Prof G Markets · Thursday, September 24, 2026
Howard Marks identifies a significant shift in fiscal responsibility, noting that the US has not had a budget surplus since 2000, with deficits now approaching $2 trillion annually even during times of prosperity. He argues that this 'profligacy' contributes to rising interest rates as the demand for capital increases. Marks emphasizes that unlike deficits incurred during recessions or emergencies, persistent large deficits during economic booms are a cause for concern.
“Well, for historical reference, I think the last time we had a budget surplus was when Clinton left office. So that was 2000. So 26 years of deficit.”
“But running a 2 trillion dollar deficit at a time of prosperity, uh, when unemployment is quite low, near, near a record, uh, you know, when there is no emergency to counter. Uh, that that's something very different.”
“So, you know, when you ask what's changed, I think one thing that's changed is, uh, it does seem that nobody cares about the deficit. Nobody ever talks about a balanced budget anymore, uh, which used to be a topic of conversation.”