> My concern, though, is that at the last minute, the White House will step in, make a bunch of decisions, and then when Trump says “vote for this,” the whole caucus will go do it the same way they defer to Trump on everything. In this scenario, there will have been almost no scrutiny of exactly how much is added to the deficit and how much is cut from Medicaid and where else those cuts are.
Well Matt, I love you but I think you answered your own question here. When Trump says jump, they all respond how high. They are more afraid of Trump, than they are of their own constituents. It will not be until their constituents are harmed by these policies that things will change. Mike Johnson won 86% of the vote during his last election, despite always running on cutting Medicaid. Even though about 25% of the people in his district depend on it. I don't understand how GOP voters insist that the GOP/MAGA will never do the cruel things that they say they are going to do. The voters will always vote "R" no matter what because their information bubble keeps them gullible and low information, so they don't care. Plus, they know that the voters trust Trump more than the news. I really don't know how we combat that; Americans seem intent on touching the stove.
The DOGE stuff, while nonsense, shows that fraud isn't going to get it done. Tough choices. We are back to the bond trader being the most powerful person in the world. We are really exposed to interest rate increases. I mean the 10 year is at 4.5%. That's not a high rate. But if it goes to 7%, we are paying double in interest what we pay in defense.
The wild thing is, if republicans came in, decided the deficit was too much, and then capped social security payments by income, raise the retirement age, and did reduced the federal healthcare outlays, I’d hate it, but at least I would understand it.
This, though, is insanity. I guess our best hope is the freedom caucus
Freedom Caucus = MAGA. Trump said “deficit,” deficit it was. Since Reagan, deficits for Republicans have been ok if necessary to reduce taxes on high income people (and they always are, becasue they do not have the political courage to cut transfers to low income people).
Since the median voter mostly votes on vibes/micro economics and "deficits" like "democracy" are far away abstract concepts, the only questions are:
1. Do we think the bond market is going to impose discipline against this corrupt smoke and mirrors scheme? It is more likely to do so now than before but who knows?
2. When the bond market reacts to this debt insanity and yields spike past 5% will the Fed intervene and start buying up US debt again? Yes, with high likelihood.
3. Will there be some kind of forced debt restructuring whereby Trump threatens Europe and Japan into hold very long term US debt in exchange for US security guarantees and will the EU and Japan go along with that?
I always assume that the GOP's deep cultural affinity with the median voter will shield them from any significant blow back on things that really annoy me, so we have to ask ourselves what are the prospects for the average used car dealer and HGTV home flipper if the GOP budget passes. These are the kinds of people the GOP needs to lose for there to be a real change in our current descent.
why not, as an experiment, ask chatgpt/claude/gemini or whatever to write a budget and then compare it to what republicans actually come up with. (it will be be like the us/russia dynamic pre-invasion, where you say ``they are going to propose this weird and oddly specific thing'' and then they either have to look like idiots or do something else just to spite you)
I don’t recall that the national debt went down in the Obama years. To the contrary. I think the kind of fiscally conservative republican I was, now being a fiscally conservative independent, proved to be a losing proposition at the ballot box. “A reduction in the rate of increase is a cut” and “Pushing grandma off a cliff” proved more potent than sensible restraint.
So the republicans are doing dumb stuff. I’m not surprised. It seems that “bipartisan” generally happens only when everybody is getting to spend a bunch. I suggest that instead of just bashing republican stupidity, celebrating both republicans and democrats who stand up for sense will be more purposeful. That will include not reflexively condemning any proposed reductions to one’s favorite programs, as seems to be the habit here. Possible compromises are easily killed by preemptive condemnation.
Addressing the housing crisis is key to economic growth and reducing Medicaid enrollment. States like California, New York, and Texas face severe housing shortages, leading to increased health risks and greater Medicaid reliance. If the GOP truly wants to create jobs, they need to prioritize increasing housing supply ASAP. This not only creates construction jobs but also improves health outcomes by providing stable homes, reducing strain on Medicaid. Secure housing boosts economic productivity!
Top 3 states by Medicaid enrollment:
• California (~13.8 million)
• New York (~7.2 million)
• Texas (~5.3 million)
Top 3 states by number of people in housing crisis (homelessness):
Yes, yes, the Republicans are destroying the world order that has kept peace, undermined global prosperity, trashed the rule of law in the US, shattered scientific research, and pushed us toward devastating stagflation if not worse.
But let's be fair. Trump has also called to get rid of the penny.
When I first started paying attention to Congress, and had recently come out, there were two openly gay members of Congress - Barney Frank, and Jim Kolbe, Republican from Arizona. Kolbe was campaigning to eliminate the penny, but Republican members of Congress literally turned their back on him whenever he would speak about this, because they thought the fact that he was openly gay was disgraceful.
It's fine to blame one party more than the other but the fiscal situation is so dire that it'll be hard to not have painful cuts or tax increases, probably both, in the next 10-15 years. I would rather take the hit myself rather than pass on the mountain of debt to the next generation but everyone may not feel the same way.
Radical Centrist has been saying that deficits are a big, growth sucking deal. In my 5th Substack back in 4/23 I grumbled about "developed countries" fiscal deficits (we should be net exporters of capital to the developing world.
That Biden and his advisors and Congressional Democrats were not reading, is not my fault! :)
So basically, the mad king is accelerating fiscal irresponsibility. That's an important part of the picture of the impending financial crisis. Thanks for digging all that up! I know more now.
This makes me wonder, is this the flip side of the “secret congress” idea. Is it just that secrecy helps whoever is in control? Things like “We have to pass the bill so that you can find out what is in it.” - that dynamic might just help the bill-crafter’s agenda and not be good or bad per se.
Once again, your insights are well presented. The question is: what can those of us in blue states do? Every one of my representatives is a Democrat. I financially supported the Supreme Court race in Wisconsin, the Dems for Senate from Texas and Florida and the independent in Nebraska. I am also pushing for ranked choice voting and open primaries in my own State, Washington. This is clearly not enough.
Support pro-growth policies in your state, so that your blue state gains population instead of losing it, and demonstrates nationally how effective the Democrats’ policies are.
We need good governance everywhere but instead of trying to grow population in existing blue states should we not be trying to move the party in a direction such that it can start to win more in existing Red states?
Pre-internet CA was a GOP state and it was the tech boom that turned it Blue together with Regan era immigration trends. These things go in cycles. Today's failures are downstream of yesterday's successes. The main problem in CA , namely housing, is not because CA is blue, it is because on this one issue everyone with power in CA acts like a conservative.
Maybe you can say CA liberals use progressive language on social issues to cover for their conservatism on housing. But that doesn't mean that if they stopped being overly progressive on say LGBTQ, they will be less conservative on housing.
I don't think it was the tech boom that turned california blue... that started with Bill Clinton in 1992, and really "techies" are not populous enough to be a critical voting bloc.
On the one hand, I want blue states to be well run, because that's just the right thing to do!
On the other hand, I'm not super jazzed about accelerating the trend toward "80% of Americans are represented by 20% of US Senators."
How to square the circle? Other than going "bzzzt" with a chainsaw and turning California into California del Norte and California del Sur, with two Senators each? If we can have two Dakotas, we sure as heck can have two Californias!
> My concern, though, is that at the last minute, the White House will step in, make a bunch of decisions, and then when Trump says “vote for this,” the whole caucus will go do it the same way they defer to Trump on everything. In this scenario, there will have been almost no scrutiny of exactly how much is added to the deficit and how much is cut from Medicaid and where else those cuts are.
Well Matt, I love you but I think you answered your own question here. When Trump says jump, they all respond how high. They are more afraid of Trump, than they are of their own constituents. It will not be until their constituents are harmed by these policies that things will change. Mike Johnson won 86% of the vote during his last election, despite always running on cutting Medicaid. Even though about 25% of the people in his district depend on it. I don't understand how GOP voters insist that the GOP/MAGA will never do the cruel things that they say they are going to do. The voters will always vote "R" no matter what because their information bubble keeps them gullible and low information, so they don't care. Plus, they know that the voters trust Trump more than the news. I really don't know how we combat that; Americans seem intent on touching the stove.
C’mon Matt, every Republican president in my lifetime has passed massive tax cuts, don’t overthink it.
Matt you’ll be pleased to know that I’m now horrified and angry about an issue that I hadn’t been thinking much about until now.
The DOGE stuff, while nonsense, shows that fraud isn't going to get it done. Tough choices. We are back to the bond trader being the most powerful person in the world. We are really exposed to interest rate increases. I mean the 10 year is at 4.5%. That's not a high rate. But if it goes to 7%, we are paying double in interest what we pay in defense.
The wild thing is, if republicans came in, decided the deficit was too much, and then capped social security payments by income, raise the retirement age, and did reduced the federal healthcare outlays, I’d hate it, but at least I would understand it.
This, though, is insanity. I guess our best hope is the freedom caucus
Freedom Caucus = MAGA. Trump said “deficit,” deficit it was. Since Reagan, deficits for Republicans have been ok if necessary to reduce taxes on high income people (and they always are, becasue they do not have the political courage to cut transfers to low income people).
The insanity is the point!
Since the median voter mostly votes on vibes/micro economics and "deficits" like "democracy" are far away abstract concepts, the only questions are:
1. Do we think the bond market is going to impose discipline against this corrupt smoke and mirrors scheme? It is more likely to do so now than before but who knows?
2. When the bond market reacts to this debt insanity and yields spike past 5% will the Fed intervene and start buying up US debt again? Yes, with high likelihood.
3. Will there be some kind of forced debt restructuring whereby Trump threatens Europe and Japan into hold very long term US debt in exchange for US security guarantees and will the EU and Japan go along with that?
I always assume that the GOP's deep cultural affinity with the median voter will shield them from any significant blow back on things that really annoy me, so we have to ask ourselves what are the prospects for the average used car dealer and HGTV home flipper if the GOP budget passes. These are the kinds of people the GOP needs to lose for there to be a real change in our current descent.
why not, as an experiment, ask chatgpt/claude/gemini or whatever to write a budget and then compare it to what republicans actually come up with. (it will be be like the us/russia dynamic pre-invasion, where you say ``they are going to propose this weird and oddly specific thing'' and then they either have to look like idiots or do something else just to spite you)
I don’t recall that the national debt went down in the Obama years. To the contrary. I think the kind of fiscally conservative republican I was, now being a fiscally conservative independent, proved to be a losing proposition at the ballot box. “A reduction in the rate of increase is a cut” and “Pushing grandma off a cliff” proved more potent than sensible restraint.
So the republicans are doing dumb stuff. I’m not surprised. It seems that “bipartisan” generally happens only when everybody is getting to spend a bunch. I suggest that instead of just bashing republican stupidity, celebrating both republicans and democrats who stand up for sense will be more purposeful. That will include not reflexively condemning any proposed reductions to one’s favorite programs, as seems to be the habit here. Possible compromises are easily killed by preemptive condemnation.
Addressing the housing crisis is key to economic growth and reducing Medicaid enrollment. States like California, New York, and Texas face severe housing shortages, leading to increased health risks and greater Medicaid reliance. If the GOP truly wants to create jobs, they need to prioritize increasing housing supply ASAP. This not only creates construction jobs but also improves health outcomes by providing stable homes, reducing strain on Medicaid. Secure housing boosts economic productivity!
Top 3 states by Medicaid enrollment:
• California (~13.8 million)
• New York (~7.2 million)
• Texas (~5.3 million)
Top 3 states by number of people in housing crisis (homelessness):
• California (187,000+)
• New York (158,000+)
• Florida (30,000+)
I’d call it the Tinker Bell budget - it flys if everybody claps hard enough.
Please clap.
Yes, yes, the Republicans are destroying the world order that has kept peace, undermined global prosperity, trashed the rule of law in the US, shattered scientific research, and pushed us toward devastating stagflation if not worse.
But let's be fair. Trump has also called to get rid of the penny.
Trump wants to be hated by squished-penny-collecting children throughout America!
(My son has two albums of squished pennies, he's always like "ooh, Mommy, can I get one?" when he sees one of those penny-squishing machines)
When I first started paying attention to Congress, and had recently come out, there were two openly gay members of Congress - Barney Frank, and Jim Kolbe, Republican from Arizona. Kolbe was campaigning to eliminate the penny, but Republican members of Congress literally turned their back on him whenever he would speak about this, because they thought the fact that he was openly gay was disgraceful.
Imagine paying good, hard currency to deface valueless cents. Tariffs? The worst value destroyer is squished penny machines.
It's fine to blame one party more than the other but the fiscal situation is so dire that it'll be hard to not have painful cuts or tax increases, probably both, in the next 10-15 years. I would rather take the hit myself rather than pass on the mountain of debt to the next generation but everyone may not feel the same way.
Radical Centrist has been saying that deficits are a big, growth sucking deal. In my 5th Substack back in 4/23 I grumbled about "developed countries" fiscal deficits (we should be net exporters of capital to the developing world.
That Biden and his advisors and Congressional Democrats were not reading, is not my fault! :)
So basically, the mad king is accelerating fiscal irresponsibility. That's an important part of the picture of the impending financial crisis. Thanks for digging all that up! I know more now.
The mad king terminology is going to prove very effective I think.
This makes me wonder, is this the flip side of the “secret congress” idea. Is it just that secrecy helps whoever is in control? Things like “We have to pass the bill so that you can find out what is in it.” - that dynamic might just help the bill-crafter’s agenda and not be good or bad per se.
Once again, your insights are well presented. The question is: what can those of us in blue states do? Every one of my representatives is a Democrat. I financially supported the Supreme Court race in Wisconsin, the Dems for Senate from Texas and Florida and the independent in Nebraska. I am also pushing for ranked choice voting and open primaries in my own State, Washington. This is clearly not enough.
Support pro-growth policies in your state, so that your blue state gains population instead of losing it, and demonstrates nationally how effective the Democrats’ policies are.
We need good governance everywhere but instead of trying to grow population in existing blue states should we not be trying to move the party in a direction such that it can start to win more in existing Red states?
Pre-internet CA was a GOP state and it was the tech boom that turned it Blue together with Regan era immigration trends. These things go in cycles. Today's failures are downstream of yesterday's successes. The main problem in CA , namely housing, is not because CA is blue, it is because on this one issue everyone with power in CA acts like a conservative.
Maybe you can say CA liberals use progressive language on social issues to cover for their conservatism on housing. But that doesn't mean that if they stopped being overly progressive on say LGBTQ, they will be less conservative on housing.
I don't think it was the tech boom that turned california blue... that started with Bill Clinton in 1992, and really "techies" are not populous enough to be a critical voting bloc.
So I'm genuinely torn on this!
On the one hand, I want blue states to be well run, because that's just the right thing to do!
On the other hand, I'm not super jazzed about accelerating the trend toward "80% of Americans are represented by 20% of US Senators."
How to square the circle? Other than going "bzzzt" with a chainsaw and turning California into California del Norte and California del Sur, with two Senators each? If we can have two Dakotas, we sure as heck can have two Californias!