Partisan shutdown standoff ignores key risk to US stability: rising national debt

Reuters.com ^ | October 12, 20256:17 AM CDT | David Morgan

[E. Pluribus Unum]

Summary

• Shutdown standoff overlooks rising national debt and fiscal health issues
• Debt growth outpaces economic growth, threatening fiscal stability
• 'Messaging war' distracts from underlying problems, budget expert says

WASHINGTON, Oct 12 (Reuters) - The ongoing shutdown debate between Democrats and President Donald Trump's Republicans is largely avoiding the difficult fiscal issues clouding the country's future - the rising national debt and the long-term financial health of Social Security and Medicare.

The fifteenth partial federal govern since 1981 has been sparked by Democrats' demand for spending, which would cost about $1.5 trillion over the next decade according to the nonpartisan Committee for a Responsible Federal Budget, adding to the nearly $38 trillion national debt.

"We have huge real problems in this country, and we are stuck in a perpetual messaging war between the two parties, instead of real attempts to fix these divisions and divides and do something to deal with our fiscal problems," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for deficit-reduction.

The Senate has now voted repeatedly on dueling funding packages, including a bill passed by the Republican-controlled House of Representatives and backed by Trump that would reopen federal agencies at recent funding levels through November 21. But Democrats favor their own legislation, which would ramp up spending mainly for healthcare.

There has been little or no discussion about how to reduce the nearly $2 trillion federal deficit.

Most government shutdowns over the past 44 years have involved fiscal issues such as spending, deficits and the need for a balanced budget. But since the start of Trump's first term in 2017, the government has now shut down three times over social issues including immigration and healthcare.

Graphic: A timeline showing US government shutdowns since 1980.

[tennmountainman]

Rot Gut Reuters never worried about the National Debt when Biden
was President.

[lurk]

How many elected critters are serious about debt? 25%?

[bobbo666]

Get rid of 20M illegals, aka parasites, and 50M visa holders and prices will crash — plus no more shortages in healthcare.

[Owen]

Numbers:

Debt $37T. Portion of that debt held at the Fed about 11%. The interest paid to the QE remnants (this 11%) is immediately refunded to Treasury. [Note the Fed has other debt on the balance sheet — mortgage backed securities, remnants of 2009 disaster] But for now, $4T of US debt is Fed held and does not collect interest.

Foreign holders in total — 30%. About $9T. That interest DOES GET PAID and leaves the US.

This leaves domestic non governmental holdings of US debt at $24T. Mostly in institutions. Pension funds and mutual funds often have bylaws requiring some % of portfolio to be in ultra low risk debt holdings — which are these US Treasuries. It is interesting to note that this is not discretionary. With the bylaws in place, even if the Treasuries yielded negative interest rate (which HAS happened) those institutions would still have to hold them (and pay rather than collect interest).

[Steve_Seattle]

" . . . is largely avoiding the difficult fiscal issues clouding the country's future - the rising national debt and the long-term financial health of Social Security and Medicare."

Where was Reuters when Joe Biden was piling on to the national debt? Cheering him on, no doubt.

[Steve_Seattle]

"Rot Gut Reuters never worried about the National Debt when Biden was President."

Beat me to it.

[P.O.E.]

“Get rid of 20M illegals, aka parasites, and 50M visa holders and prices will crash — plus no more shortages in healthcare.”

And lowering our carbon footprint. (For the planet.)

And saving the environment -no more building mega-warehouses and chicken-coop apartment blocks or trashing the wilderness trails from there to here. (For the spotted owls and snail darters.)

And saving water (for the whales)

And reducing class sizes (for the children)

Where are the libs on these issues all of a sudden?

[EQAndyBuzz]

“ And lowering our carbon footprint. (For the planet.)”

You are not getting rid of it. Just moving it. Person still has to breathe.

[SunkenCiv]

[al-Reuters:] Partisan Intransigent Demagogic Party Schumer shutdown standoff ignores key risk to US stability: follows DNC talking points about their sudden concern trolling about rising national debt

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[grobdriver]

That’s fine.
Schumer just has to say “uncle”.

[GOPJ]

Democrats and their boys in the press only care about the debt when a Republican is in office.

When democrats are in office they support any and all spending for democrat victim groups. That said, Trump will take care of it... and he’ll be doing it with tariffs... and federal worker draw-downs, and reduced regulations, and offering deals to foreign countries build factories in the United States. We’re in good hands with Trump.

The guy who wrote this probably can’t do math beyond high school Algebra ... if that.

[sauropod]

Bkmk