how. Obama was willing to cut spending but also wanted to increase taxes on higher income households, while the Republicans in Congress drew a hard line against any tax increases and wanted deeper spending cuts. In the end, they reached bipartisan bills, including the American Taxpayer Relief Act of 2012.

The debt ceiling brinksmanship was political theater. Republicans used the threat of defaulting on US debt in order to extract concessions from Democrats without having to agree to any policy demands. Congress passed laws with required spending every year and no one has the legal authority to not spend it. If Congress really cared about reducing the deficit, they wouldn't pass spending bills that required deficit spending.

As for increasing debt in the 2010s, I think it was viewed as a potential long-term problem but sustainable because interest rates were quite low. When inflation was at 2% and interest is at 2%, the US government was able to borrow money at 0% in real terms. Government spending on roads, airports, and even marginally productive projects that increase economic growth could be viewed as rational.

I think the US and world got complacent during the low interest rate era, and eventually realized deficit-spending in a low-rate environment boosted economic growth more than expected. The US doubled down on this by passing the 2018 Tax Cut and Jobs Act, which reduced taxes significantly without cutting spending concurrently, which created large deficits even during periods of economic growth.

The problem now is interest rates have gone up substantially, so debt servicing is going to become a much bigger burden. I don't think it's politically possible to reduce the deficit through spending cuts alone. The annual deficit is greater than the entire US defense budget and Medicaid combined.

Unless we suddenly get a burst of growth from AI that will increase our tax base, (which I think a lot of politicians are counting on), a long-term fix will require increased taxes (which will slow economic growth at least somewhat) and reduced spending (in particular lowering healthcare expenses, which are still rising at an unsustainable rate).