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We have pretty strong real world evidence that austerity contracts the economy, makes things worse. Government spending brings more money into circulation, stimulates the economy.
Austerity measures may seem obvious, but we’d be far better off rolling back tax cuts for the wealthy of the last several decades, and provide better/more services to those who need it.
We have the world’s first trillionaire, yet he pays a lower tax rate than most of us.
That’s if the budget has been under control previously.
I think we have crossed the threshold where pain is unavoidable.
That’s actually the logic I use- if we hadn’t had those tax cuts we’d still have a huge debt but not “pain is unavoidable”. We could have been running a relatively flat deficit that you could argue we’d eventually grow out of. You can’t argue that anymore but perhaps restoring those taxes would bring us back to more sane territory
Or we could tax the rich and expand services to the poor and needy?
I mean, we could tax a worryingly large percentage of GDP, plus make significant cuts to the military, and existing services + the interest we pay on debt would still keep us in the red.
…Hence, that’s a nice sentiment, and social services can certainly be reworked.
But we are in a debt spiral. The way out is a way no one on the political spectrum will like.
The way out is to make corporations and the most wealthy of us pay their share of taxes and not rob the country blind.
U.S taxes are ~17% of GDP, while spending is 23%. That's already significant.
Lets increase corporate taxes manyfold so its the primary source of revenue, and gut defense spending to 1/3 its size, while cutting income tax on the poor. Lets not touch medicare or anything at all, even though its arguably insufficient. Let's pretend that's somehow politically viable and wouldn't topple the US government from its side effects:
https://www.thefiscaltimes.com/newsletter/20261016-US-Budget-Deficit-Rises-Third-Highest-History
...We would still barely break even.
And that's before the AI bubble pops, and kills tax revenue, and increases that $1 trillion in interest costs dramatically through the government's interest rates rising.
There's basically no way around this without touching something painful, like social security. "Tax the corporations" alone will not be enough; we are past that point, unfortunately.