A US deficit of $2.3 trillion is about 7.5% of expected US GDP in 2026. Canada is in the range of 2% defict/GDP. Their 10 year bond is about 4.5%; ours is about 3.5%. - ThreadSky

kevinmilligan.bsky.social • 27 days ago

A US deficit of $2.3 trillion is about 7.5% of expected US GDP in 2026. Canada is in the range of 2% defict/GDP.

Their 10 year bond is about 4.5%; ours is about 3.5%.

Reposted from Matthew Yglesias

Pretty concerned about ye olde budget deficit situation with inflation still a bit above target and interest rates rising

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kevinmilligan.bsky.social•27 days ago

Yes, the US has lower tax rates. If we were to run a 7% of GDP deficit we too could have lower tax rates. Our current deficit is about 2% of GDP.

That extra 5 points of GDP is about $150B/year. Imagine the tax rate cuts that would afford! But it would all be borrowed money. I wouldn't do that.

kevinmilligan.bsky.social•27 days ago

Anyway it is interesting watching people beating drums about awesome US growth rates without mentioning that the US is doing that in part by keeping tax rates unsustainably low and Keynesian-juicing their economy with 7% of GDP deficits.

priorconfirmed.bsky.social•27 days ago

There will be a reckoning when they are forced to fix the fiscal situation in the future, it will be very very painful for them

grovvypippin.bsky.social•27 days ago

The United States is the Alberta of Greeces.

chrisneill.bsky.social•27 days ago

Sorry pretty sure the lower tax rates are causing the higher gdp growth and that's going to show up in higher tax revenue and lower deficits aaaannyyy daaayy noowww.

jean-b-anderson.bsky.social•27 days ago

Most of the people who do that alternate between complaining that US growth is higher and complaining that Trudeau (now Carney) is running up enormous unsustainable deficits

prleblond.bsky.social•27 days ago

And let’s not forget how much exceptional healthcare spending also boosts the U.S. economy…

https://www.ft.com/content/352bb9d9-cbdf-43e5-bb84-1c75c6267d89

splitrailfence.bsky.social•27 days ago

We also have yields that reflect not a ton of faith in the US. Those high yields add to our already high debt that will be made higher by Trump tax cuts and tariff; his tariff the last time became the 21st highest tax in US history, so we don't really get a tax cut.

jean-b-anderson.bsky.social•27 days ago

The US is conducting an interesting experiment in fiscal policy...

carsjam.bsky.social•27 days ago

Buffett had some interesting comments recently.

jean-b-anderson.bsky.social•27 days ago

Yes, he did. Of course, I’m so old I can remember the CNN taking heads being very condescending to deluded old Warren when he tried to warn them about the tech bubble back in 1999.

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