Trump has continual paroxysms over the US trade deficit. By buying things from the rest of the world, he tells us, the US is being "ripped off" blah blah blah continual nonsensical bloviation "I have really big hands." In fact under Trump the trade deficit stayed more or less constant with how it had been under Obama, even growing a little bit. It had been much worse leading up to the financial crisis, though to call it worse is to imply that it's bad at all and I'm not ready to concede that. The deficit got bigger under Biden. I'm fine with that. We purchased goods from lower cost providers.
You would think he would be equally if not more concerned about needing to pay interest on the debt to foreigners. The Congressional Budget Office estimates that the cost to service the debt will approach $1 trillion in 2025 and will rise from there.
Foreign holders of US debt, firstly Japan, China and the UK but lots of others too, hold about 30% of our debt. So we're likely paying them $300 billion a year for having lent us money. That's about $900 a year for each and every one of us. In general I think we are better off buying things from lower cost providers and being a reliable enough counterparty for them that they are happy to buy our debt at lower rather than higher prices.
Which would imply that we should take deficits seriously and try to both exercise budgetary restraint -- for instance by taking steps to put Social Security and Medicare on firmer footing, which would be financially meaningful, instead of just fucking around, firing federal employees willy-nilly and canceling grants for which funds have already been allocated -- and raise more revenue by increasing taxes on those who can pay instead of pursuing long-since debunked supply side economic voodoo.
When the bond market is unhappy with what the government is doing, the cost to service the debt goes up. This is a bad dynamic. Republicans should think about this before doing stupid shit and Democrats should too.
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