When the government spends more than it taxes at any given fiscal year, it is known as a deficit. If the government taxes more than it spends, it has a surplus.
There are a couple of points you are missing. They are major, and they change the entirety of anything that follows.
1) The government's spending is the "ONLY" source of "net" monetary assets the private sector has. Every dollar that isn't clawed back in taxation becomes someone's asset in the non-government sectors that enables retirement of private bank debt and that can be net saved.
2) The monopoly issuer of a fiat currency cannot have a "surplus" that would better enable it to spend. It always has an infinite amount of its currency to deploy available resources into the private sector, so it never "has" nor "doesn't have" money/revenue. There is no "infinite+1" in any math I am familiar with. This was confirmed as long ago as '45 by a New York Fed Chairman (Beardsley Ruml) who wrote a paper titled "Taxing For Revenue Is Obsolete".
Each year, the federal government must pay that debt back in the form of interest payments. For the fiscal year of 2021, the government must pay $378 billion.
While it is no more difficult for the sovereign currency issuer to pay interest than it is for any other purpose, this is not necessary and should be stopped. The way to do that is simply stop issuing Treasury bonds to "match" (not fund) deficit spending.
It's just welfare for the bankers and oligarchs anyway and "IS NOT" a funding mechanism for the US government. One cannot loan what doesn't yet exist. That would solve your "loanable funds" issue as well, although it is not real either.
Some economists, like Jason Furman and Larry Summers believe that the US government has a greater ability to spend more due to historically low interest rates. When rates are low, the cost to borrow money reduces.
Interest rates are not a random thing, or even influenced by market forces. They are set by the Fed and its combined balance sheet with Treasury that always makes it the heavy hitter in bond auctions.
Instead of playing games that only benefit the investment class and serve no real purpose without a gold reserve to defend, why not just set a Zero Interest Rate Policy (ZIRP) and let banks actually live or die in the "free market" conservatives are always telling us about?
The Congressional Budget Office, a nonpartisan research agency that reports economic information to Congress,
So, neoliberalism isn't "partisan"? The only purpose served by this group of overpaid liars is to keep the rubes in the dark about how their money is actually created and spent.
Entitlement programs, such as Medicare and Social Security, are expected to grow as well.
CBO projects that both programs and their trust funds will be exhausted in a few years, meaning their shortfalls will add to the deficit, as well as the interest costs on those shortfalls.
Having a government that cannot become insolvent in its own currency means that none of its programs can either. The "trust funds" mentioned are just spreadsheets detailing contributions and outlays. They have no "money" in them, so they are worthless as a funding source, as is the horribly regressive tax that people imagine is funding them.
Social Security and Medicare were the two biggest cons perpetrated on the middle class worker in history, and not for the reasons you might think. They simply reduced the purchasing power of workers while offering no benefit that wasn't always available to Congress in funding either program.
The only one of your charts and graphs that has any relevance to our economic reality is the one you opened this piece with from FRED charting debt in relation to GDP. You understand that those grey vertical lines are recessions and depressions, right? Perhaps you weren't aware of the significance of those outside of your intentions, but they have something in common.
Prior to each of those recession/depression events the federal government cut its spending into the private sector. There have been many explanations given for this, and I understand that commonality doesn't always mean causation, but damn, EVERY SINGLE TIME should give us a clue about where to look. Those who refuse to see reality when it is right in their faces usually have an agenda.
